Registration No. 33------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COLUMBIA/HCA HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-2497104
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 West Main Street, Louisville, Kentucky 40202 (502) 572-2000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Stephen T. Braun
Senior Vice President and General Counsel
Columbia/HCA Healthcare Corporation
201 West Main Street
Louisville, Kentucky 40202
(502) 572-2000
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of the 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, please check the following
box. / X /
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CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount
maximum maximum of
Title of Amount to offering aggregate Regis-
Securities to be price per offering tration
be registered registered unit* price* Fee
Common Stock, 524,370 shares(1) $0.2162 $113,368.79 39.00
Par value
$.01 per 194,242 shares(1) $0.5952 $115,612.84 40.00
share, with
associated 150,000 shares(2) $40.875 $6,131,250.00 2,114.00
Stock Purchase _______ ____________ ________
Rights 868,612 $6,360,231.63 $2,193.00
(1) Pursuant to Rule 457(h) for those shares offered pursuant to stock
options, the fee is computed upon the basis of the price at which the
options may be exercised.
(2) Estimated pursuant to Rule 457 solely for purposes of determining the
registration fee. Calculated on the basis of the average of the high
price of $41.25 and the low price of $40.50 reported by the consolidated
transaction reporting system for securities listed on the New York Stock
Exchange ($40.875 per share) on February 17, 1994.
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
Securities and Exchange Commission, acting pursuant to said Section 8(a),
may determine.
Exhibit Index appears on page number II-5.
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PROSPECTUS
COLUMBIA/HCA HEALTHCARE CORPORATION
868,612 Shares
Common Stock
Par Value $.01 Per Share
This Prospectus relates to the offering by Columbia/HCA Healthcare
Corporation (the "Company") of 868,612 shares of Common Stock, par value
$.01 per share (the "Common Stock"), (i) purchasable by certain persons or
related entities ("Grantees") who have been granted options to purchase an
aggregate of 297,990 shares of the Common Stock ("Initial Options")
pursuant to the Company's Nonqualified Initial Option Plan (the "Plan");
(ii) purchasable by charitable foundations or organizations which have
been granted options to purchase an aggregate of 420,622 shares of Common
Stock (the "Charitable Options"); and (iii) up to 150,000 shares of Common
Stock issuable to each employee who was a participant in the 1992 Employee
Stock Purchase Plan of HCA-Hospital Corporation of America for the plan
year ending May 31, 1994 ("ESPP Shares").
All shares of the Common Stock of the Company, including the shares
of Common Stock to which this Prospectus relates, are listed on the New
York Stock Exchange.
This Prospectus may not be used for reoffers or resales of Common
Stock acquired hereunder.
It may be advisable for purchasers of shares of Common Stock
hereunder to consult with legal counsel concerning the securities and tax
law implications of the acquisition or disposition of the shares of Common
Stock obtained by exercise of the Initial Options or of the Charitable
Options.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________________________, 1994
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other
information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the following Regional Offices
of the Commission: New York Regional Office, Seven World Trade Center,
New York, New York 10048; and the Chicago Regional Office, Northwestern
Atrium Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained at prescribed rates by writing to
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, the Company's Common Stock is listed
on the New York Stock Exchange and similar information concerning the
Company can be inspected and copied at the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a Registration Statement on
Form S-3 (together with all amendments, supplements and exhibits thereto,
the "Registration Statement") filed by the Company with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus omits certain of the information set forth in the Registration
Statement (in accordance with the rules and regulations of the
Commission), and reference is hereby made to the Registration Statement
and related exhibits for further information with respect to the Company
and the Common Stock.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (including its
predecessors, Columbia Healthcare Corporation and Columbia Hospital
Corporation) with the Commission are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1992 (the
"Form 10-K").
2. The portions of the Proxy Statement for the Annual Meeting of
Stockholders held May 20, 1993 that have been incorporated by
reference in the Form 10-K.
3. Quarterly Reports on Form 10-Q for the interim periods ended March
31, 1993, June 30, 1993 and September 30, 1993.
4. Current Reports on Form 8-K dated June 10, 1993, September 16, 1993,
September 29, 1993, October 2, 1993, November 5, 1993, November 10,
1993, November 15, 1993, December 15, 1993, February 11, 1994 and
February 22, 1994.
5. Registration Statement on Form 8-A dated August 31, 1993.
6. Registration Statement on Form S-4 (File No. 33-49773).
7. Registration Statement on Form S-4 (File No. 33-50735).
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The following Galen Health Care, Inc. documents are incorporated herein by
reference:
1. General Form for Registration of Securities on Form 10 dated
December 31, 1992 (File No. 1-11233).
2. Form 8, Amendment No. 1 to General Form for Registration of
Securities on Form 10 dated February 17, 1993.
3. Quarterly Reports on Form 10-Q for the interim periods ended
February 28, 1993 and May 31, 1993.
4. Current Report on Form 8-K dated June 10, 1993.
The following HCA - Hospital Corporation of America documents are
incorporated by reference herein:
1. Annual Report on Form 10-K for the year ended December 31, 1992 (the
"1992 HCA 10-K").
2. The portions of the Proxy Statement for the Annual Meeting of
Stockholders held April 19, 1993 that have been incorporated by
reference in the 1992 HCA 10-K.
3. Quarterly Reports on Form 10-Q for the interim periods ended March
31, 1993, June 30, 1993 and September 30, 1993.
4. Current Reports on 8-K dated February 2, 1993, February 18, 1993,
February 22, 1993, June 1, 1993, July 28, 1993, August 9, 1993,
September 2, 1993 and October 2, 1993, October 25, 1993, November
17, 1993, December 16, 1993 and February 10, 1994.
5. Registration Statement on Form 8-A dated January 17, 1992, as
amended by Amendment No. 1 on Form 8 dated February 13, 1992.
All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of this offering
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such reports and documents. Any
statement set forth herein or in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, will be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement set forth herein or in a subsequently filed
document deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will furnish, without charge, to each person to whom a
Prospectus is delivered, upon written or oral request, a copy of any or
all of the foregoing documents incorporated herein by reference other than
exhibits to such documents (unless such exhibits are specifically
incorporated by reference therein). Requests for such documents should be
submitted in writing to Joan O. Kroger, Secretary, Columbia/HCA Healthcare
Corporation, 201 West Main Street, Louisville, Kentucky 40202 or by
telephone at (502) 572-2259.
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THE COMPANY
The Company is a health care services company that is engaged
primarily in buying, selling, owning and operating general, acute care and
specialty hospitals and related health care facilities.
Effective February 10, 1994, the Company consummated a business
combination transaction (the "HCA Merger") with HCA-Hospital Corporation
of America, a Delaware corporation, ("HCA"), pursuant to which HCA merged
with a wholly owned subsidiary of the Company. As a result of the HCA
merger, HCA became a wholly owned subsidiary of the Company. HCA is a
health care services company that primarily owns and operates acute care
and specialty hospitals.
The Company was formed in January 1990 as a Nevada corporation and
reincorporated in Delaware in September 1993. The Company's principal
executive offices are located at 201 West Main Street, Louisville,
Kentucky 40202, and its telephone number at such address is (502) 572-
2000.
NONQUALIFIED INITIAL OPTION PLAN
General
This Prospectus is being used, in part, in connection with the
offering and sale by the Company of shares of the Company's Common Stock
which are issuable upon exercise of options which were granted by HCA in
1989 pursuant to its Nonqualified Initial Option Plan (the "Plan") which
was assumed by the Company in the HCA Merger. Shares issued under the
Plan shall be authorized but unissued shares.
The Plan was adopted by HCA in March 1989 in connection with the
acquisition by merger (the "Old Merger") in March 1989 of Hospital
Corporation of America ("Original HCA"), then a publicly-held Tennessee
corporation, by senior management of Original HCA and certain other
investors. Under the Plan, options to purchase shares of common stock
(the "Initial Options") were granted on the effective date of the Old
Merger to certain present and former officers, directors and key employees
of Original HCA and of its subsidiaries ("Grantees") in consideration for
the cancellation by the recipients of options in respect of shares of
Original HCA common stock ("Original HCA Options") under Original HCA's
pre-Old Merger employee stock option plan. For each $2.273 of Spread
represented by canceled Original HCA Options (the term "Spread" meaning
the excess of $51 over the exercise price of each canceled Original HCA
Option), such investors in Original HCA elected to receive Initial Options
to purchase one share of the HCA Common Stock at an exercise price of
$0.227 per share. The Plan was assumed by the Company in connection with
the HCA Merger and each option was adjusted consistent with the terms of
the HCA Merger into the right to acquire 1.05 shares of Common Stock for
each share of HCA Common Stock, (the "Exchange Ratio"). Accordingly, the
exercise price per share of Common Stock was adjusted to $0.2162 per share
of Common Stock.
A total of 297,990 Initial Options were outstanding, vested and
unexercised as of February 10, 1994 and held by seven individuals. No
Initial Options remain available for grant under the Plan as of February
10, 1994.
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Administration
The Plan is administered by the Compensation Committee of the
Company's Board of Directors (the "Committee") which acts as manager and
not trustee. The present members of the Committee are Darla D. Moore,
Chairperson, Charles J. Kane, Robert D. Walter and William T. Young. The
Committee members receive no additional compensation for administering the
Plan. The members of the Committee serve in such capacity at the
discretion of the Board of Directors. There are no specific terms
relating to the length of time a member may serve or the method for
removing him or her.
Exercisability
All of the Initial Options are fully exercisable at any time before
March 15, 2014 at an adjusted exercise price of $0.2162 per share.
Antidilution/Amendments to Plan
These shares of Common Stock purchasable under the Initial Options
are subject to adjustment in number and exercise price in the event of
stock dividends, splits or consolidations of the outstanding Common Stock,
other changes in capitalization, or various business combinations. The
Board may at any time, or from time to time, amend the Plan in any
respect, except that without shareholder approval, no amendment (i) may
reallocate or increase the total number of shares of Common Stock
available under the Plan, (ii) may materially increase the benefits
accruing to participants or (iii) may materially change the requirements
for eligibility. Without consent of the Grantee, no amendment may
adversely affect any right acquired prior to such amendment by such
Grantee.
ERISA/Section 401(a) of the Internal Revenue Code
The Plan is not subject to any provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"). The Plan is not qualified under
Section 401(a) of the Internal Revenue Code.
Method of Exercise
Notice; Exercise Price; Use of Owned Common Stock. Initial Options
are exercisable by delivering or mailing to the Company a notice, on a
form furnished by the Committee, specifying the number of shares to be
purchased and a check, money order or other authorized means of payment
for the full exercise price.
Additionally, the exercise price may be paid, in whole or in part,
at the option of the Grantee, in shares of the Company's Common Stock
already owned by the Grantee. With respect to payment of the exercise
price in shares of the Company's Common Stock:
- The fair market value of the shares delivered in payment of all
or part of the exercise price is deemed to be the average of the
"high" and "low" prices per share of publicly-traded Company
Common Stock as reported in The Wall Street Journal on the last
business day prior to the day of payment of the exercise price.
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- In order to prevent the need for fractional shares and in order
to ensure that the full exercise price has been paid, the Grantee,
on the day of the exercise of his or her Initial Options, may only
deliver or mail to the Company the largest whole number of shares
which, when their fair market value has been determined as
described above, is less than or equal to the total exercise price
for the Initial Options exercised on that day.
- The difference, if any, between the total exercise price for the
Initial Options exercised and the actual market value of the
shares tendered as determined on the business day immediately
before the day of option exercise is to be paid in the form of
cash or money order payable to the Company.
Withholding Tax. Additionally, at the time of exercise a Grantee
will be required to pay the Company the aggregate amount of withholding
tax required by Federal, state and local authorities calculated on the
income to the Grantee resulting from the excess of the then market price
of the Common Stock over the exercise price of the Initial Option. Also,
a Grantee may elect to pay withholding taxes in excess of the statutory
minimum as long as the amount paid does not exceed the Grantee's estimated
Federal, state and local tax obligations associated with the exercise,
including FICA and FUTA taxes to the extent applicable. In certain
circumstances, a Grantee may be permitted to pay the withholding taxes by
delivering previously owned shares of the Common Stock or by electing to
have the Company withhold shares of the Common Stock due such Grantee upon
the option exercise (such shares turned in being valued at their then fair
market value).
Suspension or Termination of Plan
The Board of Directors may at any time terminate or suspend the Plan
or amend certain provisions of the Plan. No termination, suspension or
amendment of the Plan, however, may adversely affect any right acquired by
a Grantee, or by any estate of a Grantee, under the terms of an Initial
Option granted before the date of such termination, suspension or
modification, unless such Grantee or successor shall consent; but it shall
be conclusively presumed that any adjustment for changes in capitalization
as provided in the Plan does not affect any such right.
Tax Information
The Initial Options granted under the Plan are not intended to be
"qualified" stock options under the Internal Revenue Code, but are
designed to qualify for tax treatment under which taxable income is
realized upon the exercise of the option. Upon exercise of the option,
the Grantee is subject to ordinary income tax on the difference between
the exercise price of the option and the fair market value of the Common
Stock determined at the time of exercise.
A Grantee that elects to exercise Initial Options, in whole or in
part, by delivering the Common Stock in lieu of cash for the exercise
price or the costs of tax withholding, will recognize ordinary income upon
exercise to the extent of the difference between the fair market value of
shares received and those exchanged less cash paid, if any.
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Transferability
All Initial Options granted under the Plan are transferable only by
gift to the relatives of a Grantee or by will or the laws of descent and
distribution.
CHARITABLE OPTIONS
The Charitable Options are subject to the terms and provisions of
one of the following agreements (1) the Stock Option Pledge Agreement (the
"1990 SOP Agreement") dated October 1, 1990, between HCA and a charitable
foundation in respect of Charitable Options exercisable originally into
215,600 shares of HCA's Class A Common Stock (the "1990 Charitable
Options"); (2) the Stock Option Pledge Agreement dated December 27, 1991
(the "1991 SOP Agreement") between HCA and a charitable foundation in
respect of Charitable Options exercisable originally into 400,000 shares
of HCA Class A Common Stock (the "1991 Charitable Options"); (3) the Stock
Option Pledge Agreement dated May 24, 1993 (the "1993 SOP Agreement")
between HCA and a charitable organization in respect of Charitable Options
exercisable originally into 55,000 shares of HCA's Class A Common Stock
(the "1993 Charitable Options") and (4) the Stock Option Pledge Agreement
dated February 7, 1994 (the "1994 SOP Agreement") between HCA and a
charitable foundation in respect of Charitable Options exercisable
originally into 29,566 shares of HCA's Class A Common Stock (the "1994
Charitable Options"). Just prior to the HCA Merger, the following
Charitable Options remained outstanding: 215,600 of 1990 Charitable
Options; 110,000 of 1991 Charitable Options; 45,426 of 1993 Charitable
Options; and 29,566 of 1994 Charitable Options.
In the HCA Merger, the Company assumed HCA's obligations in respect
of the Charitable Options, provided that after applying the Exchange
Ratio, the 400,592 Charitable Options immediately prior to the HCA Merger
were automatically converted into 420,622 Charitable Options at the
effective time of the HCA Merger. The Exchange Ratio also reduced the
exercise price of the Charitable Options, as explained below. Fractional
shares will not be issued.
The 1990 Charitable Options are exercisable at any time prior to
October 1, 2015 at an adjusted exercise price of $0.2162 per share, all
payable in cash. The 1991 Charitable Options are exercisable at any time
prior to December 27, 2016 at an adjusted exercise price of $0.5952 per
share, all payable in cash. The 1993 Charitable Options will be
exercisable at August 1, 1994, 1995, and 1996 pursuant to the vesting
formula set out in the 1993 SOP Agreement at an adjusted exercise price of
$0.5952 per share, all payable in cash and expire May 31, 2003. The 1994
Charitable Options are exercisable at any time prior to February 7, 2019
at an adjusted exercise price of $0.5952 per share, all payable in cash.
Any change in the number of outstanding shares of Common Stock
occurring through stock splits, stock dividends or stock consolidations
shall be reflected in a change in the number of shares exercisable upon
exercise of the Charitable Options.
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ISSUANCE OF COMMON STOCK TO
EMPLOYEES TO PAY THEM
THEIR GAIN UNDER HCA'S
EMPLOYEE STOCK PURCHASE PLAN
In connection with the HCA Merger, the Company agreed to pay to each
employee who was a participant in HCA's 1992 Employee Stock Purchase Plan
(the "Stock Purchase Plan") for the plan year ending May 31, 1994 an
amount equal to the product of (a) the excess of (i) the closing price of
the Company's Common Stock on the New York Stock Exchange on October 1,
1993 ($30.25) over (ii) the option price under the Stock Purchase Plan
($16.58) and (b) the number of shares of the Class A Common Stock of HCA
which, immediately prior to the effective time of the HCA Merger (the
"Effective Time"), could have been purchased under the Stock Purchase Plan
with the funds held in such participant's account under such plan at such
time.
This amount (1) shall be payable to employees who were participants
in the Stock Purchase Plan in shares of Common Stock of the Company (the
Shares being valued for this purpose on the basis of the average of the
closing sales prices of a Share as reported on the New York Stock Exchange
Composite Tape over the ten (10) business days immediately preceding the
day during which the Effective Time occurs) and (2) will be paid to such
participants as promptly as practicable after the Effective Time, provided
however, that cash shall be paid the participants in lieu of fractional
Company shares (valued on the same basis as set forth above). Up to
150,000 shares will be distributed to approximately 9,700 participants as
a result of termination of the Stock Purchase Plan.
The Company has also agreed to pay each employee who was a
participant under the Stock Purchase Plan in cash, as promptly as
practicable after the Effective Time, the funds in such participant's
contribution account under the Plan, without interest, in conformity with
the provisions of the Stock Purchase Plan (minus withholding taxes, social
security taxes and other applicable payroll deductions).
RESTRICTIONS ON SALES OF COMMON STOCK/AFFILIATES/SECTION 16
This Prospectus covers the registration of Common Stock issuable by
the Company upon the purchase of shares of Common Stock upon the exercise
of Initial Options, or Charitable Options and the issuance of ESPP Shares.
This Prospectus does not cover the resale of such shares of Common Stock.
Persons who are not deemed to be "affiliates" of the Company, are not
restricted as to sale or other disposition of such shares. However, it
should be noted that all sales of securities, including Common Stock, are
subject to anti-fraud provisions contained in federal and state securities
laws.
An "affiliate" of the Company is a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, the Company. Persons deemed to be
affiliates may sell or otherwise dispose of shares pursuant to Rule 144
promulgated by the Securities and Exchange Commission. The Rule 144
procedure is subject to certain limitations and requirements including
limitations on the number of shares of Common Stock which may be sold in
any three-month period.
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Also, any executive officer or director of the Company holding an
Initial Option granted under the Plan should consider the applicability of
Sections 16 of the Securities Exchange Act of 1934 in connection with the
exercise of any Initial Options and the disposition of any shares of
Common Stock so acquired.
As a result of the foregoing discussion in this section, it may be
advisable for purchasers of shares of Common Stock hereunder to consult
with legal counsel concerning the securities law implications of the
exercise of Initial Options or Charitable Options, or on the issuance of
ESPP Shares, as the case may be, and the acquisition or disposition of
shares of Common Stock obtained as a result thereof.
USE OF PROCEEDS
The net proceeds to be received by the Company from the exercise of
the Initial Options and the Charitable Options will be used by the Company
for general corporate purposes. The Company will not receive any proceeds
from its issuance of the ESPP Shares.
DESCRIPTION OF COLUMBIA CAPITAL STOCK
Authorized Capital Stock
The Company's authorized capital stock consists of 800,000,000
authorized shares of Columbia/HCA Common Stock, 25,000,000 shares of
Columbia/HCA Nonvoting Common Stock and 25,000,000 shares of Columbia/HCA
Preferred Stock.
Common Stock
The holders of Common Stock are entitled to one vote for each share
on all matters voted on by the stockholders, including the election of
directors and, except as otherwise required by law, as provided in the
Company's Restated Certificate of Incorporation with respect to the Series
A Preferred Stock (as defined below) or provided in any resolution adopted
by the Company's Board of Directors with respect to any series of
Preferred Stock, will exclusively possess all voting power. The holders
of Common Stock do not have any cumulative voting, conversion, redemption
or preemptive rights. Subject to any preferential rights of any
outstanding series of Preferred Stock designated by the Columbia Board
from time to time, the holders of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors
from funds available therefor, and upon liquidation are entitled to
receive pro rata all assets of the Company available for distribution to
such holders. The terms of the Common Stock provide that any Regulated
Stockholder (as defined under "Comparative Rights of Stockholders - Common
Stock and Nonvoting Common Stock") may convert shares of Common Stock into
Nonvoting Common Stock.
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Nonvoting Common Stock
The rights of holders of Columbia Nonvoting Common Stock are
identical to those of holders of Common Stock, except with respect to
voting and conversion rights. The holders of Nonvoting Common Stock will
have no right to vote on matters submitted to a vote of stockholders,
except (i) as to an amendment of a provision of the Company's Restated
Certificate of Incorporation that would adversely affect the powers,
preferences or special rights of the holders of the Nonvoting Common Stock
and (ii) as otherwise required by law.
The shares of Nonvoting Common Stock are convertible into Common
Stock on a share-for-share basis (subject to anti-dilution adjustments),
except that no holder of shares of Nonvoting Common Stock may convert any
such shares to the extent that, as a result, the holder and its
affiliates, directly or indirectly, would own, control or have the power
to vote a greater number of shares of Common Stock or other voting capital
stock of Columbia than the holder and its affiliates would be permitted to
own, control or have power to vote under any law, regulation, rule or
other requirement of any governmental authority at the time applicable to
the holder or its affiliates.
Preferred Stock
The Board of Directors is authorized to provide for the issuance of
shares of Preferred Stock, in one or more series, and to fix for each such
series such voting powers, designations, preferences and relative,
participating, optional and other special rights, and such qualifications,
limitations or restrictions, as are stated in the resolution adopted by
the Board of Directors providing for the issuance of such series and as
are permitted by Delaware law. In connection with the stockholder rights
plan adopted by the Company, the Company's Restated Certificate of
Incorporation provides for the issuance of a series of 8,000,000 shares of
Columbia Preferred Stock designated as the Series A Participating
Preferred Stock (the "Series A Preferred Stock") and a series consisting
of 250,000 shares of Preferred Stock designated as the Series B
Participating Preferred Stock (the "Series B Preferred Stock"). For a
description of the terms of the Series A Preferred Stock and Series B
Preferred Stock, see "--Preferred Stock Purchase Rights."
Preferred Stock Purchase Rights
The Board of Directors has adopted a stockholders rights plan,
pursuant to which one Preferred Stock Purchase Right (a "Right") is issued
with respect to each share of Common Stock issued by the Company. Each
Right entitles the registered holder to purchase from the Company one one-
hundredth of a share of Series A Preferred Stock at a price of $100,
subject to adjustment (the "Purchase Price"). The description and terms
of the Rights are set forth in a Rights Agreement as amended, dated
September 1, 1993 (the "Rights Agreement") between Columbia and Mid-
America Bank of Louisville & Trust Company, as Rights Agent (the "Rights
Agent").
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Currently, the Rights are attached to all Common Stock certificates
representing shares outstanding and are not represented by separate Rights
certificates. Until the earlier to occur of (i) the first date (the
"Stock Acquisition Date") of a public announcement that, without the prior
approval of the Company, a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right to
acquire beneficial ownership of securities having 15% or more of the
voting power of all outstanding voting securities of the Company or (ii)
ten days (unless such date is extended by the Board of Directors)
following the commencement of (or a public announcement of an intention to
make) a tender offer or exchange offer which would result in any person or
group of related person becoming an Acquiring Person (the earlier of such
dates being called the "Rights Distribution Date"), the Rights will be
evidenced by Common Stock certificates. Until the Rights Distribution
Date, the Rights will be transferred only with Common Stock certificates.
Common Stock certificates contain a notation incorporating the Rights
Agreement by reference. Until the Rights Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Stock outstanding as of the Rights Distribution
Date will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable
following the Rights Distribution Date, separate certificates evidencing
the Rights ("Rights Certificates") will be mailed to holders of record of
the Common Stock as of the close of business on the Rights Distribution
Date, and the separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Rights Distribution Date.
The Rights expire on the earliest of (i) September 1, 2003, (ii)
consummation of a merger transaction with a person or group who acquired
Common Stock pursuant to a Permitted Offer (as defined below), and is
offering in the merger the same form of consideration, and not less than
the price per share, paid pursuant to the Permitted Offer or (iii)
redemption of the Rights by the Company as described below.
The Purchase Price payable, and the number of shares of Series A
Preferred Stock or other securities issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series A Preferred Stock, (ii) upon the grant to
holders of the Series A Preferred Stock of certain rights or warrants to
subscribe for Series A Preferred Stock certain convertible securities or
securities having rights, privileges and preferences the same as, or more
favorable than, the Series A Preferred Stock at less than the current
market price of the Series A Preferred Stock or (iii) upon the
distribution to holders of the Series A Preferred Stock of evidences of
indebtedness, cash (excluding regular quarterly cash dividends out of
earnings or retained earnings), assets (other than a dividend payable in
Series A Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
In the event that, after the first date of public announcement by
the Company or an Acquiring Person that an Acquiring Person has become
such, the Company is involved in a merger or other business combination
transaction in which the Common Stock is exchanged or changed (other than
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a merger with a person or group who acquired Common Stock pursuant to a
Permitted Offer and is offering in the merger not less than the price paid
pursuant to the Permitted Offer and the same form of consideration paid in
the Permitted Offer), or 50% or more of the Company's assets or earning
power are sold (in one transaction or a series of transactions), proper
provision shall be made so that upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock
of the acquiring company (or, in the event that there is more than one
acquiring company, the acquiring company receiving the greatest portion of
the assets or earning power transferred) which at the time of such
transaction would have a market value of two times the exercise price of
the Right (such right being called the "Merger Right"). "Permitted Offer"
means a tender offer or exchange offer for all outstanding shares of
Common Stock at a price and on terms determined, prior to the purchase of
shares under such tender offer or exchange offer, by at least a majority
of the members of the Board of Directors who are not officers of the
Company to be both adequate and otherwise in the best interest of the
Company, its stockholders (other than the person on whose behalf the offer
is being made) and other relevant constituencies.
In the event that an Acquiring Person becomes such, proper provision
shall be made so that each holder of a Right will have, for a 60 day
period thereafter, the right to receive upon exercise that number of
shares of Common Stock having a market value of two times the exercise
price of the Right, to the extent available, and then (after all
authorized and unreserved shares of Common Stock have been issued) a
common stock equivalent (such as Series A Preferred Stock or another
equity security with at least the same economic value as the Common
Stock), or, in certain circumstances, cash, property or a reduction in the
purchase price, having a market value of two times the exercise price of
the Right (such right being called the "Subscription Right").
The holder of a Right will continue to have the Merger Right whether
or not such holder exercises the Subscription Right. Upon the occurrence
of any of the events giving rise to the right to exercise the Merger Right
or the Subscription Right, any Rights that are or were at any time owned
by an Acquiring Person shall become void insofar as they relate to the
Merger Right or the Subscription Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of
the Common Stock on the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming
an Acquiring Person or (ii) the expiration of the Rights, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 in cash
per Right (the "Redemption Price"), which redemption shall be effective
upon the action of the Board of Directors in the exercise of its sole
discretion. Additionally, the Company may, following the Stock
Acquisition Date, redeem the then outstanding Rights in whole, but not in
part, at the Redemption Price provided that such redemption is (i) in
connection with a merger or other business combination transaction or
series of transactions involving the Company in which all holders of
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<PAGE>
Common Stock are treated alike but not involving an Acquiring Person or
any person who was an Acquiring Person or (ii) following an event giving
rise to, and the expiration of the exercise period for, the Subscription
Right if and for as long as no person beneficially owns securities
representing 15% or more of the voting power of the Company's voting
securities. Upon the effective date of the redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors prior to the Rights Distribution Date. After the
Rights Distribution Date, the provisions of the Rights Agreement may be
amended by the Board of Directors to cure any ambiguity, defect or
inconsistency, or to make changes which do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person).
The Series A Preferred Stock purchasable upon exercise of the Rights
will be nonredeemable and junior to any other series of preferred stock
the Company may issue (unless otherwise provided in the terms of such
stock). Each share of Series A Preferred Stock will have a preferential
quarterly dividend in an amount equal to 100 times the dividend declared
on each share of Common Stock, but in no event less than $1.00. In the
event of liquidation, the holders of Series A Preferred Stock will receive
a preferred liquidation payment equal to $100 per share, plus an amount
equal to accrued and unpaid dividends thereon to the date of such payment.
Each share of Series A Preferred Stock will have 100 votes, voting
together with the shares of Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Series A Preferred Stock will be entitled to
receive 100 times the amount and type of consideration received per share
of Common Stock. The rights of Series A Preferred Stock as to dividends,
liquidation and voting, and in the event of mergers and consolidations,
are protected by customary anti-dilution provisions. Fractional shares of
Series A Preferred Stock will be issuable; however, the Company may elect
to distribute depository receipts in lieu of such fractional shares. In
lieu of fractional shares other than fractions that are multiples of one
one-hundredth of a share, an adjustment in cash will be made based on the
market price of the Series A Preferred Stock on the last trading date
prior to the date of exercise. The terms of the Series A Preferred Stock
also provide that any Regulated Stockholder may convert shares of Series
A Preferred Stock into Series B Preferred Stock.
Until a Right is exercised, the holder thereof, as such, has no
rights as a stockholder of the Company including, without limitation, the
right to vote or to receive dividends.
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<PAGE>
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
the Company without conditioning the offer on the Rights being redeemed or
a substantial number of Rights being acquired. However, the Rights should
not interfere with any tender offer or merger approved by the Company
because the Rights (i) do not become exercisable in the event of a
Permitted Offer and expire automatically upon the consummation of a merger
in which the form of consideration is the same as, and the price is not
less than the price paid in, the Permitted Offer and (ii) are redeemable
in connection with an approved merger in which all holders of Common Stock
are treated alike.
In addition, the Rights Agreement also provides for the issuance of
one Preferred Stock Purchase Right (a "Nonvoting Right") with respect to
each share of Nonvoting Common Stock. Each Nonvoting Right will entitle
the registered holder to purchase from the Company one one-hundredth of a
share of Series B Preferred Stock at a price of $100, subject to
adjustment. The terms of the Nonvoting Rights and the Series B Preferred
Stock are substantially identical to the terms of the Rights and the
Series A Preferred Stock except that (i) the Series B Preferred Stock do
not have the right to vote on matters upon which the Common Stock have the
right to vote, (ii) the subscription right applicable to the Nonvoting
Rights differ from the Subscription Right in that each holder of a
Nonvoting Right will have, for a 60-day period after an Acquiring Person
becomes such, the right to receive upon exercise thereof Nonvoting Common
Stock or a common stock equivalent to the Nonvoting Common Stock instead
of Common Stock, which is the case with respect to the Rights, and (iii)
the shares of Series B Preferred Stock will be convertible into shares of
Series A Preferred Stock.
The foregoing summary of certain terms of the Rights is qualified in
its entirety by reference to the Rights Agreement, a copy of which is
incorporated herein by reference.
PLAN OF DISTRIBUTION
This Prospectus is being issued in connection with the offering by
the Company of 868,612 shares of Common Stock purchasable by (i) Grantees
who have been granted 297,990 Initial Options under the Plan, (ii)
charitable organizations which have been granted 420,622 Charitable
Options and (iii) up to 150,000 shares of Common Stock issuable to participants
in the Stock Purchase Plan for the plan year ending May 31, 1994. See
the discussion above about the plan of distribution set forth under the
captions "Nonqualified Initial Option Plan," "Charitable Options" and
"Issuance of Common Stock to Employees to Pay them Their Gain Under HCA's
Employee Stock Purchase Plan" in this Prospectus.
The shares purchased hereunder shall be issued from the authorized
but unissued shares of Common Stock of the Company. No fees shall be
charged in connection with any exercise of an Initial Option or Charitable
Option or the issuance of the ESPP Shares.
This Prospectus may not be used for reoffers or resales of Common
Stock acquired hereunder.
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<PAGE>
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock being
offered hereby will be passed upon for the Company by Stephen T. Braun,
Senior Vice President and General Counsel of the Company. As of January
31, 1994, Mr. Braun owned 1,072 shares and had stock options to purchase
44,500 shares of Common Stock of the Registrant.
EXPERTS
The consolidated financial statements and financial statement
schedules of Galen and the supplemental consolidated financial statements
and supplemental financial statement schedules of the Company,
incorporated herein by reference in this Prospectus, have been audited by
Coopers & Lybrand, independent accountants, to the extent and for the
periods indicated in their reports thereon incorporated by reference
herein, which include explanatory paragraphs regarding (as to the Company)
the merger of Columbia Hospital Corporation and Galen Health Care, Inc.
and (as to the Company and Galen) on a change in accounting for income
taxes. Such financial statements and financial statement schedules
audited by Coopers & Lybrand have been incorporated herein by reference in
reliance upon such reports given upon the authority of said firm as
experts in accounting and auditing.
The consolidated financial statement schedules of Columbia Hospital
Corporation, incorporated by reference in this Prospectus, have been
audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto. Such financial statements
and schedules audited by Arthur Andersen & Co. have been incorporated
herein by reference in reliance upon the authority of said firm as experts
in accounting and auditing in giving such report.
The consolidated financial statements and financial statement
schedules of HCA-Hospital Corporation of America, incorporated by
reference in this Prospectus, and which are referred to and made a part of
this Prospectus, have been audited by Ernst & Young, independent auditors,
as set forth in their report thereon, included therein, and incorporated
herein by reference. Such financial statements and schedules are
incorporated herein by reference in reliance on such report given upon the
authority of such firm as experts in accounting and auditing.
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<PAGE>
This Prospectus does not COLUMBIA/HCA HEALTHCARE
constitute an offer or solicitation CORPORATION
by anyone in any state in which such
offer or solicitation is not authorized 868,612 Shares
or in which the person making such offer
or solicitation is not qualified to do Common Stock
so or to anyone to whom it is unlawful
to make such offer or solicitation. $.01 Par Value
-----------------
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PROSPECTUS
TABLE OF CONTENTS February ___, 1994
-Page-
Available Information 4
Incorporation of Certain
Documents by Reference 4
The Company 6
Non-Qualified Initial Option Plan 6
Charitable Options 9
Issuance of Common Stock to 10
Employees to Pay Them
Their Gain Under HCA's
Employee Stock Purchase Plan
Restrictions on Sales of
Common Stock/Affiliates/Section 16 10
Use of Proceeds 11
Description of Capital Stock 11
Plan of Distribution 16
Legal Matters 17
Experts 17
-18-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses to be paid by the
Company in connection with the issuance and distribution of the securities
being registered:
Securities and Exchange Commission
Registration Fee $ 2,193.00
Legal Fees and Expenses 5,000.00
Accounting Fees and Expenses 10,000.00
Miscellaneous 2,807.00
_________
TOTAL $20,000.00
=========
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "GCL")
permits a Delaware corporation to indemnify any person who was or is, or
is threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise. The indemnity may include expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided that such person acted in good
faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, such person had no reasonable cause to
believe the conduct was unlawful. A Delaware corporation may indemnify
such persons in actions brought by or in the right of the corporation to
procure a judgment in its favor under the same conditions, except that no
indemnification is permitted in respect of any claim, issue or matter as
to which such person has been adjudged to be liable to the corporation
unless and to the extent the Court of Chancery of the State of Delaware,
or the court in which such action or suit is brought, determines upon
application that, in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as
the Court of Chancery or other such court deems proper. To the extent
such person has been successful on the merits or otherwise in defense of
any action referred to above, or in defense of any claim, issue or matter
therein, the corporation must indemnify such person against expenses
(including attorneys' fees) actually and reasonably incurred by such
person in connection therewith. Corporations, under certain
circumstances, may pay expenses incurred by an officer or director in
advance of the final disposition of an action for which indemnification
may be permitted or required.
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<PAGE>
The indemnification and advancement of expenses provided for or granted
pursuant to Section 145 of the GCL are not exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise. Section 145 further provides that
a corporation may maintain insurance against liabilities for which
indemnification is not expressly provided by statute.
The Sixteenth Article of the Company's Restated Certificate of
Incorporation essentially provides for the indemnification of directors,
officers, employees and agents of the Company to the fullest extent
authorized by the GCL.
The Company will have in effect officers and directors liability
insurance policies with various insurance companies. The policies provide
indemnity to the directors and officers of the Company for loss arising
from claims concerning a covered wrongful act where there is no corporate
indemnification. The insurance will also reimburse the Company for
indemnification it may be required by statute or the Company's Restated
Certificate of Incorporation or By-laws to make to any of its directors
and officers in connection with a claim by reason of a wrongful act. The
policy covers negligent acts, errors, omissions, or breach of duty by a
director or officer. The principal exclusions from coverage include the
following: (i) violations of Section 16(b) of the Securities Exchange Act
of 1934; (ii) dishonest acts; and (iii) libel, slander or non-monetary
damages. The policy provides for a $1,000,000 deductible self-insurance
retention by the Company. The limit of liability under the policies is
$60,000,000 in the aggregate annually for coverage in excess of
deductibles and participation.
The Company has entered into Indemnity Agreements (the "Agreements")
with certain of its directors and officers ("Indemnitees"), whereby the
Company will indemnify such parties and advance expenses to the fullest
extent permitted by the GCL.
An Indemnitee will not be entitled to indemnification or advancement
of expenses under the Agreements with respect to any proceeding or claim
brought or made by the Indemnitee against the Company. If the Indemnitee
is not entitled to indemnification of all expenses, he or she may still be
indemnified for a portion of the expenses. The determination of
entitlement to indemnification under the Agreements will be made by a
majority of a quorum of disinterested directors, independent counsel or by
the stockholders of the Company. In the event of a change in control of
the Company (as defined in the Agreements), the determination of
entitlement will be made, if the Indemnitee so elects, by an independent
counsel selected by the Indemnitee, and the Company will have the burden
of proof to overcome a presumption that the Indemnitee is entitled to
indemnification.
The Agreements further provide that to the extent the Company
maintains a liability insurance policy for directors, officers, employees,
agents or fiduciaries, the Indemnitee will be covered by such policy in
accordance with its terms to the maximum extent of the coverage available
for any such officer, director, employee, agent or fiduciary under the
policy. The Agreements will terminate upon the later of: (a) 10 years
after the date the Indemnitee ceases to serve; or (b) the final
termination of all pending proceedings covered thereunder.
II-2
<PAGE>
Item 16. Exhibits.
The Exhibit Index immediately preceding the exhibits is incorporated
by reference herein.
Item 17. Undertakings.
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 herein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
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,
unless the information required to be included in
such post-effective amendment is contained in a
periodic report filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by
reference;
(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, unless the
information required to be included in such
post-effective amendment is contained in a
periodic report filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by
reference; and
(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;
(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; and
II-3
<PAGE>
(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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in such Act and is, therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
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 Company 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 of whether such indemnification by
it is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
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 Louisville, Commonwealth of
Kentucky, on the 23 day of February, 1994.
COLUMBIA/HCA HEALTHCARE CORPORATION
By STEPHEN T. BRAUN
Senior Vice President and
General Counsel
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature
appears below constitutes and appoints Stephen T. Braun and David C.
Colby, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and re-substitution, for him or
her and in his or her name, place and stead, in any and all capacities, to
sign any and all Amendments (including Post-Effective Amendments) to this
Registration Statement, and to file the same, with all 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 such and every
act and thing requisite and necessary to be done, as fully to all intents
and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them,
or their or his or her substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
II-4
<PAGE>
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
Thomas F. Frist,Jr.,M.D. Chairman of the Board February 23, 1994
Richard L. Scott Chief Executive Officer February 23, 1994
(Principal Executive Officer)
and Director
David C. Colby Chief Financial Officer February 23, 1994
(Principal Financial Officer)
Richard A. Lechleiter Vice President & Controller February 23, 1994
(Principal Accounting Officer)
Magdalena Averhoff, M.D. Director February 23, 1994
J. David Grissom Director February 23, 1994
Ethan Jackson Director February 23, 1994
Charles J. Kane Director February 23, 1994
John W. Landrum Director February 23, 1994
T. Michael Long Director February 23, 1994
Darla D. Moore Director February 23, 1994
Rodman W. Moorhead III Director February 23, 1994
Carl F. Pollard Director February 23, 1994
Carl E. Reichardt Director February 23, 1994
Frank S. Royal, M.D. Director February 23, 1994
Robert D. Walter Director February 23, 1994
William T. Young Director February 23, 1994
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit Index
4.1 Restated Certificate of Incorporation filed as Appendix D to
the Company's Registration Statement on Form S-4, as amended,
(No. 33-50735), is incorporated by reference herein.
4.2 Stock Option Pledge Agreement - 1990
4.3 Stock Option Pledge Agreement - 1991
4.4 Stock Option Pledge Agreement - 1993
4.5 Stock Option Pledge Agreement - 1994
4.6 HCA Initial Option Plan
4.7 Form of Amended and Restated Rights Agreement, dated February
10, 1994 between Columbia Healthcare Corporation and Mid-
America Bank of Louisville and Trust Company. Exhibit 4.9 to
the Company's Registration Statement on Form S-4, as amended,
(File No. 33-50735) is incorporated by reference herein.
5 Opinion of Stephen T. Braun, Senior Vice President and General
Counsel of the Registrant, as to the validity of the
securities registered herein.
24.1 Consent of Stephen T. Braun, Senior Vice President and General
Counsel of the Registrant, included in 5 above.
24.2 Consent of Coopers & Lybrand.
24.3 Consent of Ernst & Young
24.4 Consent of Arthur Andersen & Co.
25 Power of Attorney (included on the signature page of this
Registration Statement).
II-6
EXHIBIT 4.2
STOCK OPTION PLEDGE AGREEMENT
STOCK OPTION PLEDGE AGREEMENT (the "Option" or the "Agreement"),
made as of the 1st day of October, 1990, by and between HCA-HOSPITAL
CORPORATION OF AMERICA, a Delaware corporation, having its principal place
of business at One Park Plaza, Nashville, Tennessee (the "Company") and
THE HCA FOUNDATION, a charitable corporation, having its principal office
at One Park Plaza, Nashville, Tennessee (the "Optionee").
As a charitable contribution, the Company hereby pledges and grants
an option on 539 shares of the Class A Common Stock of the Company, par
value $.01 per share (the "Common Stock"), to the Optionee at the price
and in all respects subject to the terms, conditions and provisions of
this Agreement.
1. Option Price. The option price is $90.91 for each share.
2. Exercise of Option. This Option shall be exercisable, in
whole or in part, at any time and from time to time during the period
commencing on the date hereof and ending twenty-five (25) years
thereafter, in accordance with the terms of this Agreement as follows:
(a) Method of Exercise. This Option shall be exercisable, in
whole or in part and from time to time until all shares
subject to the Option have been acquired or the Option has
expired, by a written notice of exercise which shall:
(1) state the election to exercise the Option and the
number of shares in respect of which it is being
exercised; and
(2) contain such representations and agreements as to
investment intent with respect to such shares of
Common Stock as may be satisfactory to the Company's
counsel; and
(3) be signed by the authorized officer of the Optionee
and, if the Option is being exercised by any person
or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of
the right of such person or persons to exercise the
Option.
Payment of the purchase price of any shares with respect to which
the Option is being exercised shall be by certified or bank cashier's or
teller's check, and shall be delivered with the notice of exercise. The
certificate or certificates for shares of Common Stock as to which the
Option shall be exercised shall be registered in the name of the Optionee
or such other allowable entity or entities exercising the Option.
<PAGE>
(b) Restrictions on Exercise. As a condition to his exercise
of this Option, the Company may require the Optionee or the
person exercising this Option to make any representation to
the Company as may be required by counsel for the Company.
3. Nontransferability of Option. This Option may not be
transferred except upon the following conditions:
(a) Self-Dealing. In the event the exercise of this Option or
any portion of this Option by the Optionee will constitute
an act of "self-dealing" (as defined in 4941(d) of the
Internal Revenue Code of 1986, as amended, or of the
corresponding provisions of any subsequent federal tax laws
(collectively, the "Code"), which would give rise to any
liability for the tax imposed by 4941(a) of the Code, then
the Optionee may transfer this Option in whole or in part
to one or more transferees provided each such transferee
must be a "charitable" organization under Section 501(c)(3)
of the Code; or
(b) Termination. In the event of termination, dissolution or
winding up of the Optionee, the Optionee may transfer this
Option (or any unexercised portion) to any organization or
organizations to which it is permitted to transfer its
assets under the provisions of the Charter of the Optionee.
It will be presumed for purposes of this Agreement that the exercise
of the Option by the Optionee would constitute an act of self-dealing (as
described above) unless Optionee receives written notice from the Company
stating, based upon the advice of counsel, the Company no longer believes
that the exercise of the Option by the Optionee would constitute an act of
self-dealing.
In the event the Option is transferred under the provisions of this
paragraph, transfer shall be made by written notice from the Optionee to
the Company setting forth the name and address of the transferee and the
number of shares with respect to which the option is being transferred.
The transfer of the Option with respect to such shares will not be
effective until the Company has received from its counsel a written
opinion that the proposed transfer is authorized under the terms of this
Agreement and that the proposed transfer will not violate any applicable
state or federal securities laws or the rules and regulations of any stock
exchange on which the stock of the Company is then listed.
In the event of a transfer of the Option by the Optionee, no
subsequent transfer or assignment of the Option shall be made by the
transferee.
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<PAGE>
A transfer or attempted transfer of the Option in violation of the
terms of this Agreement shall terminate and extinguish the Option with
respect to the shares covered by the transfer or attempted transfer.
4. Stock Subject to the Option. The Board of Directors of the
Company shall set aside and reserve five hundred thirty-nine (539) shares
of the authorized and unissued Common Stock to be issued in satisfaction
of this Option. If the Option should expire or become unexercisable for
any reason without having been exercised in full, the shares which were
subject thereto shall be free from any restrictions. The Company will not
be required to issue or deliver any certificate or certificates for shares
to be issued hereunder until such shares have been listed (or authorized
for listing upon official notice of issuance) upon each stock exchange on
which outstanding shares of the same class may then be listed and until
the Company has taken such steps as may, in the opinion of counsel for the
Company, be required by law and applicable regulations, including the
rules and regulations of the Securities and Exchange Commission, and state
blue-sky laws and regulations, in connection with the issuance or sale of
such shares, and the listing of such shares on each such exchange. The
Company will use its best efforts to comply with any such requirements.
5. Adjustments Upon Changes in Capitalization.
(a) Any change in the number of outstanding shares of Common Stock
occurring through stock splits, stock dividends or stock consolidations
after the execution of this Agreement shall be reflected proportionately
in a change in the number of shares subject to this Option then
outstanding and in the amounts remaining available for purchase under this
Option; and a proportionate change shall be made in the per share option
price as to any outstanding options or portions thereof not yet exercised.
Fractional shares shall be rounded to the nearest whole shares. If
changes in capitalization other than those considered above shall occur,
the Company shall, in good faith, make such adjustments as it may consider
appropriate in the number and class of shares remaining subject to options
previously granted and in the per share option price.
(b) In the event that the outstanding shares of Common Stock are
changed into or exchanged for a different number or kind of shares or
other securities or property (including cash) of the Company or of
another corporation by reason of reorganization, merger, consolidation or
sale or transfer of all or substantially all of the Company's assets to
another corporation, appropriate adjustments shall be made by the Company,
in good faith, in the number and kind of shares, other securities or
property as to which outstanding options, or portions thereof then
unexercised, shall be exercisable. Any adjustment of this Agreement or in
this outstanding Option shall be effective on the effective date of the
event giving rise to such adjustment.
-3-
<PAGE>
6. Notices. Each notice relating to this Agreement shall be
in writing and delivered in person or by certified mail to the proper
address. Each notice shall be deemed to have been given on the date it is
received. Each notice to the Company shall be addressed to it at its
principal office, now at One Park Plaza, Nashville, Tennessee 37203,
attention of the Secretary. Each notice to the Optionee shall be
addressed to the Optionee at the Optionee's address set forth in the
heading of this Agreement. In the event of a transfer of this Option, in
whole or in part, notice to a transferee shall be sent to the address set
forth in the notice of transfer required by paragraph 3 of this Agreement.
Anyone to whom a notice may be given under this Agreement may designate a
new address by notice to that effect.
7. Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon each successor of the Company. All
obligations imposed upon the Optionee and all rights granted to the
Company under this Agreement shall be binding upon the Optionee's
successors and any assignee of this Option. This Agreement shall be the
sole and exclusive source of any and all rights which the Optionee, its
successors or assigns may have in respect to any options or Common Stock
granted or issued hereunder.
8. Resolution of Disputes. Any dispute or disagreement which
should arise under, or as a result of, or in any way relate to, the
interpretation, construction or application of this Agreement will be
determined by the Board of Directors of the Company. Any determination
made hereunder shall be final, binding and conclusive for all purposes.
9. Execution of Other Relevant Agreements Upon Exercise. As
soon as practicable after exercise of this Option, the party exercising
this Option shall deliver to the Company an agreement executed and
delivered by such person in which such person accepts and agrees to the
terms of the Stockholders Agreement (as defined below), the Voting
Agreement (as defined below), the Proxy Agreement (as defined below) and
the Registration Rights Agreement (as defined below), to the extent such
agreements are in effect on the date of the exercise, unless such person
is already a party to such agreements; and the terms of such agreements
will, without any action on the part of the Company or such person, be
applicable to the shares of Common stock issuable in respect of this
Option. The term "Stockholders Agreement" means the Stockholders
Agreement dated as of March 16, 1989, as amended, by and among the Company
and the other persons and entities parties thereto. The terms "Voting
Agreement", "Proxy Agreement" and "Registration Rights Agreement" are as
defined in the Stockholders Agreement.
10. Certain Other Miscellaneous Provisions.
(a) No Optionee shall have any rights of a stockholder of the
Company with respect to shares subject to this Option until he has given
written notice of exercise of this Option and paid in full for such
shares, and a stock certificate has been issued to the Optionee for such
shares of Common Stock.
-4-
<PAGE>
(b) The Company may require each person purchasing shares of
Common Stock pursuant to the Option to represent to and agree with the
Company in writing that he is acquiring the shares without a view to
distribution thereof. If the Common Stock issuable upon exercise of this
Option is not registered pursuant to the Securities Act of 1933 at the
time this Option is exercised, the certificates for such shares may
include any legend which the Company deems appropriate to reflect any
restrictions on transfers. If at the time of exercise of any portion of
the option granted hereunder, any of the Stockholders Agreement, Voting
Agreement, or Proxy Agreement remain in effect, the stock certificates for
the shares of Common Stock issuable upon such exercise will bear the
legend required by any such agreement then in effect.
(c) No benefit or promise under this Agreement shall be secured
by any specific assets of the Company, nor shall any assets of the Company
be designated as attributable or allocated to the satisfaction of the
Company's obligations under this Agreement.
(d) This Agreement shall be governed by the laws of the State
of Delaware.
IN WITNESS WHEREOF, the Company and the Optionee have caused this
Agreement to be executed as of the day, month and year first above
written.
HCA-HOSPITAL CORPORATION OF AMERICA
By: ______________________________
Ronald P. Soltman
Vice President
THE HCA FOUNDATION
By: ______________________________
Ida F. Cooney
Executive Director
-5-
EXHIBIT 4.3
STOCK OPTION PLEDGE AGREEMENT
STOCK OPTION PLEDGE AGREEMENT (the "Option" or the "Agreement"),
made on the 27th day of December 1991, by and between HCA-HOSPITAL
CORPORATION OF AMERICA, a Delaware corporation, having its principal place
of business at One Park Plaza, Nashville, Tennessee (the "Company") and
THE HCA FOUNDATION, a charitable corporation, having its principal office
at One Park Plaza, Nashville, Tennessee (the "Optionee").
As a charitable contribution, the Company hereby pledges and grants
an option on 1,000 shares (before the 400-for-1 stock split in December
1991) of the Class A Common Stock of the Company, par value $.01 per share
(the "Common Stock"), to the Optionee at the price and in all respects
subject to the terms, conditions and provisions of this Agreement.
1. Option Price. The option price is $250 for each share.
2. Exercise of Option. This Option shall be exercisable, in
whole or in part, at any time and from time to time during the period
commencing on the date hereof and ending twenty-five (25) years
thereafter, in accordance with the terms of this Agreement as follows:
(a) Method of Exercise. This Option shall be exercisable, in
whole or in part and from time to time until all shares
subject to the Option have been acquired or the Option has
expired, by a written notice of exercise which shall:
(1) state the election to exercise the Option and the
number of shares in respect of which it is being
exercised; and
(2) contain such representations and agreements as to
investment intent with respect to such shares of
Common Stock as may be satisfactory to the Company's
counsel; and
(3) be signed by the authorized officer of the Optionee
and, if the Option is being exercised by any person
or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of
the right of such person or persons to exercise the
Option.
Payment of the purchase price of any shares with respect to which
the Option is being exercised shall be by certified or bank cashier's or
teller's check, and shall be delivered with the notice of exercise. The
certificate or certificates for shares of Common Stock as to which the
Option shall be exercised shall be registered in the name of the Optionee
or such other allowable entity or entities exercising the Option.
(b) Restrictions on Exercise. As a condition to his exercise
of this Option, the Company may require the Optionee or the
person exercising this Option to make any representation to
the Company as may be required by counsel for the Company.
<PAGE>
3. Restrictions on Exercise and Transfer. This Option may not
be exercised or transferred, except upon the following conditions:
(a) Self-Dealing. In the event the exercise of this Option or
any portion of this Option by the Optionee will constitute
an act of "self-dealing" (as defined in 4941(d) of the
Internal Revenue Code of 1986, as amended, or of the
corresponding provisions of any subsequent federal tax laws
(collectively, the "Code"), which would give rise to any
liability for the tax imposed by 4941(a) of the Code, then
the Optionee may transfer this Option in whole or in part
to one or more transferees provided each such transferee
must be a "charitable" organization under Section 501(c)(3)
of the Code; or
(b) Termination. In the event of termination, dissolution or
winding up of the Optionee, the Optionee may transfer this
Option (or any unexercised portion) to any organization or
organizations to which it is permitted to transfer its
assets under the provisions of the Charter of the Optionee.
It will be presumed for purposes of this Agreement that the exercise
of the Option by the Optionee would constitute an act of self-dealing (as
described above) unless Optionee receives written notice from the Company
stating, based upon the advice of counsel, the Company no longer believes
that the exercise of the Option by the Optionee would constitute an act of
self-dealing.
In the event the Option is transferred under the provisions of this
paragraph, transfer shall be made by written notice from the Optionee to
the Company setting forth the name and address of the transferee and the
number of shares with respect to which the option is being transferred.
The transfer of the Option with respect to such shares will not be
effective until the Company has received from its counsel a written
opinion that the proposed transfer is authorized under the terms of this
Agreement and that the proposed transfer will not violate any applicable
state or federal securities laws or the rules and regulations of any stock
exchange on which the stock of the Company is then listed.
In the event of a transfer of the Option by the Optionee, no
subsequent transfer or assignment of the Option shall be made by the
transferee, but upon such transfer, the transferee may then exercise the
Option in conformity with the provisions of Section 2 hereof.
An exercise, transfer or attempted transfer of the Option in
violation of the terms of this Agreement shall terminate and extinguish
the Option with respect to the shares covered by the transfer or attempted
transfer.
4. Stock Subject to the Option. The Board of Directors of the
Company shall set aside and reserve one thousand (1,000) shares of the
authorized and unissued Common Stock to be issued in satisfaction of this
Option. If the Option should expire or become unexercisable for any
reason without having been exercised in full, the shares which were
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<PAGE>
subject thereto shall be free from any restrictions. The Company will not
be required to issue or deliver any certificate or certificates for shares
to be issued hereunder until such shares have been listed (or authorized
for listing upon official notice of issuance) upon each stock exchange on
which outstanding shares of the same class may then be listed and until
the Company has taken such steps as may, in the opinion of counsel for the
Company, be required by law and applicable regulations, including the
rules and regulations of the Securities and Exchange Commission, and state
blue-sky laws and regulations, in connection with the issuance or sale of
such shares, and the listing of such shares on each such exchange. The
Company will use its best efforts to comply with any such requirements.
5. Adjustments Upon Changes in Capitalization.
(a) Any change in the number of outstanding shares of Common Stock
occurring through stock splits, stock dividends or stock consolidations
after the execution of this Agreement shall be reflected proportionately
in a change in the number of shares subject to this Option then
outstanding and in the amounts remaining available for purchase under this
Option; and a proportionate change shall be made in the per share option
price as to any outstanding options or portions thereof not yet exercised.
Fractional shares shall be rounded to the nearest whole shares. If
changes in capitalization other than those considered above shall occur,
the Company shall, in good faith, make such adjustments as it may consider
appropriate in the number and class of shares remaining subject to options
previously granted and in the per share option price.
(b) In the event that the outstanding shares of Common Stock are
changed into or exchanged for a different number or kind of shares or
other securities or property (including cash) of the Company or of
another corporation by reason of reorganization, merger, consolidation or
sale or transfer of all or substantially all of the Company's assets to
another corporation, appropriate adjustments shall be made by the Company,
in good faith, in the number and kind of shares, other securities or
property as to which outstanding options, or portions thereof then
unexercised, shall be exercisable. Any adjustment of this Agreement or in
this outstanding Option shall be effective on the effective date of the
event giving rise to such adjustment.
6. Notices. Each notice relating to this Agreement shall be
in writing and delivered in person or by certified mail to the proper
address. Each notice shall be deemed to have been given on the date it is
received. Each notice to the Company shall be addressed to it at its
principal office, now at One Park Plaza, Nashville, Tennessee 37203,
attention of the Secretary. Each notice to the Optionee shall be
addressed to the Optionee at the Optionee's address set forth in the
heading of this Agreement. In the event of a transfer of this Option, in
whole or in part, notice to a transferee shall be sent to the address set
forth in the notice of transfer required by paragraph 3 of this Agreement.
Anyone to whom a notice may be given under this Agreement may designate a
new address by notice to that effect.
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<PAGE>
7. Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon each successor of the Company. All
obligations imposed upon the Optionee and all rights granted to the
Company under this Agreement shall be binding upon the Optionee's
successors and any assignee of this Option. This Agreement shall be the
sole and exclusive source of any and all rights which the Optionee, its
successors or assigns may have in respect to any options or Common Stock
granted or issued hereunder.
8. Resolution of Disputes. Any dispute or disagreement which
should arise under, or as a result of, or in any way relate to, the
interpretation, construction or application of this Agreement will be
determined by the Board of Directors of the Company. Any determination
made hereunder shall be final, binding and conclusive for all purposes.
9. Execution of Other Relevant Agreements Upon Exercise. As
soon as practicable after exercise of this Option, the party exercising
this Option shall deliver to the Company an agreement executed and
delivered by such person in which such person accepts and agrees to the
terms of the Stockholders Agreement (as defined below), the Voting
Agreement (as defined below), the Proxy Agreement (as defined below) and
the Registration Rights Agreement (as defined below), to the extent such
agreements are in effect on the date of the exercise, unless such person
is already a party to such agreements; and the terms of such agreements
will, without any action on the part of the Company or such person, be
applicable to the shares of Common stock issuable in respect of this
Option. The term "Stockholders Agreement" means the Stockholders
Agreement dated as of March 16, 1989, as amended, by and among the Company
and the other persons and entities parties thereto. The terms "Voting
Agreement", "Proxy Agreement" and "Registration Rights Agreement" are as
defined in the Stockholders Agreement.
10. Certain Other Miscellaneous Provisions.
(a) No Optionee shall have any rights of a stockholder of the
Company with respect to shares subject to this Option until he has given
written notice of exercise of this Option and paid in full for such
shares, and a stock certificate has been issued to the Optionee for such
shares of Common Stock.
(b) The Company may require each person purchasing shares of
Common Stock pursuant to the Option to represent to and agree with the
Company in writing that he is acquiring the shares without a view to
distribution thereof. If the Common Stock issuable upon exercise of this
Option is not registered pursuant to the Securities Act of 1933 at the
time this Option is exercised, the certificates for such shares may
include any legend which the Company deems appropriate to reflect any
restrictions on transfers. If at the time of exercise of any portion of
the option granted hereunder, any of the Stockholders Agreement, Voting
Agreement, or Proxy Agreement remain in effect, the stock certificates for
the shares of Common Stock issuable upon such exercise will bear the
legend required by any such agreement then in effect.
-4-
<PAGE>
(c) No benefit or promise under this Agreement shall be secured
by any specific assets of the Company, nor shall any assets of the Company
be designated as attributable or allocated to the satisfaction of the
Company's obligations under this Agreement.
(d) This Agreement shall be governed by the laws of the State
of Delaware.
11. Transfer to The Nashville Community Foundation.
Notwithstanding anything to the contrary set forth herein, the Optionee
agrees promptly to transfer this Option to The Nashville Community
Foundation ("NCF"), in full and without the payment of consideration to
Optionee (the "Mandated Transfer"), upon receipt of written notice from
the Company or from NCF that NCF has received a letter from the Internal
Revenue Service granting NCF Section 501(c)(3) "tax-exempt" status; and
upon consummation of the Mandated Transfer, the provisions of Section 3 of
this Agreement shall then be deemed immediately deleted from the terms and
conditions of this Option without further action by the Company, the
Optionee or NCF.
IN WITNESS WHEREOF, the Company and the Optionee have caused this
Agreement to be executed as of the day, month and year first above
written.
HCA-HOSPITAL CORPORATION OF AMERICA
By: ________________________________
Ronald P. Soltman
Vice President
THE HCA FOUNDATION
By: ________________________________
-5-
EXHIBIT 4.4
STOCK OPTION PLEDGE AGREEMENT
STOCK OPTION PLEDGE AGREEMENT (the "Agreement"), made on the 24th
day of May 1993, by and between HCA-HOSPITAL CORPORATION OF AMERICA, a
Delaware corporation, having its principal place of business at One Park
Plaza, Nashville, Tennessee 37203 (the "Company") and UNITED WAY OF MIDDLE
TENNESSEE, a charitable corporation, having its principal place of
business at 250 Venture Circle, Nashville, Tennessee 37228 (the
"Optionee").
WHEREAS, The HCA Foundation has a remaining charitable pledge to
Optionee for 1993 aggregating $188,000;
WHEREAS, The HCA Foundation expects to make charitable pledges to
Optionee for the years 1994 and 1995 in the amounts of approximately
$520,000 and $545,000, respectively;
NOW, THEREFORE, the Company and Optionee agree as follows:
1. Charitable Pledge. As a charitable contribution on behalf
of itself and The HCA Foundation, the Company hereby pledges and grants
options (the "Options") on an aggregate of 55,000 shares of the Class A
Common Stock of the Company, par value $.01 per share (the "Common
Stock"), to the Optionee at the price and in all respects subject to the
terms, conditions and provisions of this Agreement.
2. Option Exercise Price. The option exercise price is $0.625
for each share purchasable hereunder, payable all in cash at the time of
exercise.
3. Vesting and Exercisability. The Options will vest and be
exercisable in conformity with the following schedule:
(1) On or after August 1, 1993, Optionee may exercise Options
exercisable into such number of shares of Common Stock (the
"1993 Options") which if immediately sold would generate
$188,000 in profits to the Optionee.
(2) On or after August 1, 1994, Optionee may exercise Options
exercisable into such number of shares of Common Stock (the
"1994 Shares") which if immediately sold would generate no
more than $520,000 in profits to the Optionee.
(3) On or after August 1, 1995, Optionee may exercise Options
exercisable into such number of shares of Common Stock (the
"1995 Options") which if immediately sold would generate no
more than $545,000 in profits to the Optionee.
<PAGE>
The foregoing calculations of profits are to be made net of the Optionee's
expected trading commissions and the option exercise price of $0.625 per
share and by utilizing the closing price of a share of Common Stock on the
last public trading date before the day of exercise. Such calculations
are subject to verification by the Company. In the event that additional
Options remain after Optionee's exercise of all 1993, 1994 and 1995
Options, such Options will become exercisable in their entirety on or
after August 1, 1996, with the net proceeds of the sale of shares related
thereto to be applied in satisfaction of any pledge of HCA or The HCA
Foundation to Optionee for 1996 or thereafter.
4. Period of Exercisability; Exercise of Options. Once they
have vested and become exercisable, the Options shall be exercisable, in
whole or in part, at any time thereafter during the period commencing on
the date they become exercisable pursuant to Section 3 hereof and ending
on May 31, 2003 in accordance with the terms of this Agreement as follows:
(a) Method of Exercise. Once exercisable, the Options shall be
exercisable, in whole or in part and from time to time,
until all shares of Common Stock subject to the Options
have been acquired or the Options have expired, by a
written notice of exercise which shall be in the form of
Notice of Exercise attached hereto as Exhibit A and shall
be signed by an authorized officer of Optionee.
(b) Payment of Option Exercise Price. Payment of the option
exercise price of any shares with respect to which the
Options are being exercised shall be by good and valid
check payable to the order of the Company and shall be
delivered with the Notice of Exercise. The certificate or
certificates for shares of Common Stock as to which the
Options shall be exercised shall be registered in the name
of the Optionee or its designee as set forth in the Notice
of Exercise.
5. Stock Subject to the Option. The Board of Directors of the
Company shall set aside and reserve fifty-five thousand (55,000) shares of
the authorized and unissued Common Stock to be issued in satisfaction of
exercise of the Options. If all or any part of the Options should expire
or become unexercisable for any reason without having been exercised in
full, the shares which were subject thereto shall be free from any
restrictions. The Company will not be required to issue or deliver any
certificate or certificates for shares to be issued hereunder until such
shares have been listed (or authorized for listing upon official notice of
issuance) upon each stock exchange on which outstanding shares of the same
class may then be listed and until the Company has taken such steps as
may, in the opinion of counsel for the Company, be required by law and
applicable regulations in respect of their issuance, including the rules
and regulations of the Securities and Exchange Commission, and state blue-
sky laws and regulations, in connection with the issuance or sale of such
shares, and the listing of such shares on each such exchange. The Company
will use its reasonable best efforts to comply with any such requirements.
-2-
<PAGE>
6. Adjustments Upon Changes in Capitalization.
(a) Any change in the number of outstanding shares of Common Stock
occurring through stock splits, stock dividends or stock consolidations
after the execution of this Agreement shall be reflected proportionately
in a change in the number of shares subject to the Options then
outstanding and in the amounts remaining available for purchase under the
Options; and a proportionate change shall be made in the per share option
exercise price as to any outstanding Options or portions thereof not yet
exercised. Fractional shares shall be rounded to the nearest whole
shares. If changes in capitalization other than those considered above
shall occur, the Company shall, in good faith, make such adjustments as it
may consider appropriate in the number and class of shares remaining
subject to options previously granted and in the per share option exercise
price.
(b) In the event that the outstanding shares of Common Stock are
changed into or exchanged for a different number or kind of shares or
other securities or property (including cash) of the Company or of
another corporation by reason of reorganization, merger, consolidation or
sale or transfer of all or substantially all of the Company's assets to
another corporation, appropriate adjustments shall be made by the Company,
in good faith, in the number and kind of shares, other securities or
property as to which outstanding options, or portions thereof then
unexercised, shall be exercisable. Any adjustment of this Agreement or in
the outstanding Options shall be effective on the effective date of the
event giving rise to such adjustment.
7. Notices. Each notice relating to this Agreement shall be
in writing and delivered in person or by U.S. mail to the proper address.
Each notice shall be deemed to have been given on the date it is received.
Each notice to the Company shall be addressed to it at its principal
office, now at One Park Plaza, Nashville, Tennessee 37203, attention of
the Secretary. Each notice to the Optionee shall be addressed to the
Optionee at the Optionee's address set forth in the heading of this
Agreement. Anyone to whom a notice may be given under this Agreement may
designate a new address by notice to that effect.
8. No Assignment; Benefit of Agreement. THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NEITHER THE COMPANY NOR
THE OPTIONEE SHALL ASSIGN OR OTHERWISE TRANSFER ITS RIGHTS OR OBLIGATIONS
UNDER THIS AGREEMENT. OPTIONEE SHALL NOT ASSIGN OR OTHERWISE TRANSFER THE
OPTIONS OR ANY PART THEREOF. This Agreement shall inure to the benefit of
and be binding upon each successor of the Company. All obligations
imposed upon the Optionee and all rights granted to the Company under this
Agreement shall be binding upon the Optionee's successors. This Agreement
shall be the sole and exclusive source of any and all rights which the
Optionee and its successors may have in respect to the Options or any
shares of Common Stock issued hereunder.
-3-
<PAGE>
9. Resolution of Disputes. Any dispute or disagreement which
should arise under, or as a result of, or in any way relate to, the
interpretation, construction or application of this Agreement will be
determined by the Board of Directors of the Company. Any determination
made hereunder by such Board shall be final, binding and conclusive for
all purposes.
10. Miscellaneous Provisions.
(a) The Optionee shall have no rights of a stockholder of the
Company with respect to shares issuable upon exercise of the Options until
it has given written notice of exercise of the Options and paid in full
for such shares, and a stock certificate(s) has been issued to the
Optionee or its designee for such shares of Common Stock.
(b) If the Common Stock issuable upon exercise of this Option
has not been registered pursuant to the Securities Act of 1933 at the time
this Option is exercised in whole or in part, (i) the Company may require
each person receiving shares of Common Stock pursuant to exercise of the
Options to represent to and agree with the Company in writing that it is
acquiring the shares without a view to distribution thereof and (ii) the
certificates for such shares may include any legend which the Company
deems appropriate to reflect any restrictions on transfers on the non-
registration of such shares under the Securities Act of 1933.
(c) No benefit or promise under this Agreement shall be secured
by any specific assets of the Company, nor shall any assets of the Company
be designated as attributable or allocated to the satisfaction of the
Company's obligations under this Agreement.
(d) This Agreement shall be governed by the laws of the State
of Tennessee without regard to such state's conflict of laws rules.
IN WITNESS WHEREOF, the Company and the Optionee have caused this
Agreement to be executed as of the day, month and year first above
written.
HCA-HOSPITAL CORPORATION OF AMERICA
By: ______________________________
Ronald P. Soltman
Vice President
UNITED WAY OF MIDDLE TENNESSEE
By: ______________________________
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<PAGE>
Exhibit A
**********
NOTICE OF EXERCISE BY UNITED WAY OF MIDDLE TENNESSEE
OF STOCK OPTIONS ISSUED PURSUANT TO
STOCK OPTION PLEDGE AGREEMENT
DATED MAY __, 1993
***************
____________, 199_
HCA-Hospital Corporation of America
One Park Plaza
Nashville, Tennessee 37203
Attention: Secretary
The undersigned hereby exercises its right as Optionee under the
Stock Option Pledge Agreement (the "Agreement") dated May __, 1993, to
purchase _____________ shares of the Class A Common Stock, $.01 par value,
of HCA-Hospital Corporation of America, a Delaware corporation (the
"Company"), at a per share option exercise price of $0.625 per share. The
"total option exercise price" for the shares is $______________ (total
number of shares purchased multiplied by $0.625). Enclosed is a check in
the amount of $___________ made payable to HCA-Hospital Corporation of
America to pay the "total option exercise price". The undersigned
represents, warrants and affirms that the Options exercised hereunder have
vested and are exercisable under Section 3 of the Agreement.
Please issue the stock certificates as follows:
Name(s) and Address: MAIL TO:
_______________________ _______________________
_______________________ _______________________
_______________________ _______________________
Taxpayer Identification
Number 62-___________
Please Issue Certificate(s) as follows:
____________ Certificates for __________ shares each.
____________ Certificates for __________ shares each.
____________ Certificates for __________ shares each.
Option Reconciliation Chart:
Options Heretofore Exercised ______
Options Hereby Exercised ______
Options Remaining for Future Exercise______
Total: 55,000
UNITED WAY OF MIDDLE TENNESSEE
By: ________________________________
Print Name: ________________________
[n.b.THE FOLLOWING TO BE ADDED ONCE THE SHARES ARE REGISTERED:
NOTE: SHARES ISSUED PURSUANT TO OPTION EXERCISES ON THIS FORM HAVE BEEN
REGISTERED PURSUANT TO REGISTRATION STATEMENT NO. 33-_____ ON FORM S-3 OF
HCA-HOSPITAL CORPORATION OF AMERICA EFFECTIVE _____________, 1993.]
EXHIBIT 4.5
STOCK OPTION PLEDGE AGREEMENT
STOCK OPTION PLEDGE AGREEMENT (the "Option" or the "Agreement"),
made on the 7th day of February 1994, by and between HCA-HOSPITAL
CORPORATION OF AMERICA, a Delaware corporation, having its principal place
of business at One Park Plaza, Nashville, Tennessee (the "Company") and
THE HCA FOUNDATION, a charitable corporation, having its principal office
at One Park Plaza, Nashville, Tennessee (the "Optionee").
As a charitable contribution, the Company hereby pledges and grants
an option on 29,566 shares of the Class A Common Stock of the Company, par
value $.01 per share (the "Common Stock"), to the Optionee at the price
and in all respects subject to the terms, conditions and provisions of
this Agreement.
1. Option Price. The option price is $0.625 for each share.
2. Exercise of Option. This Option shall be exercisable, in
whole or in part, at any time and from time to time during the period
commencing on the date hereof and ending twenty-five (25) years
thereafter, in accordance with the terms of this Agreement as follows:
(a) Method of Exercise. This Option shall be exercisable, in
whole or in part and from time to time until all shares
subject to the Option have been acquired or the Option has
expired, by a written notice of exercise which shall:
(1) state the election to exercise the Option and the
number of shares in respect of which it is being
exercised; and
(2) contain such representations and agreements as to
investment intent with respect to such shares of
Common Stock as may be satisfactory to the Company's
counsel; and
(3) be signed by the authorized officer of the Optionee
and, if the Option is being exercised by any person
or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of
the right of such person or persons to exercise the
Option.
Payment of the purchase price of any shares with respect to which
the Option is being exercised shall be by certified or bank cashier's or
teller's check, and shall be delivered with the notice of exercise. The
certificate or certificates for shares of Common Stock as to which the
Option shall be exercised shall be registered in the name of the Optionee
or such other allowable entity or entities exercising the Option.
<PAGE>
(b) Restrictions on Exercise. As a condition to his exercise
of this Option, the Company may require the Optionee or the
person exercising this Option to make any representation to
the Company as may be required by counsel for the Company.
3. Restrictions on Exercise and Transfer. This Option may not
be exercised or transferred, except upon the following conditions:
(a) Self-Dealing. In the event the exercise of this Option or
any portion of this Option by the Optionee will constitute
an act of "self-dealing" (as defined in 4941(d) of the
Internal Revenue Code of 1986, as amended, or of the
corresponding provisions of any subsequent federal tax laws
(collectively, the "Code"), which would give rise to any
liability for the tax imposed by 4941(a) of the Code, then
the Optionee may transfer this Option in whole or in part
to one or more transferees provided each such transferee
must be a "charitable" organization under Section 501(c)(3)
of the Code; or
(b) Termination. In the event of termination, dissolution or
winding up of the Optionee, the Optionee may transfer this
Option (or any unexercised portion) to any organization or
organizations to which it is permitted to transfer its
assets under the provisions of the Charter of the Optionee.
It will be presumed for purposes of this Agreement that the exercise
of the Option by the Optionee would constitute an act of self-dealing (as
described above) unless Optionee receives written notice from the Company
stating, based upon the advice of counsel, the Company no longer believes
that the exercise of the Option by the Optionee would constitute an act of
self-dealing.
In the event the Option is transferred under the provisions of this
paragraph, transfer shall be made by written notice from the Optionee to
the Company setting forth the name and address of the transferee and the
number of shares with respect to which the option is being transferred.
The transfer of the Option with respect to such shares will not be
effective until the Company has received from its counsel a written
opinion that the proposed transfer is authorized under the terms of this
Agreement and that the proposed transfer will not violate any applicable
state or federal securities laws or the rules and regulations of any stock
exchange on which the stock of the Company is then listed.
In the event of a transfer of the Option by the Optionee, no
subsequent transfer or assignment of the Option shall be made by the
transferee, but upon such transfer, the transferee may then exercise the
Option in conformity with the provisions of Section 2 hereof.
-2-
<PAGE>
An exercise, transfer or attempted transfer of the Option in
violation of the terms of this Agreement shall terminate and extinguish
the Option with respect to the shares covered by the transfer or attempted
transfer.
4. Stock Subject to the Option. The Board of Directors of the
Company shall set aside and reserve 29,566 shares of the authorized and
unissued Common Stock to be issued in satisfaction of this Option. If the
Option should expire or become unexercisable for any reason without having
been exercised in full, the shares which were subject thereto shall be
free from any restrictions. The Company will not be required to issue or
deliver any certificate or certificates for shares to be issued hereunder
until such shares have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange on which outstanding
shares of the same class may then be listed and until the Company has
taken such steps as may, in the opinion of counsel for the Company, be
required by law and applicable regulations, including the rules and
regulations of the Securities and Exchange Commission, and state blue-sky
laws and regulations, in connection with the issuance or sale of such
shares, and the listing of such shares on each such exchange. The Company
will use its best efforts to comply with any such requirements.
5. Adjustments Upon Changes in Capitalization.
(a) Any change in the number of outstanding shares of Common Stock
occurring through stock splits, stock dividends or stock consolidations
after the execution of this Agreement shall be reflected proportionately
in a change in the number of shares subject to this Option then
outstanding and in the amounts remaining available for purchase under this
Option; and a proportionate change shall be made in the per share option
price as to any outstanding options or portions thereof not yet exercised.
Fractional shares shall be rounded to the nearest whole shares. If
changes in capitalization other than those considered above shall occur,
the Company shall, in good faith, make such adjustments as it may consider
appropriate in the number and class of shares remaining subject to options
previously granted and in the per share option price.
(b) In the event that the outstanding shares of Common Stock are
changed into or exchanged for a different number or kind of shares or
other securities or property (including cash) of the Company or of
another corporation by reason of reorganization, merger, consolidation or
sale or transfer of all or substantially all of the Company's assets to
another corporation, appropriate adjustments shall be made by the Company,
in good faith, in the number and kind of shares, other securities or
property as to which outstanding options, or portions thereof then
unexercised, shall be exercisable. Any adjustment of this Agreement or in
this outstanding Option shall be effective on the effective date of the
event giving rise to such adjustment.
-3-
<PAGE>
6. Notices. Each notice relating to this Agreement shall be
in writing and delivered in person or by certified mail to the proper
address. Each notice shall be deemed to have been given on the date it is
received. Each notice to the Company shall be addressed to it at its
principal office, now at One Park Plaza, Nashville, Tennessee 37203,
attention of the Secretary. Each notice to the Optionee shall be
addressed to the Optionee at the Optionee's address set forth in the
heading of this Agreement. In the event of a transfer of this Option, in
whole or in part, notice to a transferee shall be sent to the address set
forth in the notice of transfer required by paragraph 3 of this Agreement.
Anyone to whom a notice may be given under this Agreement may designate a
new address by notice to that effect.
7. Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon each successor of the Company. All
obligations imposed upon the Optionee and all rights granted to the
Company under this Agreement shall be binding upon the Optionee's
successors and any assignee of this Option. This Agreement shall be the
sole and exclusive source of any and all rights which the Optionee, its
successors or assigns may have in respect to any options or Common Stock
granted or issued hereunder.
8. Resolution of Disputes. Any dispute or disagreement which
should arise under, or as a result of, or in any way relate to, the
interpretation, construction or application of this Agreement will be
determined by the Board of Directors of the Company. Any determination
made hereunder shall be final, binding and conclusive for all purposes.
9. Certain Other Miscellaneous Provisions.
(a) No Optionee shall have any rights of a stockholder of the
Company with respect to shares subject to this Option until he has given
written notice of exercise of this Option and paid in full for such
shares, and a stock certificate has been issued to the Optionee for such
shares of Common Stock.
(b) The Company may require each person purchasing shares of
Common Stock pursuant to the Option to represent to and agree with the
Company in writing that he is acquiring the shares without a view to
distribution thereof. If the Common Stock issuable upon exercise of this
Option is not registered pursuant to the Securities Act of 1933 at the
time this Option is exercised, the certificates for such shares may
include any legend which the Company deems appropriate to reflect any
restrictions on transfers. If at the time of exercise of any portion of
the option granted hereunder, any of the Stockholders Agreement, Voting
Agreement, or Proxy Agreement remain in effect, the stock certificates for
the shares of Common Stock issuable upon such exercise will bear the
legend required by any such agreement then in effect.
(c) No benefit or promise under this Agreement shall be secured
by any specific assets of the Company, nor shall any assets of the Company
be designated as attributable or allocated to the satisfaction of the
Company's obligations under this Agreement.
(d) This Agreement shall be governed by the laws of the State
of Tennessee.
-4-
IN WITNESS WHEREOF, the Company and the Optionee have caused this
Agreement to be executed as of the day, month and year first above
written.
HCA-HOSPITAL CORPORATION OF AMERICA
By: ________________________________
Ronald P. Soltman
Vice President
THE HCA FOUNDATION
By: ________________________________
Pete Bird
Corporate Secretary
-5-
EXHIBIT 4.6
As amended through December 16, 1991
HCA -- HOSPITAL CORPORATION OF AMERICA
NONQUALIFIED INITIAL OPTION PLAN
ARTICLE I
1.1 Name. The name of this Plan is the HCA -- Hospital
Corporation of America Nonqualified Initial Option Plan (the "Plan"). The
purpose of this Plan is to allow the Company to grant stock options in
connection with the cancellation of stock options of Hospital Corporation
of America ("HCA") in connection with the merger of TF Acquisition Inc.,
a wholly owned subsidiary of the Company ("Acquisition"), with and into
HCA (the "Merger") in accordance with an Agreement and Plan of Merger
dated November 21, 1988, as amended, among the Company, HCA and
Acquisition (the "Merger Agreement"). In accordance with the Merger
Agreement, HCA will become a wholly owned subsidiary of the Company upon
consummation of the Merger.
1.2 Definitions. Whenever used in the Plan, the following terms
shall have the meaning set forth below:
(a) "Board" or "Board of Directors" shall mean the Board of
Directors of the Company.
(b) "Class A Stock" shall mean Class A Common Stock of the
Company.
(c) "Company" shall mean HCA-Hospital Corporation of America.
(d) "Common Stock" shall mean Class A Stock, Class B Common Stock
and Class C Common Stock of the Company.
(e) "Effective Date" shall mean the date the Plan is approved by
the sole shareholder of the Company.
(f) "Exchange Act" is defined in Section 4.1(f) of the Plan.
(g) "Fair Market Value" shall mean (a) with respect to any share
of Class A Stock: (i) if, as of the date of determination,
there is a public trading market for shares of Common Stock
for which price quotations are readily available, the average
of the "high" and "low" prices per share of Class A Stock for
the day on which trading occurs immediately preceding the date
of determination as reported in The Wall Street Journal or if
no "high" and "low" prices are so reported, but there is so
reported only a "bid" and "asked" price for such day, the
average of the "bid" and "asked" prices as reported in The
Wall Street Journal; or (ii) if, as of the date of
determination, there is no public trading market for shares of
Class A Stock for which price quotations are readily
available, the sum of (A) the fair market value of a share of
Class A Stock as determined by an appraiser (selected pursuant
to the Stockholders Agreement) as of the last day of each
fiscal year of the Company and (B) the amount (or, if
applicable, fair market value, as determined in good faith by
the Board of Directors) of any declared but unpaid cash
dividend or property distribution if such dividend or
distribution was subtracted by the appraiser in calculating
the amount described in the preceding clause (A). In
determining the fair market value of any share of Class A
Stock, the appraiser shall not take into account any premiums
for control, any discounts for minority interests or any
restrictions or other limitations on such shares contained in
the Stockholders Agreement, including, without limitation, the
transfer restrictions and the right of the Company to purchase
such shares as provided in the Stockholders Agreement.
(h) "Initial Public Offering" shall mean the completion of the
sale or sales of shares of Common Stock pursuant to an
effective registration statement under the Securities Act of
1933 (other than a registration statement relating to shares
of Common Stock issuable upon exercise of options granted
under the Plan or relating to any other employee benefit plan
of the Company) in which the aggregate public offering price
of such sale or sales equals or exceeds $50 million.
(i) "Participant" shall mean a person named in Schedule A, which
is attached hereto and made a part hereof.
(j) "Merger Date" shall mean the effective date of the merger of
TF Acquisition, Inc. into HCA, with HCA as the surviving
corporation, pursuant to the Merger Agreement.
(k) "Proxy Agreement" shall mean the Proxy and Authorization
Agreement, dated as of the Merger Date, among certain
stockholders pursuant to which certain stockholders will grant
to Thomas F. Frist, Jr. an irrevocable proxy to vote such
stockholder's Class A Stock.
(l) "Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of the Merger Date, by the Company,
each holder of Common Stock of the Company and each holder of
options granted under this Plan providing such persons with
certain registration rights.
-2-
<PAGE>
(m) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(n) "Stockholders Agreement" shall mean the Stockholders
Agreement, dated as of the Merger Date, by and among the
Company and all persons who, immediately after the Merger
Date, will hold shares of Common Stock of the Company or
options granted pursuant to this Plan.
(o) "Voting Agreement" shall mean the Voting Agreement, dated as
of the Merger Date, by the Company and certain stockholders of
the Company with respect to the management and corporate
governance of the Company and HCA.
1.3 Plan Duration. The Plan shall remain in effect for
twenty-five (25) years from the Effective Date or until termination by the
Board of Directors, whichever occurs first.
ARTICLE II
2.1 Plan Administration. The Plan shall be administered by the
Board of Directors or, if the Board delegates its authority, by the
Compensation Committee of the Board (the "Committee"). The Board of
Directors (or, if applicable, the Committee) shall have the authority,
consistent with the Plan, to interpret the Plan and the options granted
under the Plan, to adopt, amend and rescind rules and regulations for the
administration of the Plan and the options, and generally to conduct and
administer the Plan and to make all determinations in connection therewith
which may be necessary or advisable.
ARTICLE III
3.1 Eligibility. Only those persons who are listed on Schedule A
hereto are eligible to participate in the Plan.
ARTICLE IV
4.1 Grant and Exercise Of Options. (a) Upon the later of the
approval of the Plan by the sole stockholder of the Company and the
closing of the transactions contemplated by the Subscription Agreement,
the Board of Directors (or, if applicable, the Committee) shall grant
options to each person listed on Schedule A hereto (each, a "Participant")
for the number of shares of Class A Stock set forth opposite such person's
name on Schedule A. The exercise price per share of Class A Stock shall
be $90.91. An option may not be exercised more than twenty-five (25)
years after the date it is granted.
(b) Option Agreements for options granted hereunder shall
contain such provisions as may be required by the terms hereof including
provisions concerning the manner by which the options may be exercised and
such other provisions (including restrictions on the option and the option
stock), as the Board of Directors (or, if applicable, the Committee) shall
impose in its discretion.
-3-
<PAGE>
(c) No option shall be exercised by a Participant unless he
shall have executed and delivered to the Company an Option Agreement.
(d) Appropriate officers of the Company are hereby
authorized to prepare, execute and deliver Option Agreements, and
amendments thereto, in the name of the Company, with such provisions as
from time to time may be dictated by the Board consistent with the
provisions hereof.
(e) Options shall be exercised by delivering or mailing to
the Board (or, if applicable, the Committee):
(1) A notice, in the form and at times prescribed by
the Board (or, if applicable, the Committee),
specifying the number of shares to be purchased.
(2) An agreement executed and delivered by the
Participant in which the Participant accepts and
agrees to the terms of the Stockholders
Agreement, the Voting Agreement, the Proxy
Agreement or the Registration Rights Agreement to
the extent such agreements are in effect on the
date of the exercise, unless such Participant is
already a party to such agreements and the terms
of such agreements will, without any action on
the part of the Company or such Participant, be
applicable to the shares of Class A Stock
issuable in respect of such option.
(f) The option may be exercised in whole or in part. Upon
receipt of such notice and upon payment of the option price for the number
of shares to be purchased (i) in cash, (ii) at any time after the
Company's Initial Public Offering, in Regulation T cashless exercises or
pursuant to such procedure as established by the Board, or (iii) at any
time after the Company's Initial Public Offering, by the delivery of
certificates for Class A Stock, valued at Fair Market Value, the Company
shall promptly deliver to the Participant a certificate or certificates
for the shares purchased, without charge to him for issue or transfer tax;
provided if the Participant delivering Class A Stock in connection with an
exercise is an individual subject to Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), such Participant shall
acknowledge on a form provided by the Company that such delivery is a
"sale" pursuant to Section 16 of the Exchange Act.
(g) All options granted pursuant to this Plan and shares of
Class A Stock acquired pursuant to the exercise of options shall be
subject to the provisions of the Stockholders Agreement. In particular,
options held by any officer or employee of the Company or any of its
subsidiaries and shares of Class A Stock acquired pursuant to an exercise
of options by any such officer or employee shall be subject to the
provisions of the Stockholders Agreement relating to "puts" and "calls" in
the event of the termination of employment of the Participant.
-4-
<PAGE>
ARTICLE V
5.1 Terms and Conditions Applicable to All Options. All options
granted under this Plan shall be subject to the foregoing, and to the
following:
(a) Each option shall be exercisable during and over a
period ending twenty-five (25) years from the date of
grant.
(b) Each option shall be fully exercisable from the date of
the grant of the option.
(c) Payment in full, in the manner set forth in Section
4.1(f) above of the Plan shall be made for all shares
purchased.
(d) No optionee shall have any rights of a stockholder with
respect to shares subject to his option until he has
given written notice of exercise of his option and paid
in full for such shares, and a stock certificate has
been issued to the optionee for such shares of Class A
Stock.
(e) The Board of Directors (or, if applicable, the
Committee) may require each person purchasing shares of
Class A Stock pursuant to the option to represent to and
agree with the Company in writing that he is acquiring
the shares without a view to distribution thereof. If
the Class A Stock issuable upon exercise of the option
is not registered pursuant to the Securities Act of 1933
at the time the option is exercised, the certificates
for such shares may include any legend which the Board
of Directors (or, if applicable, the Committee) deems
appropriate to reflect any restrictions on transfers.
If at the time of exercise of any portion of the option
granted hereunder, any of the Stockholders Agreement,
Voting Agreement, or Proxy Agreement remain in effect,
the stock certificates for the shares of Class A Stock
issuable upon such exercise will bear the legend
required by any such agreement then in effect.
(f) The option shall not be transferable by the Participant
otherwise than by gift to the Participant's spouse, or
any of the Participant's ancestors, descendants,
siblings, descendants of any sibling or the spouse of
any of the foregoing, by will or by the laws of descent
and distribution.
-5-
<PAGE>
ARTICLE VI
6.1 Limitation on Shares of Class A Stock Available Under the
Plan. The total number of shares of Class A Stock available to
Participants under the Plan is 17,930.
The grant of a stock option under Article IV shall reduce the
available shares by the number of shares subjected to such option. Shares
available pursuant to a stock option granted under Article IV which has
been cancelled, or has lapsed, expired or otherwise terminated shall not
be regranted pursuant to this Plan.
ARTICLE VII
7.1 Adjustment Upon Changes in Capitalization.
(a) Any change in the number of outstanding shares of Common
Stock occurring through stock splits, stock dividends or stock
consolidations after the adoption of the Plan shall be reflected
proportionately in a change in the number of shares subject to options
then outstanding and in the amounts remaining available for purchase under
outstanding options; and a proportionate change shall be made in the per
share option price as to any outstanding options or portions thereof not
yet exercised. Fractional shares shall be rounded to the nearest whole
shares. If changes in capitalization other than those considered above
shall occur, the Board of Directors (or, if applicable, the Committee)
shall, in good faith, make such adjustments as it may consider appropriate
in the number and class of shares remaining subject to options previously
granted and in the per share option price.
(b) In the event that the outstanding shares of Common Stock
are changed into or exchanged for a different number or kind of shares or
other securities or property (including cash) of the Company or of another
corporation by reason of reorganization, merger, consolidation, or sale or
transfer of all or substantially all of the Company's assets to another
corporation, appropriate adjustments shall be made by the Board of
Directors (or, if applicable, the Committee), in good faith, in the number
and kind of shares, other securities or property as to which outstanding
options, or portions thereof then unexercised, shall be exercisable. Any
adjustment of the Plan or in outstanding options shall be effective on the
effective date of the event giving rise to such adjustment.
ARTICLE VIII
8.1 Employment. The establishment of the Plan and awards
hereunder shall not be construed as conferring on any Participant any
right to employment, continued employment, and the employment of any
Participant who is an employee may be terminated without regard to the
effect which such action might have upon him or her as a Participant.
-6-
<PAGE>
ARTICLE IX
9.1 Withholding Taxes. The Board of Directors (or, if applicable,
the Committee) may require a Participant receiving Class A Stock pursuant
to an option granted hereunder to pay the Company the amount determined by
the Company to be the amount required by it to be withheld with respect to
the exercise of the option (i) in accordance with Section 3402 of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) in order to
satisfy the relevant requirements of Section 83 of the Code and the
regulations thereunder and (iii) in order to satisfy any similar
requirements of state or local governments. However, at any time after an
Initial Public Offering, a Participant shall be permitted to pay all or a
portion of any federal, state or local withholding taxes in connection
with the exercise of options granted under the Plan:
(i) by electing to have the Company withhold shares of Class
A Stock due such Participant upon such exercise, or
(ii) by tendering previously owned shares of Class A Stock,
such shares withheld pursuant to clause (i) or tendered pursuant to clause
(ii) having a Fair Market Value equal to the amount of tax to be withheld.
A Participant's election in respect of the use for withholding of Class A
Stock is subject to the following conditions:
(1) the election must be made on or prior to the date on
which the amount to be withheld is required to be
determined;
(2) the election must be irrevocable; and
(3) the election is subject to disapproval by the Board (or,
if applicable, the Committee).
If the Participant delivering Class A Stock or having his shares reduced
is an individual subject to Section 16 of the Exchange Act, such
Participant shall acknowledge on a form provided by the Company that such
delivery or share reduction is a "sale" pursuant to Section 16 of the
Exchange Act. As part of the withholding election, a Participant may pay
withholding taxes in excess of the statutory minimum as long as the amount
paid does not exceed the Participant's estimated federal, state and local
tax obligations associated with the exercise, including FICA and FUTA
taxes to the extent applicable.
ARTICLE X
10.1 Unfunded Plan. No benefit or promise under the Plan shall be
secured by any specific assets of the Company, nor shall any assets of the
Company be designated as attributable or allocated to the satisfaction of
the Company's obligations under the Plan.
ARTICLE XI
11.1 Governing Law. This Plan shall be governed by the laws of the
State of Delaware.
-7-
<PAGE>
ARTICLE XII
12.1 Amendment, Modification, and Termination of the Plan. The
Board of Directors of the Company, at any time may terminate and in any
respect amend or modify the Plan; provided, however, that no such action
by the Board of Directors, without approval of the Company's shareholders,
may: (a) increase the total number of shares of Common Stock available
under the Plan in the aggregate or which may be allocated to any one
Participant; (b) materially increase the cost of the Plan or the benefits
accruing to Participants thereunder, or (c) materially modify the
requirements as to eligibility for participation in the Plan. No
amendment, modification or termination of the Plan shall in any manner
adversely affect the rights of any Participant or any estate of any
Participant under the Plan without the consent of such Participant.
-8-
EXHIBIT-5
February 23, 1994
Columbia/HCA Healthcare Corporation
201 W. Main Street
Louisville, KY 40202
RE: Registration Statement on Form S-3, Registering 868,612 Shares of
Common Stock, and associated Preferred Stock Purchase Rights $.01
Par Value of Columbia/HCA Healthcare Corporation (the "Registration
Statement")
Ladies and Gentlemen:
I am Senior Vice President and General Counsel for Columbia/HCA
Healthcare Corporation, a Delaware corporation (the "Company"), and have
been involved with the registration under the Securities Act of 1933, as
amended (the "Act"), of an aggregate of 868,612 shares of Common Stock,
$.01 par value of the Company, and associated Preferred Stock Purchase
Rights (the "Common Stock") being offered to certain stockholders of the
Company under various stock option arrangements and in connection with the
termination of an Employee Stock Purchase Plan with HCA-Hospital
Corporation of America ("HCA") in connection with the merger involving the
Company and HCA.
In connection with the offering of the Columbia Common Stock, I have
examined originals or copies submitted to me that I have assumed are
genuine, accurate, and complete, of all such corporate records of the
Company, and other documents I have deemed necessary or appropriate to
require as the basis for the opinion hereinafter expressed.
Based and relying solely upon the foregoing, it is my opinion that
when the 868,612 shares of Common Stock and associated Stock Purchase
Rights, or any portion thereof, are issued as described in the
Registration Statement, such shares will be legally issued, fully paid,
and nonassessable.
This opinion may be filed as an exhibit to the Registration
Statement. Consent is also given to the reference to me under the caption
"Legal Matters" in the Prospectus included in the Registration Statement
as having passed upon the validity of the issuance of the Common Stock and
associated Stock Purchase Rights. In giving this consent, I do not hereby
admit that I come within the category of persons whose consent is required
under Section 7 of the Act or rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
Respectfully submitted,
BY: Stephen T. Braun
Senior Vice President &
General Counsel
EXHIBIT-24.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3 of our report dated September 27, 1993 (which
includes explanatory paragraphs regarding the merger of Columbia Hospital
Corporation and Galen Health Care, Inc. and a change in accounting for
income taxes) on our audits of the supplemental consolidated financial
statements and supplemental financial statement schedules of Columbia
Healthcare Corporation as of December 31, 1992 and 1991 and for each of
the three years in the period ended December 31, 1992, which report is
included in Columbia Healthcare Corporation's Current Report on Form 8-K
dated September 29, 1993. Additionally, we consent to the incorporation
by reference of (i) our report dated October 20, 1992, except as to the
information presented in Note 11, for which the date is November 13, 1992,
(which report includes an explanatory paragraph regarding a change in
accounting for income taxes) on our audits of the consolidated financial
statements and financial statement schedules of Humana Inc. ("Galen Health
Care, Inc.") as of August 31, 1992 and 1991 and for each of the three
years in the period ended August 31, 1992, and (ii) our report dated
October 20, 1992, except as to the information presented in Note 13, for
which the date is November 13, 1992, (which report includes an explanatory
paragraph regarding a change in accounting for income taxes) on our audits
of the consolidated financial statements and financial statement schedules
of the health plan operations of Humana Inc. ("Humana Health Plans") as of
August 31, 1992 and 1991 and for each of the three years in the period
ended August 31, 1992, which reports are included in Galen Health Care,
Inc.'s General Form for Registration of Securities on Form 10 dated
December 31, 1992 (File No. 1-11233) and Galen Health Care, Inc.'s Form 8,
Amendment No. 1 to General Form for Registration of Securities on Form 10
dated February 17, 1993. We also consent to the reference to our Firm
under the caption "Experts".
COOPERS & LYBRAND
Louisville, Kentucky
February 23, 1994
EXHIBIT-24.3
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) of Columbia Healthcare Corporation for
the registration of its common stock and to the incorporation by reference
therein of our report dated February 15, 1993, with respect to the
consolidated financial statements and schedules of HCA-Hospital
Corporation of America included in its Annual Report (Form 10-K) for the
year ended December 31, 1992, filed with the Securities and Exchange
Commission.
Nashville, Tennessee
February 23, 1994
EXHIBIT 24.4
CONSENT OF ARTHUR ANDERSEN & CO.
As independent public accountants, we hereby consent to the use of
our reports (and to all references to our Firm) included in or made a part
of this Registration Statement.
ARTHUR ANDERSEN & CO.
Fort Worth, Texas
February 23, 1994
