EXHIBIT 10
HCA INC.
2002 PERFORMANCE EQUITY INCENTIVE PLAN
Purpose and Administration of the Plan
The Performance Equity Incentive Plan ("Plan") has been established to encourage
outstanding performance of employees who are in a position to make substantial
contributions to the success of the Company. This plan is governed by the
Company's 2000 Equity Incentive Plan.
Participation
Eligibility to participate in the Plan shall be extended generally to all full
time regular/corporate payroll Director and above with at least three months
employment in the fiscal year ("Participants") subject to approval by the CEO of
HCA. For a Participant added during the Fiscal Year, the consideration shall be
determined pursuant to the Plan and prorated. Proration may also apply to
employees who transfer to a position eligible for a different incentive target.
Incentive Calculation and Payment
Plan payments for Participants are based on a combination of financial/non
financial measurements (see chart below). As soon as practical, after the Fiscal
Year, when the financial results of the Company are known, the appropriate
senior officer will review and recommend plan payments. The Committee may make
adjustments to performance targets deemed necessary to avoid unwarranted
penalties or windfalls; providing however, such adjustments for covered officers
can only be in the form of a reduction. Such adjustments will recognize
uncontrollable outside factors and will be kept to a minimum. Payments shall be
made as soon as practicable, after the annual financial results are known, but
in no event later than three months after the Fiscal Year. Payments will be in
the form of restricted stock that will vest at 50% per year over the following
two years. This Plan is not a "qualified" plan for tax purposes, and any
payments are subject to tax withholding requirements.
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FINANCIAL NON-FINANCIAL
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EBITDA EPS(1) Other Satisfaction Employee Individual
(Actual to Corporate - Client Satisfaction Specific
Budget) Operations - Patient Goals
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Covered Officers(2) 100%
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Corporate SVP's 80% 10% 10%
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Group Operations 40% 40% 20%
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Corporate - Other(3) 25% 25% 10% 40%
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Hospitals 70%(4) 15% 15%
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RSC(5) 80% 20%
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Termination of Participant
In the event a payment is due pursuant to the Plan and a Participant's
employment with the Company is terminated prior to the payment by reason of
retirement, total and permanent disability or death, such Participant (or estate
in the event of death) shall receive a pro rata payment. A Participant who is
otherwise voluntarily or involuntarily separated prior to the payment of any
Incentive Compensation shall cease to be a Participant and shall not have earned
any right to receive any payments pursuant to the Plan. In addition, a
Participant will forfeit all unvested shares at the time of separation.
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(1) EPS will have a potential upside of 150% for exceeding budgeted EPS.
(2) Covered Officer incentive pool = Total Company EBITDA X .02%. The maximum %
that each covered officer may earn from this pool is: CEO - 36%;
President - 21%; all other covered officers 14.3%.
(3) Corporate Departments financial measures will be 25% EPS and 25% Department
Budget.
(4) EBITDA for Hospital Executives will have an upside potential of up to 200%
for exceeding budget. Half of this measure will be calculated with bad debt, and
half will be calculated without, for facilities supported by a Revenue Service
Center (RSC).
(5) RSC's will be based on financial measures related to shared services (i.e.,
AR, Bad Debt, Operating Cost v. Budget).