TRIAD HOSPITALS, INC.
EMPLOYEE STOCK PURCHASE PLAN
TRIAD HOSPITALS, INC.
EMPLOYEE STOCK PURCHASE PLAN
Index
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Page
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ARTICLE 1 - Purpose................................................-1-
ARTICLE 2 - Eligible Employees.....................................-1-
ARTICLE 3 - Stock Subject to the Plan..............................-1-
ARTICLE 4 - Payment Periods and Stock Options......................-1-
ARTICLE 5 - Exercise of Option.....................................-2-
ARTICLE 6 - Authorization for Entering Plan........................-3-
ARTICLE 7 - Amount of Payroll Deductions...........................-3-
ARTICLE 8 - Change in Payroll Deductions...........................-3-
ARTICLE 9 - Withdrawal from the Plan...............................-3-
ARTICLE 10 - Establishment of Brokerage Account.....................-4-
ARTICLE 11 - Issuance of Stock; Fractional Shares...................-4-
ARTICLE 12 - No Transfer or Assignment of Employee's Rights.........-4-
ARTICLE 13 - Termination of Employee's Rights.......................-4-
ARTICLE 14 - Termination and Amendments to the Plan.................-5-
ARTICLE 15 - Limitations on Sale of Stock Purchased Under the Plan..-5-
ARTICLE 16 - Company's Payment of Expenses Related to the Plan......-5-
ARTICLE 17 - Participating Subsidiaries.............................-5-
ARTICLE 18 - Administration of the Plan.............................-6-
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ARTICLE 19 - Optionees Not Stockholders.............................-6-
ARTICLE 20 - Application of Funds...................................-6-
ARTICLE 21 - Changes in Capital.....................................-6-
ARTICLE 22 - Approval of Stockholders...............................-6-
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TRIAD HOSPITALS, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE 1 - Purpose
The Triad Hospitals, Inc. Employee Stock Purchase Plan (the ''Plan'') is
intended as an incentive and to encourage stock ownership by all eligible
employees of Triad Hospitals, Inc. (the ''Company'') and participating
subsidiaries so that they may share in the fortunes of the Company by acquiring
or increasing their proprietary interest in the Company. The Plan is designed
to encourage eligible employees to remain in the employ of the Company. It is
intended that options issued pursuant to this Plan shall constitute options
issued pursuant to an ''employee stock purchase plan'' within the meaning of
section 423 of the Internal Revenue Code of 1986, as amended (the ''Code'').
ARTICLE 2 - Eligible Employees
All full-time and regular part-time employees of the Company (or of any of
its participating subsidiaries) who have completed three months of employment
with the Company (or any of its subsidiaries) shall be eligible to receive
options under this Plan to purchase shares of the common stock of the Company
(the "Common Stock") (except employees in countries whose laws make
participation impractical). Months of employment credited to otherwise eligible
employees of the Company for purposes of eligibility to participate in the
Columbia/HCA Healthcare Corporation Employee Stock Purchase Plan will be
credited solely for purposes of eligibility determinations in 1999 as months of
employment under the Plan. Persons who have been so employed for three months
or more (or otherwise credited with three or more months of employment) on the
first day of a Payment Period shall receive their options as of such day. In no
event may an employee be granted an option under the Plan if such employee,
immediately after the option is granted, owns stock representing five percent
(5%) or more of the total combined voting power or value of all classes of stock
of the Company. For purposes of determining stock ownership under this Article,
the rules of section 424(d) of the Code shall apply, and stock which the
employee may purchase under outstanding options shall be treated as stock owned
by the employee.
ARTICLE 3 - Stock Subject to the Plan
The total number of shares of Common Stock of the Company that may be
issued pursuant to the Plan is 3,000,000 shares, which may consist, in whole or
in part, of unissued shares or treasury shares.
ARTICLE 4 - Payment Periods and Stock Options
The six-month periods, December 1 to May 31 and June 1 to November 30, are
the Payment Periods during which payroll deductions will be accumulated under
the Plan; provided, however,
the initial Payment Period shall be a special, one-time, short period from July
1, 1999 to November 30, 1999. Each Payment Period includes only regular paydays
falling within it.
Two times each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last business day of such Payment Period, at
the Option Price, such number of shares of Common Stock reserved for the purpose
of the Plan which equals the number of whole or fractional shares whose purchase
price does not exceed ten percent (10%) of the participant's Covered
Compensation during the Payment Period divided by the price as determined below,
on condition that such employee remains eligible to participate in the Plan as
provided herein. The participant shall be entitled to exercise such options as
granted only to the extent of his accumulated payroll deductions through his
last payday in a Payment Period.
For purposes of the Plan, the "Option Price" for each Payment Period shall
be the lesser of (i) 85% of the average market price of the Company's Common
Stock on the first business day of the Payment Period, rounded up to avoid
fractions other than 1/4, 1/2 and 3/4, or (ii) 85% of the average market price
of the Company's Common Stock on the last business day of the Payment Period,
rounded up to avoid fractions other than 1/4, 1/2 and 3/4.
For purposes of the Plan, "Covered Compensation" means base compensation
for services, including shift or other regular compensatory premiums, and
payments in substitution for base pay, such as vacation, holiday, and sick pay,
but not including overtime, bonuses or short- or long-term disability payments.
For purposes of this Plan, the term ''average market price'' means the
closing price of Common Stock of the Company on the NASDAQ, or any other
exchange upon which the Company's Common Stock is then traded.
For purposes of this Plan, the term ''business day'' means a day on which
there is trading in the Company's Common Stock on the NASDAQ, or any other
exchange upon which the Company's Common Stock is then traded.
No employee shall be granted an option which permits his rights to purchase
Common Stock under the Plan and any similar plans of the Company (or any parent
or subsidiary corporations) to accrue at a rate which exceeds $25,000 of fair
market value of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time. The purpose
of the limitation in the preceding sentence is to comply with section 423(b)(8)
of the Code.
ARTICLE 5 - Exercise of Option
Each eligible employee who continues to be a participant in the Plan on the
third Friday of the last month of a Payment Period shall be deemed to have
irrevocably stated his intention to exercise his option on the last business day
of such Payment Period and shall be deemed to have purchased from the Company
the number of such whole or fractional shares of Common Stock
reserved for the purposes of the Plan as his accumulated payroll deductions
during such Payment Period will purchase at the Option Price. If a participant
is not an employee on the third Friday of the last month of a Payment Period, he
shall not be entitled to exercise his option.
ARTICLE 6 - Authorization for Entering Plan
An employee may become a participant in the Plan by filling out, signing
and delivering to the Company's Human Resources Department an Authorization in
the form and manner satisfactory to the Company:
A. stating the whole percentage of Covered Compensation to be deducted
regularly from his pay; and
B. authorizing the purchase of Common Stock for him in each Payment Period
in accordance with the terms of the Plan.
Such Authorization must be received by the Company's Human Resources
Department no later than the third Friday of the last month of a Payment Period
in order to be effective for the following Payment Period.
The Company will accumulate and hold for the employee's account the amounts
deducted from his pay pursuant to his Authorization. No interest will be paid
on such amounts.
ARTICLE 7 - Amount of Payroll Deductions
An employee may authorize payroll deductions in a whole percentage amount
not less than one percent (1%) but not more than ten percent (10%) of his
Covered Compensation received during the Payment Period.
ARTICLE 8 - Change in Payroll Deductions
Deductions may be increased or decreased only at the beginning of a Payment
Period. A new Authorization will be required and must be received by the
Company's Human Resources Department no later than the third Friday of the last
month of a Payment Period in order to be effective for the following Payment
Period.
ARTICLE 9 - Withdrawal from the Plan
An employee may withdraw from the Plan, in whole but not in part, at any
time by delivering an Authorization to the Company's Human Resources Department
indicating such employee's intent to withdraw. An employee may change his
contribution rate effective the first day of a Payment Period. Once during each
Payment Period, an employee may reduce his contribution rate to 0% and may
either allow dollars contributed to participate in the allocation or receive a
refund prior to the
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allocation. If such Authorization is received at least five (5) business days
prior to the third Friday of the last month of a Payment Period, the Company
will promptly refund the entire balance of his deductions accumulated during
such period. If an employee's Authorization is received after such date, but
before the end of a Payment Period, deductions will be stopped as soon as
practicable, and deductions accumulated during such period will be applied to
the purchase of stock.
An employee who withdraws from the Plan is like an employee who has never
entered the Plan. To re-enter, he must file a new Authorization by the third
Friday of the last month of a Payment Period which cannot, however, become
effective before the beginning of the next Payment Period following his
withdrawal.
ARTICLE 10 - Establishment of Brokerage Account
By enrolling in the Plan, each participating employee will be deemed to
have authorized the establishment of a brokerage account in his name at a
securities brokerage firm approved by the Compensation Committee of the
Company's Board of Directors (the ''Committee'').
ARTICLE 11 - Issuance of Stock; Fractional Shares
Stock purchased under the Plan will be held in an account in the name of
the employee, or if his Authorization so specifies, in the name of the employee
and another person of legal age as joint tenants with rights of survivorship,
unless prohibited by state law. Certificates will be issued, at the employee's
request, only for whole numbers of shares. Fractional interests in shares will
be carried forward in an employee's account until such time as they equal one
full share, or until the termination of an employee's brokerage account,
whereupon an amount equal to the value of such fractional interest shall be paid
in cash to the employee.
ARTICLE 12 - No Transfer or Assignment of Employee's Rights
An employee's rights under the Plan are his alone and may not be
transferred, assigned to or availed of by any other person. Any option granted
to an employee may be exercised only by him.
ARTICLE 13 - Termination of Employee's Rights
An employee's rights under the Plan will terminate when he ceases to be an
employee because of retirement, resignation, discharge, death, change of status,
or for any other reason. A withdrawal Authorization will be considered as
having been received from the employee on the day his employment ceases, and all
payroll deductions not used to purchase stock will be refunded to the employee,
or in the event of the employee's death, to his estate.
If an employee's payroll deductions are interrupted by any legal process, a
withdrawal Authorization will be considered as having been received from him on
the day the interruption occurs.
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ARTICLE 14 - Termination and Amendments to the Plan
The Plan may be terminated at any time by the Committee. It will terminate
in any case when all or substantially all of the shares of stock reserved for
the purposes of the Plan have been purchased. If at any time shares of stock
reserved for the purpose of the Plan remain available for purchase but not in
sufficient number to satisfy all then unfilled purchase requirements, the
available shares shall be apportioned among participants in proportion to their
options, and the Plan shall terminate. Upon such termination or any other
termination of the Plan, all payroll deductions not used to purchase stock will
be refunded.
The Committee also reserves the right to amend the Plan from time to time
in any respect; provided, however, that no amendment shall be effective without
prior approval of the stockholders of the Company, which would (a) except as
provided in Article 21, increase the number of shares of Common Stock to be
offered above or (b) except as provided in Article 17, change the classes of
employees eligible to receive options under the Plan.
ARTICLE 15 - Limitations on Sale of Stock Purchased Under the Plan
The Plan is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his own affairs. An employee may, therefore, sell
stock purchased under the Plan at any time he chooses; provided, however, that
because of certain federal income tax requirements, each employee will agree by
entering the Plan, to give the Company prompt notice of any such stock disposed
of within (i) two years after the date of grant of the applicable option or (ii)
one year after the transfer of such stock to such employee showing the number of
such shares disposed of, and an appropriate legend requiring such notice shall
be placed on the certificates of Common Stock issued hereunder. The employee
assumes the risk of any market fluctuations in the price of such stock.
ARTICLE 16 - Company's Payment of Expenses Related to the Plan
The Company will bear all costs of administering and carrying out the Plan.
ARTICLE 17 - Participating Subsidiaries
The term ''participating subsidiaries'' shall mean any subsidiary of the
Company (i) which is at least fifty percent (50%) owned by the Company (or a
parent or a subsidiary), (ii) which is a "corporation" as determined under
section 424 of the Code and (iii) which is designated by the Committee to
participate in the Plan. The Committee shall have the power to make such
designation before or after the Plan is approved by the stockholders.
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ARTICLE 18 - Administration of the Plan
The Plan shall be administered by the Committee. Acts by a majority of the
Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final. The Committee may
from time to time adopt such rules and regulations for carrying out the Plan as
it may deem best. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any option granted under it.
ARTICLE 19 - Optionees Not Stockholders
Neither the granting of an option to an employee nor the deductions from
his pay shall make such employee the owner of the shares covered by an option
until such shares have been purchased by him.
ARTICLE 20 - Application of Funds
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.
ARTICLE 21 - Changes in Capital
If the Common Stock of the Company subject to the Plan shall at any time be
changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation or other
corporate reorganization in which the Company is the surviving corporation, the
number and kind of shares subject to this Plan and the option prices shall be
appropriately and equitably adjusted so as to maintain the option prices
thereof. In the event of a dissolution or liquidation of the Company or a
merger, consolidation, sale of all or substantially all of its assets, or other
corporate reorganization in which the Company is not the surviving corporation,
or any merger in which the Company is the surviving corporation but the holders
of its Common Stock receive securities of another corporation, any outstanding
options hereunder shall terminate. The existence of the Plan or options
hereunder shall not in any way prevent any transaction described herein, and no
holder of an option shall have the right to prevent such transaction.
ARTICLE 22 - Approval of Stockholders
Commencement of the Plan shall be subject to approval by the stockholders
of the Company within 12 months before or after the date the Plan is adopted by
the Board of Directors. Notwithstanding any provision to the contrary, failure
to obtain such stockholder approval shall void
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the Plan, any options granted under the Plan, any share purchases pursuant to
the Plan, and all rights of all participants.
This Employee Stock Purchase Plan has been executed effective this 1st
day of June, 1999.
TRIAD HOSPITALS, INC.
ATTEST: By: Rick Thomason
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Its: Vice President of Human Resources
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Secretary
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