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The 17,741,379 Common Stock Warrants that HealthTrust issued
to HCAII were each exercisable for one share of HealthTrust
Common Stock, beginning on March 1, 1988, for a period of 20
years. In the aggregate those Common Stock Warrants were
exercisable for 34.3 percent of HealthTrust's Common Stock, on a
fully diluted basis. The exercise price through 1989 was $30 per
share. Thereafter, the exercise price was to be reduced annually
for the next 6 years until it reached a price of $10 per share.
The exercise price was to remain $10 per share through 2008
unless HealthTrust's Common Stock reached specified levels and
the ESOP loans were current, in which case the exercise price
would be further reduced to $6 per share, starting in 1993.
The Employee Stock Ownership Plan
The Acquisition Agreement required that HealthTrust
establish an ESOP for the benefit of its employees. Accordingly,
an ESOP was established by HealthTrust and funded with a trust
(the ESOP), and Mr. Thomas Neill, Mr. William Gregory, and Mr.
Mark Warren, who were employees of HealthTrust, were appointed by
HealthTrust to serve on the ESOP administrative committee (ESOP
Committee), which operated independent of HealthTrust Management.
HealthTrust appointed the First American Trust Co. of Nashville,
Tennessee, to serve as trustee (Trustee) for the ESOP. The ESOP
Committee retained independent legal counsel and its own
investment advisor, Interstate Securities Corp (Interstate).
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