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EXHIBIT 10.1
COLUMBIA/HCA HEALTHCARE CORPORATION OUTSIDE
DIRECTORS STOCK AND INCENTIVE COMPENSATION PLAN
Amended and Restated September 23, 1999
1. PURPOSES; CONSTRUCTION.
This Plan shall be known as the "Columbia/HCA Healthcare Corporation
Outside Directors Stock and Incentive Compensation Plan" and is
hereinafter referred to as the "Plan." The purposes of the Plan are to
encourage ownership of stock in the Company by Outside Directors,
through the granting of non-qualified stock options, restricted stock
awards and restricted stock unit awards, to provide an incentive to the
directors to continue to serve the Company and to aid the Company in
attracting qualified director candidates in the future. Options granted
under the Plan will not be incentive stock options within the meaning
of section 422 of the Code.
The provisions of the Plan are intended to satisfy any applicable
requirements of Section 16(b) of the Exchange Act, and shall be
interpreted in a manner consistent with any such requirements thereof,
as now or hereafter construed, interpreted and applied by regulation,
rulings and cases.
The terms of the Plan shall be as set forth below, effective May 1,
1999.
2. ADMINISTRATION OF THE PLAN.
2.1 General Authority.
The Plan shall be administered by the Board. The Board shall have
plenary authority in its discretion, but subject to the express
provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan
or necessary or advisable in the administration of the Plan, including,
without limitation, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the
details and provisions of the Agreements and to make all other
determinations deemed necessary or advisable for the administration of
the Plan. The Board's determinations on the foregoing matters shall be
final and conclusive. No member of the Board shall be liable for any
action taken or determination made in good faith with respect to the
Plan or any grant hereunder.
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3. DEFINITIONS.
As used in the Plan, the following words and phrases shall have the
meanings indicated:
(a) "Agreement" shall mean an agreement entered into between the
Company and a Participant in connection with a grant under the
Plan.
(b) "Annual Meeting" shall mean an Annual Meeting of the
Stockholders of the Company.
(c) "Board " shall mean the Board of Directors of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Common Stock" shall mean the voting shares of common stock of
the Company, with a par value of $.01 per share.
(f) "Company" shall mean Columbia/HCA Healthcare Corporation, a
Delaware corporation, or any successor corporation.
(g) "Disability" shall mean a Participant's total and permanent
inability to perform his or her duties with the Company or any
Subsidiary by reason of any medically determinable physical or
mental impairment, within the meaning of Code section
22(e)(3).
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time and as now or hereafter
construed, interpreted and applied by regulations, rulings and
cases.
(i) "Fair Market Value" per Share, Restricted Share or Restricted
Share Unit shall mean the mean of the high and low prices of a
Share on the relevant date as reported by the New York Stock
Exchange, or such value as otherwise determined using
procedures established by the Board.
(j) "Option" shall mean a stock option granted under the Plan.
(k) "Option Price" shall mean the price at which each Share
subject to an Option may be purchased, determined in
accordance with Section 5.2 hereof.
(l) "Outside Director" shall mean any member of the Board who is
not also an employee of the Company (or any Subsidiary
thereof).
(m) "Participant" shall mean any Outside Director who has received
an Option or other award hereunder that has not yet
terminated.
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(n) "Restricted Period" shall have the meaning given in Section
6.2(a) hereof.
(o) "Restricted Share" or "Restricted Shares" shall mean Shares
purchased hereunder subject to restrictions.
(p) "Restricted Share Unit" or "Restricted Share Units" shall have
the meaning given in Section 7 hereof.
(q) "Rule 16b-3" shall mean Rule 16b-3, as in effect from time to
time, promulgated by the Securities and Exchange Commission
under Section 16 of the Exchange Act, including any successor
to such Rule.
(r) "Shares" shall mean shares of Common Stock of the Company.
(s) "Subsidiary" shall have the meaning set forth in Section 8.2.
4. STOCK SUBJECT TO PLAN.
4.1 Number of Shares.
The maximum number of Shares which may be issued pursuant to Options
and other awards under the Plan shall be 500,000 Shares, which number
shall be subject to adjustment as provided in Section 9 hereof. Such
Shares may be either authorized but unissued Shares, or Shares that
shall have been or may be reacquired by the Company.
4.2 Reuse of Shares.
If an Option or a Restricted Share or Restricted Share Unit award under
the Plan is canceled, terminates, expires unexercised or is exchanged
for a different award without the issuance of Shares, the covered
Shares shall, to the extent of such termination or non-use, again be
available for awards thereafter granted during the term of the Plan.
5. OPTIONS.
5.1 Grant of Options.
Each person who is an Outside Director immediately following the 1998
Annual Meeting shall be granted an Option, as of the first business day
subsequent to such 1998 Annual Meeting, to acquire Shares having an
aggregate Option Price equal to twelve and one-half (12.5) times such
Outside Director's annual retainer fee then in effect. Each such Option
shall become exercisable in five cumulative installments, each of which
shall relate to 20% of the Shares covered by the Option, on the date of
grant and the four next succeeding anniversary dates thereof.
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Each person who shall become an Outside Director thereafter, but prior
to the close of the Board's term ending in 2003, shall be granted an
Option, as of the first business day after the commencement of his
service as an Outside Director, to acquire Shares having an aggregate
Option Price equal to such Outside Director's annual retainer fee then
in effect multiplied by two and one-half (2.5) times the number of
one-year periods (including as a one-year period the partial year
remaining before the next Annual Meeting, if he becomes an Outside
Director between Annual Meetings) remaining in the period ending with
the Annual Meeting in the year 2003. Each such Option shall become
exercisable in cumulative installments, each of which shall relate to a
pro-rata portion of the Shares covered by the Option, on the date of
grant and respective succeeding dates of the Annual Meetings, ending
with such Annual Meeting for the year 2003.
Notwithstanding anything in the Plan to the contrary, the Board may,
from time to time, in its sole discretion, designate Participants who
are to be granted additional options ("Discretionary Options") and
determine the number of shares subject to such Discretionary Options.
The Board, in its sole discretion, shall prescribe the time or times at
which, or the conditions upon which, a Discretionary Option or portion
thereof shall become vested and exercisable, and may accelerate the
exercisability of any Discretionary Option at any time. Notwithstanding
the provisions of Section 5.3, the Option Price of each Share under a
Discretionary Option shall be determined by the Board; provided,
however, that the Option Price of each Share under such Discretionary
Option shall not be less than 100 percent of the Fair Market Value of a
Share on the date of grant. Notwithstanding the provisions of Section
5.4, the Board may, in the case of a Discretionary Option, provide for
a shorter than ten-year exercise period in the Agreement.
5.2 Option Price.
The Option Price of each Share subject to an Option shall be 100
percent of the Fair Market Value of a Share on the date of grant.
5.3 Term.
The term of any Option issued pursuant to the Plan shall be ten years
from the date of grant and may extend beyond the date of termination of
the Plan.
5.4 Option Exercise.
An Option may be exercised in whole or in part at any time, with
respect to whole Shares only, within the period permitted thereunder
for the exercise thereof, and shall be exercised by written notice of
intent to exercise the Option with respect to a specified number of
Shares, delivered to the Company at its principal office, and payment
in full to the Company at said office of the amount of the Option Price
for the number of Shares with respect to which the Option is then being
exercised. Payment of the Option Price shall be made (i) in cash or
cash equivalents, (ii) in
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whole Shares valued at the Fair Market Value of such Shares on the date
of exercise (or next succeeding trading date, if the date of exercise
is not a trading date) or (iii) by a combination of such cash (or cash
equivalents) and such Shares; provided, however, that the optionee
shall not be entitled to tender Shares pursuant to successive,
substantially simultaneous exercises of an Option or any other stock
option of the Company. Subject to applicable securities laws, an Option
may also be exercised by delivering a notice of exercise of the Option
and simultaneously selling the Shares thereby acquired, pursuant to a
brokerage or similar agreement approved in advance by proper officers
of the Company, using the proceeds of such sale as payment of the
exercise price. Subject to the provisions of Section 10 hereof, the
Company shall issue a stock certificate for the Shares purchased by
exercise of an Option, in the name of the optionee (or other person
exercising the Option in accordance with the provisions of the Plan),
as soon as practicable after due exercise and payment of the aggregate
Option Price for such Shares.
5.5 Limited Transferability of Options.
All Options shall be nontransferable except (i) upon the optionee's
death, by the optionee's will or the laws of descent and distribution
or (ii) on a case-by-case basis, as may be approved by the Board in its
discretion, in accordance with the terms provided below. Each Agreement
shall provide that the optionee may, during his or her lifetime and
subject to the prior approval of the Board at the time of proposed
transfer, transfer all or part of the Option to a Family Member (as
defined below), provided that such transfer is made for estate
planning, tax planning, donative purposes or pursuant to a domestic
relations order, and no consideration (other than nominal
consideration) is received by the optionee. The transfer of an Option
shall be subject to such other terms and conditions as the Board may in
its discretion impose from time to time, including (without limitation)
a condition that the portion of the Option to be transferred be vested
and exercisable by the optionee at the time of the transfer and a
requirement that the terms of such transfer be documented in a written
agreement (in such form as the Board may prescribe). Subsequent
transfers of an Option transferred under this Section shall be
prohibited, other than by will or the laws of descent and distribution
upon the death of the transferee.
For purposes hereof, a "family member" shall mean any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the employee's household (other than
a tenant or employee), a trust in which these persons have more than
fifty percent of the beneficial interest, a foundation in which these
persons (or the employee) control the management of assets, and any
other entity in which these persons (or the employee) own more than
fifty percent of the voting interests.
No transfer of an Option by the optionee by will or by laws of descent
and distribution shall be effective to bind the Company unless the
Company shall have
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been furnished with written notice thereof and an authenticated copy of
the will and/or such other evidence as the Board may deem necessary to
establish the validity of the transfer. During the lifetime of an
optionee, except as provided above, the Option shall be exercisable
only by the optionee, except that, in the case of an optionee who is
legally incapacitated, the Option shall be exercisable by the
optionee's guardian or legal representative. In the event of any
transfer of an Option to a Family Member in accordance with the
provisions of this Section, such Family Member shall thereafter have
all rights that would otherwise be held by such optionee (or by such
optionee's guardian, legal representative or beneficiary), except as
otherwise provided herein.
5.6 Death of Optionee.
If a Participant holding an Option dies while he is an Outside
Director, the executor or administrator of the estate of the decedent
(or the person or persons to whom an Option shall have been validly
transferred in accordance with Section 5.5) shall have the right,
during the period ending six months after the date of the optionee's
death (subject to the provisions of Section 5.3 hereof concerning the
maximum term of an Option), to exercise the Option to the extent that
it was exercisable at the date of such optionee's death and shall not
have been previously exercised.
5.7 Disability.
If an optionee's service as an Outside Director shall be terminated as
a result of Disability, the optionee (or in the case of an optionee who
is legally incapacitated, his guardian or legal representative) shall
have the right, during a period ending six months after the date of
such termination (subject to the provisions of Section 5.3 hereof
concerning the maximum term of an Option), to exercise an Option to the
extent that it was exercisable at the date of such optionee's
termination and shall not have been previously exercised.
5.8 Other Termination of Service.
If an optionee's service as an Outside Director shall be terminated for
any reason other than death or Disability, the optionee shall have the
right, during the period ending ninety days after such termination
(subject to the provisions of Section 5.3 hereof concerning the maximum
term of an Option), to exercise the Option to the extent that it was
exercisable on the date of such termination of service and shall not
have been previously exercised.
6. RESTRICTED SHARES.
6.1 Grant of Annual Restricted Share Retainer Awards.
Commencing with the one-year period immediately following the 1998
Annual Meeting, each Outside Director shall be entitled to receive, as
a retainer for each
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one-year period for which he is to serve as an Outside Director, an
award of a number of Restricted Shares having a Fair Market Value of
$40,000 on the date of grant of such award, subject to the provisions
of Section 7.1. Awards hereunder for any such one-year period shall be
granted as of the first business day of the period (or the first
business day after the person becomes an Outside Director, with an
appropriate proration of the amount, in the case of a mid-year
appointment).
6.2 Terms of Restricted Share Agreements.
Each grant of Restricted Shares under the Plan shall be evidenced by a
written Agreement between the Company and Participant, which shall be
in such form as the Board shall from time to time approve and shall
comply with the terms of the Plan, including (without limitation) the
following terms and conditions (and with such other terms and
conditions, not inconsistent with the terms of the Plan, as the Board,
in its discretion, may establish):
(a) RESTRICTED PERIOD. Except as otherwise provided in the Plan,
the Restricted Period for Restricted Shares granted under this
Section 6 shall end on the first business day after the next
following Annual Meeting.
(b) OWNERSHIP AND RESTRICTIONS. At the time of grant of Restricted
Shares, a certificate representing the number of Restricted
Shares granted shall be registered in the name of the
Participant. Such certificate shall be held by the Company or
any custodian appointed by the Company for the account of the
Participant, subject to the terms and conditions of the Plan,
and shall bear such legend setting forth the restrictions
imposed thereon as the Board, in its discretion, may
determine. The Participant shall have all rights of a
stockholder with respect to such Restricted Shares, including
the right to receive dividends and the right to vote such
Restricted Shares, subject to the following restrictions: (i)
the Participant shall not be entitled to delivery of the stock
certificate until the expiration of the Restricted Period and
the fulfillment of any other restrictive conditions set forth
in this Plan or the Agreement with respect to such Restricted
Shares; (ii) none of the Restricted Shares may be sold,
assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of (except by will or the applicable
laws of descent and distribution) during such Restricted
Period or until after the fulfillment of any other restrictive
conditions; and (iii) except as otherwise provided under the
Plan, all of the Restricted Shares shall be forfeited and all
rights of the Participant to such Restricted Shares shall
terminate, without further obligation on the part of the
Company, unless the Participant continues to serve as an
Outside Director for the entire Restricted Period and unless
any other restrictive conditions relating to the Restricted
Shares are met. Any common stock, any other securities of the
Company and any other property (except cash dividends)
distributed with respect to the Restricted Shares shall be
subject to the same restrictions, terms and conditions as such
Restricted Shares.
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(c) TERMINATION OF RESTRICTIONS. At the end of the Restricted
Period and provided that any other restrictive conditions of
the Restricted Shares are met, or at such earlier time as
shall be applicable under the Plan, all restrictions set forth
in the Agreement relating to the Restricted Shares or in the
Plan shall lapse as to the Restricted Shares subject thereto,
and a stock certificate for the appropriate number of Shares,
free of the restrictions and restrictive stock legend (other
than as required under the Securities Act of 1933 or
otherwise), shall be delivered to the Participant or his or
her beneficiary or estate, as the case may be.
(d) TERMINATION OF BOARD SERVICE DURING RESTRICTED PERIOD. Except
as provided herein, if during the Restricted Period for any
Restricted Shares held by a Participant the Participant's
service as an Outside Director is terminated for any reason
other than death or Disability, the Participant shall forfeit
all rights with respect to such Restricted Shares, which shall
automatically be considered to be cancelled.
(e) ACCELERATED LAPSE OF RESTRICTIONS. Upon a termination of
service as an Outside Director which results from a
Participant's death or Disability, all restrictions then
outstanding with respect to Restricted Shares held by such
Participant shall automatically expire and be of no further
force and effect.
7. RESTRICTED SHARE UNITS.
7.1 Election of Restricted Share Unit Award.
Any person who is elected as an Outside Director immediately following
the Company's 1998 Annual Meeting may elect, by written notice to the
Company on or before May 8, 1998 (in such form as the Board shall
prescribe), to receive an award of Restricted Share Units having a Fair
Market Value of $200,000 on the date of grant, which date shall be the
first business day subsequent to such 1998 Annual Meeting.
In the case of any person who is serving as an Outside Director for a
term beginning after 1998 (and has not previously been permitted to
make an election hereunder), such person may, if the Board shall permit
in its discretion (by a resolution adopted within the 90-day period
following (a) an Annual Meeting or (b) the date the person became an
Outside Director, in the case of a mid-year appointment), elect to
receive an award of Restricted Share Units having a Fair Market Value,
on the date of grant, of $40,000 multiplied by the remaining number of
one-year periods prior to the 2003 Annual Meeting (including the
one-year period in which the person is permitted to make an election
hereunder, with an appropriate proration to reflect a partial year of
service). Any such election shall be made by written notice to the
Company within fourteen days following the date of the Board resolution
permitting such election, and the date of grant of any such award shall
be the first business day subsequent to (a) the Annual
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Meeting for the calendar year in which the award is elected or (b) the
date the person became an Outside Director, in the case of a mid-year
appointment.
Any Restricted Share Unit award hereunder shall be in lieu of
Restricted Share awards under Section 6 for the successive one-year
periods beginning on the date of the Annual Meeting for the first year
(or partial year) in respect of which the Restricted Share Unit award
is granted hereunder and ending with the 2003 Annual Meeting, and any
Outside Director electing a Restricted Share Unit award hereunder shall
have no right to any Restricted Share award under Section 6 for any
period prior to the 2003 Annual Meeting that is covered by a Restricted
Share Unit award hereunder.
7.2 Terms of Restricted Share Unit Agreements.
Each award of Restricted Share Units under the Plan shall be evidenced
by a written Agreement between the Company and Participant, which shall
be in such form as the Board shall from time to time approve and shall
comply with the terms of the Plan, including (without limitation) the
following terms and conditions (and with such other terms and
conditions, not inconsistent with the terms of the Plan, as the Board,
in its discretion, may establish):
(a) VESTING. Except as otherwise provided in the Plan, an award of
Restricted Share Units shall vest in cumulative annual
installments, each of which shall relate to 20% of the units
covered by the award, on the five anniversary dates next
succeeding the date of grant. In the case of an election made
pursuant to Section 7.1 hereof after 1998, an award of
Restricted Share Units shall vest in cumulative annual
installments, each relating to a pro-rata portion of the units
covered by the award (based on the applicable number of
vesting dates), on the respective first business days
subsequent to the Annual Meetings following the date of grant
through the first business day subsequent to the 2003 Annual
Meeting.
(b) TERMINATION OF BOARD SERVICE PRIOR TO FULL VESTING. If a
Participant's service as an Outside Director is terminated for
any reason other than death or Disability before a Restricted
Share Unit award held by him has become fully vested, the
Participant shall forfeit all rights with respect to any Units
that are not yet vested on the date of termination.
(c) ACCELERATED VESTING. Upon a Participant's termination of
service as an Outside Director which results from the
Participant's death or Disability, any Restricted Share Units
standing to his credit immediately prior to such termination
shall immediately vest, to the extent that such Units would
have vested on the first business day following the next
Annual Meeting.
(d) DIVIDEND EQUIVALENTS. A Participant shall be credited with
dividend equivalents on any vested Restricted Share Units
credited to his account at
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the time of any payment of dividends to stockholders on
Shares. The amount of any such dividend equivalents shall
equal the amount that would have been payable to the
Participant as a stockholder in respect of a number of Shares
equal to the number of vested Restricted Share Units then
credited to him. Any such dividend equivalents shall be
credited to his account as of the date on which such dividend
would have been payable and shall be converted into additional
Restricted Share Units (which shall be immediately vested)
based upon the Fair Market Value of a Share on the date of
such crediting. No dividend equivalents shall be paid in
respect of Restricted Share Units that are not yet vested.
(e) PAYMENT OF AWARDS. A Participant shall be entitled to payment,
at the time of his termination of service as an Outside
Director, in respect of all vested Restricted Share Units then
credited to him. Subject to the provisions of Sections 9 and
10, such payment shall be made through the issuance to the
Participant of a stock certificate for a number of Shares
equal to the number of vested Restricted Share Units credited
to him at the time of such termination.
Notwithstanding the foregoing, a Participant may elect an
alternative payment date for the distribution of Shares in
respect of his vested Restricted Share Units. Any such
election must be made by written notice to the Company by May
31, 1998, or, in the case of an election made pursuant to
Section 7.1 hereof after 1998, within fourteen days following
the date of the Board resolution permitting such election (in
such form as the Company shall prescribe), and may specify as
the alternative payment date either (i) June 1, 2003 or (ii)
June 1, 2008. Any such election shall be irrevocable.
8. CHANGE IN CONTROL.
8.1 Effect of Change in Control.
Upon a "change in control" of the Company (as defined below), the
following shall occur:
(a) Each outstanding Option, to the extent that it shall not
otherwise have become exercisable, shall become fully and
immediately exercisable (without regard to the otherwise
applicable installment provisions of Section 5.1 hereof);
(b) All restrictions relating to any Restricted Shares then held
by Participants shall lapse and be of no further force and
effect; and
(c) Any Restricted Share Units credited to a Participant's account
shall immediately vest, to the extent that such units would
have been vested on the next following anniversary date of the
date of grant.
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8.2 Definition.
For purposes of Section 8.1 hereof, "change in control" of the Company
shall mean any of the following events:
(i) An acquisition (other than directly from the Company)
of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term Person is
used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the
"1934 Act")) immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of twenty
percent (20%) or more of the combined voting power of
the then outstanding Voting Securities; provided,
however, that in determining whether a change in
control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an
acquisition which would cause a change in control. A
"Non-Control Acquisition" shall mean an acquisition
by (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (A) the Company or (B)
any corporation or other Person of which a majority
of its voting power or its equity securities or
equity interest is owned directly or indirectly by
the Company (a "Subsidiary") or (ii) the Company or
any Subsidiary.
(ii) The individuals who, as of the date hereof, are
members of the Board (the "Incumbent Board"), cease
for any reason to constitute at least two-thirds of
the Board; provided, however, that if the election,
or nomination for election, by the Company's
stockholders of any new director was approved by a
vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent
Board; provided, further, however, that no individual
shall be considered a member of the Incumbent Board
if (1) such individual initially assumed office as a
result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated
under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf
of a Person other than the Board (a "Proxy Contest")
including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest
or (2) such individual was designated by a Person who
has entered into an agreement with the Company to
effect a transaction described in clause (i) or (iii)
of this Section 8.2; or
(iii) Approval by stockholders of the Company and
consummation of:
(1) A merger, consolidation or reorganization
involving the Company, unless,
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(A) The stockholders of the Company,
immediately before such merger,
consolidation or reorganization,
own, directly or indirectly
immediately following such merger,
consolidation or reorganization, at
least seventy-five percent (75%) of
the combined voting power of the
outstanding Voting Securities of
the corporation resulting from such
merger or consolidation or
reorganization or its parent
corporation (the "Surviving
Corporation") in substantially the
same proportion as their ownership
of the Voting Securities
immediately before such merger,
consolidation or reorganization;
(B) The individuals who were members of
the Incumbent Board immediately
prior to the execution of the
agreement providing for such
merger, consolidation or
reorganization constitute at least
two-thirds of the members of the
board of directors of the Surviving
Corporation; and
(C) No Person (other than the Company,
any Subsidiary, any employee
benefit plan (or any trust forming
a part thereof) maintained by the
Company, the Surviving Corporation
or any Subsidiary, or any Person
who, immediately prior to such
merger, consolidation or
reorganization, had Beneficial
Ownership of twenty percent (20%)
or more of the then outstanding
Voting Securities) has Beneficial
Ownership of twenty percent (20%)
or more of the combined voting
power of the Surviving
Corporation's then outstanding
Voting Securities.
(2) A complete liquidation or dissolution of the
Company; or
(3) An agreement for the sale or other
disposition of all or substantially all of
the assets of the Company to any Person
(other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a change in control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increased the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
change in control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial
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Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a change in
control shall occur.
9. ANTIDILUTION ADJUSTMENTS.
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger or consolidation, or the sale,
conveyance, lease or other transfer by the Company of all or
substantially all of its property, or any other change in the corporate
structure or shares of the Company, pursuant to any of which events the
then outstanding Shares are split up or combined, or are changed into,
become exchangeable at the holder's election for, or entitle the holder
thereof to, other shares of stock, or in the case of any other
transaction described in section 424(a) of the Code, the Board may make
such adjustment or substitution (including by substitution of shares of
another corporation) as it may determine to be appropriate, in its sole
discretion, in (i) the aggregate number and kind of shares that may be
distributed in respect of Option exercises and/or awards under the
Plan, (ii) the number and kind of shares subject to outstanding Options
and/or the Option Price of such shares, (iii) the number and kind of
Restricted Shares outstanding under the Plan and (iv) the number and
kind of shares represented by Restricted Share Units outstanding under
the Plan.
10. CONDITIONS OF ISSUANCE OF STOCK CERTIFICATES.
10.1 Applicable Conditions.
The Company shall not be required to issue or deliver any certificate
for Shares under the Plan prior to fulfillment of all of the following
conditions:
(a) the completion of any registration or other qualification of
such Shares, under any federal or state law, or under the
rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body, that the
Board shall, in its sole discretion, deem necessary or
advisable;
(b) the obtaining of any approval or other clearance from any
federal or state governmental agency that the Board shall, in
its sole discretion, determine to be necessary or advisable;
(c) the lapse of such reasonable period of time following the
event triggering the obligation to distribute shares as the
Board from time to time may establish for reasons of
administrative convenience;
(d) satisfaction by the Participant of any applicable withholding
taxes or other withholding liabilities; and
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(e) if required by the Board, in its sole discretion, the receipt
by the Company from a Participant of (i) a representation in
writing that the Shares received pursuant to the Plan are
being acquired for investment and not with a view to
distribution and (ii) such other representations and
warranties as are deemed necessary by counsel to the Company.
10.2 Legends.
The Company reserves the right to legend any certificate for Shares,
conditioning sales of such shares upon compliance with applicable
federal and state securities laws and regulations.
11. PAYMENT OF WITHHOLDING AND PAYROLL TAXES.
Subject to the requirements of Section 16(b) of the Exchange Act, the
Board shall have discretion to permit or require a Participant, on such
terms and conditions as it determines, to pay all or a portion of any
taxes arising in connection with an Option or other award under the
Plan by having the Company withhold Shares or by the Participant's
delivering other Shares having a then-current Fair Market Value equal
to the amount of taxes to be withheld. In the absence of such
withholding or delivery of Shares, the Company shall otherwise withhold
from any payment under the Plan all amounts required by law to be
withheld.
12. NO RIGHTS TO CONTINUED SERVICE.
Nothing in the Plan or in any grant made or Agreement entered into
pursuant hereto shall confer upon any Participant the right to continue
service as a member of the Board or to be entitled to any remuneration
or benefits not set forth in the Plan or such Agreement.
13. AMENDMENT AND TERMINATION OF THE PLAN.
The Board, at any time and from time to time, may suspend, terminate,
modify or amend the Plan; provided, however, that an amendment which
requires stockholder approval for the Plan to continue to comply with
any law, regulation or stock exchange requirement shall not be
effective unless approved by the requisite vote of stockholders. No
suspension, termination, modification or amendment of the Plan shall
adversely affect any grants previously made, unless the written consent
of the Participant is obtained.
14. TERM OF THE PLAN.
The Plan, as amended effective May 1, 1999, shall terminate on May 17,
2008. No grants may be made after such termination, but termination of
the Plan shall
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not, without the consent of any Participant who then holds Options or
Restricted Shares or to whom Restricted Share Units are then credited,
alter or impair any rights or obligations in respect of such Options,
Restricted Shares or Restricted Share Units.
15. GOVERNING LAW.
The Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of
Delaware without giving effect to the choice of law principles thereof,
except to the extent that such laws are preempted by Federal law.
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APPENDIX A
SPECIAL RULE APPLICABLE IN CONNECTION WITH TRIAD AND LIFEPOINT SPIN-OFFS.
Notwithstanding anything elsewhere in the Plan to the contrary, a
Columbia/HCA Outside Director who, in connection with the distribution of
LifePoint Hospitals, Inc. Common Stock and Triad Hospitals, Inc. Common Stock
(the "Spin-Off"), ceases to be an Outside Director of Columbia/HCA but continues
as an Outside Director of LifePoint Hospitals, Inc. or Triad Hospitals, Inc.
immediately following such Spin-Off shall be treated as an Outside Director of
Columbia/HCA, solely for purposes of determining the period during which any
Option that was vested and exercisable immediately prior to such Spin-Off shall
continue to be exercisable thereafter, as long as he or she is an Outside
Director of LifePoint Hospitals, Inc. or Triad Hospitals, Inc.
At such time as such person ceases to be an Outside Director of
LifePoint Hospitals, Inc. or Triad Hospitals, Inc., such cessation of service
will be treated as though it were a cessation of service as an Outside Director
of Columbia/HCA under comparable circumstances.
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