<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------------------------------------------------
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
JUNE 21, 2000
-------------
QUORUM HEALTH GROUP, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE
--------------------------------------------------------------------------------
(State of Incorporation)
33-31717-A 62-1406040
------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
103 CONTINENTAL PLACE, BRENTWOOD, TENNESSEE 37027
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(615) 371-7979
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS.
March 26, 1999 Options to Remain Outstanding
On March 31, 2000, the FASB issued its final interpretation of APB Opinion
No. 25 "Accounting for Certain Transactions involving Stock Compensation." The
interpretation requires variable-award accounting for stock options granted six
months before or after the cancellation or settlement of options if the new
options have a lower exercise price than the cancelled or settled options. The
interpretation will be effective July 1, 2000 and covers certain events that
occurred after December 15, 1998. No adjustments are made to financial
statements for periods prior to the effective date and no expense is recognized
for any additional compensation costs attributable to periods before the
effective date.
In March 1999, our board of directors approved a plan to allow employees
to exchange "underwater" stock options. These stock options had exercise prices
higher than the then market price of our common stock. Based on the exchange, on
March 26, 1999, we canceled 5.2 million options at exercise prices ranging from
$12.09 to $33.06 and granted 3.6 million options at an exercise price of $9.00.
The effect was to reduce the number of options held to offset the benefit of a
lower exercise price. The estimated economic value of the grants was generally
unchanged as a result of the exchange. We also made an annual grant of 1.4
million options on March 11, 1999 with an exercise price of $8.81. Under the
final interpretation of APB 25, both the March 26, 1999 options and a portion of
the March 11, 1999 options will be subject to variable-award accounting.
The March 26, 1999 options provided that they would vest and terminate
thirty days after we gave notice to our employees that we are required to apply
variable-award accounting to these options. The March 11, 1999 options do not
contain this provision. Based on the proposed interpretation of APB 25 at the
time we granted the March 11, 1999 options, they would not have been subject to
variable-award accounting.
Our board of directors has determined that it is in our best interests,
and that of our stockholders, not to give the notice which would vest and
terminate the March 26, 1999 options. These options will therefore remain
outstanding. This means that approximately 2.4 million March 26, 1999 options
still outstanding, as well as approximately 1 million of the March 11, 1999,
options will be subject to variable-award accounting beginning July 1, 2000.
Until these options expire or are exercised, under APB 25 we will
recognize compensation expense as the market price of our common stock increases
from its market price on July 1, 2000. We will also recognize reduced
compensation expense as the market price decreases, to the extent we have
previously recognized compensation expense.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QUORUM HEALTH GROUP, INC.
Date: June 30, 2000 By: \s\ Ashby Q. Burks
-----------------------------------------------
Ashby Q. Burks, Vice President/
General Counsel & Secretary
