<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
HEALTH MANAGEMENT ASSOCIATES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 18, 1997
The Annual Meeting of Stockholders of HEALTH MANAGEMENT ASSOCIATES, INC. (the
"Company") will be held at the Philharmonic Center for the Arts, Daniels
Pavilion, 5833 Pelican Bay Blvd., Naples, Florida 34108 on Tuesday, February 18,
1997 at 1:30 p.m., local time, for the following purposes more fully described
in the accompanying proxy statement:
1. To elect six directors of the Company.
2. To consider and act upon a proposal to approve and adopt a Certificate
of Amendment to the Fifth Restated Certificate of Incorporation of the Company
to increase the number of authorized shares of Common Stock, par value $.01 per
share, to an aggregate of 300,000,000 shares.
3. To consider and act upon a proposal to approve and ratify the selection
of Ernst & Young LLP as the Company's independent auditors for the fiscal year
ending September 30, 1997.
4. To transact such other business as may properly come before the Meeting
or any adournment thereof.
The Board of Directors has fixed the close of business on December 20, 1996 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting and any adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
Robb L. Smith,
Secretary
Dated: December 30, 1996
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
5811 PELICAN BAY BOULEVARD
NAPLES, FLORIDA 34108-2710
PROXY STATEMENT
GENERAL
This proxy statement is furnished to stockholders in connection with the
solicitation of proxies by the Board of Directors of Health Management
Associates, Inc. (the "Company") to be used at the Annual Meeting of
Stockholders of the Company, which will be held on Tuesday, February 18, 1997,
and at any adjournments thereof (the "Meeting"). This proxy statement and
accompanying form of proxy are being first mailed to stockholders on or about
December 30, 1996. The proxy, when properly executed and received by the
Secretary of the Company prior to the Meeting, will be voted as therein
specified unless revoked by filing with the Secretary prior to the Meeting a
written revocation or a duly executed proxy bearing a later date. Unless
authority to vote for one or more of the director nominees is specifically
withheld according to the instructions, a signed proxy will be voted FOR the
election of the six director nominees named herein and, unless otherwise
indicated, FOR each of the other two proposals described in this proxy statement
and in the accompanying notice of meeting.
As of December 20, 1996, the record date for the Meeting, there were
[106,470,185] shares of the Company's Class A Common Stock, par value $.01 per
share (the "Common Stock"), issued and outstanding. Only holders of Common
Stock of record on the books of the Company at the close of business on December
20, 1996 are entitled to notice of and to vote at the Meeting and at any
adjournments thereof. Each such stockholder is entitled to one vote for each
share of Common Stock registered in his name. A majority of the outstanding
Common Stock, represented in person or by proxy at the Meeting, will constitute
a quorum for the transaction of all business.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by use of the mails, directors, officers or regular employees of
the Company, without extra compensation, may solicit proxies personally or by
telephone or other telecommunication. In addition, the Company has retained
Corporate Investor Communications, a professional solicitation firm, which may
assist in soliciting proxies for a fee of $4,000 plus reimbursement of out-of-
pocket expenses. The Company has requested persons holding stock for others in
their names or in the names of nominees to forward soliciting material to the
beneficial owners of such shares and will, if requested, reimburse such persons
for their reasonable expenses in so doing.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth as of December 15, 1996 certain information
concerning shares of Common Stock held by (i) each stockholder known by the
Company to own beneficially more than 5% of the class, (ii) each director of the
Company, (iii) each "Named Executive" (see "EXECUTIVE COMPENSATION"), and (iv)
all directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
----------------------
NAME AND ADDRESS OF NO. OF PERCENT
BENEFICIAL OWNER (1) SHARES OF CLASS
-----------------------------------------------------
<S> <C> <C>
William J. Schoen (2) 5,830,813
5811 Pelican Bay Blvd.
Naples, FL 34108-2710
Kent P. Dauten 160,399
707 Skokie Blvd.
Suite 600
Northbrook, IL 60062
Robert A. Knox (3) 3,293,477
717 Fifth Avenue
New York, NY 10022
Charles R. Lees (4) 58,780
2659 Townsgate Road
Suite 205
Westlake Village, CA 91361
Kenneth D. Lewis (5) 58,780
NationsBank Corporate Center
100 North Tryon Street
58th Floor
Charlotte, NC 28255
William E. Mayberry, M.D. (6) 5,625
826 Rue de Ville
Naples, FL 34108
Earl P. Holland (7) 1,084,314
5811 Pelican Bay Blvd.
Naples, FL 34108-2710
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
----------------------
NAME AND ADDRESS OF NO. OF PERCENT
BENEFICIAL OWNER (1) SHARES OF CLASS
-----------------------------------------------------
<S> <C> <C>
Joseph V. Vumbacco (8) 108,996
5811 Pelican Bay Blvd.
Naples, FL 34108-2710
Stephen M. Ray (9) 446,759
5811 Pelican Bay Blvd.
Naples, FL 34108-2710
Joe D. Pinion 88,218
5811 Pelican Bay Blvd.
Naples, FL 34108-2710
Putnam Investments, Inc. (10) 21,616,716
One Post Office Square
Boston, MA 02109
All Directors and Executive 11,649,115
Officers as a Group (11 per-
sons)(11)
- -----------------------------------------------------
</TABLE>
(1) Unless otherwise indicated, each stockholder shown on the table has sole
voting and investment power with respect to the shares beneficially owned
by him or it. Negligible percentages have been omitted from the table.
(2) The amount shown includes: (a) 3,528,283 shares issuable upon exercise of
currently exercisable options; (b) 5,062 shares held by Mr. Schoen, and
2,000 shares held by his wife, each as custodian for their son (as to which
shares Mr. Schoen disclaims beneficial ownership); (c) 160,702 shares held
by Mr. Schoen individually; (d) 1,134,766 shares held by Mr. Schoen as sole
Trustee of the William J. Schoen Revocable Trust; and (e) 1,000,000 shares
held by Karen A. Sutton as Trustee of the William J. Schoen Charitable
Unitrust.
(3) Mr. Knox, a director of the Company, is Senior Managing Director of
Cornerstone Equity Investors, LLC ("Cornerstone"). Mr. Knox and Cornerstone
may constitute a group for purposes of the rules and regulations under the
Securities Exchange Act of 1934, as amended; however, they disclaim any
group membership. By investment management contract, Cornerstone has voting
and investment power with respect to certain holdings of The Prudential
Insurance Company of America and its affiliates. The amount shown includes
223,069 shares held by Mr. Knox individually, and 3,070,408 shares subject
to such investment management contract.
-3-
<PAGE>
(4) The amount shown includes 47,530 shares issuable upon exercise of currently
exercisable options.
(5) The amount shown includes 38,530 shares issuable upon exercise of currently
exercisable options.
(6) The amount shown includes: (a) 3,375 shares issuable upon exercise of
currently exercis able options; and (b) 2,250 shares held by Dr. Mayberry
as Trustee of the W.E. Mayberry Trust.
(7) The amount shown includes: (a) 315,450 shares issuable upon exercise of
currently exercisable options; (b) an aggregate of 90,000 shares held by
Mr. Holland in joint tenancy with members of his family; (c) 22,500 shares
held by Mr. Holland's wife as custodian for their daughter (as to which
shares Mr. Holland disclaims beneficial ownership); (d) 605,739 shares held
by Mr. Holland individually; and (e) 50,625 shares held by Mr. Holland as
sole Trustee of the Declaration of Trust Established for the Benefit of
Earl P. Holland.
(8) The amount shown includes: (a) 100,000 shares issuable upon exercise of
currently exercisable options; (b) 6,936 shares held in Mr. Vumbacco's
account under the Company's Retirement Savings Plan, as to which shares he
has investment power only; and (c) 2,060 shares held by Mr. Vumbacco
individually.
(9) The amount shown includes: (a) 159,375 shares issuable upon exercise of
currently exercisable options; (b) 17,384 shares held by Mr. Ray
individually; and (c) 270,000 shares held by Mr. Ray as sole Trustee of the
Stephen M. Ray Living Trust.
(10) The following information is derived from the Schedule 13G (Amendment No.
4) of Putnam Investments, Inc. dated April 8, 1996, and has been adjusted
to give effect to a 3-for-2 stock split in the form of a stock dividend
paid by the Company on June 14, 1996: The amount shown includes 9,840,903
shares beneficially owned by Putnam Investment Management Inc., 10,808,358
shares beneficially owned by Putnam Investments Inc. and 967,455 shares
beneficially owned by The Putnam Advisory Company, Inc. as a result of
their serving as investment advisors to various investment companies
registered under the Investment Company Act of 1940 and/or employee benefit
plans, pension funds, endowment funds or other institutional clients.
Putnam Investments, Inc., which is a wholly-owned subsidiary of Marsh &
McLennan Companies, owns Putnam Investment Management, Inc. and The Putnam
Advisory Company, Inc. Putnam Investments, Inc. has shared voting power
with respect to 540,343 shares and shared dispositive power with respect to
all shares.
(11) See footnotes (2) through (9) to this table.
-4-
<PAGE>
ELECTION OF DIRECTORS
A Board of Directors consisting of six directors is to be elected by the
stockholders at the Meeting, each to hold office until the next Annual Meeting
of Stockholders or until his successor is duly elected and qualifies.
The Board of Directors recommends the election of the six nominees named
below, all of whom are currently directors of the Company. Unless authority to
vote for one or more of the nominees is specifically withheld according to the
instructions, proxies in the enclosed form will be voted FOR the election of
each of the six nominees named below. The Board of Directors does not
contemplate that any of the nominees will not be able to serve as a director,
but if that contingency should occur prior to the voting of the proxies, the
persons named in the enclosed proxy reserve the right to vote for such
substitute nominee or nominees as they, in their discretion, shall determine.
<TABLE>
<CAPTION>
YEAR
FIRST
ELECTED
NAME AND BACKGROUND DIRECTOR
- -----------------------------------------------------------------------------------------------
<S> <C>
WILLIAM J. SCHOEN, age 61, has served as Chairman of the Board of Directors, 1983
President and Chief Executive Officer of the Company since April 1986. He was
first elected a director in February 1983, became President and Chief Operating
Officer in December 1983, and Co-Chief Executive Officer in December 1985.
From 1982 to 1987 Mr. Schoen was Chairman of Commerce National Bank,
Naples, Florida, and from 1973 to 1981 he was President, Chief Operating
Officer and Chief Executive Officer of The F&M Schafer Corporation, a
consumer products company. From 1971 to 1973, Mr. Schoen was President of
the Pierce Glass subsidiary of Indian Head, Inc., a diversified company. In
addition to serving on the Company's Board of Directors, Mr. Schoen also serves
on the Board of Directors of First Union National Bank of Florida and Horace
Mann Insurance Companies.
KENT P. DAUTEN, age 41, served as a director of the Company from March 1981 1981
through May 1983, and from June 1985 through September 1988. He was again
elected a director in November 1988. Since February 1994 Mr. Dauten has been
President of Keystone Capital, Inc., a private investment firm founded by him.
From January 1993 until February 1994, Mr. Dauten was a Senior Vice President
of Madison Dearborn Partners, Inc., an investment management company. Mr.
Dauten was formerly a Senior Vice President of First Chicago Investment Corpo-
ration and First Capital Corporation of Chicago, the venture capital subsidiaries
of First Chicago Corporation, where he had been employed in various investment
management positions since 1979.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
YEAR
FIRST
ELECTED
NAME AND BACKGROUND DIRECTOR
- -----------------------------------------------------------------------------------------------
<S> <C>
ROBERT A. KNOX, age 44, became Senior Managing Director of Cornerstone Equity 1985
Investors, LLC, an investment advisory firm, on December 6, 1996. From 1994
until December 1996, he was Chairman and Chief Executive Officer, and from 1984
to 1994 he was President, of Prudential Equity Investors, Inc., an investment
capital firm. Prior to that since 1975, Mr. Knox was employed by The
Prudential Insurance Company of America. He also serves on the Board of
Directors of Lechters, Inc.
CHARLES R. LEES, age 77, served as a director of the Company from April 1988 1988
through September 1988, and was again elected a director in February 1989. Mr.
Lees has been in the private practice of law, concentrating in tax matters, since
May 1985. For more than 25 years prior to his retirement in 1979, Mr. Lees was
a Partner of the accounting firm of KPMG Peat Marwick LLP, specializing in tax
matters.
KENNETH D. LEWIS, age 49, is President of NationsBank Corporation, a position 1991
that he has held since November 1993. From December 1991 to November 1993
he served as President of General Banking for NationsBank. Prior to that, Mr.
Lewis had been employed by NCNB Corporation in various capacities since
1969, including President of NCNB Texas from 1988 to 1990, and President of
NCNB National Bank of Florida from 1986 to 1988.
WILLIAM E. MAYBERRY, M.D., age 67, is the retired Chairman of the Board and 1994
Chief Executive Officer of the Mayo Foundation and the Mayo Clinic, Rochester,
Minnesota, where he had been employed in various capacities from 1960 until his
retirement in 1992.
</TABLE>
BOARD MEETINGS AND COMMITTEES OF THE BOARD
During the fiscal year ended September 30, 1996 ("Fiscal 1996"), the Board
of Directors held four meetings and also acted by unanimous written consent on
one occasion. Each director attended at least 75% of such Board meetings and
meetings of the Board Committees on which he served.
The Company has standing Audit and Compensation Committees of the Board of
Directors. Although the Company has no standing Nominating Committee, the Board
of Directors will consider director nominees recommended by stockholders. Such
recommenda tions should be sent to the Company, to the attention of the
Secretary.
The members of the Audit Committee are Messrs. Dauten (Chairman), Lees and
Dr. Mayberry. The Committee reviews with Ernst & Young LLP, the Company's
independent auditors, the Company's financial statements and internal accounting
procedures, Ernst & Young LLP's suditing procedures and fees, and the possible
effects of professional services
-6-
<PAGE>
upon the independence of Ernst & Young LLP. The Audit Committee held three
meetings during Fiscal 1996.
The members of the Compensation Committee are Messrs. Knox (Chairman),
Dauten and Lewis. The Committee makes recommendations to the Board with respect
to compensation and benefits paid to the Company's senior management. The
Compensation Committee also makes determinations under the Company's various
plans providing incentive compensation for management. See "EXECUTIVE
COMPENSATION." The Compensation Committee held five meetings during Fiscal
1996.
COMPENSATION OF DIRECTORS
The Company pays its non-employee directors $2,000 per quarter for their
services as directors and $2,000 for each Board meeting attended. All of the
Company's directors other than Mr. Schoen qualify for such payments, and during
Fiscal 1996 such fees paid aggregated $80,000. The Company also reimburses all
of its directors for reasonable expenses incurred in connection with attending
Board and Board committee meetings. Except as described under "Directors' Stock
Options" below, the Company had no other compensation arrangements with
directors during Fiscal 1996.
DIRECTORS' STOCK OPTIONS
Pursuant to the Company's Stock Option Plan for Outside Directors, during
Fiscal 1996 the Company granted to each of Messrs. Dauten, Lees, Lewis and Dr.
Mayberry (the "Optionees"), each a non-employee director of the Company, an
option, expiring on April 25, 2006, to purchase 3,375 shares of Common Stock (as
adjusted to give effect to a 3-for-2 stock split in the form of a stock dividend
paid on June 14, 1996) at an exercise price of $21.58 per share (as so
adjusted). Each option becomes exercisable in 1,125-share annual increments
commencing one year from the date of the grant. None of such options are
transferable except by will or intestacy, and during the Optionee's lifetime
they are exercisable only by him. Unexercised options lapse 90 days after the
Optionee ceases to be a director of the Company, except that if the Optionee
ceases to be a director by reason of his death, his option lapses six months
after the date of his death.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During Fiscal 1996, the W.E. Mayberry Trust, of which William E. Mayberry,
M.D., a director of the Company, is trustee, inadvertently failed to file with
the Securities and Exchange Commission (the "SEC") on a timely basis one report
disclosing one acquisition by such Trust of Common Stock by gift from Dr.
Mayberry. Such report has since been filed. All of the Company's directors and
executive officers are now current in such filings. In making the foregoing
statements, the Company has relied on the written representations of its
directors and executive officers and copies of the reports that they have filed
with the SEC.
-7-
<PAGE>
EXECUTIVE COMPENSATION
Shown on the table below is information on the annual and long-term
compensation for services rendered to the Company in all capacities, for the
fiscal years ended September 30, 1996, 1995 and 1994, paid by the Company to
those persons who were, at the end of Fiscal 1996, the Chief Executive Officer
of the Company and the four most highly compensated executive officers of the
Company other than the Chief Executive Officer (collectively, the "Named
Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------ ------------------------------------
Awards Payouts
------------------------ ----------
Other All
Annual Restricted Other
Compen- Stock LTIP Compen-
Name and Principal Salary Bonus sation Awards Options Payouts sation
Position Year ($) (1) ($) (2) ($) (3) ($) (4) (#) (5) ($) ($)
- --------------------------------------------------- --------- --------- -------- ----------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Schoen 1996 $493,750 $493,750 $ 3,166 $493,750 300,000 0 0
Chairman of the Board, President and Chief 1995 468,875 468,875 3,080 468,875 900,000 0 0
Executive Officer 1994 444,125 444,125 3,080 444,125 0 0 0
Earl P. Holland 1996 $239,500 $179,625 $ 3,166 $179,625 150,000 0 0
Executive Vice President 1995 229,125 171,844 3,216 171,844 450,000 0 0
1994 217,375 163,031 3,168 163,031 0 0 0
Joseph V. Vumbacco (6) 1996 $159,375 $119,531 0 $119,531 300,000 0 0
Executive Vice President
</TABLE>
-8-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------ ------------------------------------
Awards Payouts
------------------------ ----------
Other All
Annual Restricted Other
Compen- Stock LTIP Compen-
Name and Principal Salary Bonus sation Awards Options Payouts sation
Position Year ($) (1) ($) (2) ($) (3) ($) (4) (#) (5) ($) ($)
- --------------------------------------------------- --------- --------- -------- ----------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stephen M. Ray 1996 $155,625 $ 93,375 $ 3,112 $ 75,000 75,000 0 0
Senior Vice President 1995 150,000 75,000 2,945 75,000 225,000 0 0
and Chief Financial 1994 115,250 57,625 2,428 57,625 0 0 0
Officer
Joe D. Pinion (7) 1996 $155,750 $ 70,088 $ 1,154 $ 70,088 75,000 0 0
Senior Vice President
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amounts shown include cash compensation earned and paid during the
fiscal year indicated as well as cash compensation deferred at the election
of the Named Executive.
(2) The bonuses shown were awarded and paid in the succeeding fiscal year for
services rendered during the fiscal year indicated.
(3) The amounts shown include employer contributions to the Company's Retirement
Savings Plan. The amounts shown do not include the value of perquisites and
other personal benefits because the aggregate amount of such compensation
for each fiscal year shown did not exceed the lesser of $50,000 or 10% of
the total amount of annual salary and bonus shown for the Named Executive.
(4) The amounts shown reflect contingent awards of Common Stock pursuant to the
Company's 1996 Executive Incentive Compensation Plan (the "EICP") and Stock
Incentive Plan for Corporate Officers and Management Staff (the "Stock
Incentive Plan"). See "EXECUTIVE COMPENSATION - Report of Compensation
Committee With Respect to Executive Compensation." The awards shown were
made in the succeeding fiscal year for services rendered during the fiscal
year indicated, and the dollar values shown represent the aggregate market
value of the shares awarded on the respective dates of the awards. Without
giving effect to awards made after the close of Fiscal 1996, the aggregate
numbers and dollar values of such shares credited to the respective
individuals' contingent award accounts at Fiscal 1996 year-end, based on the
market value of the Common Stock at Fiscal 1996 year-end ($24.875 per
share), were: Mr. Schoen - 204,448 shares ($5,085,644); Mr. Holland -
69,119 shares ($1,719,335); Mr. Ray - 26,804 shares ($666,750); and Mr.
Pinion - 14,461 shares ($359,717). Dividends are not payable on such
shares, but customary anti-dilution adjustments apply in the event of stock
splits and stock dividends.
(5) The amounts shown have been adjusted to give effect to two 3-for-2 stock
splits in the form of stock dividends paid on October 20, 1995 and June 14,
1996.
-9-
<PAGE>
(6) Mr. Vumbacco was first employed by the Company on January 15, 1996.
Accordingly, the amounts shown for Fiscal 1996 reflect less than a full
year's service.
(7) Mr. Pinion first became an executive officer on January 1, 1996, but the
amounts shown for Fiscal 1996 reflect his compensation for the full fiscal
year.
-10-
<PAGE>
STOCK OPTIONS
Shown below is further information on grants of stock options during Fiscal
1996 to the Named Executives under the EICP and the Company's 1993 Non-Statutory
Stock Option Plan. No stock appreciation rights ("SARs") were granted in Fiscal
1996 and there are no SARs outstanding.
OPTION GRANTS IN FISCAL 1996*
<TABLE>
<CAPTION>
Individual Grants
- -------------------------------------------------------------------
Percent of Grant Date Value
Total Op-
tions
Granted to
Options Employees Exercise
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date
--------------------
Grant Date
Present Value $ (1)
- -------------------- -------- ------------ --------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
William J. Schoen 300,000 24.0% $23.25 05/20/06 $3,165,000
Earl P. Holland 150,000 12.0 23.25 05/20/06 1,582,500
Joseph V. Vumbacco 300,000 24.0 18.75 01/14/06 2,394,000
Stephen M. Ray 75,000 6.0 23.25 05/20/06 791,250
Joe D. Pinion 75,000 6.0 23.25 05/20/06 791,250
=========================================================================================
</TABLE>
-11-
<PAGE>
* Pursuant to anti-dilution provisions of the respective plans, all numbers of
shares and per share prices have been adjusted to give effect to a 3-for-2
stock split in the form of a stock dividend paid on June 14, 1996.
(1) The hypothetical grant date present values for options granted during Fiscal
1996 are presented pursuant to the rules of the SEC and are calculated under
the modified Black-Scholes Model for pricing options, a mathematical formula
used to value options traded on stock exchanges. This formula considers a
number of factors in forecasting an option's present value. Factors used to
value options granted on May 21, 1996 include the expected volatility rate
of the shares underlying the option (33.73%), the risk free rate of return
(6.78%), dividend yield (0%), projected time of exercise (7 years) and
projected risk of forfeiture rate for vesting period (5% per annum).
Factors used to value options granted January 15, 1996 include the expected
volatility rate of the shares underlying the option (33.60%), the risk free
rate of return (5.46%), dividend yield (0%), projected time of exercise (7
years) and projected risk of forfeiture rate for vesting period (5% per
annum). The actual before-tax amount, if any, realized upon the exercise of
stock options will depend upon the excess, if any, of the market price of
the Common Stock over the exercise price per share of Common Stock at the
time the option is exercised. There is no assurance that the hypothetical
grant date present values of the options reflected in this table will be
realized.
Shown below is information with respect to option exercises by the Named
Executives during Fiscal 1996 and unexercised options to purchase Common Stock,
granted to the Named Executives during and prior to Fiscal 1996 under the EICP
and the Company's prior stock option plans and held by them at the end of Fiscal
1996.
-12-
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND
FISCAL YEAR-END OPTION VALUES*
<TABLE>
<CAPTION>
Shares Value Number of Unexercised Value of Unexercised
Acquired on Realized Options Held at in-the-Money Options
Name Exercise (#) ($) Fiscal Year-End at Fiscal Year-End
(#) ($) (1)
- -------------------- ------------- ----------- -------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William J. Schoen 750,000 $11,701,532 4,028,288 900,000 $75,124,927 $8,445,833
Earl P. Holland 320,625 3,413,555 318,750 450,000 5,345,573 4,222,917
Joseph V. Vumbacco 0 0 0 300,000 0 1,837,500
Stephen M. Ray 177,187 1,939,353 159,375 225,000 2,672,786 2,111,458
Joe D. Pinion 159,908 1,593,375 84,375 75,000 1,677,995 121,875
========================================================================================================
</TABLE>
* Pursuant to anti-dilution provisions of the respective plans, all numbers of
shares and per share prices have been adjusted to give effect, as
applicable, to five 3-for-2 stock splits in the form of stock dividends paid
on April 9, 1992, November 3, 1993, June 17, 1994, October 20, 1995 and June
14, 1996.
(1) Expressed as the excess of the market value of the Common Stock at Fiscal
1996 year-end ($24.875 per share) over the exercise price of each option.
-13-
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has an Amended and Restated Employment Agreement with William J.
Schoen, dated December 15, 1992, providing for him to serve as the Company's
Chairman of the Board, President and Chief Executive Officer at an annual base
salary of $400,000, subject to cost of living increases by the Board of
Directors. Mr. Schoen is also guaranteed participation in the Company's
Incentive Compensation Plan for Corporate Officers and Management Staff (the
"Incentive Compensation Plan") (see "EXECUTIVE COMPENSATION - Report of
Compensation Committee With Respect to Executive Compensation") at the 100%
category, and certain fringe benefits. Mr. Schoen's employment is terminable
upon his death, disability, voluntary termination or for defined cause. Should
the Company otherwise terminate Mr. Schoen's employment or reduce his
responsibilities or authority, or should there be a defined change in control of
the Company, then Mr. Schoen will be entitled to a lump sum payment equal to the
gross income paid him by the Company for the preceding three years. Mr. Schoen
has agreed not to compete with the Company or its affiliates during the term of
this agreement.
The Company does not have employment agreements with any of its other
executive officers.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company's Supplemental Executive Retirement Plan (the "Supplemental Plan")
is a deferred compensation plan for key executive employees that is not intended
to be tax-qualified. It commenced on May 1, 1990 for the Company's executive
officers. Each participant in the Supplemental Plan is entitled to receive a
fixed monthly benefit, commencing on his normal retirement date, for the longer
of 120 months or his life. The monthly benefit, which is determined by the Board
of Directors, may vary for each participant and may be increased periodically by
the Board. During Fiscal 1996, the Company recorded $240,000 of deferred
compensation expense in respect of the Supplemental Plan. To qualify for
benefits, a participant must continue as an employee until age 62 and must be an
employee for at least five years after commencing participation. No benefit is
paid if employment is terminated earlier, regardless of the reason, except if a
participant's employment is terminated by the Company for reasons other than
"cause," or by the participant for a "stated good reason," within two years
after a "change of ownership" of the Company (as those terms are defined in the
Supplemental Plan). In that case, the actuarial equivalent of a participant's
retirement benefit is paid in a single sum as soon as practicable after
termination of employment. In addition, if such a change of ownership occurs
after a participant has already begun to receive benefit payments, the actuarial
equivalent of the remaining benefits payable will be paid in a single sum. The
Supplemental Plan also provides that in the event a participant dies after
qualifying for retirement benefits but before all retirement benefits are paid,
the remaining benefits payable will be paid to the participant's designated
beneficiary or legal representative. Life insurance contracts may be purchased
by the Company to provide some or all of the benefits under the Supplemental
Plan.
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REPORT OF COMPENSATION COMMITTEE WITH RESPECT TO EXECUTIVE COMPENSATION
The following report of the Compensation Committee required by the rules of
the SEC to be included in this Proxy Statement shall not be deemed incorporated
by reference by any statement incorporating this Proxy Statement by reference
into any filing under the Securities Act of 1933, as amended (the "Securities
Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
except to the extent that the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under either such Act.
EXECUTIVE COMPENSATION PHILOSOPHY:
The fundamental compensation philosophy of the Board of Directors is that
there should be a substantial and meaningful connection between executive
compensation and stockholder value. Under the supervision of the Compensation
Committee of the Board of Directors (the "Committee"), which is comprised of
outside directors and which also administers the EICP, the Stock Incentive Plan
and the Company's prior stock option plans, the Company has developed and
implemented compensation policies, plans and programs designed to enhance the
profitability of the Company and increase stockholder value by aligning closely
the financial interests of the Company's executive officers with those of its
stockholders. In furtherance of these goals, annual base salaries are intended
to serve as only a portion of an executive's total achievable compensation. The
Board of Directors believes that attracting and retaining executives of high
quality is essential to the Company's growth and success. The Board of
Directors further believes that the long term success of the Company is enhanced
by a comprehensive compensation program that includes different types of
incentives for motivating executives and rewarding outstanding service,
including awards that link compensation to applicable measures of Company
performance. The Company relies to a large degree on annual and long-term
incentive compensation to attract and retain executives of outstanding ability
and to motivate them to perform to the full extent of their abilities. Both the
annual and long-term components of the incentive compensation policy are closely
tied to profitability and stockholder value. In years of outstanding
profitability, executive officers will be substantially rewarded for their
respective contributions to the Company's success through a combination of cash
and stock-based incentive awards.
THE EICP:
The EICP, which was approved by the stockholders in 1996, is a comprehensive
executive compensation plan which provides for grants of performance or annual
incentive awards that may be settled in cash, stock or other property, as well
as stock options, SARs, restricted stock, deferred stock and other stock-related
awards (collectively, "Awards"). The EICP supersedes the Incentive Compensation
Plan, the Stock Incentive Plan and the Company's prior stock option plans
(collectively, the "Prior Plans"), although previously granted awards under the
Prior Plans remain outstanding in accordance with their respective terms and the
terms of the Prior Plans. Although the types of Awards authorized under the
EICP are generally similar to those under the Prior Plans, the Board determined
to recommend to the stockholders adoption of the entirely new EICP in order to
respond to a number of changes and proposed changes under the Exchange Act and
Internal Revenue Code, to broaden the types of performance goals that may be set
by the Committee and
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otherwise to add flexibility to annual incentive awards and other performance-
based awards intended to qualify for certain corporate tax deductions, to
increase the number of shares of Common Stock that may be subject to awards, and
otherwise to adopt provisions intended to enable the Committee better to promote
the goals and policies of the Company's annual and stock-based long-term
incentive programs.
Under the EICP, the total of 7,500,000 shares of Common Stock are reserved and
available for delivery to participants in connection with Awards, plus any
shares of Common Stock remaining available under the Prior Plans and other
shares of Common Stock that may later become available under the Prior Plans,
plus 7% of the number of shares of Common Stock issued by the Company during the
term of the EICP (other than issuances under any compensation or benefit plan of
the Company).
The determination of the types of Awards to be granted at any time, the
criteria for such grants, the recipients of Awards and the various conditions
thereof, are all in the discretion of the Committee.
EXECUTIVE OFFICER COMPENSATION:
The Company's Fiscal 1996 and current total compensation program for executive
officers consists of both cash and stock-based compensation. The annual cash
compensation consists of a base salary determined at the beginning of each
calendar year and the awarding of incentive bonuses pursuant to the EICP, as
described below. The base salaries are fixed at levels that the Committee
believes to be generally below amounts paid to highly qualified senior
executives at other large companies engaged in the same or similar business as
the Company. Salaries are reviewed on an annual basis and may be increased at
that time based on (i) the Committee's consensus that the individual's
contribution to the Company has increased and (ii) increases in competitive pay
levels.
In general, annual cash compensation incentives for executives are intended to
reflect the Company's belief that management's contribution to stockholder
return comes from maximizing earnings. Under the current incentive compensation
program under the EICP (which parallels the prior Incentive Compensation Plan),
a bonus (calculated as a percentage of base salary) is paid to participants for
each year in which the Company achieves, in audited fiscal year-end results, at
least 75% of its profit plan. Each participant in this incentive compensation
program is in one of six bonus categories (30%, 40%, 50%, 60%, 75% or 100% of
base salary), and his proportionate share of the annual bonus depends upon the
profit percentage achieved by the Company. Participants in this incentive
compensation program are selected and assigned to bonus categories by the
Committee, and all of the Company's executive officers are participants.
Long-term incentives are currently intended to be provided through the grant
of stock options and contingent stock awards. Under the EICP, the Committee has
the authority to determine the individuals to whom stock options are granted,
the terms on which option grants are made, and the term of and the number of
shares subject to each option. Through the grant of stock options, the
objective of aligning executive officers' long-range interests with those of the
stockholders are met by providing the executive officers with the opportunity to
build a meaningful stake in the Company.
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<PAGE>
In granting stock options to the Company's senior management, the Committee
reviews and considers the individual awards, taking into account the respective
scope of accountability, strategic and operational goals, and anticipated
performance requirements and contributions of each option grantee.
Under the current stock incentive program under the EICP (which parallels the
prior Stock Incentive Plan), the Committee has the authority to award shares of
Common Stock to all executive officers and senior managers of the Company. In
making such awards, the Committee considers all of the factors discussed, and
follows the procedure described, in the previous paragraph.
Stock awards under the prior Stock Incentive Plan and the stock incentive
program under the EICP are generally contingent upon completion of four
additional years of employment with the Company. The market value as of the
award grant date of the shares credited to an executive's contingent award
account for any fiscal year may not exceed 100% of the executive's bonus for the
same year under the incentive compensation program discussed above. No shares
are issued or reserved for the executive's account at the time of an award, but
are instead issued after the fourth anniversary of the award grant date,
provided the executive is still an employee of the Company.
Executive officers may also participate in the Company's Retirement Savings
Plan, a 401(k) plan, which includes both employer and employee contributions.
In addition, the Company has an unfunded deferred compensation program that
provides payments to key executive employees selected by the Board of Directors
who reach normal retirement age. The amount of the benefit provided each
executive is at the discretion of the Board. See "EXECUTIVE COMPENSATION -
Supplemental Executive Retirement Plan."
CHIEF EXECUTIVE OFFICER COMPENSATION:
The key performance measure used to determine Mr. Schoen's Fiscal 1996
compensation package was the Committee's assessment of his ability and
dedication to provide the leadership and vision necessary to enhance the long-
term value of the Company.
Pursuant to the terms of his employment agreement with the Company (see
"EXECUTIVE COMPENSATION - Employment Agreements"), which was approved by the
Board of Directors, Mr. Schoen's annual salary is $400,000, subject to cost of
living increases by the Board of Directors. The Committee believes that Mr.
Schoen's salary is fixed at a level which is below the amounts paid to other
chief executive officers with comparable qualifications, experience,
responsibilities and proven results at other large companies engaged in the same
or similar business.
Consistent with the Company's executive compensation philosophy, Mr. Schoen's
total compensation package depends largely on annual and long-term incentive
compensation. The annual incentive component is currently made up of a cash
bonus under the incentive compensation program under the EICP, paid after the
end of the fiscal year and based on the profitability of the Company. The long-
term incentive component currently takes the form of stock options and
contingent stock awards under the EICP. Mr. Schoen will also be eligible to
receive other Awards under the EICP. Both the annual and long-term components
of Mr. Schoen's incentive
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<PAGE>
compensation are variable and closely tied to corporate performance in a manner
which encourages dedication to building profitability and stockholder value.
In evaluating the performance and setting the incentive compensation of Mr.
Schoen as the Company's Chief Executive Officer, the Committee has taken
particular note of the substantial increase in the Company's stockholder value
over a number of years in general and specifically from Fiscal 1995 to Fiscal
1996.
The Company substantially out-performed both the Standard & Poor's 500 Stock
Index and the S&P Health Care Sector Index in stockholder value growth (see
"EXECUTIVE COMPENSATION - Stock Price Performance Graph"). Among the key
indicators of the Company's performance in Fiscal 1996, net patient service
revenue increased 34% from $531,094,000 in Fiscal 1995 to $714,317,000 in Fiscal
1996, and net income increased 33% from $63,331,000 in Fiscal 1995 to
$84,086,000 in Fiscal 1996. Earnings per share increased 29% from $.59 in
Fiscal 1995 to $.76 in Fiscal 1996. During Fiscal 1996 the Company's stock
price increased 74%. In addition, the Company has paid five 3-for-2 stock
splits in the form of stock dividends since April 1992, including the stock
dividend paid on June 14, 1996.
In addition to leading the Company to outstanding financial achievements, Mr.
Schoen has established a strong record in the areas of innovation, quality and
management efficiency, and has built a strong management team and aggressively
pursued new areas for growth. For example, he developed the Company's industry
niche and its successful acquisition strategy.
Mr. Schoen's short-term and long-term incentive compensation package for
Fiscal 1996 includes a cash bonus in an amount equal to 100% of his annual
salary, a contingent stock award in an amount equal to his cash bonus, and the
grant of options to purchase 300,000 shares of Common Stock. Mr. Schoen's
compensation package has successfully focused on the importance of increasing
profitability and stockholder value by providing him with significant short-term
and long-term incentive compensation during periods when performance objectives
have been met or exceeded.
COMPENSATION COMMITTEE:
Robert A. Knox, Chairman
Kent P. Dauten
Kenneth D. Lewis
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<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph sets forth a comparison of the cumulative total
stockholder return on the Common Stock during the five-year period ended
September 30, 1996, based on the market price thereof and taking into account
all stock splits in the form of stock dividends paid through Fiscal 1996, with
the cumulative total return of companies on the Standard & Poor's 500 Stock
Index and companies on the S&P Health Care Sector Index (formerly called the S&P
Health Care Composite Index).
COMPARISON OF CUMULATIVE TOTAL RETURN
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG HMA, S&P 500 INDEX AND S&P HEALTH CARE SECTOR INDEX
<CAPTION>
Measurement period HMA S&P 500 S&P HEALTH CARE
(Fiscal year Covered) Index SECTOR INDEX
- --------------------- --------- --------- ---------------
<S> <C> <C> <C>
Measurement PT -
09/30/91 $ 100 $ 100 $ 100
FYE 09/30/92 $ 108.87 $ 111.05 $ 95.85
FYE 09/30/93 $ 191.74 $ 125.49 $ 82.58
FYE 09/30/94 $ 268.10 $ 130.11 $ 99.79
FYE 09/30/95 $ 349.78 $ 168.82 $ 143.09
FYE 09/30/96 $ 612.44 $ 203.14 $ 187.41
</TABLE>
ASSUMES $100 INVESTED ON SEPTEMBER 30, 1991 IN THE COMPANY'S COMMON STOCK, THE
COMPANIES COMPRISING THE STANDARD & POOR'S 500 STOCK INDEX AND THE COMPANIES
CURRENTLY COMPRISING THE S&P HEALTH CARE SECTOR INDEX. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS.
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted in the graph above.
The Company will neither make nor endorse any predictions as to future stock
performance.
The Stock Price Performance Graph above shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act or the Exchange Act, except
to the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under either such Act.
CERTAIN TRANSACTIONS
Pursuant to a Registration Agreement dated as of September 2, 1988,
Prudential Equity Investors, Inc. (with which Robert A. Knox, a director of the
Company, was formerly affiliated), Mr. Knox, and certain of the Company's
executive officers (William J. Schoen, Earl P. Holland, Robb L. Smith and
Stephen M. Ray), and two former executive officers (Kelly E. Curry and T.
Jefferson Jones) have certain demand registration rights and "piggyback"
registration rights, at the Company's expense, with respect to registration
under the Securities Act of all of their shares of Common Stock.
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<PAGE>
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Company's Fifth Restated Certificate of Incorporation currently authorizes
the issuance of an aggregate of 150,000,000 shares of Common Stock, par value
$.01 per share, and 5,000,000 shares of Preferred Stock, par value $.01 per
share. On December 10, 1996 the Board of Directors approved and adopted,
subject to approval and adoption by the stockholders, a Certificate of Amendment
to the Fifth Restated Certificate of Incorporation (the "Amendment"), which
increases the number of authorized shares of Common Stock to an aggregate of
300,000,000 shares. The authorized Preferred Stock would not be changed by the
Amendment, nor would any other change to the Fifth Restated Certificate of
Incorporation result from the Amendment.
If approved and adopted by the stockholders at the Meeting, the Amendment will
become effective upon the filing thereof by the Delaware Department of State. A
filing is anticipated to occur within 30 days following the Meeting.
The Board of Directors has considered in the past and will continue to
consider various means of broadening the ownership of the Common Stock and
enhancing its marketability, including the payment of stock dividends and stock
splits. The Company has paid five 3-for-2 stock splits in the form of stock
dividends since April 1992, including the stock dividend paid on June 14, 1996.
The Board has also considered and will continue to consider the possibility of
acquiring hospital facilities through the issuance of Common Stock, and the
advisability of increasing stock ownership and meeting part of the Company's
future capital requirements through additional public offerings of Common Stock.
Any such future action is, of course, subject to the Company's earnings and
financial condition as well as market conditions and other factors that the
Board deems relevant. Finally, the Board believes that stock-based executive
compensation provides incentives to management that are in the best interests of
the stockholders and the Board desires to continue such compensation, through
the EICP or otherwise.
The Company currently has outstanding approximately 106,500,000 shares of
Common Stock and no shares of Preferred Stock. In addition, approximately
15,500,000 shares of Common Stock are currently reserved for issuance as stock
incentives under the EICP and under outstanding options and stock awards under
the Prior Plans. Accordingly, no more than approximately 28,000,000 shares of
Common Stock are currently available for issuance for other purposes. By way of
example, if the Board of Directors were to determine at any time in the future
that the payment of another 3-for-2 stock split in the form of a stock dividend
were in the best interests of the Company's stockholders, the Company would not
have sufficient authorized but unissued shares with which to pay such a
dividend.
Aside from the Board's ongoing consideration of a stock dividend or stock
split, management's ongoing evaluation of acquisition possibilities and the
Board's belief in the efficacy of stock-based executive compensation, the Board
has no present plans, agreements or understandings, pending or under discussion
for the issuance of any shares of Common Stock except for the shares reserved
for issuance as stock incentives described above. However, the Board of
Directors considers that in the prudent operation of the Company, it is
desirable to have sufficient authorized
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<PAGE>
but unissued shares of Common Stock available to allow the Company to take
prompt advantage of market or other conditions in connection with possible
financings or acquisitions, for stock dividends or distributions, for grants of
options and other stock rights, and for other proper corporate purposes deemed
necessary or advisable by the Board of Directors. The Board of Directors also
believes that the availability of additional shares of Common Stock for such
purposes without delay or the necessity for a special meeting of stockholders
(except as may be required by applicable law or regulatory authorities or by the
rules of any stock exchange on which the Company's stock is listed) will be
beneficial to the Company by providing it with the flexibility required to
consider and respond to future business opportunities and needs as they arise.
The Amendment, if approved and adopted by the stockholders, would result in
over approximately 178,000,000 shares of Common Stock authorized but uncommitted
and available for future use by action of the Board of Directors. None of these
shares would be subject to any preemptive rights. While the Board does not
believe that the increased capitalization would adversely affect the rights of
existing stockholders, the future issuance of shares of Common Stock might serve
to dilute the interest of existing stockholders and may be issued at a time and
under circumstances that may increase or decrease the earnings per share, and
increase or decrease the book value per share, of shares currently outstanding.
BOARD RECOMMENDATION
Delaware law requires that the Amendment be approved and adopted by the
affirmative vote of at least a majority of the outstanding shares of Common
Stock.
The Board of Directors recommends a vote in favor of the proposal to approve
and adopt a Certificate of Amendment to the Fifth Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock to an
aggregate of 300,000,000 shares. The persons named in the enclosed proxy
(unless otherwise instructed therein) will vote such proxies FOR this proposal.
SELECTION OF INDEPENDENT AUDITORS
The firm of Ernst & Young LLP, Certified Public Accountants, served as the
independent auditors of the Company for Fiscal 1996, and the Board of Directors
has selected Ernst & Young LLP as the Company's independent auditors for the
fiscal year ending September 30, 1997. This selection will be presented to the
stockholders for their approval at the Meeting. The Board of Directors
recommends a vote in favor of the proposal to approve and ratify this selection,
and the persons named in the enclosed proxy (unless otherwise instructed
therein) will vote such proxies FOR such proposal. If the stockholders do not
approve this selection, the Board of Directors will reconsider its choice.
The Company has been advised by Ernst & Young LLP that a representative will
be present at the Meeting and will be available to respond to appropriate
questions. In addition, the Company intends to give such representative an
opportunity to make any statements if he should so desire.
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<PAGE>
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
In order for any stockholder proposal to be included in the Company's proxy
statement to be issued in connection with the 1998 Annual Meeting of
Stockholders, such proposal must be received by the Company no later than
September 1, 1997.
OTHER MATTERS
The Board of Directors does not know of any other matters that are to be
presented for action at the Meeting. Should any other matter come before the
Meeting, however, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies with respect to such matter in
accordance with their judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
Robb L. Smith,
Secretary
Dated: December 30, 1996
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PROXY
HEALTH MANAGEMENT ASSOCIATES, INC.
The undersigned hereby appoints William J. Schoen and Robb L. Smith, and each
and any of them, proxies for the undersigned with full power of substitution, to
vote all shares of the Common Stock of Health Management Associates, Inc. (the
"Company") owned by the undersigned at the Annual Meeting of Stockholders to be
held at the Philharmonic Center for the Arts, Daniels Pavilion, 5833 Pelican Bay
Blvd., Naples, Florida 34108, on Tuesday, February 18, 1997 at 1:30 p.m., local
time, and at any adjournments thereof:
1. Election of Directors.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary). for all nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME LISTED BELOW.
William J. Schoen Kent P. Dauten Robert A. Knox
Charles R. Lees Kenneth D. Lewis William E. Mayberry, M.D.
2. Proposal to approve and adopt a Certificate of Amendment to the Fifth
Restated Certificate of Incorporation of the Company to increase the number
of authorized shares of Common Stock, par value $.01 per share, to an
aggregate of 300,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve and ratify the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending September 30, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(Continued and to be signed, on reverse side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
This Proxy will be voted as specified by the undersigned. This proxy revokes
any prior proxy given by the undersigned. Unless authority to vote for one or
more of the nominees is specifically withheld according to the instructions, a
signed Proxy will be voted FOR the election of the six named nominees for
directors and, unless otherwise specified, FOR each of the other two proposals
listed herein and described in the accompanying Proxy Statement. The
undersigned acknowledges receipt with this Proxy of a copy of the Notice of
Annual Meeting and Proxy Statement dated December 30, 1996, describing more
fully the proposals set forth herein.
Dated: _______________________, 1997
___________________________________
___________________________________
Signature(s) of stockholder(s)
Please date and sign name exactly as it
appears hereon. Executors, administrators,
trustees, etc. should so indicate when
signing. If the stockholder is a corporation,
the full corporate name should be inserted and
the proxy signed by an officer of the
corporation, indicating his title.
