EXHIBIT 99.2
HCA INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made
and entered into as of this ___th day of ___________, 2005, by and between HCA
Inc., a Delaware corporation (the "Company" and, together with its Subsidiaries
and Affiliates, "HCA"), and ___________, (the "Optionee"). Capitalized terms not
otherwise defined herein shall have the meaning ascribed to such terms in the
HCA 2000 Equity Incentive Plan (the "Plan").
WHEREAS, the Company has adopted the Plan, which permits the award of
stock options for the purchase of shares of the common stock, par value $.01 per
share, of the Company (the "Shares"); and
WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase Shares as hereinafter provided in accordance with the provisions of the
Plan;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Award of Option.
(a) The Company hereby awards the Optionee the right and
option (the "Option") to purchase all or any part of the number of Shares (the
"Option Stock") indicated on the Notice of Award of Stock Options, as further
provided herein.
(b) The Option shall be granted to the Optionee in four
(4) equal installments (the "Installments") of one-fourth (1/4) of the number of
Shares awarded under this Agreement on each of January 27, 2004 (the "Initial
Grant Date"), April 27, 2004, July 27, 2004 and October 27, 2004 (each a
"Subsequent Grant Date" and together with the Initial Grant Date, the "Grant
Dates"), with an Option Price equal to the Fair Market Value of the Shares on
such Grant Date, as more specifically set forth on the Notice of Award of Option
attached and made a part hereto, and pursuant to the terms and conditions set
forth in this Agreement and subject to all provisions of the Plan.
Notwithstanding the foregoing, in the event (i) of the occurrence of a Change in
Control or (ii) HCA receives notice of Optionee's termination of employment due
to Disability or Retirement of the Optionee consistent with HCA's policies and
procedures, all Shares subject to the Option awarded pursuant to this Agreement
but not previously granted shall be automatically granted to the Optionee (a)
with respect to a Change in Control, on the date that is immediately prior to
the effective date of such Change in Control, or (b) with respect to Disability
or Retirement, on the date that is immediately prior to the effective date of
the Optionee's Retirement or termination by reason of Disability, as the case
may be, as specified in the Optionee's notice, in each case with an Option Price
equal to the Fair Market Value of such Shares on such grant date. For purposes
of this Agreement, "Disability" means that the Optionee is permanently unable to
perform the essential duties of the Optionee's occupation. For purposes of this
Agreement, "Retirement" means Optionee's voluntary termination of employment
with HCA after attaining 65 years of age or Optionee's voluntary termination of
employment with HCA after 10 years of service with HCA and after attaining 55
years of age. The Optionee, holder or beneficiary of the Option shall not have
any of the rights of a stockholder with respect to the Option Stock until such
person has become a holder of such Shares by the due exercise of the Option and
payment of the Option Payment (as defined in Section 3 below) in accordance with
this Agreement.
(c) The Option shall be a non-qualified stock option. In
order to provide the Company with the opportunity to claim the benefit of any
income tax deduction which may be available to it upon the exercise of the
Option, and in order to comply with all applicable federal or state tax laws or
regulations, the Company may take such action as it deems appropriate to insure
that, if necessary, all applicable federal, state or other taxes are withheld or
collected from the Optionee.
2. Exercise of Option. The Optionee may exercise the Option for
up to one-fourth of each Installment of the Option Stock each year commencing
one year from the date of this Agreement, with additional installments of
one-fourth of each Installment of the Option Stock exercisable on the second,
third and fourth anniversaries of the date of this Agreement. Such installments
shall be cumulative and, if in any year the total number of Shares of Option
Stock which may be purchased in such year is not purchased, the Shares not
purchased may be purchased in any subsequent year during the Term (as defined in
Section 4 below) of the Option. Notwithstanding the above, each outstanding
Option shall vest and become exercisable upon (i) the occurrence of a Change in
Control or (ii) the death, Disability or Retirement of the Optionee.
3. Manner of Exercise. The Option may be exercised in whole or in
part at any time within the period permitted hereunder for the exercise of the
Option, with respect to whole Shares only, by serving written notice of intent
to exercise the Option delivered to the Company at its principal office (or to
the Company's designated agent), stating the number of Shares to be purchased,
the Option Price(s) for such Shares, the person or persons in whose name the
Shares are to be registered and each such person's address and social security
number. Such notice shall not be effective unless accompanied by payment in full
of the aggregate Option Price for the Shares with respect to which the Option is
then being exercised (the "Option Payment"). The Option Payment shall be made in
cash or cash equivalents or in whole Shares that have been held by the Optionee
for at least six (6) months (or such shorter period as may be permitted by the
Committee) ("Qualified Pre-Owned Shares") valued at the shares' Fair Value on
the date of exercise (or next succeeding trading date if the date of exercise is
not a trading date) or the actual sales price of such Shares, together with any
applicable withholding taxes, or by a combination of such cash (or cash
equivalents) and Shares. The Optionee shall not be entitled to tender Shares
pursuant to successive, substantially simultaneous exercises of the Option or
any other stock option of the Company. Subject to applicable securities laws,
the Optionee may also exercise the Option by delivering a notice of exercise of
the Option and by simultaneously selling the Shares of Option Stock 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 Option Payment, together with any applicable withholding taxes. At the time
of exercising the Option, the Company shall satisfy any related tax withholding
obligations by withholding from the Shares otherwise issuable pursuant to the
Option a number of Shares
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having a Fair Value on the date of exercise equal to the required withholding
taxes as set forth by Internal Revenue Service guidelines for the employer's
minimum statutory withholding, or by the Optionee delivering to the Company a
like number of Qualified Pre-Owned Shares. For purposes of this Agreement, "Fair
Value" means the closing sales price of the Shares on the New York Stock
Exchange or the actual sales price of such Shares.
4. Termination of Option. The Option will expire ten years from
the date of this Agreement (the "Term") with respect to any then unexercised
portion thereof, unless terminated earlier as set forth below:
(a) Termination by Death. If the Optionee's employment by
HCA terminates by reason of death, or if the Optionee dies within three months
after termination of such employment for any reason other than Cause, this
Option may thereafter be exercised by the legal representative of the estate or
by the legatee of the Optionee under the will of the Optionee, for a period of
one year from the date of death or until the expiration of the Term of the
Option, whichever period is the shorter.
(b) Termination by Reason of Disability. If the
Optionee's employment by HCA terminates by reason of Disability, this Option may
thereafter be exercised by the Optionee or personal representative or guardian
of the Optionee, as applicable, for a period of one year from the date of such
termination of employment or until the expiration of the Term of the Option,
whichever period is the shorter.
(c) Termination by Retirement. If Optionee's employment
by HCA terminates by reason of Retirement, this Option may thereafter be
exercised by the Optionee for a period of three years from the date of such
termination of employment or until the expiration of the Term of the Option,
whichever period is the shorter.
(d) Termination for Cause. If the Optionee's employment
by HCA is terminated for Cause, this Option shall terminate immediately and
become void and of no effect.
(e) Other Termination. If the Optionee's employment by
HCA is voluntarily terminated or involuntarily terminated for any reason other
than for Cause, death, Disability or Retirement, this Option may be exercised,
to the extent the Option was exercisable at the time of such termination, by the
Optionee for a period of three months from the date of such termination of
employment or the expiration of the Term of the Option, whichever period is the
shorter.
5. No Right to Continued Employment. The grant of the Option
shall not be construed as giving Optionee the right to be retained in the employ
of HCA and HCA may at any time dismiss Optionee from employment, free from any
liability or any claim under the Plan.
6. Adjustment to Option Stock. The Committee may make adjustments
in the terms and conditions of, and the criteria included in, this Option in
recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.2 of the Plan) affecting the Company or the
financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan.
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7. Amendments to Option. Subject to the restrictions contained in
Sections 6.2 and 14 of the Plan, the Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, the Option, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would adversely affect the rights of the Optionee or any holder
or beneficiary of the Option shall not to that extent be effective without the
consent of the Optionee, holder or beneficiary affected.
8. Limited Transferability. During the Optionee's lifetime this
Option can be exercised only by the Optionee, except as otherwise provided in
Section 4(a) above or in this Section 8. This Option may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by
Optionee other than (i) to a Permitted Transferee or (ii) by will or the laws of
descent and distribution. Any attempt to otherwise transfer this Option shall be
void. No transfer of this 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 been furnished with written notice thereof and an authenticated copy of the
will and/or such other evidence as the Committee may deem necessary or
appropriate to establish the validity of the transfer. Any transfer of this
Option by the Optionee to a Permitted Transferee must be for no consideration
and, after the transfer, the Permitted Transferee shall have the sole
responsibility for determining whether and when to exercise the Option. A
Permitted Transferee may not transfer any such Option other than by will or the
laws of descent and distribution. For purposes of this Agreement, "Permitted
Transferee" means the Optionee's Immediate Family, a Permitted Trust or a
partnership of which the only partners are members of the Optionee's Immediate
Family. For purposes of this Agreement, "Immediate Family" means the Optionee's
children and grandchildren, including adopted children and grandchildren,
stepchildren, parents, stepparents, grandparents, spouse, siblings (including
half brothers and sisters), father-in-law, mother-in-law, daughters-in-law and
sons-in-law. For purposes of this Agreement, a "Permitted Trust" means a trust
solely for the benefit of the Optionee or Optionee's Immediate Family.
9. Reservation of Shares. At all times during the term of this
Option, the Company shall use its best efforts to reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of this
Agreement.
10. Plan Governs. The Grantee hereby acknowledges receipt of a
copy of the Plan and agrees to be bound by all the terms and provisions thereof.
The terms of this Agreement are governed by the terms of the Plan, and in the
case of any inconsistency between the terms of this Agreement and the terms of
the Plan, the terms of the Plan shall govern.
11. Severability. If any provision of this Agreement is, or
becomes, or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or the Award, or would disqualify the Plan or
Award under any laws deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award, and the remainder of the Plan
and Award shall remain in full force and effect.
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12. Notices. All notices required to be given under this Option
shall be deemed to be received if delivered or mailed as provided for herein to
the parties at the following addresses, or to such other address as either party
may provide in writing from time to time.
To the Company: HCA Inc.
Xxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Vice President - Compensation
To the Optionee: The address then maintained with respect to the
Optionee in the Company's records.
13. Governing Law. The validity, construction and effect of this
Agreement shall be determined in accordance with the laws of the State of
Delaware without giving effect to conflicts of laws principles.
14. Resolution of Disputes. Any dispute or disagreement which may
arise under, or as a result of, or in any way related to, the interpretation,
construction or application of this Agreement shall be determined by the
Committee. Any determination made hereunder shall be final, binding and
conclusive on the Grantee and the Company for all purposes.
15. Successors in Interest. This Agreement shall inure to the
benefit of and be binding upon any successor to the Company. This Agreement
shall inure to the benefit of the Optionee's legal representative and assignees.
All obligations imposed upon the Optionee and all rights granted to the Company
under this Agreement shall be binding upon the Optionee's heirs, executors,
administrators, successors and assignees.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have caused this Non-Qualified Stock
Option Agreement to be duly executed effective as of the day and year first
above written.
HCA Inc.
By:
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Optionee:
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Please Print
Optionee:
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Signature
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