Stock Option Pledge Agreement
Exhibit 4.12
Stock Option Pledge Agreement, hereinafter referred to as the “Option” or the “Agreement”, made as
of the 9th day of October, 1997, between Columbia/HCA Healthcare Corporation, a Delaware
corporation, having its principal place of business at Xxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000
(the “Company”) and the Columbia/HCA Healthcare Foundation, Inc., a charitable corporation, having
its principle office at Xxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (the “Foundation”).
1. Pledge of Options. As a charitable contribution, the Company hereby pledges and grants an
option on 1,000,000 shares of Common Stock of the Company, par value $.01 per share (“Common
Stock”) to the Foundation at the price and in
all respects subject to the terms, conditions and provisions of this Agreement
(the “Option”). The Option shall be subject to the condition that the Company
and the Foundation receive the following revenue rulings from the Internal
Revenue Service on or before December 31, 1999:
| (a) | The pledge of the Option by the Company to the Foundation hereunder does not constitute an act of self-dealing between a private foundation and disqualified person under the provisions of section 4941 of the Internal Revenue Code of 1986. | ||
| (b) | The exercise of the Option by an unrelated charitable organization to whom the option was transferred will not constitute an act of self-dealing between the Foundation and a disqualified person under Section 4941 of the Internal Revenue Code of 1986. | ||
| (c) | After a transfer of the Option by the Foundation to an unrelated charitable organization, the Company will be entitled to a charitable contribution deduction under Section 170 of the Internal Revenue Code of 1986 upon the exercise of the Option in an amount equal to the difference between the exercise price and the fair market value of the stock on the date of exercise, subject to the limitations on the amount of a charitable contribution deduction of a corporation under Section 170(b)(2) of the Internal Revenue Code of 1986. | ||
| (d) | The Option will be excluded from the assets taken into account in computing the amount of the minimum investment return of the Foundation for purposes of determining the tax on failure to distribute income under section 4942 of the Internal Revenue Code of 1986. |
In the event all of the revenue rulings are not received by the Company
and the Foundation on or before December 31, 1999, then the Options shall be
void unless the Company in writing waives the requirement of one or more of the
revenue rulings or extends the time for the receipt of the rulings.
2. Option Price. The option price is $28.125 for each share,
representing the closing price of the shares on the New York Stock Exchange on
the date of this Agreement.
3. 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
when the last of the rulings from the Internal Revenue Service are received as
required under paragraph 1, above, and ending on October 9, 2007 in accordance
with the terms of this Agreement as follows:
| (a) | Method of Exercises. 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;
(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;
(3) be signed by the authorized person or persons exercising
the Option and 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, or wire transfer, 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 person or persons exercising the Option.
| (b) | Restrictions on Exercise. As a condition to his exercise of this Option, the Company may require the person exercising this Option to make any representation or warranty to the Company as may be required by counsel for the Company. |
4. Nontransferability of Option. This Option may not be transferred
except as follows:
| (a) | The Foundation may transfer and assign this Option or any portion thereof to one or more unrelated charitable organizations described in Sections 170(c)(2) and 501(c)(3) of the Code; | ||
| (b) | A transferee of the Option or a portion thereof shall not transfer or assign the Option or any portion thereof without the written consent of the Company; | ||
| (c) | In the event of termination, dissolution, or winding up of the Foundation, the Foundation 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 Foundation; | ||
| (d) | In the event the Option is transferred under the provisions of this paragraph, transfer shall be made by written notice from the Foundation to the Company |
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| 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 listed; | |||
| (e) | 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. |
5. Stock Subject to the Option. The Board of Directors of the Company
shall set aside and reserve One Million (1,000,000) 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 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 Corporation, 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. The
Company may require the Foundation or any of its successors or assigns to make
such representations, including, but not limited to, written representation that
the shares are to be acquired for investment and not for resale or with a view
to the distribution thereof, and to furnish such information as the Company may
consider appropriate in connection with the issuance and delivery of the shares
in compliance with applicable laws, rules and regulations. The Company may cause
a legend or legends to be placed on such certificates to make appropriate
reference to such representation and to restrict transfer in the absence of
compliance with applicable federal or state securities laws. Neither the
Foundation, nor any of its successors or assigns shall be, or have any rights
and privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of this Option unless and until certificates for
such shares have been issued.
6. Adjustments Upon Changes In Capitalization. In the event that the
Common Stock should as a result of a stock split or stock dividend or
combination of shares or other change or exchange for other securities by
reclassification or otherwise, be increased or decreased or changed into, or
exchanged for, a different number or kind of shares or other securities of the
Company or any other corporation, or in the event of a spin-off, spin-out or
other distribution of assets to shareholders or the assumption or conversion of
outstanding grants pursuant to an acquisition, the number and kind of shares
then subject to this Option and the exercise price per share thereof, shall be
appropriately adjusted by the Company to reflect such action.
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7. 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 Xxx Xxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, attention of the Secretary. Each notice to
the Foundation shall be addressed to the Foundation or such other at the
Foundation’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 to 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.
8. 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 Foundation and all rights granted to the Company under this Agreement shall
be binding upon the Foundation’s successors and any assignee of this Option.
This Agreement shall be the sole and exclusive source of any and all rights
which the Foundation, its successors or assigns may have in respect to any
options or Common Stock granted or issued hereunder.
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 shall be final
binding, and conclusive for all purposes.
10. Modifications. No change or modification of this Agreement shall be
valid or binding upon the parties hereto, nor shall any waiver of any term or
condition in the future be so binding, unless such change or modification or
waiver shall be in writing and signed by the parties hereto.
11. Governing Law. This Agreement shall be interpreted and construed in
accordance with the laws of the State of Tennessee. The titles of the sections
and subsections herein have been inserted as a matter of convenience of
reference only and shall not control or affect the meaning on any of the terms
of the provisions herein.
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IN WITNESS WHEREOF, the Company and the Foundation have caused this
Agreement to be executed as of the day, month and year first above written.
| ATTEST: | COLUMBIA/HCA HEALTHCARE CORPORATION | |||
/s/ Xxxx X. Xxxxxx XX
|
By: | /s/ R. Xxxxxx Xxxxxxx | ||
| ATTEST: | COLUMBIA/HCA HEALTHCARE FOUNDATION, INC. | |||
/s/ Xxxx Pack
|
By: | /s/ Xxxxx X. Xxxxxxxx | ||
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