Exhibit 10.28
STOCK OPTION
AGREEMENT
under the
Health Management Associates,
Inc.
1996 Executive Incentive
Compensation Plan
This Stock Option Agreement
is made as of September 13, 2008, by and between Health
Management Associates, Inc. , a Delaware corporation (the
“Company”), and Gary D. Newsome, (the
“Optionee”).
Background.
This Agreement is made pursuant to,
and is governed by, the Health Management Associates, Inc. 1996
Executive Incentive Compensation Plan (the
‘“Plan”). The purpose of this Agreement is
to evidence an option granted under and in accordance with the
Plan. All of the terms and conditions of the Plan are incorporated
herein by reference as if set forth herein in full. As used in this
Agreement, the term “Shares” means the shares of the
Company’s Class A Common Stock, par value $.01 per share
(the “Class A Common Stock”), or other securities
resulting from an adjustment under Section 9, that underlie
the option hereby granted.
Accordingly, the parties agree as
follows:
1. Grant of Option. The Company hereby
grants to the Optionee an option to purchase an aggregate of
500,000 Shares upon the terms and conditions hereof (the
“Option”).
2. Term. Subject to earlier termination as
provided herein, the Option will lapse and terminate on and is not
exercisable after September 12, 2018. Notwithstanding the
foregoing:
(a) Certain Terminations of
Employment: the Option will lapse and terminate if
(i) Optionee does not hold the position of President and CEO
on December 31, 2009 or (ii) on the day on which the
Optionee ceases to be employed by the Company or a parent or
subsidiary of the Company (an “Affiliate”) for any
reason other than his death, his total and permanent disability, or
his retirement on or after age 62;
(b) Death or Disability: if
the Optionee’s employment with the Company or an Affiliate
terminates on account of his death or his total and permanent
disability, the Option will lapse and terminate on the earlier of
(i) the date 36 months after the date of such termination of
employment, or (ii) September 12, 2018; and
(c) Retirement: if the
Optionee’s employment with the Company or an Affiliate
terminates on account of his retirement on or after age 62, the
Option will lapse and terminate on September 12, 2018, even if
that date is subsequent to the date of such termination of
employment.
Upon any termination of the Option,
the Optionee’s rights under this Agreement, including the
right to exercise the Option under Section 4, will thereupon
terminate.
3. Exercise Price. The price of each Share
purchased upon exercise of the Option will be $4.75 (that being the
last reported sale price per share of the Class A Common Stock
on the date hereof, as reported by the New York Stock
Exchange).
4. Schedule and Method of
Exercise.
(a) Subject to the provisions of
Section 2, and to the further provisions of this
Section 4, the option vests and is exercisable according to
the following schedule:
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(i)
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First
Installment: exercisable
for 125,000 Shares beginning on September 13, 2009, and ending
on September 12, 2018;
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(ii)
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Second
Installment: exercisable
for an additional 125,000 Shares beginning on September 13,
2010, and ending on September 12, 2018;
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(iii)
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Third
Installment: exercisable
for an additional 125,000 Shares beginning on September 13,
2011, and ending on September 12, 2018; and
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(iv)
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Fourth
Installment: exercisable
for an additional 125,000 Shares beginning on September 13,
2012, and ending on September 12, 2018.
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(b) An Option may be exercised by
written notice given by the Optionee to the Company specifying the
number of Shares that the Optionee elects to purchase, accompanied
by full payment for such Shares. Upon each exercise, the exercise
price will be payable by one or any combination of the following
methods, as determined by the Option holder and specified in his
notice of exercise: (i) in cash, or (ii) by delivery of
shares of Class A Common Stock already owned by the Option
holder, which will be accepted in exchange at the fair market value
of the Class A Common Stock on the date of exercise. Upon
determining that the Optionee has complied with all of the
provisions of this Agreement, including such reasonable
requirements as the Company may impose pursuant to Section 11,
the Company will issue certificates for the Shares purchased upon
such exercise.
5. Partial Exercise. The Option to the
extent exercisable under Section 4, may be exercised from time
to time in whole or part, provided that the Option may not be
exercised for fractional Shares.
6. No ISO Treatment . The Option is not an
“incentive stock option” as described in
Section 422A of the Internal Revenue Code of 1986, as
amended.
7. No Rights of Stockholder. No person,
estate or other entity will have the rights of a stockholder of the
Company with respect to any Shares until a certificate for such
Shares has been delivered to the Option holder.
8. Rights of the Company. This Agreement
does not affect the Company’s right to take any corporate
action whatsoever, including its right to recapitalize, reorganize
or make other changes in its capital structure or business, merge
or consolidate, issue bonds, notes or stock, including preferred
stock, or options therefor, dissolve or liquidate, or sell or
transfer any part of its assets or business.
9. Adjustments. Upon the occurrence of any
of the events contemplated by Section 10(c) of the Plan
appropriate adjustment will be made to:
