HCA INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): February 1, 2006 (January 26, 2006)
(Exact name of registrant as specified in its charter)
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Delaware
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001-11239
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75-2497104 |
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer |
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Identification No.) |
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One Park Plaza, Nashville, Tennessee |
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37203 |
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (615) 344-9551
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry Into a Material Definitive Agreement.
A. Restricted Share and Non-Qualified Stock Option Awards to Executive Officers.
On January 26, 2006, after consideration of presentations and recommendations of management
and independent compensation consultants, and such other matters and information as deemed
appropriate, the Compensation Committee (the “Committee”) of the Board of Directors of HCA Inc.
(the “Company”) approved awards of restricted shares of the Company’s common stock, together with
non-qualified stock option awards to purchase shares of the Company’s common stock, to the
executive officers of the Company, pursuant to the HCA 2005 Equity Incentive Plan (the “2005
Plan”). The Company’s named executive officers will receive restricted shares
and non-qualified stock options as a result of the 2006 awards as follows:
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No. of |
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Restricted |
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No. of |
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Title |
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Shares |
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Options |
Jack O. Bovender, Jr.
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Chairman and Chief
Executive Officer
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66,750
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66,750 |
Richard M. Bracken
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President and Chief
Operating Officer |
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29,900 |
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29,900 |
Samuel N. Hazen
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President — Western Group |
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18,100 |
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18,125 |
R. Milton Johnson
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Executive Vice President
and Chief
Financial
Officer |
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18,100 |
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18,125 |
Robert A. Waterman
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Senior Vice President and
General Counsel |
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12,900 |
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12,925 |
The restricted shares awarded by the Committee were granted on January 26, 2006 and will vest
ratably over five years in increments of 20% on each of the first, second, third, fourth and fifth
anniversaries of the date of grant. Notwithstanding the foregoing, the shares of restricted stock
will become fully vested upon the occurrence of a change in control of the Company (as defined in
the award agreements) or the termination of the executive by reason of death or disability. The
restricted share awards are subject to the terms of the 2005 Plan and the individual award
agreements substantially in the form of Exhibit 10.1 hereto and incorporated herein by reference.
The foregoing summary of the terms of the restricted share awards is qualified in its
entirety by reference to the complete text of the 2005 Plan and the individual award agreements.
The option shares awarded by the Committee will be granted in four equal installments on each
of January 26 (the “initial grant date”), April 26, July 26, and October 26 of 2006. The exercise
price for each installment will be equal to the fair market value of the underlying shares of
common stock on the date of grant. Each grant will vest and become exercisable ratably in 25%
increments on each of the first, second, third and fourth anniversaries of the initial grant date.
Notwithstanding the foregoing, the installment grant dates will be accelerated, and all of the
option shares under the awards will become fully vested, upon the occurrence of a change in control
of the Company (as defined in the award agreements) or the termination of the executive by reason
of disability. Additionally, all of the option shares will become fully vested upon the
retirement (as defined in the award agreements) of the optionee so long as the optionee’s retirement
takes place after December 31, 2006, and all of the option shares will become fully vested, to the
extent the installments had already been granted, upon the death of the optionee. The non-qualified
stock option awards are subject to the terms of the 2005 Plan and the individual award agreements
substantially in the form of Exhibit 10.2 hereto and incorporated herein by reference. The
foregoing summary of the terms of the non-qualified stock option awards is qualified in its
entirety by reference to the complete text of the 2005 Plan and the individual award agreements.
B. 2006 Senior Officer Performance Excellence Program.
On January 26, 2006, the Committee also adopted the 2006 Senior Officer Performance Excellence
Program (the “Senior Officer PEP”). Under the Senior Officer PEP, the officers of the Company who
are subject to Section 16 of the Securities Exchange Act of 1934, as amended, shall be eligible to
earn performance awards based upon the achievement of certain specified performance targets. The
specified performance criteria for the Company’s five most highly compensated executive officers
(the “Covered Officers”) are EPS (as defined in the Senior Officer PEP) and EBITDA (as defined in
the Senior Officer PEP). The performance criteria for other participants are based on the Company’s
financial results and specified individual performance goals. Target awards range from 50% to 120%
of a participant’s base salary with respect to the Covered Officers, and from 30% to 50% of a
participant’s
base salary with respect to participants other than the Covered Officers. Participants will receive
100% of the target award for target performance, 50% of the target award for a minimum acceptable
(threshold) level of performance, and a maximum of 200% of the target award for maximum
performance.
No awards will be paid to a participant if the Committee determines that the participant’s
conduct during the year was inconsistent with the Company’s stated mission and values, its Code of
Conduct or the Corporate Integrity Agreement. Except as the Committee may otherwise determine in
its sole and absolute discretion, termination of a participant’s employment prior to the end of the
year, other than for reasons of death or disability, will result in the forfeiture of the award by
the participant, and no payments shall be made with respect thereto.
Following the end of the fiscal year, the Committee will determine whether and the extent to
which the applicable performance targets were met. Based upon this assessment, the Committee may
award each eligible participant in the Senior Officer PEP a cash award based on the target award,
the achievement of the relevant performance criteria and the terms of the Senior Officer PEP. No
payments will be made for performance below specified threshold amounts. Payouts between threshold
and maximum will be calculated by the Committee in its sole discretion using interpolation. The
Committee may make adjustments to the terms of awards under the Senior Officer PEP in recognition
of unusual or nonrecurring events affecting a participant or the Company, or the financial
statements of the Company; in the event of changes in applicable laws, regulations, or accounting
principles; or in the event that the Committee determines that such adjustments are appropriate in
order to prevent dilution or enlargement of the benefits available under the Senior Officer PEP.
The Committee is also authorized to adjust performance targets or awards (other than with respect
to performance awards to Covered Officers) to avoid unwarranted penalties or windfalls. Performance
awards to Covered Officers may be reduced, but not increased, in the sole discretion of the
Committee in order to avoid unwarranted windfalls.
The foregoing description of the Senior Officer PEP does not purport to be complete and is
qualified in its entirety by reference to the Senior Officer PEP, a copy of which is attached
hereto as Exhibit 10.3 and is incorporated herein by reference. The Company has separate
performance excellence programs for its employees who are not senior officers.
Item 9.01. Financial Statements and Exhibits.
Exhibits.
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10.1
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Form of 2006 Restricted Share Award Agreement (Officers) |
10.2
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Form of 2006 Non-Qualified Stock Option Agreement (Officers) |
10.3
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2006 Senior Officer Performance Excellence Program |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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HCA INC. |
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By: |
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/s/ R. Milton Johnson |
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R. Milton Johnson |
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Executive Vice President and Chief Financial Officer |
Date:
February 1, 2006
EXHIBIT INDEX
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10.1
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Form of 2006 Restricted Share Award Agreement (Officers) |
10.2
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Form of 2006 Non-Qualified Stock Option Agreement (Officers) |
10.3
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2006 Senior Officer Performance Excellence Program |