Surgery Partners, Inc. (NASDAQ:SGRY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02
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Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Resignation of Matthew Lozow
On May 30, 2017, Matthew Lozow notified Surgery Partners, Inc. (the
Company) of his resignation from the Board of Directors (the Board)
of the Company, including all committees thereof as well as the
boards of directors of the Company’s subsidiaries on which he
serves, effective upon the Common Stock Closing (as defined below).
Company) of his resignation from the Board of Directors (the Board)
of the Company, including all committees thereof as well as the
boards of directors of the Company’s subsidiaries on which he
serves, effective upon the Common Stock Closing (as defined below).
Mr. Lozow has served on the Board since the Companys formation in
April 2015, and has served as a member of the Compensation
Committee of the Board since the Committees inception.
April 2015, and has served as a member of the Compensation
Committee of the Board since the Committees inception.
As previously reported by the Company on May 11, 2017, on May 9,
2017, the Company entered into a Stock Purchase Agreement (the
Common Stock Purchase Agreement), by and among the Company, H.I.G.
Surgery Centers, LLC (H.I.G.), H.I.G. Bayside Debt LBO Fund II L.P.
(for the purposes stated therein) and BCPE Seminole Holdings LP
(Bain Capital), an affiliate of Bain Capital Private Equity, to
which, upon the closing of the transactions contemplated thereby
(the Common Stock Closing), H.I.G. will sell 26,455,651>shares
of common stock of the Company to Bain Capital.
2017, the Company entered into a Stock Purchase Agreement (the
Common Stock Purchase Agreement), by and among the Company, H.I.G.
Surgery Centers, LLC (H.I.G.), H.I.G. Bayside Debt LBO Fund II L.P.
(for the purposes stated therein) and BCPE Seminole Holdings LP
(Bain Capital), an affiliate of Bain Capital Private Equity, to
which, upon the closing of the transactions contemplated thereby
(the Common Stock Closing), H.I.G. will sell 26,455,651>shares
of common stock of the Company to Bain Capital.
to its rights under the Common Stock Purchase Agreement, Bain
Capital has requested the resignation of Mr. Lozow, the director on
the Board who is affiliated with H.I.G., effective upon the Common
Stock Closing. Mr. Lozows resignation from the Board is not due to
a disagreement with the Board or management or on any matter
relating to the Companys operations, policies or procedures.
Capital has requested the resignation of Mr. Lozow, the director on
the Board who is affiliated with H.I.G., effective upon the Common
Stock Closing. Mr. Lozows resignation from the Board is not due to
a disagreement with the Board or management or on any matter
relating to the Companys operations, policies or procedures.
Appointment of Christopher R. Gordon and T. Devin OReilly as
Non-Voting Observers to the Board
Non-Voting Observers to the Board
As previously reported on May 11, 2017, also on May 9, 2017, the
Company entered into a Securities Purchase Agreement (the Preferred
Purchase Agreement), by and among the Company and Bain Capital, to
which, upon the closing of the transactions contemplated thereby
(the Preferred Stock Closing), the Company will issue to Bain
Capital up to 320,000 shares of preferred stock, par value $0.01
per share, of the Company, to be created out of the authorized and
unissued shares of preferred stock of the Company and designated as
10.00% Series A Convertible Perpetual Participating Preferred Stock
(the Series A Preferred Stock). The proceeds from the issuance and
sale of the Series A Preferred Stock will be used to fund a portion
of the merger consideration to be paid by the Company in its
acquisition of NSH Holdco, Inc., a Delaware corporation (NSH), to
the Agreement and Plan of Merger, by and among the Company, SP
Merger Sub, Inc., NSH, and IPC / NSH, L.P., solely in its capacity
as sellers representative, dated May 9, 2017 (the Merger Agreement
and, together with the Common Stock Purchase Agreement and the
Preferred Purchase Agreement, the Transaction Agreements). The
Preferred Stock Closing is a condition precedent to the Common
Stock Closing.
Company entered into a Securities Purchase Agreement (the Preferred
Purchase Agreement), by and among the Company and Bain Capital, to
which, upon the closing of the transactions contemplated thereby
(the Preferred Stock Closing), the Company will issue to Bain
Capital up to 320,000 shares of preferred stock, par value $0.01
per share, of the Company, to be created out of the authorized and
unissued shares of preferred stock of the Company and designated as
10.00% Series A Convertible Perpetual Participating Preferred Stock
(the Series A Preferred Stock). The proceeds from the issuance and
sale of the Series A Preferred Stock will be used to fund a portion
of the merger consideration to be paid by the Company in its
acquisition of NSH Holdco, Inc., a Delaware corporation (NSH), to
the Agreement and Plan of Merger, by and among the Company, SP
Merger Sub, Inc., NSH, and IPC / NSH, L.P., solely in its capacity
as sellers representative, dated May 9, 2017 (the Merger Agreement
and, together with the Common Stock Purchase Agreement and the
Preferred Purchase Agreement, the Transaction Agreements). The
Preferred Stock Closing is a condition precedent to the Common
Stock Closing.
to the Common Stock Purchase Agreement, the Company and H.I.G. have
agreed to take all required action to appoint up to two non-voting
observers designated by Bain Capital to the Board (the Board
Observers) to attend regular and special meetings of the Board,
subject to the terms of the Common Stock Purchase Agreement and
effective upon the expiration or early termination of the
applicable waiting period, together with any extensions thereof,
under the>Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the HSR Act Expiration). Bain Capital has designated Christopher
R. Gordon and T. Devin OReilly as the two Board Observers.
agreed to take all required action to appoint up to two non-voting
observers designated by Bain Capital to the Board (the Board
Observers) to attend regular and special meetings of the Board,
subject to the terms of the Common Stock Purchase Agreement and
effective upon the expiration or early termination of the
applicable waiting period, together with any extensions thereof,
under the>Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the HSR Act Expiration). Bain Capital has designated Christopher
R. Gordon and T. Devin OReilly as the two Board Observers.
On May 30, 2017, the Board approved the appointment of each of
Messrs. Gordon and OReilly as the Board Observers, effective upon
the HSR Act Expiration, to attend regular and special meetings of
the Board subject to the terms of the Common Stock Purchase
Agreement.
Messrs. Gordon and OReilly as the Board Observers, effective upon
the HSR Act Expiration, to attend regular and special meetings of
the Board subject to the terms of the Common Stock Purchase
Agreement.
Election of Christopher R. Gordon, Expansion of the Board and
Contingent Appointment of T. Devin OReilly
Contingent Appointment of T. Devin OReilly
to the Common Stock Purchase Agreement, the Company and H.I.G. have
also agreed to take all required action to appoint up to two
directors designated by Bain Capital (the Bain Designees) to the
Board effective upon the Preferred Stock Closing. Bain Capital has
designated Messrs. Gordon and OReilly as the two Bain Designees,
and requested that Mr. Gordon be appointed as a Class III director
and Mr. OReilly be appointed as a Class II director.
also agreed to take all required action to appoint up to two
directors designated by Bain Capital (the Bain Designees) to the
Board effective upon the Preferred Stock Closing. Bain Capital has
designated Messrs. Gordon and OReilly as the two Bain Designees,
and requested that Mr. Gordon be appointed as a Class III director
and Mr. OReilly be appointed as a Class II director.
The Board size is fixed at six directors, with five seats occupied
and one vacancy created by the resignation of Mr. Christopher
Laitala, which vacancy is for a Class III director. The Companys
Amended and Restated Certificate of Incorporation, as in effect as
of May 30, 2017 and as of the date hereof, provides that prior to
the date that H.I.G. (through one or more of its affiliates) ceases
to beneficially own 50% or more of the Companys common stock, (i)
vacancies on the Board shall be filled by a vote of a majority of
the then outstanding common stock, (ii) the size of the Board shall
be determined by a vote of a majority of the then outstanding
common stock and (iii) newly-created directorships shall be filled
by a vote of a majority of the directors then on the Board.
and one vacancy created by the resignation of Mr. Christopher
Laitala, which vacancy is for a Class III director. The Companys
Amended and Restated Certificate of Incorporation, as in effect as
of May 30, 2017 and as of the date hereof, provides that prior to
the date that H.I.G. (through one or more of its affiliates) ceases
to beneficially own 50% or more of the Companys common stock, (i)
vacancies on the Board shall be filled by a vote of a majority of
the then outstanding common stock, (ii) the size of the Board shall
be determined by a vote of a majority of the then outstanding
common stock and (iii) newly-created directorships shall be filled
by a vote of a majority of the directors then on the Board.
On May 30, 2017, the Board unanimously nominated Mr. Gordon to fill
the Class III vacancy, and unanimously recommended his appointment
as a Class III director to the stockholders of the Company, in each
case, effective upon the Preferred Stock Closing. In connection
therewith, on May 30, 2017, H.I.G., the holder of 26,455,651 shares
of common stock of the Company, which shares represent at least a
majority of the issued and outstanding capital stock of the Company
as of such date, by written consent in lieu of a meeting of the
stockholders of the Company, approved, among other things (as
further described below): (i) the election of Mr. Gordon to the
Board to fill the Class III vacancy and serve as a Class III
director, which class will stand for re-election at the 2018 annual
meeting of stockholders, effective upon the Preferred Stock
Closing, and (ii) the expansion of the size of the Board from six
directors to seven directors (the Board Expansion), effective upon
the Preferred Stock Closing, to effectuate the appointment of Mr.
OReilly to the Board upon the Preferred Stock Closing.
the Class III vacancy, and unanimously recommended his appointment
as a Class III director to the stockholders of the Company, in each
case, effective upon the Preferred Stock Closing. In connection
therewith, on May 30, 2017, H.I.G., the holder of 26,455,651 shares
of common stock of the Company, which shares represent at least a
majority of the issued and outstanding capital stock of the Company
as of such date, by written consent in lieu of a meeting of the
stockholders of the Company, approved, among other things (as
further described below): (i) the election of Mr. Gordon to the
Board to fill the Class III vacancy and serve as a Class III
director, which class will stand for re-election at the 2018 annual
meeting of stockholders, effective upon the Preferred Stock
Closing, and (ii) the expansion of the size of the Board from six
directors to seven directors (the Board Expansion), effective upon
the Preferred Stock Closing, to effectuate the appointment of Mr.
OReilly to the Board upon the Preferred Stock Closing.
On May 30, 2017, subject to the fulfillment of certain conditions
precedent, the Board also conditionally appointed Mr. OReilly as a
Class II director, which appointment (assuming the fulfillment of
such conditions) would be effective upon (i) the Board Expansion
and (ii) the Preferred Stock Closing. Class II directors will stand
for re-election at the 2020 annual meeting of stockholders
precedent, the Board also conditionally appointed Mr. OReilly as a
Class II director, which appointment (assuming the fulfillment of
such conditions) would be effective upon (i) the Board Expansion
and (ii) the Preferred Stock Closing. Class II directors will stand
for re-election at the 2020 annual meeting of stockholders
The Board expects to appoint Messrs. Gordon and OReilly to the
Compensation Committee of the Board upon their appointment to the
Board upon the Preferred Stock Closing.
Compensation Committee of the Board upon their appointment to the
Board upon the Preferred Stock Closing.
The Company expects that in connection with the effectiveness of
their appointments to the Board upon the Preferred Stock Closing,
each of Messrs. Gordon and OReilly will enter into the Companys
standard form of indemnification agreement, which is incorporated
herein by reference to Exhibit 10.14 to Amendment No. 1 to the
Companys Registration Statement on Form S-1, filed with the U.S.
Securities and Exchange Commission (the SEC) on September 14, 2015,
the terms of which are described in such Registration Statement.
their appointments to the Board upon the Preferred Stock Closing,
each of Messrs. Gordon and OReilly will enter into the Companys
standard form of indemnification agreement, which is incorporated
herein by reference to Exhibit 10.14 to Amendment No. 1 to the
Companys Registration Statement on Form S-1, filed with the U.S.
Securities and Exchange Commission (the SEC) on September 14, 2015,
the terms of which are described in such Registration Statement.
Except for the indemnification agreements and the agreements of
Bain Capital and the Company provided in the Common Stock Purchase
Agreement and Preferred Purchase Agreement, including Bain Capitals
designation rights with respect to the Board Observers and Bain
Designees, there is no arrangement or understanding between either
of Mr. Gordon or Mr. OReilly and any other persons or entities to
which either of Mr. Gordon or Mr. OReilly was appointed to the
Board. Except for the transactions contemplated by the Transaction
Agreements, there are no transactions between the Company and
either of Mr. Gordon or Mr. Reilly that require disclosure under
Item 404(a) of Regulation S-K.
Bain Capital and the Company provided in the Common Stock Purchase
Agreement and Preferred Purchase Agreement, including Bain Capitals
designation rights with respect to the Board Observers and Bain
Designees, there is no arrangement or understanding between either
of Mr. Gordon or Mr. OReilly and any other persons or entities to
which either of Mr. Gordon or Mr. OReilly was appointed to the
Board. Except for the transactions contemplated by the Transaction
Agreements, there are no transactions between the Company and
either of Mr. Gordon or Mr. Reilly that require disclosure under
Item 404(a) of Regulation S-K.
On June 5, 2017, the Company issued a press release announcing
H.I.G.s election of Mr. Gordon to the Board and the contingent
appointment of Mr. OReilly to the Board, in each case, effective
upon the Preferred Stock Closing. A copy of the press release has
been filed as Exhibit 99.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
H.I.G.s election of Mr. Gordon to the Board and the contingent
appointment of Mr. OReilly to the Board, in each case, effective
upon the Preferred Stock Closing. A copy of the press release has
been filed as Exhibit 99.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
The foregoing descriptions of the Common Stock Purchase Agreement
and the Preferred Purchase Agreement do not purport to be complete
and are subject to, and qualified in their entirety by the full
text of the Common Stock Purchase Agreement and the Preferred
Purchase Agreement, which are incorporated into this Item 5.02 by
reference to Exhibit 10.2 and Exhibit 10.1, respectively, to the
Companys Current Report on Form 8-K filed with the SEC on May 11,
2017.
and the Preferred Purchase Agreement do not purport to be complete
and are subject to, and qualified in their entirety by the full
text of the Common Stock Purchase Agreement and the Preferred
Purchase Agreement, which are incorporated into this Item 5.02 by
reference to Exhibit 10.2 and Exhibit 10.1, respectively, to the
Companys Current Report on Form 8-K filed with the SEC on May 11,
2017.
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Item 5.07
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Submission of Matters to a Vote of Security Holders.
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As further described in Item 5.02 of this Current Report on Form
8-K which disclosure is hereby incorporated in to this Item 5.07 by
reference, on May 30, 2017, H.I.G., the holder of 26,455,651 shares
of common stock of the Company, which shares of common stock
represent at least a majority of the issued and outstanding shares
of capital stock of the Company as of May 30, 2017, acting by
written consent in lieu of a meeting of the stockholders of the
Company, voted all such shares to approve (x) effective upon the
Preferred Stock Closing (i) the election of Mr. Gordon to the Board
to fill the Class III director vacancy and serve as a Class III
director and (ii) the Board Expansion, and (y) upon the
effectiveness of Mr. Lozows resignation from the Board and
contemporaneously with the Common Stock Closing, the subsequent
reduction of the size of the Board from seven to six directors
(collectively, the Stockholder Approvals).>H.I.G.s action by
written consent in lieu of a meeting of the stockholders of the
Company is the only vote required in respect of the Stockholder
Approvals, and as such, there were no votes cast against or
withheld, and no abstentions or broker non-votes with respect to
the Stockholder Approvals.
8-K which disclosure is hereby incorporated in to this Item 5.07 by
reference, on May 30, 2017, H.I.G., the holder of 26,455,651 shares
of common stock of the Company, which shares of common stock
represent at least a majority of the issued and outstanding shares
of capital stock of the Company as of May 30, 2017, acting by
written consent in lieu of a meeting of the stockholders of the
Company, voted all such shares to approve (x) effective upon the
Preferred Stock Closing (i) the election of Mr. Gordon to the Board
to fill the Class III director vacancy and serve as a Class III
director and (ii) the Board Expansion, and (y) upon the
effectiveness of Mr. Lozows resignation from the Board and
contemporaneously with the Common Stock Closing, the subsequent
reduction of the size of the Board from seven to six directors
(collectively, the Stockholder Approvals).>H.I.G.s action by
written consent in lieu of a meeting of the stockholders of the
Company is the only vote required in respect of the Stockholder
Approvals, and as such, there were no votes cast against or
withheld, and no abstentions or broker non-votes with respect to
the Stockholder Approvals.
The Company will file an Information Statement on Schedule 14C
describing these matters and will deliver a copy of the Information
Statement to all stockholders of record on May 30, 2017.
describing these matters and will deliver a copy of the Information
Statement to all stockholders of record on May 30, 2017.
Forward-Looking Statements
This report may contain forward-looking statements as defined by
the Private Securities Litigation Reform Act of 1995 or by the SEC
in its rules, regulations and releases. These statements include,
but are not limited to, the Companys expectations regarding the
actions contemplated by the Transaction Agreements, including the
closing of the transactions contemplated thereby and actions
contingent thereon, the performance of the Companys business and
the other non-historical statements. These statements can be
identified by the use of words such as believes, anticipates,
expects, intends, plans, continues, estimates, predicts, projects,
forecasts, and similar expressions. All forward looking statements
are based on managements current expectations
the Private Securities Litigation Reform Act of 1995 or by the SEC
in its rules, regulations and releases. These statements include,
but are not limited to, the Companys expectations regarding the
actions contemplated by the Transaction Agreements, including the
closing of the transactions contemplated thereby and actions
contingent thereon, the performance of the Companys business and
the other non-historical statements. These statements can be
identified by the use of words such as believes, anticipates,
expects, intends, plans, continues, estimates, predicts, projects,
forecasts, and similar expressions. All forward looking statements
are based on managements current expectations
and beliefs only as of the date of this report and are subject to
risks, uncertainties and assumptions that could cause actual
results to differ materially from those discussed in, or implied
by, the forward-looking statements, including but not limited to,
the risk that the parties are unable to obtain required regulatory
approvals, the risk that the parties are unable to satisfy other
conditions to the consummation of the transactions contemplated by
the Transaction Agreements, the occurrence of any event, change or
other circumstance that could give rise to the termination of the
Transaction Agreements, the risk that the transactions contemplated
thereby may involve unexpected liabilities or delays, and such
other the risks identified and discussed from time to time in the
Companys reports filed with the SEC, including the Companys most
recent Annual Report on Form 10-K. Readers are strongly encouraged
to review carefully the full cautionary statements described in
these reports. Except as required by law, the Company undertakes no
obligation to revise or update publicly any forward-looking
statements to reflect events or circumstances after the date of
this report, or to reflect the occurrence of unanticipated events
or circumstances.
risks, uncertainties and assumptions that could cause actual
results to differ materially from those discussed in, or implied
by, the forward-looking statements, including but not limited to,
the risk that the parties are unable to obtain required regulatory
approvals, the risk that the parties are unable to satisfy other
conditions to the consummation of the transactions contemplated by
the Transaction Agreements, the occurrence of any event, change or
other circumstance that could give rise to the termination of the
Transaction Agreements, the risk that the transactions contemplated
thereby may involve unexpected liabilities or delays, and such
other the risks identified and discussed from time to time in the
Companys reports filed with the SEC, including the Companys most
recent Annual Report on Form 10-K. Readers are strongly encouraged
to review carefully the full cautionary statements described in
these reports. Except as required by law, the Company undertakes no
obligation to revise or update publicly any forward-looking
statements to reflect events or circumstances after the date of
this report, or to reflect the occurrence of unanticipated events
or circumstances.
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Item 9.01>
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Financial Statements and Exhibits.
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(d) Exhibits
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Exhibit No.
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Description
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10.1
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Form of Indemnification Agreement (incorporated herein by
reference to Exhibit 10.14 to Amendment No. 1 to the Company’s Registration Statement on Form S-1, filed September 14, 2015). |
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10.2
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Stock Purchase Agreement by and between H.I.G. Surgery
Centers, LLC, H.I.G. Bayside Debt LBO Fund II L.P. (for the specific purposes stated therein), BCPE Seminole Holdings LP and Surgery Partners, Inc., dated May 9, 2017 (incorporated herein by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed May 11, 2017).* |
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10.3
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Securities Purchase Agreement by and among Surgery
Partners, Inc. and BCPE Seminole Holdings LP, dated May 9, 2017 (incorporated herein by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed May 11, 2017).* |
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99.1
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Press Release dated June 5, 2017 issued by Surgery
Partners, Inc. |
* Schedules and/or Exhibits have been omitted to Item 601(b)(2) of
Regulation S-K. The Company agrees to furnish a
Regulation S-K. The Company agrees to furnish a
>>>supplemental copy of any omitted schedule or exhibit to
the SEC upon request.
the SEC upon request.
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.
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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Surgery Partners, Inc.
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By:
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/s/ Michael T. Doyle
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Michael T. Doyle
Chief Executive Officer
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Date: June 5, 2017
EXHIBIT INDEX
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Exhibit No.
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Description
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10.1
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Form of Indemnification Agreement (incorporated herein
by reference to Exhibit 10.14 to Amendment No. 1 to the Company’s Registration Statement on Form S-1, filed September 14, 2015). |
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10.2
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Stock Purchase Agreement by and between H.I.G. Surgery
Centers, LLC, H.I.G. Bayside Debt LBO Fund II L.P. (for the specific purposes stated therein), BCPE Seminole Holdings LP and Surgery Partners, Inc., dated May 9, 2017 (incorporated herein by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed May 11, 2017).* |
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10.3
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Securities Purchase Agreement by and among Surgery
Partners, Inc. and BCPE Seminole Holdings LP, dated May 9, 2017 (incorporated herein by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed May 11, 2017).* |
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99.1
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Press Release dated June 5, 2017 issued by Surgery
Partners, Inc. |
* Schedules and/or Exhibits have been omitted
About Surgery Partners, Inc. (NASDAQ:SGRY)
Surgery Partners, Inc. is a healthcare services company. The Company operates in three lines of business across the United States: Surgical Facility Services, Ancillary Services and Optical Services. The Company’s Surgical Facility Services segment consists of the operation of ambulatory surgery centers (ASCs) and surgical hospitals, which include its anesthesia services. The Company’s Ancillary Services segment consists of a diagnostic laboratory, a specialty pharmacy and multi-specialty physician practices. The Company’s physician practices include its owned and operated physician practices pursuant to management service agreements. The Company’s optical services segment consists of an optical laboratory, an optical products group purchasing organization and a marketing business. The Company’s optical laboratory manufactures eyewear, while its optical product purchasing organization negotiates volume buying discounts with optical product manufacturers.
