<PAGE>
As filed with the Securities and Exchange Commission on January 16, 2001
Registration No. 333-48820
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------
AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
Health Management Associates, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 61-0963645
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
5811 Pelican Bay Boulevard, Suite 500
Naples, Florida 34108-2710
(941) 598-3131
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Principal Executive Offices)
Joseph V. Vumbacco
Chief Executive Officer
Health Management Associates, Inc.
5811 Pelican Bay Boulevard, Suite 500
Naples, Florida 34108-2710
(941) 598-3131
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies to:
Craig S. Wittlin, Esq.
HARTER, SECREST & EMERY LLP
700 Midtown Tower
Rochester, New York 14604-2070
(716) 232-6500
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Amount
Title Of Each Class Of To Be Proposed Maximum Proposed Maximum Amount of
Securities To Be Registered Registered Offering Price Per Security Aggregate Offering Price Registration Fee
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Convertible Senior
Subordinated
Debentures due
2020(1)................ $488,750,000(1) $700.00(2)(3) $342,125,000(2)(3) $90,321
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Class A Common Stock,
$.01 par value......... 14,448,574(4) -- -- --(5)
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</TABLE>
(1) Represents the aggregate principal amount at maturity of debentures that
were originally issued by the registrant in August 2000.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of Regulation C of the Securities Act, based upon
the average PORTAL bid and asked prices for the securities on October 24,
2000.
(3) Excludes accrued interest and distributions, if any.
(4) Represents the number of shares of class A common stock that are currently
issuable upon conversion of the debentures. The number of shares of class A
common stock that may be issued upon conversion of the debentures in the
future is indeterminate, and the Registrant is also registering this
indeterminate amount pursuant to Rule 416 under the Securities Act.
(5) No separate consideration will be received for class A common stock
issuable upon conversion of the debentures; therefore, no registration fee
is required pursuant to Rule 457(i).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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--------------------------------------------------------------------------------
<PAGE>
Dated January 16, 2001
Prospectus
$488,750,000
Health Management Associates, Inc.
Convertible Senior Subordinated Debentures due 2020 and Class A Common Stock
Issuable Upon Conversion of the Debentures
We issued the debentures at an issue price of $588.66 per debenture (58.866%
of the principal amount at maturity) in a private placement in August 2000.
This prospectus will be used by selling securityholders to resell their
debentures and the class A common stock issuable upon conversion of their
debentures.
The debentures will mature on August 16, 2020. Interest on the debentures at
the rate of 0.25% per year on the principal amount at maturity is payable
semiannually in arrears on August 16 and February 16 of each year, beginning
February 16, 2001. The rate of cash interest and accrual of original issue
discount represent a yield to maturity of 3.00% per year calculated from August
16, 2000.
The debentures are convertible at any time on or before the maturity date
into 29.5623 shares of our class A common stock per debenture. The conversion
rate may be adjusted for various reasons, but will not be adjusted for accrued
original issue discount or accrued cash interest.
Holders may require us to purchase all or a portion of their debentures on
August 16, 2003, August 16, 2008 and August 16, 2013 for a purchase price per
debenture of $635.88, $724.58 and $827.53, respectively, plus accrued and
unpaid cash interest to each purchase date. We may choose to pay the purchase
price in cash or class A common stock or a combination of cash and class A
common stock. In addition, upon a change of control occurring on or before
August 16, 2003, each holder may require us to repurchase all or a portion of
such holder's debentures. HMA may redeem all or a portion of the debentures at
any time on or after August 16, 2003.
Our class A common stock currently trades on the New York Stock Exchange
under the symbol "HMA". The last reported sale price of the class A common
stock on the New York Stock Exchange was $17 3/4 per share on January 12, 2001.
----------------
The securities offered hereby involve risks. See "Risk Factors" beginning on
page 8.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORS HAVE APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
FORWARD-LOOKING STATEMENTS................................................. 2
WHERE YOU CAN FIND MORE INFORMATION........................................ 3
PROSPECTUS SUMMARY......................................................... 4
SUMMARY OF THE DEBENTURES.................................................. 6
RISK FACTORS............................................................... 8
RATIO OF EARNINGS TO FIXED CHARGES......................................... 11
USE OF PROCEEDS............................................................ 11
DIVIDEND POLICY............................................................ 11
DESCRIPTION OF DEBENTURES.................................................. 12
REGISTRATION RIGHTS........................................................ 26
DESCRIPTION OF CAPITAL STOCK............................................... 27
FEDERAL INCOME TAX CONSIDERATIONS.......................................... 27
SELLING SECURITYHOLDERS.................................................... 30
PLAN OF DISTRIBUTION....................................................... 35
LEGAL MATTERS.............................................................. 37
EXPERTS.................................................................... 37
</TABLE>
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to
provide you with different information. If anyone provides you with different
or inconsistent information, you should not rely on it. We are not making an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information appearing in this
prospectus is accurate only as of the date on the front cover of this
prospectus. Our business, financial condition, results of operations and
prospects may have changed since that date.
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended.
Forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause our actual results, performance, achievements
or industry results to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among other things, the following:
. possible changes in the levels and terms of reimbursement for our
charges by government programs, including Medicare or Medicaid or other
third-party payors;
. existing laws and government regulations and changes in or failure to
comply with laws and governmental regulations;
. our ability to successfully integrate recent and future acquisitions;
. competition;
. demographic changes;
. technological and pharmaceutical improvements that increase the cost of
providing, or reduce the demand for, our services;
. the ability to attract and retain qualified personnel, including
physicians; and
. our ability to finance growth on favorable terms.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, given these uncertainties, you are cautioned not to
place undue reliance on our forward-looking statements.
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<PAGE>
Except as required by law, we disclaim any obligation to update any such
factors or to publicly announce the results of any revisions to any of the
forward-looking statements contained in this prospectus in order to reflect
future events or developments.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
internet at the SEC's web site at "http://www.sec.gov". You may also read and
copy any document we file at the SEC's public reference room located at 450
Fifth Street, N.W., Washington, DC 20549, as well as at the regional offices of
the SEC located at 7 World Trade Center, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms and
their copy charges.
Our class A common stock is listed on the New York Stock Exchange under the
symbol "HMA". You may also inspect the information we file with the SEC at the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
We are "incorporating by reference" specified documents that we file with
the SEC, which means:
. incorporated documents are considered part of this prospectus;
. we are disclosing important information to you by referring you to those
documents; and
. information that we file in the future with the SEC will automatically
update and supersede this prospectus.
We incorporate by reference the documents listed below and any documents
that we file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, after the date of this prospectus:
The documents that we are incorporating by reference are:
. Our current report on Form 8-K filed on January 5, 2001;
. Our Definitive Proxy Statement filed on December 27, 2000;
. Our Annual Report on Form 10-K for the fiscal year ended September 30,
2000.
You may also request a copy of these filings (excluding exhibits), at no
cost, by telephoning our Executive Vice President-Finance at (941)598-3131 or
writing to him at the following address:
Health Management Associates, Inc.
5811 Pelican Bay Boulevard, Suite 500
Naples, Florida 34108-2710
Attention: Executive Vice President-Finance
3
<PAGE>
PROSPECTUS SUMMARY
The following summary highlights selected information appearing elsewhere in
this prospectus. Because this is a summary, it may not contain all the
information that may be important to you. You should read this entire
prospectus, including the information incorporated by reference, before making
an investment decision. When used in this prospectus, the terms "we," "our,"
and "us" refer to HMA and its subsidiaries and not to the initial purchasers of
the debentures.
Health Management Associates, Inc.
We own and operate general acute care hospitals and psychiatric hospitals in
non-urban communities. Presently, we operate 37 hospitals, consisting of 34
acute care hospitals with a total of 4,904 licensed beds and three psychiatric
hospitals with a total of 186 licensed beds. Our facilities are located in
Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, North Carolina,
Oklahoma, Pennsylvania, South Carolina and West Virginia. See "Recent
Acquisitions" below. For our fiscal year ended September 30, 2000, our general
acute care hospitals contributed approximately 96% of our consolidated net
patient service revenues.
Services provided by our hospitals include general surgery, internal
medicine, obstetrics, emergency room care, radiology, oncology, diagnostic
care, coronary care, pediatric services, behavioral health services and
psychiatric care and, in several of our hospitals, specialized services such as
open-heart surgery and neurosurgery. Our facilities benefit from shared
services, such as purchasing, information services, finance and control
systems, facilities planning, physician recruitment services, administrative
personnel management, marketing and public relations.
Strategy and Description of Business
Our business strategy is to efficiently and profitably operate our existing
hospitals, acquire additional hospitals in non-urban communities and provide
high quality healthcare.
Existing Hospitals
For our existing hospitals, we seek to increase our patient revenue by
increasing admissions and outpatient business by providing outstanding
healthcare. These hospitals are administered and directed on a local basis by
each hospital's executive director. A key element of our strategy is the
establishment and maintenance of cooperative relationships with our physicians.
We maintain a physician recruitment program which is designed to attract and
retain qualified specialists and other physicians in conjunction with our
existing physicians and community needs, and in order to broaden the services
offered by our hospitals. We also pursue various clinical means to increase the
utilization of our services, particularly emergency and outpatient services.
These include our "Nurse First" emergency service program, which provides for a
registered nurse to quickly assess the condition of patients upon arrival in
our emergency rooms, our "Pro Med" program, an emergency room clinical pathway
support service, "Med Key", a plastic identification and patient information
card which streamlines the registration process, and "One Call Scheduling", a
dedicated phone system which physicians and their staff can use to schedule
various diagnostic tests and services at one time.
Acquisitions
For acquisitions, we generally seek to acquire acute care hospitals in
market areas of 40,000 to 300,000 people in the southeastern and southwestern
United States. Typically, the acute care hospitals we acquire are, or can
become, the provider of choice for healthcare services in their market areas.
When we evaluate potential
4
<PAGE>
acquisitions, we require that a hospital's market service area have a
demonstrated need for the hospital, along with an established physician base
which can benefit from our ability to attract additional, qualified physicians
to the area.
Many of the hospitals we acquire are under-performing at the time of
acquisition. Upon acquiring a hospital, and following a thorough review of
current administrative leadership and retention where appropriate, among other
things, we employ a well-qualified executive director and controller, implement
a proprietary management information system, recruit physicians, establish
additional quality assessment and efficiency measures, introduce volume
purchasing under company-wide agreements, and spend the necessary capital to
renovate the facility and upgrade equipment. We strive to provide at least 90%
of the acute care needs of each community our hospitals serve as well as reduce
the out-migration of potential patients to hospitals in larger urban areas.
We manage each acquired hospital to improve the services it provides in an
efficient manner. We have generally been successful in achieving a significant
improvement in the operating performance of our facilities within a reasonable
time period. Once a facility has matured, we generally achieve additional
growth through the continued growth of existing physicians' practices and the
recruitment of existing physicians, expansion of healthcare services offered to
the community and favorable demographic trends.
Quality Healthcare
We continually seek to improve the quality of the healthcare services we
deliver through our company-wide proprietary QSM patient quality management
program. In addition, in 2000, our hospitals that were surveyed by the Joint
Commission on Accreditation of Healthcare Organizations averaged a score of
92.35, which was above the industry average. Furthermore, in 2000 one of our
hospitals was awarded Top 100 Hospital status by HCIA-Sachs, Inc., an
independent rater of hospitals, and one additional hospital was cited as a Top
100 Hospital for the care of stroke patients.
Recent Acquisitions
We proactively identify acquisition targets in addition to responding to
requests for proposals from entities that are seeking to sell or lease hospital
facilities. As a result, we may enter into agreements to acquire additional
hospital facilities from time to time. At any given time we are actively
involved in negotiations concerning possible acquisitions. Our recent
acquisitions include the following:
. On July 1, 2000, we acquired the assets of St. Joseph's Hospital, a 268
bed general acute care facility located in Lancaster, Pennsylvania with
approximately $68,000,000 in patient service revenues in 1999. The
aggregate cost for this acquisition was approximately $61,500,000.
. On September 1, 2000, we acquired the assets of Pasco Community
Hospital, a 120 bed general acute care facility located in Dade City,
Florida. The aggregate cost for this acquisition was approximately
$15,500,000.
. On October 1, 2000, we acquired the assets of Davis Medical Center, a
149 bed general acute care facility located in Statesville, North
Carolina. The aggregate cost for this acquisition was approximately
$50,000,000.
Principal Executive Offices
Our principal executive offices are located at 5811 Pelican Bay Boulevard,
Suite 500, Naples, Florida 34108-2710. Our telephone number is (941) 598-3131.
5
<PAGE>
SUMMARY OF THE DEBENTURES
The following is a brief summary of some of the terms of the debentures. For
a more complete description of the terms of the debentures, see "Description of
Debentures."
Debentures.................. $488,750,000 aggregate principal amount at
maturity of Convertible Senior Subordinated
Debentures due 2020. Each debenture was
originally issued at a price of $588.66 per
debenture and in a principal amount at maturity
of $1,000.
Maturity.................... August 16, 2020.
Cash interest............... 0.25% per year on the principal amount at
maturity, payable semiannually in arrears in cash
on August 16 and February 16 of each year,
beginning February 16, 2001.
Yield to maturity of 3.00% per year (computed on a semiannual bond
debentures................. equivalent basis) calculated from August 16,
2000.
Conversion rights........... Holders may convert the debentures at any time.
For each debenture converted, we will deliver
29.5623 shares of our class A common stock. The
conversion rate may be adjusted for various
reasons, but will not be adjusted for accrued
original issue discount, cash interest or
interest payable upon the occurrence of a tax
event. Upon conversion, the holder will not
receive any cash payment representing accrued
original issue discount or any accrued interest;
such accrued original issue discount and accrued
cash interest will be deemed paid by the shares
of class A common stock received by the holder on
conversion.
Ranking..................... The debentures are unsecured and subordinated in
right of payment to our existing and future
senior indebtedness, and senior to any future
junior subordinated indebtedness.
Original issue discount..... Each debenture was offered at an original issue
discount for United States federal income tax
purposes equal to the principal amount at
maturity of the debenture less the issue price to
investors. You should be aware that as original
issue discount accrues you must include it in
your gross income for United States federal
income tax purposes.
Sinking fund................ None.
Optional redemption......... We may redeem all or a portion of the debentures
for cash at any time, on or after August 16,
2003, at redemption prices equal to the issue
price of the debentures plus accrued original
issue discount and accrued cash interest to the
date of redemption.
Purchase by HMA at the
option of the holder....... Holders may require us to purchase their
debentures on any of the following dates at the
following prices, plus accrued cash interest to
the purchase date:
6
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. On August 16, 2003 at a price of $635.88
per debenture;
. On August 16, 2008 at a price of $724.58
per debenture; and
. On August 16, 2013 at a price of $827.53
per debenture.
We may choose to pay the purchase price in cash
or shares of class A common stock or a
combination of cash and shares of class A common
stock.
Change in control........... Upon a change in control of HMA occurring on or
before August 16, 2003, each holder may require
us to repurchase all or a portion of such
holder's debentures at a price equal to the issue
price of such debentures plus accrued original
issue discount and accrued cash interest to the
date of repurchase. If a change in control
occurs, we cannot assure you that we will have
sufficient funds to pay the change in control
purchase price if you exercise your right to
require us to purchase your debentures. The term
"change in control" is defined in the
"Description of Debentures--Change In Control
Permits Purchase of Debentures at the Option of
the Holder" section of this prospectus.
Optional conversion to
semiannual coupon From and after the occurrence of a tax event, at
debenture upon tax event... our option, interest in lieu of future original
issue discount and regular cash interest will
accrue on each debenture from the option exercise
date at 3.00% per year on the restated principal
amount and will be payable semiannually on each
interest payment date. Any such interest in lieu
of original issue discount and any regular cash
interest will be computed in the same manner and
payable at the same time as the regular cash
interest and will accrue from the most recent
date to which interest has been paid or, if no
interest has been paid, the option exercise date.
In such event, the redemption price, purchase
price and change in control purchase price will
be adjusted as described in this prospectus.
However, there will be no changes in the holders'
conversion rights.
Use of proceeds............. The selling securityholders will receive all of
the proceeds from the sale of the debentures and
class A common stock under this prospectus. We
will not receive any of the proceeds from the
sale by any selling securityholder of the
debentures or the underlying class A common
stock.
Trading..................... The debentures and class A common stock sold
using this prospectus will no longer be eligible
for trading in the PORTAL market.
Class A common stock........
As of December 15, 2000, there were 243,573,264
shares of our class A common stock issued and
outstanding (excluding shares available for
issuance under our stock option and incentive
plans and shares subject to outstanding options).
Our class A common stock is traded on the New
York Stock Exchange under the symbol "HMA". See
"Description of Capital Stock."
7
<PAGE>
RISK FACTORS
This prospectus contains forward-looking statements that involve a number of
risks and uncertainties inherent in the purchase of the debentures or our class
A common stock. You should be aware that such statements are projections or
estimates as to future events, which may or may not occur.
In addition to the other information in this prospectus, you should
carefully consider the following risk factors before deciding whether an
investment in our securities is suitable for you. If any of the adverse events
contemplated by these risk factors actually occur, our business, financial
condition and results of operations could be materially adversely affected. The
risks and uncertainties described below are not the only ones we face, and
additional risks and uncertainties may also impair our business operations.
If government programs or managed care companies reduce the payments we receive
as reimbursement for our services, our revenues may decline.
We derive a substantial portion of our net revenues from third-party payors,
including the Medicare and Medicaid programs. Changes in government
reimbursement programs have resulted in limitations on the growth rates of the
reimbursement programs and, in some cases, in reduced levels of reimbursement
for healthcare services, and additional changes are anticipated. The Balanced
Budget Act of 1997, which established a plan to balance the federal budget by
fiscal year 2002, includes significant reductions in spending levels for the
Medicare and Medicaid programs, including:
. changes in reimbursement for hospital services; and
. repeal of the federal payment standard (often referred to as the "Boren
Amendment") for hospitals and nursing facilities, which could result in
lower Medicaid reimbursement rates.
The Balanced Budget Refinement Act of 1999 is expected to reduce the adverse
effects of the Balanced Budget Act of 1997 through a "corridor reimbursement
approach," where a percentage of losses under the Medicare outpatient
prospective payment system will be reimbursed through December 31, 2003. All of
our acute care hospitals qualify for relief under this provision.
In addition to changes in government reimbursement programs, private payors,
including managed care payors, increasingly are demanding discounted fee
structures or the assumption by healthcare providers of all or a portion of the
financial risk through prepaid capitation arrangements. We are not currently,
and do not expect to become, party to any capitation arrangements.
We expect that efforts to impose reduced reimbursements, greater discounts
and more stringent cost controls by government and other payors could continue.
We believe that additional reductions in the payments we receive for our
services could reduce our overall revenues.
If we fail to comply with extensive laws and government regulations, we could
suffer penalties or be required to make significant changes to our operations.
The healthcare industry is required to comply with many laws and regulations
at the federal, state and local government levels. These laws and regulations
require that hospitals meet various requirements, including those relating to
the adequacy of medical care, billing for services, equipment, personnel,
operating policies and procedures, maintenance of adequate records, compliance
with building codes, and environmental protection. If we fail to comply with
applicable laws and regulations, we could suffer civil and criminal penalties,
including the loss of our licenses to operate and our ability to participate in
Medicare, Medicaid, and other federal and state healthcare programs.
8
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We are subject to uncertainties regarding healthcare reform.
In recent years, an increasing number of legislative initiatives have been
introduced or proposed in Congress and in state legislatures that would effect
major changes in the healthcare system, either nationally or at the state
level. Among the proposals that have been introduced are price controls on
hospitals, insurance market reforms to increase the availability of group
health insurance to small businesses, requirements that all businesses offer
health insurance coverage to their employees and the creation of a government
health insurance plan or plans that would cover all citizens and increase
payments by beneficiaries. We cannot predict whether any of the above proposals
or any other proposals will be adopted, and if adopted, no assurance can be
given that the implementation of such reforms will not have a material adverse
effect on our business.
Providers in the hospital industry have been the subject of federal and state
investigations, and we may become subject to such investigations in the future.
Significant media and public attention has recently been focused on the
hospital industry due to ongoing investigations related to certain referral,
cost reporting and billing practices, laboratory and home healthcare services
and physician ownership and joint ventures involving hospitals. Both federal
and state government agencies have announced heightened and coordinated civil
and criminal enforcement efforts. In addition, the office of the Inspector
General of the United States Department of Health and Human Services and the
United States Department of Justice have from time to time established
enforcement initiatives that focus on specific billing practices or other
suspected areas of abuse. Recent initiatives include a focus on hospital
billing practices.
Although we monitor our billing practices and hospital practices to maintain
compliance with prevailing industry interpretations of applicable law and
believe that our current practices are consistent with current industry
practices, government investigations or interpretations inconsistent with
industry practices could occur. In public statements, governmental authorities
have taken positions on issues for which little official interpretation had
been available previously, such as the legality of physician ownership in
healthcare facilities in which they perform services and the propriety of
including marketing costs in the Medicare cost report of hospital affiliated
home health agencies. Some of these positions appear to be inconsistent with
practices that have been common within the industry and which have not
previously been challenged in this manner. Moreover, some government
investigations that have in the past been conducted under the civil provisions
of federal law are now being conducted as criminal investigations under the
Medicare fraud and abuse laws. We cannot predict whether we or other hospital
operators will be the subject of future investigations or inquiries.
Our growth strategy depends on acquisitions, and we may not be able to continue
to acquire hospitals that meet our target criteria. We may also have
difficulties acquiring hospitals from non-profit entities due to regulatory
scrutiny.
A key element of our growth strategy is expansion through the acquisition of
acute care hospitals in attractive non-urban markets. We face competition for
acquisitions primarily from other for-profit healthcare companies as well as
from not-for-profit entities. Some of our competitors could have greater
resources than we do. In general, we cannot assure you that we will be able to
acquire hospitals that meet our target criteria on satisfactory terms, if at
all, nor can we offer guarantees as to the number of acquisitions we will make
during a period of time.
Hospital acquisitions generally require a longer period to complete than
acquisitions in many other businesses and are subject to additional regulatory
uncertainty. In recent years, the legislatures and attorneys general of some
states have shown a heightened level of interest in transactions involving the
sale of hospitals by not-for-profit entities. Although the level of interest
varies from state to state, the trend is to provide for increased governmental
review, and in some cases approval, of a transaction in which not-for-profit
entities sell a healthcare facility. Although we have not yet been adversely
affected as a result of these trends, such increased scrutiny may increase the
difficulty or prevent the completion of transactions with not-for-profit
organizations in certain states in the future.
9
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Other hospitals provide comparable services, which may raise the level of
competition faced by our hospitals.
In some of the geographical areas in which we operate, there are other
hospitals which provide services comparable to those offered by our hospitals,
some of which are owned by governmental agencies and supported by tax revenues,
and others of which are owned by not-for-profit corporations and may be
supported to a large extent by endowments and charitable contributions. Such
support is not available to our hospitals. Certain of our competitors may have
greater resources than we do, are better equipped than we are and could offer a
broader range of services than we do. Outpatient treatment and diagnostic
facilities, outpatient surgical centers and freestanding ambulatory surgical
centers also affect the healthcare marketplace. In recent years, competition
among healthcare providers for patients has intensified as hospital occupancy
rates in the United States have declined due to, among other things, regulatory
and technological changes, increasing use of managed care payment systems, cost
containment pressures and a shift toward outpatient treatment. There can be no
assurance that our hospitals will continue to be able to compete effectively in
attracting patients under these changing circumstances.
Our success depends upon our ability to recruit and retain physicians at our
hospitals.
In most instances, physicians are not employees of our hospitals. As members
of the medical staffs of our hospitals, they may also serve on the medical
staffs of hospitals not owned by us. Such physicians may terminate their
affiliation with our hospitals at any time. Our future success will depend, in
part, on the ability of our hospitals to continue to attract and retain quality
physicians. There can be no assurance that our hospitals will continue to be
able, on terms favorable to us, to attract physicians to their staffs.
Additionally, it could be difficult to attract an adequate number of
physicians to practice in certain of the communities in which our hospitals are
located, and the loss of physicians in these communities, or inability to
recruit physicians to these communities, could make it more difficult to
attract patients to our hospitals and could affect our profitability. The
operations of our hospitals also may be affected by a shortage of nurses and
other healthcare professionals.
Our use of debt financing to fund acquisitions will increase our leverage and
we cannot be certain that additional financing will be available when needed.
The degree to which we are leveraged could adversely affect our ability to
obtain future financing and could make us more vulnerable to competitive
pressures. Our ability to meet our debt obligations will be dependent upon our
future performance, which will be subject to financial, business and other
factors affecting our operations, many of which are beyond our control.
Additionally, we require substantial capital resources to fund our
acquisitions. The operations of our existing hospitals require ongoing capital
expenditures for renovation, expansion and the addition of medical equipment
and technology utilized in the hospitals.
Furthermore, we may need to incur additional indebtedness and may issue,
from time to time, debt or equity securities to fund acquisitions or capital
expenditures. We cannot assure you that sufficient financing will be available
to us on satisfactory terms or that our level of indebtedness may not restrict
our ability to borrow additional funds.
Fluctuations in the market price of our class A common stock may affect the
price of the debentures.
Because the debentures are convertible into shares of our class A common
stock, fluctuations in the market price of class A common stock may affect the
price of the debentures. The market prices for our class A common stock and for
securities of other companies engaged primarily in healthcare services are
subject to wide fluctuations. For example, the sale prices of our class A
common stock, as reported by the New York
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<PAGE>
Stock Exchange, fluctuated between $18 1/2 per share and $22 5/16 per share in
the quarter that ended December 31, 2000, between 12 3/4 per share and 21 1/8
per share in the quarter that ended September 30, 2000, between $11 1/4 per
share and $16 9/16 per share during the quarter that ended June 30, 2000, and
between $10 1/2 per share and $17 13/16 per share in the quarter ended March
31, 2000. The market price of our class A common stock may continue to
fluctuate due to a variety of factors, including:
. future issuances of class A common stock;
. material public announcements;
. regulatory approvals or regulatory issues;
. political developments or proposed legislation in the healthcare
industry;
. period to period fluctuations in our financial results; and
. market trends relating to our industry.
Absence of existing active public market for the debentures.
Upon their original issuance, the debentures became eligible for trading on
the PORTAL Market. The debentures sold pursuant to this prospectus, however,
will no longer be eligible for trading on the PORTAL Market and we do not
intend to apply for listing of the debentures on any securities exchange or
quotation system. We can not assure you that any active trading market for the
debentures will develop or as to the liquidity or sustainability of any such
market which does develop, the ability of the holders to sell their debentures
or the price at which holders of the debentures will be able to sell their
debentures. Future trading prices of the debentures will depend on many
factors, including, among other things, prevailing interest rates, our
operating results, the price of our class A common stock and the market for
similar securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
each of the fiscal years ended September 30, 1995, 1996, 1997, 1998, 1999 and
2000.
<TABLE>
<CAPTION>
Fiscal Year Ended
September 30,
------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Consolidated ratio of earnings to fixed
charges.......................................... 7.7 11.7 15.5 16.1 13.2
</TABLE>
The ratio of earnings to fixed charges was computed by dividing the sum of
earnings before income taxes and fixed charges by fixed charges. Fixed charges
consist of interest expense, amortization of deferred financing costs,
amortization of debt premium/discount, and a portion of operating lease rental
expense which management believes to be representative of the interest factor.
The completion of the ratio has not been audited for any of the periods
indicated.
USE OF PROCEEDS
All of the debentures and the underlying class A common stock issuable upon
conversion of the debentures are being sold under this prospectus by the
selling securityholders or by their pledgees, donees, transferors or other
successors in interest. We will not receive any proceeds from the sale by any
selling securityholder of the debentures or class A common stock.
DIVIDEND POLICY
We have historically not paid cash dividends on our capital stock and we do
not anticipate paying cash dividends on our class A common stock in the
foreseeable future.
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<PAGE>
DESCRIPTION OF DEBENTURES
The Convertible Senior Subordinated Debentures due 2020 were issued under an
indenture dated as of August 16, 2000 between us and First Union National Bank,
as trustee. The following summaries of certain provisions of the debentures and
the indenture do not purport to be complete and are subject to, and are
qualified in their entirety by reference to all of the provisions of the
debentures and the indenture. Wherever particular provisions of the indenture
(or of the form of debenture which is a part of the indenture) are referred to,
such provisions are incorporated by reference in this prospectus. The form of
each of the indenture and the debenture are contained as or in exhibits to the
registration statement of which this prospectus is a part. As used in this
description, references to "we," "us," "our," or "HMA" do not include any
current or future subsidiary of HMA.
General
The debentures are unsecured obligations of ours limited to $488,750,000
aggregate principal amount at maturity. The debentures will mature on August
16, 2020. The principal amount at maturity of each debenture is $1,000 and will
be payable at the office of the paying agent, which presently is the trustee,
or an office or agency maintained by us for such purpose, in New York, New
York.
The debentures were originally offered at a substantial discount from their
principal amount at maturity. See "Federal Income Tax Considerations--Original
Issue Discount." The debentures will accrue original issue discount while they
remain outstanding. Original issue discount is the difference between the issue
price and the principal amount at maturity of a debenture. The calculation of
the accrual of original issue discount will be on a semiannual bond equivalent
basis using a 360-day year composed of twelve 30-day months. Original issue
discount will begin to accrue on August 16, 2000, the initial issue date of the
debentures. The debentures will also bear cash interest at the rate of 0.25%
per year on the principal amount at maturity from the issue date, or from the
most recent date to which interest has been paid or provided for, until the
debentures are paid in full or funds are made available for payment in full in
accordance with the indenture. Cash interest will be payable at maturity (or
earlier date of purchase, redemption or, in certain circumstances, conversion)
and semiannually in arrears on August 16 and February 16 of each year,
commencing on February 16, 2001, to holders of record at the close of business
on the August 1 or February 1 (whether or not a business day) immediately
preceding such interest payment date. Each payment of cash interest on the
debentures will include interest accrued through the day before the applicable
interest payment date or the date of maturity (or earlier purchase, redemption
or, in certain circumstances, conversion), as the case may be. Any payment
required to be made on any day that is not a business day will be made on the
next succeeding business day. In the event of the maturity, conversion,
purchase by HMA at the option of a holder or redemption of a debenture,
original issue discount and cash interest will cease to accrue on such
debenture under the terms of and subject to the conditions in the indenture. We
may not reissue a debenture that has matured or been converted, purchased by us
at the option of a holder, redeemed or otherwise cancelled (except for
registration of transfer, exchange or replacement thereof).
Debentures may be presented for conversion at the office of the conversion
agent and for exchange or registration of transfer at the office of the
registrar. Each such agent is presently the trustee. We will not charge a
service charge for any registration of transfer or exchange of debentures.
Book-Entry Form
The debentures were originally issued in the form of a global security held
in book-entry form. DTC or its nominee is the sole registered holder of the
debentures for all purposes under the indenture. Owners of beneficial interests
in the debentures represented by the global security hold such interests
pursuant to the procedures and practices of DTC. As a result, owners of
beneficial interests must exercise any rights in respect of their interests,
including any right to convert or require repurchase of their interests, in
accordance with the procedures and practices of DTC. Beneficial owners are not
holders and are not be entitled to any rights under the global security or the
indenture provided to the holders of the debentures. HMA and the trustee, and
any of their respective agents, may treat DTC as the sole holder and registered
owner of the global security.
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<PAGE>
Certificated debentures may be issued in exchange for beneficial interests
in debentures represented by a global debenture only in the limited
circumstances set forth in the indenture.
Absence of Existing Active Public Market.
Upon their original issuance, the debentures became eligible for trading on
The PORTAL Market. The debentures sold pursuant to this prospectus, however,
will no longer be eligible for trading on The PORTAL Market and we do not
intend to apply for listing of the debentures on any securities exchange or
quotation system. We can not assure you that an active trading market for the
debentures will develop or as to the liquidity or sustainability of any such
market, the ability of the holders to sell their debentures or the price at
which holders of the debentures will be able to sell their debentures. Future
trading prices of the debentures will depend on many factors, including, among
other things, prevailing interest rates, our operating results, the price of
our class A common stock and the market for similar securities.
Conversion Rights
A holder may convert a debenture, in integral multiples of $1,000 principal
amount at maturity, into shares of class A common stock at any time before the
close of business on August 16, 2020. However, a holder may convert a debenture
into the shares of our class A common stock up to and including, but not after,
the close of business on the business day immediately preceding the date of
redemption if we call the debenture for redemption. A debenture for which a
holder has delivered a purchase notice or a change in control purchase notice
requiring us to purchase that debenture may be converted only if such notice is
withdrawn in the manner and by the time provided in the indenture.
The initial conversion rate for the debentures is 29.5623 shares of class A
common stock per $1,000 principal amount at maturity, subject to adjustment
upon the occurrence of various events described below. We will pay cash in lieu
of any fractional share in an amount equal to the value of such fractional
share based on the Sale Price (as defined below) on the trading day immediately
preceding the conversion date.
To convert a debenture, a holder must:
. complete and manually sign the conversion notice on the back of the
debenture (or complete and manually sign a facsimile of such notice) and
deliver such notice to the conversion agent (initially the trustee) at
the office maintained by the conversion agent for such purpose;
. surrender the debenture to the conversion agent;
. if required, furnish appropriate endorsements and transfer documents;
and
. if required, pay all transfer or similar taxes.
Pursuant to the indenture, the date on which all of the foregoing
requirements have been satisfied is the conversion date.
Upon conversion of a debenture, a holder will not receive any cash payment
representing accrued original issue discount or, except as described below,
accrued cash interest. Our delivery to the holder of the fixed number of shares
of class A common stock into which the debenture is convertible, together with
any cash payment in lieu of any fractional shares, will be deemed to satisfy
our obligation to pay:
. the principal amount at maturity of the debenture; and
. the accrued original issue discount and accrued cash interest
attributable to the period from the issue date to the conversion date.
As a result, accrued original issue discount and accrued cash interest will
be deemed to be paid in full rather than canceled, extinguished or forfeited.
Notwithstanding the foregoing, accrued but unpaid cash interest will be payable
upon any conversion of debentures at the option of the holder made concurrently
with or after
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<PAGE>
acceleration of the debentures following an event of default described under
"--Events of Default; Notice and Waiver" below. Debentures surrendered for
conversion during the period from the close of business on any regular record
date next preceding any interest payment date to the opening of business on the
interest payment date must be accompanied by payment in an amount equal to the
interest thereon that the registered holder is to receive. We will not require
the payment to us as described in the preceding sentence if, during such
period, a conversion occurs on or after the date that we have issued a
redemption notice and prior to the date of redemption. Except where debentures
surrendered for conversion must be accompanied by payment as described above,
no interest on converted debentures will be payable by us on any interest
payment date subsequent to the date of conversion.
The conversion rate will not be adjusted at any time during the term of the
debentures for accrued original issue discount or accrued cash interest. A
certificate for the number of full shares of class A common stock into which
any debenture is converted, together with cash in lieu of any fractional
shares, will be delivered through the conversion agent as soon as practicable,
but in any event no later than the seventh business day following the
conversion date. For a discussion of the United States federal income tax
treatment of a holder receiving class A common stock upon conversion, see
"Federal Income Tax Considerations--Disposition or Conversion of Debentures."
If we exercise our option to have interest in lieu of original issue
discount accrue on a debenture following a tax event, the holder will be
entitled on conversion to receive the same number of shares of class A common
stock that such holder would have received if we had not exercised our option.
See "--Optional Conversion to Semiannual Coupon Debenture Upon Tax Event"
below.
The conversion rate is subject to adjustment in certain events, including:
. the issuance of shares of class A common stock or other capital stock as
a dividend or a distribution with respect to class A common stock;
. subdivisions, combinations and reclassification of class A common stock;
. the issuance to all holders of class A common stock of rights or
warrants entitling them for a period not exceeding 45 days to subscribe
for shares of class A common stock at less than the then Market Price
(as defined below) of the class A common stock;
. the distribution to all holders of class A common stock of evidences of
indebtedness of HMA, securities or capital stock, cash or assets
(including securities, but excluding those rights, warrants, dividends
and distributions referred to above and dividends and distributions paid
exclusively in cash);
. the payment of dividends and other distributions on class A common stock
paid exclusively in cash, excluding cash dividends if the annualized per
share amount thereof does not exceed 10% of the Market Price of class A
common stock on the trading day immediately preceding the date of
declaration of such dividend or other distribution; and
. payment to holders of class A common stock in respect of a tender or
exchange offer (other than a odd-lot offer) by HMA or any of our
subsidiaries for class A common stock at a price in excess of 110% of
the then Market Price of class A common stock on the trading day next
succeeding the last date tenders or exchanges may be made pursuant to
such tender or exchange offer.
However, no adjustment need be made if holders may participate in the
transactions otherwise giving rise to an adjustment on a basis and with notice
that our board of directors determines to be fair and appropriate, or in
certain other cases. In cases where the fair market value of the portion of
assets, debt securities or rights, warrants or options to purchase securities
of HMA applicable to one share of class A common stock distributed to
stockholders equals or exceeds the average quoted price per share of class A
common stock, or such average quoted price exceeds such fair market value of
such portion of assets, debt, securities or rights, warrants or options so
distributed by less than $1.00, rather than being entitled to an adjustment in
the conversion rate, the
14
<PAGE>
holder of a debenture will be entitled to receive upon conversion thereof, in
addition to the shares of class A common stock into which such debenture is
convertible, the kind and amounts of assets, debt securities or rights, options
or warrants comprising the distribution that such holder would have received if
such holder had converted such debenture immediately prior to the record date
for determining the stockholders entitled to receive the distribution. The
indenture permits us to increase the conversion rate from time to time.
In the event that we are a party to any transaction, pursuant to which the
class A common stock is converted into the right to receive other securities,
cash or other property, including, without limitation, and with certain
exceptions:
. recapitalization or reclassification of the class A common stock,
. any consolidation of HMA with, or merger of HMA into any other person,
or any merger of another person into HMA,
. any sale, transfer or lease of all or substantially all of the assets of
HMA, or
. any compulsory share exchange,
then the holders of debentures then outstanding shall have the right to convert
the debentures into the kind and amount of securities, cash or other property
receivable upon the consummation of such transaction by a holder of the number
of shares of class A common stock issuable upon conversion of such debentures
immediately prior to such transaction.
In the event that we are a party to such a transaction as described above,
each debenture would become convertible into the securities, cash or property
receivable by a holder of the number of shares of the class A common stock into
which such debenture was convertible immediately prior to such transaction.
This change could substantially lessen or eliminate the value of the conversion
privilege associated with the debentures in the future. For example, if we were
acquired in a cash merger, each debenture would become convertible solely into
cash and would no longer be convertible into securities whose value would vary
depending on our future prospects and other factors.
In the event of a taxable distribution to holders of class A common stock
which results in an adjustment of the conversion rate (or in which holders
otherwise participate) or in the event the conversion rate is increased at our
discretion, the holders of the debentures may, in certain circumstances be
deemed to have received a distribution subject to United States federal income
tax as a dividend. See "Federal Income Tax Considerations--Adjustment of
Conversion Price."
Redemption of Debentures at the Option of HMA
No sinking fund is provided for the debentures. Prior to August 16, 2003,
the debentures will not be redeemable at our option. On and after that date, we
may redeem the debentures for cash as a whole at any time, or from time to time
in part, at the redemption prices set forth below plus accrued cash interest to
the redemption date. Any such redemption must be in integral multiples of
$1,000 principal amount at maturity. We will give not less than 30 days nor
more than 60 days notice of redemption by mail to holders of debentures.
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<PAGE>
The table below shows redemption prices of a debenture per $1,000 principal
amount at maturity on August 16, 2003, at each August 16 thereafter prior to
maturity, and at maturity on August 16, 2020. These prices reflect the accrued
original issue discount calculated to each such date. The redemption price of a
debenture redeemed between such dates would include an additional amount
reflecting the additional original issue discount accrued since the next
preceding date in the table to the redemption date.
<TABLE>
<CAPTION>
(1) (2) (3)
Debenture Accrued Original Redemption
Redemption Date Issue Price Issue Discount Price (1)+(2)
--------------- ----------- ---------------- -------------
<S> <C> <C> <C>
August 16, 2003 ................ $588.66 $47.22 $ 635.88
August 16, 2004 ................ 588.66 63.92 652.58
August 16, 2005 ................ 588.66 81.12 669.78
August 16, 2006 ................ 588.66 98.85 687.51
August 16, 2007 ................ 588.66 117.11 705.77
August 16, 2008 ................ 588.66 135.92 724.58
August 16, 2009 ................ 588.66 155.31 743.97
August 16, 2010 ................ 588.66 175.27 763.93
August 16, 2011 ................ 588.66 195.84 784.50
August 16, 2012 ................ 588.66 217.04 805.70
August 16, 2013 ................ 588.66 238.87 827.53
August 16, 2014 ................ 588.66 261.36 850.02
August 16, 2015 ................ 588.66 284.54 873.20
August 16, 2016 ................ 588.66 308.41 897.07
August 16, 2017 ................ 588.66 333.00 921.66
August 16, 2018 ................ 588.66 358.34 947.00
August 16, 2019 ................ 588.66 384.45 973.11
At maturity..................... 588.66 411.34 1,000.00
</TABLE>
If converted to semiannual coupon debentures following the occurrence of a
tax event, the debentures will be redeemable at the restated principal amount
plus accrued and unpaid interest from the date of such conversion to the
redemption date. However, in no event may the debentures be redeemed prior to
August 16, 2003. See "--Optional Conversion to Semiannual Coupon Debenture Upon
Tax Event" below.
If less than all of the outstanding debentures are to be redeemed, the
trustee shall select the debentures to be redeemed in principal amounts at
maturity of $1,000 or integral multiples of $1,000 by lot, pro rata or by
another method the trustee considers fair and appropriate. If a portion of a
holder's debentures is selected for partial redemption and such holder converts
a portion of such debentures prior to such redemption, such converted portion
will be deemed, solely for purposes of determining the aggregate principal
amount at maturity of the debentures to be redeemed by us, to be of the portion
selected for redemption.
Purchase of Debentures by HMA at the Option of the Holder
On August 16, 2003, August 16, 2008 and August, 16, 2013, we will, at the
option of the holder, be required to purchase, at the purchase prices set forth
below plus accrued cash interest to the purchase date, any outstanding
debenture for which a written purchase notice has been properly delivered by
the holder and not withdrawn, subject to certain additional conditions. Holders
may submit their debentures for purchase to the paying agent at any time from
the opening of business on the date that is 20 business days before such
purchase date until the close of business on such purchase date.
The purchase price of a debenture will be:
. $635.88 per debenture on August 16, 2003;
. $724.58 per debenture on August 16, 2008; and
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<PAGE>
. $827.53 per debenture on August 16, 2013.
These purchase prices equal the issue price plus accrued original issue
discount to the applicable purchase date.
We may, at our option, elect to pay the purchase price in cash or shares of
class A common stock, or any combination thereof. For a summary of the United
States federal income tax treatment of a holder receiving cash, class A common
stock or any combination thereof, see "Federal Income Tax Considerations--
Disposition or Conversion of Debentures."
If prior to a purchase date the debentures have been converted to semiannual
coupon debentures following the occurrence of a tax event, the purchase price
will be equal to the restated principal amount plus accrued and unpaid cash
interest from the date of the conversion to, but excluding, the purchase date.
See "--Optional Conversion to Semiannual Coupon Debenture Upon Tax Event"
below.
We will give notice on a date not less than 20 business days prior to each
purchase date to all holders at their addresses shown in the register of the
registrar, and to beneficial owners as required by applicable law, stating
among other things:
. whether we will pay the purchase price of the debentures in cash or
class A common stock or any combination thereof, specifying the
percentages of each;
. if we elect to pay in shares of class A common stock, in whole or in
part, the method of calculating the Market Price (as defined below) of
the class A common stock; and
. the procedures that holders must follow to require us to purchase their
debentures.
The purchase notice given by any holder requiring us to purchase debentures
will state:
. the certificate numbers of the debentures to be delivered by such holder
for purchase;
. the portion of the principal amount at maturity of debentures to be
purchased, which portion must be $1,000 or an integral multiple thereof;
. that the debentures are to be purchased by us pursuant to the applicable
provisions of the indenture and the debentures; and
. if we elect, pursuant to the notice we are required to give, to pay a
specified percentage of the purchase price in shares of class A common
stock but such specified percentage is ultimately to be paid to the
holder in cash because any of the conditions to payment of such
specified percentage of the purchase price in shares of class A common
stock is not satisfied prior to the close of business on the purchase
date, as described below, whether the holder elects (i) to withdraw the
purchase notice as to some or all of the debentures to which it relates
(stating the principal amount at maturity and certificate numbers of the
debentures as to which such withdrawal relates), or (ii) to receive cash
in respect to the purchase price of all debentures subject to such
purchase notice.
If the holder fails to indicate its choice with respect to the election
described in the final bullet point above, the holder will be deemed to have
elected to receive cash for the specific percentage of the purchase price that
was to have been payable in shares of class A common stock. See "Federal Income
Tax Considerations--Disposition or Conversion of Debentures."
Any purchase notice may be withdrawn by the holder by a written notice of
withdrawal delivered to the paying agent prior to the close of business on the
purchase date. The notice of withdrawal must state the principal amount at
maturity and the certificate numbers of the debentures as to which the
withdrawal notice relates and any principal amount at maturity which remains
subject to the purchase notice.
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<PAGE>
If we elect to pay the purchase price, in whole or in part, in shares of
class A common stock, the number of shares of class A common stock to be
delivered by us shall be equal to the portion of the purchase price to be paid
in class A common stock divided by the Market Price of a share of class A
common stock. Instead of any fractional shares otherwise deliverable as part of
the purchase price, we will pay cash based on the Market Price for such
fractional shares of class A common stock. See "Federal Income Tax
Considerations--Disposition or Conversion of Debentures."
The "Market Price" means the average of the Sale Prices of the class A
common stock for the five trading day period ending on (if the third business
day prior to the applicable purchase date is a trading day, or if not, then on
the last trading day prior to) the third business day prior to the applicable
purchase date, appropriately adjusted to take into account the occurrence,
during the period commencing on the first of such trading days during such five
trading day period and ending on such purchase date (or other date in question,
for purpose of adjusting the conversion rate), of certain events that would
result in an adjustment of the conversion rate.
The "Sale Price" of the class A common stock on any date means the closing
per share sale price (or, if no closing sale price is reported, the average of
the bid and ask prices or, if more than one in either case, the average of the
average bid and average ask prices) on such date as reported in the composite
transactions for the principal United States securities exchange on which the
class A common stock is traded or, if the class A common stock is not listed on
a United States national or regional securities exchange, as reported by the
Nasdaq Stock Market.
A "trading day" means each day on which the securities exchange or quotation
system which is used to determine the Sale Price is open for trading or
quotation. Because the Market Price of the class A common stock is determined
prior to the applicable purchase date, holders of debentures bear the market
risk with respect to the value of the class A common stock to be received from
the date such Market Price is determined to such purchase date. We may pay the
purchase price, or any portion of the purchase price, in class A common stock
only if the information necessary to calculate the Market Price is reported in
The Wall Street Journal or another daily newspaper of national circulation.
Upon determination of the actual number of shares of class A common stock
issuable in accordance with the foregoing provisions, we will publish such
information in The Wall Street Journal or another daily newspaper of national
circulation.
Our right to purchase debentures, in whole or in part, with shares of class
A common stock is subject to our satisfying various conditions, including:
. the registration of the class A common stock under the Securities Act
and the Exchange Act, if required; and
. any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such
qualification and registration.
If such conditions are not satisfied with respect to a holder prior to the
close of business on the purchase date, we will pay the purchase price of the
debentures in cash. We may not change the form of consideration (or components
or percentages of components thereof) to be paid for debentures once we have
given the notice we are required to give to holders of debentures, except as
described in the preceding sentence.
In connection with any purchase offer, we will:
. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then be applicable;
and
. file Schedule TO or any other required schedule under the Exchange Act.
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<PAGE>
Payment of the purchase price for a debenture for which a purchase notice
has been delivered and not validly withdrawn is conditioned upon delivery of
the debenture, together with necessary endorsements, to the paying agent, at
any time after delivery of such purchase notice. Payment of the purchase price
for the debenture will be made promptly following the later of the purchase
date and the time of delivery of the debenture.
If the paying agent holds money or securities sufficient to pay the purchase
price of the debenture on the business day following the purchase date in
accordance with the terms of the indenture, then, immediately after the
purchase date, such debenture will cease to be outstanding and cash interest
and original issue discount on such debenture will cease to accrue and will be
deemed paid, whether or not such debenture is delivered to the paying agent,
and all other rights of the holder shall terminate, other than the right to
receive the purchase price upon delivery of the debenture.
No debentures may be purchased for cash at the option of the holders if
there has occurred and is continuing an event of default with respect to the
debentures other than a default in the payment of the purchase price with
respect to such debentures. If we become obligated to purchase any outstanding
debenture on a purchase date, there can be no assurance that we would have
sufficient funds to pay the purchase price on that purchase date (in which
case, we could be required to issue shares of class A common stock to pay the
purchase price at valuations based on then prevailing market prices) for all of
the debentures tendered. Our then existing senior indebtedness or borrowing
agreements may provide that the maturing of any obligation to purchase the
debentures, or the occurrence of an event that would give rise to the
obligation to purchase the debentures, would constitute an event of default
thereunder, and such agreements and/or the subordination of the debentures to
such senior indebtedness, may restrict or prohibit the repurchase of the
debentures. See "--Subordination to Senior Indebtedness" below.
Change In Control Permits Purchase of Debentures at the Option of the Holder
In the event of any change in control of HMA occurring on or prior to August
16, 2003, each holder will have the right, at the holder's option, subject to
the terms and conditions of the indenture, to require us to purchase all or any
portion of the holder's debentures. However, debentures submitted for purchase
by a holder must be in principal amounts at maturity of $1,000 or an integral
multiple of $1,000.
We will be required to purchase the debentures as of the date that is 35
business days after the occurrence of such change in control (a "change in
control purchase date") at a cash price equal to the issue price plus accrued
original issue discount and accrued cash interest to the change in control
purchase date.
If prior to a change in control purchase date the debentures have been
converted to semiannual coupon debentures following the occurrence of a tax
event, we will be required to purchase the debentures at a cash price equal to
the restated principal amount plus accrued and unpaid interest from the date of
the conversion to, but excluding, the change in control purchase date.
Within 15 business days after the occurrence of a change in control, we are
obligated to mail to the trustee and to all holders of debentures at their
addresses shown in the register of the registrar and to beneficial owners as
required by applicable law a notice regarding the change in control, which
notice shall state, among other things:
. the events causing a change in control;
. the date of such change in control;
. the last date on which the purchase right may be exercised;
. the change in control purchase price;
. the change in control purchase date;
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. the name and address of the paying agent and the conversion agent;
. the conversion rate and any adjustments to the conversion rate;
. that the debentures with respect to which a change in control purchase
notice is given by the holder may be converted only if the change in
control purchase notice has been withdrawn in accordance with the terms
of the indenture; and
. the procedures that holders must follow to exercise these rights.
We will cause a copy of such notice to be published in The Wall Street
Journal or another daily newspaper of national circulation.
To exercise this right, the holder must deliver a written notice to the
paying agent prior to the close of business on the change in control purchase
date. The required purchase notice upon a change in control shall state:
. the certificate number of the debentures to be delivered by the holder;
. the portion of the principal amount at maturity to be purchased, which
portion must be $1,000 or an integral multiple of $1,000; and
. that we are to purchase such debentures pursuant to the applicable
provisions of the indenture and the debentures.
Any change in control purchase notice may be withdrawn by the holder by a
written notice of withdrawal delivered to the paying agent prior to the close
of business on the change in control purchase date.
The notice of withdrawal shall state:
. the principal amount at maturity being withdrawn;
. the certificate numbers of the debentures being withdrawn; and
. the principal amount at maturity, if any, of the debentures that remain
subject to a change in control purchase notice.
Payment of the change in control purchase price for a debenture for which a
change in control purchase notice has been delivered and not validly withdrawn
is conditioned upon delivery of the debenture, together with necessary
endorsements, to the paying agent at any time after the delivery of such change
in control purchase notice. Payment of the change in control purchase price for
such debenture will be made promptly following the later of the change in
control purchase date or the time of delivery of such debenture.
If the paying agent holds money or securities sufficient to pay the change
in control purchase price of the debenture on the business day following the
change in control purchase date in accordance with the terms of indenture,
then, immediately after the change in control purchase date, such debenture
will cease to be outstanding and cash interest and original issue discount on
such debenture will cease to accrue and will be deemed paid, whether or not
such debenture is delivered to the paying agent, and all other rights of the
holder shall terminate, other than the right to receive the change in control
purchase price upon delivery of the debenture.
Under the indenture, a "change in control" of HMA is deemed to have occurred
at such time as:
. any person, including its affiliates and associates, files a Schedule
13D or TO (or any successor schedule, form or report under the Exchange
Act) disclosing that such person has become the beneficial owner of 50%
or more of the total voting power in the aggregate of all classes of our
capital stock then outstanding normally entitled to vote in elections of
directors; or
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. there shall be consummated any consolidation or merger of HMA pursuant
to which the class A common stock would be converted into cash,
securities or other property, in each case other than a consolidation or
merger of HMA in which (i) the holders of all classes of common stock of
HMA immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the total voting power in the
aggregate of all classes of capital stock of the continuing or surviving
corporation normally entitled to vote in elections of directors
immediately after the consolidation or merger, and (ii) the shares of
class A common stock shall be converted into common stock which is (or,
upon consummation of or immediately following such consolidation or
merger, will be) listed on a United States national securities exchange
or approved for quotation on the Nasdaq National Market or any similar
United States system for automated dissemination of quotations of
securities prices.
In connection with any purchase offer in the event of a change in control,
we will:
. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then be applicable;
and
. file Schedule TO or any other required schedule under the Exchange Act.
The change in control purchase feature of the debentures may in certain
circumstances make more difficult or discourage a takeover of HMA. The change
in control purchase feature is not, however, the result of our knowledge of any
specific effort to accumulate shares of our class A common stock or to obtain
control of HMA by means of a merger, tender offer, solicitation or otherwise,
or part of a plan by management to adopt a series of anti-takeover provisions.
Instead, the change in control purchase feature is a standard term contained
in offerings of securities comparable to the debentures that have been marketed
by Donaldson, Lufkin & Jennette Securities Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Banc of America Securities LLC, the initial
purchasers of the debentures. The terms of the change in control purchase
feature resulted from negotiations between the initial purchasers and us.
We could, in the future, enter into certain transactions, including certain
recapitalizations, that would not constitute a change in control with respect
to the change in control purchase feature of the debentures but that would
increase the amount of our outstanding indebtedness.
No debentures may be purchased at the option of holders upon a change in
control if there has occurred and is continuing an event of default with
respect to the debentures, other than a default in the payment of the change in
control purchase price with respect to the debentures. Our then existing senior
indebtedness or borrowing agreements may provide that the maturing of any
obligation to purchase the debentures, or the occurrence of an event that would
give rise to the obligation to purchase the debentures, would constitute an
event of default thereunder and such agreements and/or the subordination of the
debentures to such senior indebtedness, may restrict or prohibit the repurchase
of the debentures. See "--Subordination to Senior Indebtedness" below.
Optional Conversion to Semiannual Coupon Debenture Upon Tax Event
From and after the date of the occurrence of a tax event, we will have the
option to elect to have interest in lieu of future original issue discount and
regular cash interest accrue at 3.00% per year on a principal amount per
debenture (the "restated principal amount") equal to the issue price plus
original issue discount accrued to the date of the tax event or the date on
which we exercise the option described herein, whichever is later (the "option
exercise date"). Such interest shall accrue from the option exercise date and
shall be payable semiannually on each interest payment date to holders of
record at the close of business on the regular record date immediately
preceding such interest payment date. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months and will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the option exercise date.
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A "tax event" means that HMA shall have received an opinion from independent
tax counsel experienced in such matters to the effect that, on or after the
date of this prospectus, as a result of:
. any amendment to, or change (including any announced prospective change)
in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or
. any amendment to, or change in, an interpretation or application
regulations by any legislative body, court, governmental agency or
regulatory authority,
in each case which amendment or change is enacted, promulgated, issued or
announced or which interpretation is issued or announced or which action is
taken, on or after the date of this prospectus, there is more than an
insubstantial risk that interest (including original issue discount) payable on
the debentures either:
. would not be deductible on a current accrual basis, or
. would not be deductible under any other method, in either case in whole
or in part, by us (by reason of deferral, disallowance, or otherwise)
for United States federal income tax purposes.
The Clinton Administration has previously proposed to change the tax law to
defer the deduction of original issue discount on convertible debt instruments
until the issuer pays the interest. Congress has not yet enacted these proposed
changes in the law.
If a similar proposal were ever enacted and made applicable to the
debentures in a manner that would limit our ability to either:
. deduct the interest, including original issue discount, payable on the
debentures on a current accrual basis, or
. deduct the interest, including original issue discount, payable on the
debentures under any other method for United States federal income tax
purposes,
such enactment would result in a tax event and the terms of the debentures
would be subject to modification at our option as described above.
The modification of the terms of debentures by us upon a tax event as
described above could possibly alter the timing of income recognition by
holders of the debentures with respect to the semiannual payments of interest
due on the debentures after the option exercise date. See "Federal Income Tax
Considerations."
Merger and Sales of Assets by HMA
The indenture provides that HMA may not consolidate with or merge into any
other person or convey, transfer or lease its properties and assets
substantially as an entirety to another person, unless among other things, (i)
the resulting, surviving or transferee person (if other than HMA) is organized
and existing under the laws of the United States, any state thereof or the
District of Columbia and such person assumes all of our obligations under the
debentures and the indenture, and (ii) HMA or such successor person shall not
immediately thereafter be in default under the indenture. Upon the assumption
of our obligations by such a person in such circumstances, subject to certain
exceptions, we shall be discharged from all obligations under the debentures
and the indenture. Although such transactions are permitted under the
indenture, certain of the foregoing transactions occurring on or prior to
August 16, 2003 could constitute a change in control of HMA permitting each
holder to require us to purchase its debentures as described above.
Events of Default; Notice and Waiver
The indenture provides that, if an event of default with respect to the
debentures shall have occurred and be continuing, either the trustee or the
holders of not less than 25% in aggregate principal amount at maturity
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of the debentures then outstanding may declare the issue price plus original
issue discount accrued, together with any accrued cash interest (or if the
debentures have been converted to semiannual coupon debentures following a tax
event, the restated principal amount, plus accrued interest) to the date of
such declaration (in the case of an event of default specified in the first six
bullet points of the following paragraph) or to the date of default (in the
case of an event of default specified in the last bullet point of the following
paragraph) on all the debentures to be immediately due and payable. In the case
of certain events of bankruptcy or insolvency, the issue price of the
debentures plus the original issue discount accrued thereon, together with any
accrued cash interest (or if the debentures have been converted to semiannual
coupon debentures following a tax event, the restated principal amount, plus
accrued interest) to the occurrence of such event shall automatically become
and be immediately due and payable. Under certain circumstances, the holders of
a majority in aggregate principal amount at maturity of the outstanding
debentures may rescind any such acceleration with respect to the debentures and
its consequences. Interest shall accrue and be payable on demand upon a default
in the payment of the principal amount at maturity (or, if the debentures have
been converted to semiannual coupon debentures following a tax event, the
restated principal amount), accrued original issue discount, cash interest when
due, redemption price, purchase price, change in control purchase price or
shares of class A common stock (or cash in lieu of fractional shares) to be
delivered on conversion of debentures, in each case to the extent that the
payment of such interest shall be legally enforceable. The accrual of such
interest on overdue amounts shall be in lieu of, and not in addition to, the
continued accrual of original issue discount.
The following will be events of default with respect to the debentures:
. default in payment of the principal amount at maturity (or, if the
debentures have been converted to semiannual coupon debentures following
a tax event, the restated principal amount), accrued original issue
discount, cash interest when due (if such default in payment of interest
shall continue for 30 days), redemption price, purchase price or change
in control purchase price with respect to any debenture, when the same
becomes due and payable;
. our failure to deliver shares of class A common stock (together with
cash in lieu of fractional shares) when such class A common stock (or
cash in lieu of fractional shares) is required to be delivered following
conversion of a debenture and continuance of such default for ten days;
. our failure to comply with any of our other agreements in the debentures
or the indenture upon the receipt by us of notice of such default from
the trustee or from holders of not less than 25% in aggregate principal
amount at maturity of the debentures then outstanding and our failure to
cure such default within 30 days after receipt by us of such notice;
. acceleration of Indebtedness (as defined in the indenture) of HMA or any
Significant Subsidiary (as defined in the indenture) under the terms of
the instruments evidencing such Indebtedness aggregating more than
$25,000,000 at the time outstanding;
. a default in the payment of principal and interest, if any, due at
maturity in respect of any Indebtedness of HMA or any Significant
Subsidiary having an outstanding principal amount of $25,000,000
individually or in the aggregate;
. judgments for the payment of more than $25,000,000 at the time
outstanding rendered against HMA or any Significant Subsidiary and not
discharged within 60 days after such judgment becomes final and non-
appealable; and
. certain events of bankruptcy, insolvency or reorganization with respect
to HMA or any Significant Subsidiary.
The trustee shall, within 90 days after the occurrence of any default, mail
to all holders of the debentures notice of all defaults of which the trustee
shall be aware, unless such defaults shall have been cured or waived before
giving of such notice; provided, that the trustee may withhold such notice as
to any default other than a payment default, if it determines in good faith
that withholding the notice is in the interests of the holders.
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The holders of a majority in aggregate principal amount at maturity of the
outstanding debentures may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee, provided that such direction shall not be in
conflict with any law or the indenture and subject to certain other
limitations. The trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense. No holder of any debenture will have any right to pursue
any remedy with respect to the indenture or the debentures, unless:
. such holder shall have previously given the trustee written notice of a
continuing event of default;
. the holders of at least 25% in aggregate principal amount at maturity of
the outstanding debentures shall have made a written request to the
trustee to pursue such remedy;
. such holder or holders shall have offered to the trustee reasonable
security or indemnity against any loss, liability or expense
satisfactory to it;
. the trustee shall have failed to comply with the request within 60 days
after receipt of such notice, request and offer of security or
indemnity; and
. the holders of a majority in aggregate principal amount at maturity of
the outstanding debentures shall not have given the trustee a direction
inconsistent with such request within 60 days after receipt of such
request.
The right of any holder (i) to receive payment of the principal amount at
maturity (or, if the debentures have been converted to semiannual coupon
debentures following a tax event, the restated principal amount), issue price,
accrued original issue discount, redemption price, purchase price, change in
control purchase price or interest in respect of the debentures held by such
holder on or after the respective due dates expressed in the debentures
(collectively, "Debenture Payments"), (ii) to convert such debentures, or (iii)
to bring suit to enforce any such payment on or after such respective dates or
the right to convert, shall not be impaired or adversely affected without such
holder's consent.
The holders of a majority in aggregate principal amount at maturity of
debentures at the time outstanding may waive any existing default and its
consequences except (i) any default in any payment on the debentures, (ii) any
default with respect to the conversion rights of the debentures, or (iii) any
default in respect of certain covenants or provisions in the indenture which
may not be modified without the consent of the holder of each debenture as
described in "Modification" below.
We are required to furnish to the trustee annually a statement as to any
default by us in the performance and observance of our obligations under the
indenture. In addition, we must file with the trustee written notice of the
occurrence of any default or event of default within five business days of our
becoming aware of such default or event of default.
Subordination to Senior Indebtedness
The indenture provides that the debentures, and the payment from whatever
source of the principal of, and interest and premium (if any) on the
debentures, are expressly made subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness (as defined in the
indenture) of HMA. The Senior Indebtedness includes, but is not limited to,
Senior Indebtedness outstanding pursuant to the terms of that certain Credit
Agreement dated November 30, 1999 by and among HMA, Bank of America, N.A., as
administrative agent, First Union National Bank and The Chase Manhattan Bank,
as syndication agents, and the lenders party thereto, as such agreement may be
amended from time to time.
In the event of bankruptcy, insolvency or reorganization with respect to
HMA, the holders of Senior Indebtedness shall be entitled to receive payment in
full before the holders of the debentures shall be entitled to receive any
Debenture Payments.
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In the event that HMA is in default with respect to any Senior Indebtedness
permitting the holders thereof to accelerate or declare any such Senior
Indebtedness immediately due and payable, then no Debenture Payment or any
judgment with respect thereto shall be made by or on behalf of HMA until such
default has been cured or such Senior Indebtedness has been paid in full. Prior
to the occurrence of an event of default under any document or instrument
evidencing Senior Indebtedness, HMA may make Debenture Payments.
Modification
Modification and amendment of the indenture or the debentures may be
effected by HMA and the trustee with the written consent of the holders of not
less than a majority in aggregate principal amount at maturity of the
debentures then outstanding. However, without the consent of each holder
affected thereby, no amendment may, among other things:
. reduce the principal amount at maturity, restated principal amount,
issue price, purchase price, change in control purchase price or
redemption price with respect to any debenture, or extend the stated
maturity of any debenture or alter the manner or rate of accrual of
original issue discount or cash interest or make any debenture payable
in money or securities other than that stated in the debenture;
. make any reduction in the principal amount at maturity of debentures
whose holders must consent to an amendment or any waiver under the
indenture or modify the indenture provisions relating to such amendments
or waivers;
. make any change that adversely affects the right to convert any
debenture or the right to require us to purchase a debenture; or
. impair the right to institute suit to enforce any payment with respect
to, or conversion of, the debentures.
Without the consent of any holder of debentures, we and the trustee may
amend the indenture to:
. cure any ambiguity, omission, defect or inconsistency, provided,
however, that such amendment does not materially adversely affect the
rights of any holder;
. provide for the assumption by a successor to HMA of our obligations
under the indenture and debentures;
. provide for uncertificated debentures in addition to certificated
debentures, as long as such uncertificated debentures are in registered
form for United States federal income tax purposes;
. make any change that does not materially adversely affect the rights of
any holder of debentures;
. make any change to comply with the Trust Indenture Act of 1939, or to
comply with any requirement of the SEC in connection with the
qualification of the indenture under the Trust Indenture Act of 1939; or
. add to our covenants or obligations under the indenture for the
protection of holders of the debentures or surrender any right, power or
option conferred by the indenture on HMA.
Discharge of the Indenture
We may satisfy and discharge our obligations under the indenture by
delivering to the trustee for cancellation all outstanding debentures or by
depositing with the trustee, the paying agent or the conversion agent, if
applicable, after the debentures have become due and payable, whether at stated
maturity or any redemption date, or any purchase date, or a change in control
purchase date, or upon conversion or otherwise, cash or shares of class A
common stock (as applicable under the terms of the indenture) sufficient to pay
all of the outstanding debentures and by paying all other sums payable under
the indenture by us.
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Limitations of Claims in Bankruptcy
If a bankruptcy proceeding is commenced in respect of HMA, the claim of the
holder of a debenture under Title 11 of the United States Code is limited to
the issue price of the debenture plus that portion of the original issue
discount, together with any cash interest (or, if the debentures have been
converted to semiannual coupon debentures following a tax event, the restated
principal amount, plus interest), that is deemed to have accrued from the date
of issue to the commencement of the proceeding.
Governing Law
The indenture and the debentures will be governed by, and construed in
accordance with, the laws of the State of New York.
Information Concerning the Trustee
The trustee is First Union National Bank. The trustee is a participating
lender bank under our Credit Agreement. Additionally, the trustee provides us
cash management and depository account services and a working capital line of
credit. The trustee is also our stock transfer agent. From time to time, we may
enter into other relationships with the trustee.
Other Relationships
Some of the initial purchasers and selling securityholders, and their
respective affiliates, have engaged in, and may in the future engage in,
investment banking and other commercial dealings in the ordinary course of
business with us. They have received customary fees and commissions for these
transactions. In particular, Bank of America, N.A., an affiliate of Banc of
America Securities LLC, is a lender under, and acts as the agent for, our
revolving credit facility and received a portion of the net proceeds of this
offering. Kenneth D. Lewis, president and chief operating officer of Bank of
America Corporation, an affiliate of Banc of America Securities LLC, is a
member of the board of directors of HMA. Additionally, Merrill Lynch Trust
Company, an affiliate of an initial purchaser and two selling securityholders,
is the third-party administrator of our employee 401(k) plan.
REGISTRATION RIGHTS
We entered into a registration rights agreement with the initial purchasers
of the debentures. If you sell debentures or class A common stock issued upon
conversion of the debentures under this prospectus and the registration
statement of which it is a part, you generally will be required to be named as
a selling securityholder in this prospectus, deliver this prospectus to
purchasers and be bound by applicable provisions of the registration rights
agreement, including some indemnification provisions.
In the registration rights agreement, we agreed to file a registration
statement that includes this prospectus with the SEC by November 14, 2000. We
agreed to use reasonable efforts to cause this registration statement to become
effective as promptly as practicable, but by February 12, 2001. Under the
registration rights agreement, we are obligated to use reasonable efforts to
keep the registration statement effective until the earlier of: (i) two years
from the date on which this registration statement is declared effective by the
SEC; (ii) the date on which all securities offered under this prospectus have
been sold pursuant to this prospectus; and (iii) the date on which all
outstanding securities held by non-affiliates of HMA may be resold without
registration under the Securities Act pursuant to Rule 144(k) under the
Securities Act. We may suspend the use of this prospectus under limited
circumstances, including pending corporate developments or public filings with
the SEC, for a period not to exceed 45 days in any 3-month period and 90 days
in any 12-month period. We also agreed to pay liquidated damages to holders of
debentures and shares of class A common stock issued upon conversion of the
debentures if the registration statement is not timely filed or made effective
or if the prospectus is unavailable for periods in excess of those permitted
above. You should refer to the registration rights agreement for a description
of these liquidated damages. The registration rights agreement is filed as an
exhibit to the registration statement of which this prospectus is a part.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 750,000,000 shares of class A
common stock, $0.01 par value per share, and 5,000,000 shares of preferred
stock, $0.01 par value per share. As of December 15, 2000, 243,573,264 shares
of our class A common stock and no shares of Preferred Stock were issued and
outstanding. As of December 15, 2000, 21,304,000 shares of our class A common
stock were reserved for issuance under outstanding employee and non-employee
director stock options.
Our class A common stock currently trades on the New York Stock Exchange
under the symbol "HMA".
Class A Common Stock
Under our certificate of incorporation and bylaws, holders of our class A
common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of the stockholders, including the election of
directors. A plurality of the votes cast is needed to elect directors. A
majority of votes cast is needed to take any other action, except as otherwise
provided by law. Our board of directors is not classified and common
stockholders do not have cumulative voting rights.
Without the affirmative vote of 70% of the holders of the shares of our
class A common stock, we cannot consolidate or merge with any other entity or
sell, lease, exchange or transfer all, or substantially all, of our assets.
Additionally, subject to preferences that may be applicable to our
preferred stock, the holders of our class A common stock are entitled to
receive dividends, if any, as may be declared by our board of directors out of
legally available funds. In case we are liquidated, dissolved or wound up, the
holders of our class A common stock will be entitled to share ratably in the
net assets legally available for distribution to stockholders after we pay off
all of our liabilities. Holders of our class A common stock have no preemptive
or conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to our class A common stock. The rights,
preferences and privileges of our class A common stock are subject to the
rights of the holders of shares of any series of preferred stock that our
board of directors designate and issue in the future.
Preferred Stock
Under our certificate of incorporation, our board of directors has the
authority, without further action by our stockholders, to authorize and issue
shares of preferred stock in one or more series. Our board of directors may
fix the number of shares as well as the rights, preferences, powers and
restrictions of any series of preferred stock. The preferences, powers, rights
and restrictions of different series of preferred stock may differ. The
issuance of preferred stock could decrease the amount of earnings and assets
available for distribution to holders of class A common stock. Such issuance
may also have the effect of delaying, deferring or preventing a third party
from taking control away from our present management.
Transfer Agent and Registrar
The transfer agent and registrar for our class A common stock is First
Union National Bank, which also serves as Trustee pursuant to the indenture.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of United States federal income tax
considerations relating to the purchase, ownership, disposition, and
conversion of the debentures. Unless otherwise stated, this summary deals only
with debentures held as capital assets (generally, assets held for investment
under the Internal Revenue Code of 1986, as amended (the "Code")) by a holder
who purchase debentures upon original issuance and who is, for United States
federal income tax purposes:
. a citizen or resident of the United States;
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. a corporation created or organized in or under the laws of the United
States or any of its political subdivisions;
. an estate, the net income of which is subject to United States federal
income taxation regardless of its source; or
. a trust, the administration of which is subject to the primary
supervision of a court within the United States and which has one or
more United States persons (as defined in the Code) with authority to
control all substantial decisions.
The tax treatment of a holder of debentures may vary depending on such
holder's particular situation. This summary does not address all of the tax
consequences that may be relevant to holders who may be subject to special tax
rules, such as: persons who are not citizens or residents of the United States;
banks and financial institutions; insurance companies; broker-dealers; tax-
exempt organizations; and persons who hold debentures as part of a hedging,
conversion or constructive sale transaction, straddle or other risk reduction
transaction. In addition, this summary does not address any aspects of state,
local or foreign tax laws.
Furthermore, this discussion does not address the tax consequences
applicable to holders that are treated as partnerships or as other pass-through
entities for United States federal income tax purposes. This summary is based
on the United States federal income tax law in effect as of the date hereof,
which is subject to change, possibly on a retroactive basis. There can be no
assurance that the Internal Revenue Service will not challenge one or more of
the conclusions described herein, and we have not obtained, nor do we intend to
obtain, a ruling from the Internal Revenue Service with respect to the United
States federal income tax consequences of acquiring or holding debentures.
Investors considering the purchase of debentures should consult their tax
advisors as to the particular tax consequences of purchasing, owning, and
disposing of debentures, including the application and effect of United States
federal, state, local, and foreign tax laws.
Tax Opinion
We have received an opinion from our counsel, Harter, Secrest & Emery LLP,
that, subject to the qualifications and assumptions contained therein, the
debentures will be treated as indebtedness for United States federal income tax
purposes.
Cash Interest and Original Issue Discount
The debentures were initially issued at a substantial discount from their
stated principal amount at maturity. For United States federal income tax
purposes, the excess of the stated principal amount at maturity of each
debenture over the issue price (the initial offering price to investors at
which a substantial amount of the debentures are sold) constitutes original
issue discount. In addition to stated cash interest on a debenture, which will
be taxable to a holder as ordinary interest income at the time it accrues or is
paid depending on the holder's method of accounting for United States federal
income tax purposes, holders of debentures will be required to include original
issue discount in income periodically over the term of the debentures before
receipt of the cash or other payment attributable to such income. For United
States federal income tax purposes, each holder of a debenture must generally
include in gross income a portion of the original issue discount in each
taxable year during which the debenture is held in an amount equal to the
original issue discount that accrues on the debenture during such period,
determined by using a constant yield to maturity method. The original issue
discount included in income for each year will be calculated under a
compounding formula that will result in the allocation of less original issue
discount to the earlier years of the term of the debenture and more original
issue discount to later years. Any amount included in income as original issue
discount will increase the holder's tax basis in the debenture.
We intend to treat the possibility of our payment of additional interest in
the event we fail to cause the debentures to be registered under the Securities
Act as remote under applicable Treasury regulations. Accordingly, we will
disregard this possibility in determining the yield to maturity of the
debentures for purposes of calculating original issue discount.
28
<PAGE>
Disposition or Conversion of Debentures
Except as described below, upon the sale or other disposition of a
debenture, a holder will recognize gain or loss equal to the difference between
the amount realized and the holder's income tax basis in the debenture, which
will generally equal the holder's cost of the debenture increased by any
accrued original issue discount includable in such holder's gross income and
reduced by any payments, other than payments of cash interest. Gain or loss
upon a sale or other disposition of a debenture will generally be capital gain
or loss and will be long-term capital gain or loss if the debenture is held for
more than one year.
A holder that receives class A common stock upon conversion of a debenture
will generally not recognize gain or loss (except with respect to shares, if
any, received in respect of accrued cash interest, which will be treated as a
payment of interest, and cash received in lieu of a fractional share). A
holder's income tax basis in the class A common stock received on conversion of
a debenture will be the same as the holder's adjusted income tax basis in the
debenture at the time of conversion (exclusive of any basis allocable to a
fractional share), and the holding period for the class A common stock received
on conversion will include the holding period of the debenture converted. It is
possible, however, that the Internal Revenue Service may argue that the holding
period of the class A common stock allocable to accrued original issue discount
will commence on the date of the conversion. The receipt of cash in lieu of a
fractional share of class A common stock will generally result in capital gain
or loss, measured by the difference between the cash received for the
fractional share and the holder's adjusted tax basis in the fractional share.
If a holder elects to exercise the option to cause us to purchase his
debentures on a purchase date and we issue class A common stock in satisfaction
of all of the purchase price, such exchange will be treated the same as a
conversion, except that the holding period of the class A common stock
allocable to accrued original discount will commence on the date of the
exchange. If a holder elects to exercise the option to cause us to purchase
debentures on a purchase date and we deliver a combination of cash and class A
common stock in satisfaction of the purchase price, gain, but not loss,
realized by the holder will generally be recognized, but only to the extent of
all cash received. The character of any gain recognized may be capital or
ordinary depending on the circumstances, including the extent to which a holder
actually or constructively has any other equity interest in us. (The holder's
gain realized will be the sum of any cash received (other than cash
attributable to accrued but unpaid stated interest) and the fair market value
of the class A common stock received reduced by the holder's adjusted tax basis
in the debentures.) A holder's income tax basis in the class A common stock
received will generally be the same as the holder's income tax basis in the
debenture, reduced by the cash received and increased by any gain recognized
(exclusive of any income tax basis allocable to a fractional share). In the
event a holder surrenders a debenture for conversion at such a time that the
debenture is required to be accompanied by a payment in an amount equal to the
interest due thereon on the immediately next succeeding interest payment date,
the holder, particularly if an accrual method taxpayer, should consult with a
tax advisor regarding the extent to which such payment is deductible.
Adjustment of Conversion Price
If at any time we make a distribution of property to stockholders that would
be taxable to such stockholders as a dividend for United States federal income
tax purposes (for example, distributions of evidences of indebtedness or
assets, but generally not stock dividends or rights to subscribe for class A
common stock) and, in accordance with the anti-dilution provisions of the
debentures, the conversion rate of the debentures is increased, the amount of
such increase may be deemed to be the payment of a taxable dividend to holders
of the debentures. If the conversion rate is increased at our discretion or in
other circumstances as described under the heading "Description of Debentures,"
such increase may also be deemed to be the payment of a taxable dividend to
holders of debentures. Moreover, in certain other circumstances, the absence of
such an adjustment to the conversion rate may result in a taxable dividend to
holders of class A common stock.
29
<PAGE>
Tax Event
The modification of the terms of the debentures by us upon a tax event as
described in "Description of Debentures--Optional Conversion to Semiannual
Coupon Debenture upon Tax Event," could possibly alter the timing of income
recognition by the holders of the debentures With respect to the semiannual
payments of interest due on the debentures after the option exercise date.
Backup Withholding and Information Reporting
Information reporting will apply to payments of interest or dividends, if
any, made by us on, or the proceeds of the sale or other disposition of, the
debentures or shares of class A common stock with respect to certain
noncorporate holders, and backup withholding at a rate of 31% may apply unless
the recipient of such payment supplies a taxpayer identification number,
certified under penalties of perjury, as well as certain other information or
otherwise establishes an exemption from backup withholding. Any amount withheld
under the backup withholding rules will be allowable as a credit against the
holder's United States federal income tax, provided that the required
information is provided to the Internal Revenue Service.
SELLING SECURITYHOLDERS
The following table presents information with respect to the selling
securityholders and the principal amounts of debentures and shares of our class
A common stock issuable upon the conversion of these debentures that they may
offer under this prospectus. The term "selling securityholders" includes donees
and pledgees selling securities received from a named selling securityholder
after the date of this prospectus. The debentures were originally issued by us
and sold by the initial purchasers, in transactions exempt from the
registration requirements of the Securities Act, to qualified institutional
buyers. Some of the selling securityholders listed on the following tables, and
their respective affiliates, have engaged in, and may in the future engage in,
investment banking and other commercial dealings in the ordinary course of
business with us. They have received customary fees and commissions for these
transactions. In particular, Bank of America, N.A., an affiliate of Banc of
America Securities LLC, is a lender under, and acts as the agent for, our
revolving credit facility and received a portion of the net proceeds of this
offering. Kenneth D. Lewis, president and chief operating officer of Bank of
America Corporation, an affiliate of Banc of America Securities LLC, is a
member of the board of directors of HMA. Additionally, Merrill Lynch Trust
Company, an affiliate of an initial purchaser and two selling securityholders,
is the third-party administrator of our employee 401(k) plan.
The principal amounts of debentures provided in the table below is based on
information provided to us by each of the selling securityholders on or prior
to January 15, 2001, and the percentages are based on $488,750,000 principal
amount at maturity of debentures outstanding. The number of shares of class A
common stock that may be sold is calculated based on the current conversion
ratio of 29.5623 shares of class A common stock per $1,000 principal amount at
maturity of a debenture. Based on 243,573,264 shares of class A common stock
issued and outstanding as of December 15, 2000, if each selling securityholder
named below converted all of its debentures, each would own less than 1% of our
then outstanding class A common stock, except for Convertible Asset Repackaging
Trust (by The Bank of New York), which would hold approximately 2.33% of our
then outstanding class A common stock. Since the date on which each provided
this information, each selling securityholder identified below may have sold,
transferred or otherwise disposed of all or a portion of its debentures in a
transaction exempt from the registration requirements of the Securities Act.
Information concerning the selling securityholders may change from time to time
and any changed information will be set forth in supplements to this prospectus
to the extent required. In addition, the conversion ratio, and therefore the
number of shares of our class A common stock issuable upon conversion of the
debentures, is subject to adjustment. Accordingly, the number of shares of
class A common stock issuable upon conversion of the debentures may increase or
decrease.
30
<PAGE>
The selling securityholders may from time to time offer and sell any or all
of the securities under this prospectus. Because the selling securityholders
are not obligated to sell the debentures or the class A common stock issuable
upon the conversion of the debentures, we cannot estimate the amount of the
debentures or how many shares of our class A common stock that each selling
securityholder will beneficially own after this offering.
31
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Principal amount at Percentage of of Class A
Maturity of Debentures Debentures Common Stock
Name That May Be Sold Outstanding That May Be Sold
---- ---------------------- ------------- ----------------
<S> <C> <C> <C>
1976 Distribution Trust
F.B.O. A.R.
Lowden/Zinterhofer..... $ 26,000 %* 769
1976 Distribution Trust
F.B.O. Jane A. Lowden.. 26,000 * 769
Aerojet Incorporated
Foundation............. 65,000 * 1,922
Aftra Health Fund....... 550,000 * 16,259
AIG/National Union Fire
Insurance.............. 1,300,000 * 38,431
Allstate Insurance
Company................ 3,500,000 * 103,468
Allstate Life Insurance
Company................ 7,050,000 1.44 208,414
Aloha Airlines Non-
Pilots Pension Trust... 320,000 * 9,460
Aloha Airlines Pilots
Retirement Trust....... 185,000 * 5,469
American Motorist
Insurance Company...... 960,000 * 28,380
Arapahoe County
Colorado............... 91,000 * 2,690
Arkansas PERS........... 2,850,000 * 84,253
Arkansas Teacher
Retirement............. 6,452,000 1.32 190,736
Associated Electric &
Gas Insurance Services
Limited................ 700,000 * 20,694
Aventis Pension Master
Trust.................. 340,000 * 10,051
Banc of America
Securities LLC......... 4,000,000 * 118,249
Baptist Health of South
Florida................ 421,000 * 12,446
Bay County PERS......... 450,000 * 13,303
Black Diamond Offshore,
Ltd. .................. 375,000 * 11,085
Blue Cross Blue Shield
of Florida............. 1,300,000 * 38,431
Boilermaker--Blacksmith
Pension Trust.......... 2,050,000 * 60,603
Boston Museum of Fine
Art.................... 178,000 * 5,262
British Virgin Island
Social Security Board.. 69,000 * 2,040
C & H Sugar Company,
Inc. .................. 525,000 * 15,520
CALAMOS Convertible
Fund--Investment
Trust.................. 3,300,000 * 97,556
CALAMOS Convertible
Portfolio--Advisors
Trust.................. 135,000 * 3,991
CALAMOS Global
Convertible Fund--
Investment Trust....... 730,000 * 21,580
California State Auto
Inter Insurance........ 1,400,000 * 41,387
California State Auto
Retirement Pension..... 300,000 * 8,869
Charitable Convertible
Securities Fund........ 500,000 * 14,781
Charitable Income Fund.. 225,000 * 6,652
City of Albany Pension
Plan................... 185,000 * 5,469
City of Knoxville
Pension System......... 450,000 * 13,303
City University of New
York................... 328,000 * 9,696
Conseco Annuity
Assurance--Multi-Bucket
Ann. Conv. Bond Fund... 6,500,000 1.33 192,155
Conseco Fund Group--
Convertible Securities
Fund................... 1,000,000 * 29,562
Convertible Asset
Repackaging Trust by
The Bank of New York... 203,500,000 41.64 6,015,928
Delaware PERS........... 2,225,000 * 65,776
Delta Airlines Master
Trust.................. 3,750,000 * 110,859
Deutsche Bank
Securities............. 8,765,000 1.79 259,114
Double Black Diamond
Offshore, LDC.......... 1,543,000 * 45,615
Engineers Joint Pension
Fund................... 728,000 * 21,521
Enterprise Convertible
Securities Fund........ 135,000 * 3,991
EB Convertible
Securities Fund........ 750,000 * 22,172
F.R. Convertible
Security Fund.......... 125,000 * 3,695
Field Foundation of
Illinois............... 80,000 * 2,365
Finance Factors
Limited................ 315,000 * 9,312
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Principal amount at Percentage of of Class A
Maturity of Debentures Debentures Common Stock
Name That May Be Sold Outstanding That May Be Sold
---- ---------------------- ------------- ----------------
<S> <C> <C> <C>
First Republic Bank............................ $ 280,000 %* 8,277
GenCorp Foundation............................. 65,000 * 1,922
Goldman Sachs and Company...................... 2,050,000 * 60,603
Grady Hospital Foundation...................... 198,000 * 5,853
Greek Catholic Union........................... 55,000 * 1,626
Greek Catholic Union II........................ 50,000 * 1,478
Hawaiian Airlines Employees Pension Plan--IAM.. 155,000 * 4,582
Hawaiian Airlines Pension Plan for Salaried
Employees..................................... 35,000 * 1,035
Hawaiian Airlines Pilots Retirement Plan....... 295,000 * 8,721
Health Foundation of Greater Cincinnati........ 430,000 * 12,712
Healthcare Underwriters Mutual Insurance
Company....................................... 1,325,000 * 39,170
H.K. Porter Company, Inc. ..................... 50,000 * 1,478
ICI American Holdings Trust.................... 1,200,000 * 35,475
Independence Blue Cross........................ 191,000 * 5,646
International Licensing Industries
Merchandising Association..................... 20,000 * 591
Island Holdings................................ 75,000 * 2,217
Island Insurance Convertible Account........... 315,000 * 9,312
J.P. Morgan Securities, Inc. .................. 200,000 * 5,912
Kerr-McGee Corporation......................... 1,770,000 * 52,325
Kettering Medical Center Funded Depreciation
Account....................................... 125,000 * 3,695
Key Trust Convertible Securities Fund.......... 215,000 * 6,356
Key Trust Fixed Income Fund.................... 345,000 * 10,199
Knoxville Utilities Board Retirement System.... 300,000 * 8,869
Local Initiatives Union........................ 87,000 * 2,572
Louisiana Workers' Compensation Corporation.... 280,000 * 8,277
Lumberman's Mutual Casualty.................... 751,000 * 22,201
Mag Mutual Insurance Company................... 325,000 * 9,608
Mainstay Convertible Fund...................... 3,850,000 * 113,815
Mainstay VP Convertible Portfolio.............. 1,600,000 * 47,300
McMahan Securities Co. L.P. ................... 1,100,000 * 32,519
Medical Liability Mutual Insurance Company..... 30,000,000 6.14 886,869
Merrill Lynch Insurance Group.................. 465,000 * 13,746
Merrill Lynch, Pierce, Fenner & Smith, Inc. ... 537,000 * 15,875
MFS Series Trust V: MFS Total Return Fund...... 3,500,000 * 103,468
Morgan Stanley Dean Witter Convertible
Securities Trust.............................. 3,850,000 * 113,815
Nabisco Holdings............................... 53,000 * 1,567
Nalco Chemical Company......................... 500,000 * 14,781
NCMIC Insurance Company........................ 550,000 * 16,259
New Orleans Firefighters Pension Relief Fund... 209,000 * 6,179
New York Life Insurance Company................ 12,900,000 2.64 381,354
New York Life Insurance and Annuity
Corporation................................... 2,000,000 * 59,125
Nicholas Applegate Convertible Fund............ 2,332,000 * 68,939
Nicholas Applegate Investment Grade
Convertible................................... 11,000 * 325
Northwestern Mutual Life Insurance Company..... 3,000,000+ * 88,687
Occidental Petroleum Corporation............... 353,000 * 10,435
OHIC Insurance Company......................... 800,000 * 23,650
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Principal amount at Percentage of of Class A
Maturity of Debentures Debentures Common Stock
Name That May Be Sold Outstanding That May Be Sold
---- ---------------------- ------------- ----------------
<S> <C> <C> <C>
Ohio Bureau of Workers
Compensation............ $ 241,000 %* 7,125
Omnova Solutions......... 145,000 * 4,287
Parker
Society/Convertible..... 400,000 * 11,825
Physicians Life.......... 572,000 * 16,910
Port Authority of
Allegheny County
Retirement & Disability
Allowance Plan for the
Employees Represented by
Local 85 of the
Amalgamated Transit
Union................... 2,180,000 * 64,446
Potlatch-First Trust
Company of St. Paul..... 550,000 * 16,259
PRIM Board............... 4,225,000 * 124,901
Queen's Health Plan...... 115,000 * 3,400
Raytheon Master Pension
Trust................... 769,000 * 22,733
RJR Reynolds............. 176,000 * 5,203
Salomon Brothers Asset
Management, Inc. ....... 28,600,000 5.85 845,482
San Diego City
Retirement.............. 1,425,000 * 42,126
San Diego County
Convertible............. 3,062,000 * 90,520
Screen Actors Guild
Pension Convertible..... 776,000 * 22,940
SG Cowen Securities
Corporation............. 35,500,000 7.26 1,049,462
Shell Pension Trust...... 673,000 * 19,895
Southern Farm Bureau Life
Insurance--FRIC......... 2,150,000 * 63,559
SPT...................... 1,650,000 * 48,778
Standard Insurance
Company................. 1,600,000 * 47,300
Starvest Combined
Portfolio............... 1,600,000 * 47,300
Starvest Managed
Portfolio............... 205,000 * 6,060
State of Maryland
Retirement Agency....... 4,851,000 * 143,407
State of Oregon Equity... 7,050,000 1.44 208,414
State of Oregon/SAIF
Corporation............. 13,200,000 2.70 390,222
The Dow Chemical Company
Employees' Retirement
Plan.................... 4,100,000 * 121,205
The Fondren Foundation... 125,000 * 3,695
The Grable Foundation.... 184,000 * 5,439
The Virginia Insurance
Reciprocal.............. 400,000 * 11,825
UBS O'Connor LLC......... 10,000,000 2.05 295,623
Unifi, Inc. Profit
Sharing Plan and Trust.. 200,000 * 5,912
Union Security Life
Insurance Company....... 120,000 * 3,547
United Food and
Commercial Workers Local
1262 and Employers
Pension Fund............ 980,000 * 28,971
Value Line Convertible
Fund Inc................ 500,000 * 14,781
Van Waters & Rogers, Inc.
Retirement Fund (f.k.a.
Univar Corp.)........... 580,000 * 17,146
Victory Convertible
Securities Fund......... 800,000 * 23,650
Victory Invest Quality
Bond Fund............... 145,000 * 4,287
Wake Forest University... 1,348,000 * 39,850
Worldwide Transactions,
Ltd. ................... 82,000 * 2,424
Writers Guild
Convertible............. 453,000 * 13,392
Wyoming State Treasurer.. 1,557,000 * 46,029
Zeneca AG Products
Inc. ................... 212,000 * 6,267
Zeneca Holdings Trust.... 688,000 * 20,339
</TABLE>
--------
* Less than 1%.
+ $1,000,000 of such amount is held by Northwestern Mutual Life Insurance
Company Group Annuity in a separate account.
34
<PAGE>
PLAN OF DISTRIBUTION
The selling securityholders will be offering and selling all securities
offered and sold under this prospectus. We will not receive any of the proceeds
on these sales of these securities. In connection with the initial offering of
the debentures, we entered into a registration rights agreement dated August
16, 2000 with the initial purchasers of the debentures. Securities may only be
offered or sold under this prospectus pursuant to the terms of the registration
rights agreement. However, selling securityholders may resell all or a portion
of the securities in open market transactions in reliance upon Rule 144 or Rule
144A under the Securities Act, provided they meet the criteria and conform to
the requirements of one of these rules.
Who May Sell and Applicable Restrictions
The securities may be sold from time to time directly by the selling
securityholders or alternatively through underwriters or broker-dealers or
agents. The selling securityholders may decide not to sell any of the
securities offered under this prospectus, and selling securityholders could
transfer, devise or give these securities by other means. If the securities are
sold through underwriters or broker-dealers or agents, the selling
securityholders will be responsible for underwriting discounts or commissions
or agent's commissions.
The securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve block transactions) (i) on any national
securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale, (ii) in the over-the-counter market, or (iii)
through the writing of options. In connection with sales of the securities or
otherwise, the selling securityholders may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the securities, and
deliver the securities to close out such short positions, or loan or pledge
securities to broker-dealers that in turn may sell such securities.
To the extent the selling securityholders may be deemed to be underwriters,
the selling securityholders may be subject to statutory liabilities, including,
but not limited to, liability under Sections 11, 12 and 17 of the Securities
Act and Rule 10b-5 under the Exchange Act.
Prospectus Delivery
Because selling securityholders may be deemed to be underwriters within the
meaning of Section 2(11) of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act. At any time a
particular offer of the securities is made, a revised prospectus or prospectus
supplement, if required, will be distributed which will disclose:
. the name of the selling securityholders and of any participating
underwriters, broker-dealers or agents;
. the aggregate amount and type of securities being offered;
. the price at which the securities were sold and other material terms of
the offering;
. any discounts, commissions, concessions or other items constituting
compensation from the selling securityholders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers; and
. that the participating broker-dealers did not conduct any investigation
to verify the information in this prospectus or incorporated in this
prospectus by reference.
The prospectus supplement or a post-effective amendment will be filed with
the SEC to reflect the disclosure of additional information with respect to the
distribution of the securities.
35
<PAGE>
Manner of Sales
The selling securityholders will act independently of us in making decisions
with respect to the timing, manner and size of each sale. Sales may be made
over the New York Stock Exchange (in the case of the class A common stock) or
in the over-the-counter market. The securities may be sold at then prevailing
market prices, at fixed prices or at negotiated prices.
The securities may be sold according to one or more of the following
methods:
. a block trade in which the broker or dealer so engaged will attempt to
sell the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
. purchases by a broker or dealer as principal and resale by the broker or
dealer for its account as allowed under this prospectus;
. ordinary brokerage transactions and transactions in which the broke
solicits purchasers;
. an exchange distribution under the rules of the exchange;
. face-to-face transactions between sellers and purchasers without broker-
dealer; and
. by writing options.
Some persons participating in the offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities including
the entry of stabilizing bids or syndicate covering transactions or the
imposition of penalty bids.
The selling securityholders and any other person participating in a
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including Regulation M. This regulation
may limit the timing of purchases and sales of any of the securities by the
selling securityholders and any other person. The anti-manipulation rules under
the Exchange Act may apply to sales of securities in the market and to the
activities of the selling securityholders and their affiliates. Furthermore,
Regulation M of the Exchange Act may restrict the ability of any person engaged
in the distribution of the securities to engage in market-making activities
with respect to the particular securities being distributed for a period of up
to five business days before the distribution. All of the foregoing may affect
the marketability of the securities and the ability of any person or entity to
engage in market-making activities with respect to the securities.
Hedging and Other Transactions with Broker-Dealers
In connection with distributions of the securities, the selling
securityholders may enter into hedging transactions with broker-dealers. In
connection with these transactions, broker-dealers may engage in short sales of
the registered securities in the course of hedging the positions they assume
with selling securityholders. The selling securityholders may also sell
securities short and redeliver the securities to close short positions. The
selling securityholders may also enter into options or other transactions with
broker-dealers which require the delivery to the broker-dealer of the
registered securities. The broker-dealer may then resell or transfer these
securities under this prospectus. A selling securityholder may also loan or
pledge the registered securities to a broker-dealer and the broker-dealer may
sell the securities so loaned or, upon a default, the broker-dealer may effect
sales of the pledged securities under this prospectus.
Expenses Associated with Registration
We have agreed to pay substantially all of the expenses of registering the
securities under the Securities Act and of compliance with blue sky laws,
including registration and filing fees, printing and duplicating expenses,
legal fees of our counsel, fees for one legal counsel retained by the selling
securityholders and fees of the trustee under the indenture pursuant to which
we originally issued the securities and of the registrar and transfer agent of
the class A common stock. If the debentures or the class A common stock into
which the
36
<PAGE>
debentures may be converted are sold through underwriters or broker-dealers,
the selling securityholders will be responsible for underwriting discounts,
underwriting commissions and agent commissions.
Indemnification and Contribution
In the registration rights agreement, we and the selling securityholders
have agreed to indemnify or provide contribution to each other and specified
other persons against some liabilities in connection with the offering of the
securities, including liabilities arising under the Securities Act. The selling
securityholders may also agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the securities against some
liabilities, including liabilities that arise under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers of persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is therefore unenforceable.
Suspension of this Offering
We may suspend the use of this prospectus if we learn of any event that
causes this prospectus to include an untrue statement of a material fact
required to be stated in the prospectus or necessary to make the statements in
the prospectus not misleading in the light of the circumstances then existing.
If this type of event occurs, a prospectus supplement or post-effective
amendment, if required, will be distributed to each selling securityholder.
Each selling securityholder has agreed not to trade securities from the time
the selling securityholder receives notice from us of this type of event until
the selling securityholder receives a prospectus supplement or amendment. This
time period will not exceed 45 days in any 3-month period and 90 days in any
12-month period.
Termination of this Offering
Under the registration rights agreement, we are obligated to use reasonable
efforts to keep the registration statement effective until, and therefore this
offering will terminate on, the earlier of: (i) two years from the date on
which this registration statement is declared effective by the SEC, (ii) the
date on which all securities offered under this prospectus have been sold
pursuant to this prospectus, and (iii) the date on which all outstanding
securities held by non-affiliates of HMA may be resold without registration
under the Securities Act pursuant to Rule 144(k) under the Securities Act.
LEGAL MATTERS
The validity of Health Management Associates, Inc.'s securities offered
hereby will be passed upon for HMA by Harter, Secrest & Emery LLP, Rochester,
New York.
EXPERTS
The consolidated financial statements of Health Management Associates, Inc.
appearing in Health Management Associates, Inc.'s Annual Report (Form 10-K) for
the year ended September 30, 2000, have been audited by Ernst & Young LLP,
independent certified public accountants, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
37
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
All expenses incurred in connection with the issuance and distribution of
the securities being registered will be paid by us. The following is an
itemized statement of these expenses. All amounts are estimates except the SEC
registration fee.
<TABLE>
<S> <C>
SEC registration fee......................... $ 90,321
Blue Sky Fees and expenses................... $ 5,000
Printing and engraving expenses.............. $ 15,000
Legal fees and expenses...................... $ 40,000
Accountants' fees and expenses............... $ 15,000
Trustee's fees and expenses.................. $ 2,500
Miscellaneous fees and expenses.............. $ 4,679
TOTAL...................................... $172,500
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("Section 145") permits
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director, officer or agent of the corporation or
another enterprise, if serving at the request of the corporation. Depending on
the character of the proceeding, a corporation may indemnify against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding if the person indemnified acted in good faith and, in respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In the case of an action by or in the right of the corporation, no
indemnification may be made with respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine that, despite the adjudication
of liability, such person is fairly and reasonably entitled to indemnity for
such expenses which the court shall deem proper. Section 145 further provides
that to the extent a director, officer, employee or agent of a corporation has
been successful in the defense of any action, suit or proceeding referred to
above, or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
The amended Certificate of Incorporation of the Registrant limits the
personal liability of directors to the Registrant or any of its stockholders for
monetary damages for breach of fiduciary duty as a director, provided, however,
that this limitation does not apply to any liability of a director: (i) for any
breach of the director's duty of loyalty to the Registrant 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 Title 8 of
the General Corporation Law of Delaware; or (iv) for any transaction from which
the director derived an improper personal benefit.
The Registrant maintains standard policies of insurance under which
coverage is provided (i) to its directors and officers against loss rising from
claims made by reason of breach of duty or other wrongful act, and (ii) to the
Registrant with respect to payments which may be made by the Registrant to such
officers and directors pursuant to the above indemnification provision or
otherwise as a matter of law.
II-1
<PAGE>
Item 16. List of Exhibits
The exhibits filed as part of this registration statement are as follows:
Exhibit Description
------- -----------
1.1 Purchase Agreement, dated as of August 16, 2000, between Health
Management Associates, Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Banc of America Securities LLC./1/
4.1(1) Indenture dated as of August 16, 2000 between Health Management
Associates, Inc. and First Union National Bank, as Trustee (includes
form of Convertible Senior Subordinated Debentures due 2020)./1/
4.1(2) Registration Rights Agreement dated as of August 16, 2000 by and among
Health Management Associates, Inc., and Donaldson, Lufkin & Jenrette
Securities Corporation, Merril Lynch, Pierce, Fenner & Smith
Incorporated and Banc of America Securities LLC./1/
5.1 Opinion of Harter, Secrest & Emery LLP regarding legality of
securities being registered.
8.1 Opinion of Harter, Secrest & Emery LLP as to certain tax matters./1/
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Harter, Secrest & Emery LLP (included in Exhibit 5.1
hereto).
24.1 Powers of Attorney (included on signature page).
25.1 Statement of Eligibility of Trustee on Form T-1 under the Trust
Indenture Act of 1939./1/
/1/ Previously filed.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (a)1(i) and (a)1(ii) above do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that:
(i) for Purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(ii) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Naples, State of Florida, on January 16, 2001.
HEALTH MANAGEMENT ASSOCIATES, INC.
By: /s/ Joseph V. Vumbacco
----------------------------------
Joseph V. Vumbacco
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Joseph V. Vumbacco, Stephen M. Ray, and
Timothy R. Parry, jointly and severally, his true and lawful attorneys-in-fact
and agents, each with full power of substitution and re-substitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all
amendments to this registration statement, and to file the same, with exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
* Chairman of the Board January 16, 2001
-------------------------- of Directors and Director
William J. Schoen
Executive Vice President January 16, 2001
* and Chief Financial Officer
-------------------------- (Principal Financial Officer
Stephen M. Ray and Principal Accounting
Officer)
* Director January 16, 2001
--------------------------
Kent P. Dauten
* Director January 16, 2001
--------------------------
Robert A. Knox
* Director January 16, 2001
--------------------------
Charles R. Lees
* Director January 16, 2001
--------------------------
Kenneth D. Lewis
* Director January 16, 2001
--------------------------
William E. Mayberry, M.D.
* Director January 16, 2001
--------------------------
Randolph W. Westerfield
*By: /s/ Timothy R. Parry
--------------------
Timothy R. Parry as Attorney-in-Fact
II-4
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
1.1 Purchase Agreement, dated as of August 16, 2000, between Health
Management Associates, Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Banc of America Securities LLC./1/
4.1(1) Indenture dated as of August 16, 2000 between Health Management
Associates, Inc. and First Union National Bank, as Trustee
(includes form of Convertible Senior Subordinated Debentures due
2020)./1/
4.1(2) Registration Rights Agreement dated as of August 16, 2000 by and
among Health Management Associates, Inc., and Donaldson, Lufkin &
Jenrette Securities Corporation, Merril Lynch, Pierce, Fenner &
Smith Incorporated and Banc of America Securities LLC./1/
5.1 Opinion of Harter, Secrest & Emery LLP regarding legality
of securities being registered.
8.1 Opinion of Harter, Secrest & Emery LLP as to certain tax
matters./1/
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Harter, Secrest & Emery LLP (included in Exhibit 5.1
hereto).
24.1 Powers of Attorney (included on signature page).
25.1 Statement of Eligibility of Trustee on Form T-1 Under the Trust
Indenture Act of 1939./1/
/1/ Previously filed.
