Exhibit 10(a)
STOCK OPTION AGREEMENT
AGREEMENT dated as of May 1, 1996, by and between OrNda HealthCorp, a
Delaware corporation (the "Company"), and __________ (the "Executive").
WHEREAS, the Company has adopted the OrNda HealthCorp 1994 Management
Equity Plan (the "Plan") and the Company's stockholders have ratified such
adoption; and
WHEREAS, the Company desires to grant to the Executive an option under the
Plan to acquire an aggregate of _____ shares of the Company's Common stock, $.01
par value (the "Common Stock"), on the terms set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Plan.
2. Grant of Option. The Executive is hereby granted a Nonqualified
Stock Option (the "Option") to purchase an aggregate of _____ shares of Common
Stock pursuant to the terms of this Agreement and the provisions of the Plan.
3. Option Price. The exercise price of the Option shall be $27.125 per
share of Common Stock issuable thereunder.
4. Conditions to Exercisability.
(a) If the Executive continues to be employed by the Company on the
tenth anniversary of the date hereof, the Option shall become exercisable in
full on such date. Notwithstanding the foregoing, the Option will become
exercisable with respect to twenty percent (20%) of the shares of Common Stock
covered thereby as of the last day of each fiscal year of the Company set forth
on the table below if (1) the Executive continues to be employed by the Company
on such date and (2) the Company's Earnings Per Share (as defined below) for
such fiscal year (the "Required Earnings Per Share") equals or exceeds the
amounts set forth in the table below:
Fiscal Year Required
Ending On Earnings Per Share
--------------- ------------------
August 31, 1996 $1.62
August 31, 1997 To be determined by Committee
August 31, 1998 To be determined by Committee
August 31, 1999 To be determined by Committee
August 31, 2000 To be determined by Committee
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(b) Notwithstanding the foregoing, the Option shall become
exercisable in full upon the occurrence of a Change in Control of the Company.
(c) Notwithstanding the foregoing, the Option shall become
exercisable, in whole or in part, at any time at the discretion of the
Compensation Committee of the Company's Board of Directors (the "Committee").
(d) The term "Earnings Per Share" shall mean the Company's publicly
reported primary earnings per share for a fiscal year period excluding (each an
"Exclusion") (i) extraordinary gains and losses; (ii) all gains and losses from
acquisitions and dispositions; (iii) pooling expenses, special executive
compensation charges and other non-recurring charges provided each such
Exclusion from said publicly reported primary earnings per share must be
approved by the Committee, in its sole discretion, as the type of non-operating
gain or loss properly excluded from the Company's publicly reported primary
earnings per share in arriving at a per share earnings number for the Company
which more accurately indicates the Company's operating earnings for each such
year to apply against the Required Earnings Per Share target for such year.
5. Period of Option. The Option shall expire on the earliest to occur
of:
(a) the expiration of one (l) month following the tenth anniversary
of the date hereof:
(b) the first anniversary of the Executive's death or termination
of employment for Disability; and
(c) three months after the Executive's termination of employment
other than for death or Disability.
Notwithstanding the foregoing, upon any termination from employment the
Option shall immediately terminate in respect of any portion thereof
nonexercisable at the time of such termination.
6. Exercise of Option.
(a) The Option shall be exercised in the following manner: the
Executive, or the person or persons having the right to exercise the Option upon
the death or Disability of the Executive, shall deliver to the Company written
notice specifying the number of shares of Common Stock which the Executive
elects to purchase. The Executive (or such other person) must either (i) include
with such notice full payment of the exercise price for the Common Stock being
purchased pursuant to such notice or (ii) provide for a broker-dealer to forward
such full payment to the Company, in a manner and in a period of time acceptable
to the Company, in a cashless exercise procedure. Payment of the exercise price
must be made (i) in cash, (ii) by certified or cashier's check, (iii) by
delivery to the Company of Common Stock previously owned for at least six months
and having a Fair Market Value equal to the aggregate exercise price, or (iv) in
a combination of cash, check and Common Stock. In lieu of the payment of the
exercise price as set forth in the foregoing
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sentence, upon request of the Executive (or such other person), the Company may,
in its sole discretion, allow the Executive to exercise the Option or a portion
thereof by tendering shares of Common Stock previously owned for less than six
months, including shares received upon exercise of such Option.
(b) Upon the request of the Executive, or the person or persons
having the right to exercise the Option upon the death or Disability of the
Executive, the Company may, in its sole discretion, in lieu of a normal issuance
of shares upon exercise of the Option in whole or in part, pay the Executive in
cash, Common Stock or a combination of cash and Common Stock, as the Company
shall determine, in an amount determined by multiplying (i) the excess of the
Fair Market Value of a share of Common Stock on the date of exercise of such
Option over the per share exercise price of the Option by (ii) the number of
shares of Common Stock as to which the Option is being exercised.
(c) Full payment of the exercise price for shares subject to the
Option and any applicable federal and state withholding tax shall be made at the
time of exercise of any portion of the Option. No shares shall be issued until
full payment has been made, and the Executive shall have none of the rights of a
stockholder until shares are issued to him. The Company may authorize, but shall
have no obligation to permit, the payment of any applicable federal or state
withholding tax by the tender of shares of Common Stock, including the tender of
shares which otherwise would be issued to the Executive upon exercise of the
Option, provided, however, that any such payment by a director or officer
subject to Section 16(b) of the Exchange Act shall be in compliance with Rule
16b-3.
(d) If the Plan or any law, regulation or interpretation requires
the Company to take any action regarding the Common Stock before the Company
issues certificates for the Common Stock being purchased, the Company may delay
delivering the certificates for the Common Stock for the period necessary to
take such action. The certificate or certificates representing the Common Stock
acquired pursuant to the Option may bear a legend restricting the transfer of
such Common Stock, and the Company may impose stop transfer instructions to
implement such restrictions, if applicable.
(e) The Executive will not be deemed to be a holder of any shares
pursuant to exercise of the Option until the date of the issuance of a stock
certificate to him for such shares of Common Stock and until the shares of
Common Stock are paid for in full.
7. Representations. (a) The Company represents and warrants that this
Agreement has been authorized by all necessary corporate action of the Company
and is a valid and binding agreement of the Company enforceable against the
Company in accordance with its terms.
(b) The Executive represents and warrants that he is not a party to
any agreement or instrument which would prevent him from entering into or
performing his duties in any way under this Agreement.
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8. Entire Agreement. This Agreement contains all the understandings
between the parties hereto pertaining to the matters referred to herein, and
supersedes all undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto. The Executive represents
that, in executing this Agreement, he does not rely and has not relied upon any
representation or statement not set forth herein made by the Company with regard
to the subject matter, bases or effect of this Agreement or otherwise.
9. Amendment or Modification Waiver. No provision of this Agreement
may be amended or waived unless such amendment or waiver is agreed to in
writing, signed by the Executive and by a duly authorized officer of the
Company. No waiver by any party hereto or any breach by another party hereto of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
10. Notices. Any notice to be given hereunder shall be in writing and
shall be deemed given when delivered personally, sent by courier or telecopy or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:
To Executive at:
The Executive's residence address
then on file with the Company's or its affiliates'
Human Resources Department
To the Company at:
OrNda HealthCorp
3401 West End Avenue
Nashville, Tennessee 37203
Attn: General Counsel
Telecopy: (615) 783-1232
Any notice delivered personally or by courier under this Section 10 shall
be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.
11. Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable, shall not be affected thereby, and each provision
hereof shall be validated and shall be enforced to the fullest extent permitted
by law.
12. Nontransferability. This Option (or any portion thereof) is not
transferable by the Executive otherwise than by will or by the laws of descent
and distribution.
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13. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
14. Governing Law. This agreement will be governed by and construed in
accordance with the laws of the State of Tennessee, without regard to its
conflicts of laws principles.
15. Headings. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
16. Construction. This Agreement is made under and subject to the
provisions of the Plan, and all of the provisions of the Plan are hereby
incorporated herein as provisions of this Agreement. If there is a conflict
between the provisions of this Agreement and the provisions of the Plan, the
provisions of the Plan will govern. By signing this Agreement, the Executive
confirms that he has received a copy of the Plan and has had an opportunity to
review the contents thereof.
17. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ORNDA HEALTHCORP
By:________________________________________
Ronald P. Soltman
Senior Vice President
Executive:
___________________________________________
(Name)
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