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.

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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:

 

  (i) First Installment: exercisable for 125,000 Shares beginning on
September 13, 2009, and ending on September 12, 2018;

 

  (ii) Second Installment: exercisable for an additional 125,000 Shares
beginning on September 13, 2010, and ending on September 12, 2018;

 

  (iii) Third Installment: exercisable for an additional 125,000 Shares
beginning on September 13, 2011, and ending on September 12, 2018; and

 

  (iv) Fourth Installment: exercisable for an additional 125,000 Shares
beginning on September 13, 2012, and ending on September 12, 2018.

(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.

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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: (a) the number
and kind of Shares or other securities that may be issued upon exercise of the
Option, (b) the per Share exercise price to be paid upon exercise of the Option
and (c) such other terms as the Committee under the Plan deems appropriate
pursuant to Section 10(c) of the Plan. Under no circumstance will the Optionee
be entitled to an adjustment hereunder to reflect dilution resulting from the
issuance of additional stock by the Company, except as expressly provided in the
preceding sentence, regardless of whether such stock is issued for less than the
exercise price of the Option.

10. Acceleration Upon Change of Control. In the event of a “Change in Control”
(as such term is defined in the Plan), the Option will become fully exercisable
and vested as of the date of the Change in Control and as provided by the Plan
and will remain exercisable and vested for the balance of the term thereof, as
provided by Section 2.

11. Taxes; Securities Laws Matters.

(a) Each exercise of the Option will be conditioned upon the Option holder
making arrangements satisfactory to the Company for the payment to the Company
of the amount of all taxes required by any governmental authority to be withheld
and paid over by the Company to the governmental authority on account of the
exercise. The payment of such withholding taxes to the Company may be made 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, (ii) by the Company
withholding such taxes from any other compensation owed to the Option holder by
the Company or an Affiliate, or (iii) 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.

(b) As a precondition to the Company’s execution of this Agreement and the grant
of the Option hereunder, the Optionee represents to the Company that the Option
is being, and (unless a Registration Statement with respect thereto is then
effective under the Securities Act of 1933, as amended (the “Act”) any Shares
acquired by the Optionee upon exercise of the Option will be, acquired by the
Optionee solely for

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investment and not with a view to, or for sale in connection with any
distribution thereof, nor with any present intention of selling, transferring or
disposing of the same. The Optionee acknowledges and agrees that the Option may
not be offered for sale, sold, pledged, hypothecated or otherwise transferred or
disposed of in any manner inconsistent with this Agreement or the Plan, and that
any Shares acquired upon exercise of the Option may not be offered for sale,
sold or otherwise transferred or disposed of unless (i) a Registration Statement
with respect thereto is then effective under the Act, and the Optionee has
provided proof satisfactory to counsel for the Company that he has complied with
all applicable state securities laws, or (ii) the Company has received an
opinion of counsel in form and substance satisfactory to counsel for the Company
that the proposed offer for sale, sale or transfer of the Shares is exempt from
the registration requirements of the Act and may otherwise be effected in
compliance with any other applicable laws. The Optionee agrees that unless a
Registration Statement with respect thereto is then effective under the Act, a
legend to this effect may be placed on each certificate, and a stop transfer
order may be placed against his account, relating to the Shares. In addition,
each such certificate will bear such additional legends and statements, if any,
as the Company deems advisable to assure compliance with the provisions of the
Plan as well as all applicable Federal and state laws and regulations. The
Optionee acknowledges that the Company is relying upon his representations
contained in this Section 11(b) in connection with the issuance to him of the
Option and, upon due exercise, the Shares. In consideration of such issuance,
the Optionee hereby indemnities and holds harmless the Company, and the
officers, directors, employees and agents thereof, from and against any and all
liability, losses, damages, expenses and attorneys’ fees which they may
hereafter incur, suffer or be required to pay by reason of the falsity of, or
his failure to comply with any representation or agreement contained in this
Section 11(b).

12. Non-Transferability. The Option is not transferable other than by will or
the laws of descent and distribution. Except for exercise after the Optionee’s
death as permitted by Section 2(b), the Option is exercisable only during the
Optionee’s lifetime, and only by him.

13. Tenure. The Optionee’s right, if any, to continue to serve the Company or
any Affiliate as an officer, employee or otherwise will not be enlarged or
otherwise affected by this Agreement. This Agreement does not restrict the right
of the Company or any Affiliate to terminate the Optionee’s employment at any
time.

14. Choice of Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware (without regard to the choice
of law provisions of such laws).

15. Notices. All notices and other communications required or permitted to be
given under this Agreement will be written, and will be either delivered
personally or sent by registered or certified first-class mail postage prepaid
and return receipt requested, or by telex or telecopier, addressed as follows:
if to the Company, to the Company’s principal office at 5811 Pelican Bay
Boulevard, Suite 500, Naples, Florida

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34108, Attention: Corporate Secretary; and if to Optionee or his successor, to
the address last furnished by such person to the Company. Each such notice and
other communication delivered personally will be deemed to have been given when
delivered. Each such notice and other communication given by mail will be deemed
to have been given when it is deposited in the United States mail in the manner
specified herein, and each such notice and other communication given by telex or
telecopier will be deemed to have been given when it is so transmitted and the
appropriate answer back is received. A party may change its address for the
purpose hereof by giving notice in accordance with the provisions of this
Section 15.

16. In General. This Agreement is subject to and controlled by the Plan. Any
necessary inconsistency between this Agreement and the Plan will be resolved in
favor of the Plan. This Agreement is the final complete and exclusive expression
of the understanding between the parties and supersedes any prior or
contemporaneous agreement or representation, oral or written between them.
Except as may be otherwise expressly provided by the Plan, modification of this
Agreement or waiver of a condition hereof must be written and signed by the
party to be bound. In the event that any provision of this Agreement is held to
be illegal or unenforceable, such provision will be severed from the Agreement
and the entire Agreement will not fail on account thereof, but will otherwise
remain in full force and effect. As used herein, the masculine pronoun includes
the feminine and the neuter, as appropriate to the context. Unless the context
otherwise requires, references herein to a “Section” means a Section of this
Agreement. Section headings contained herein are for convenience only and do not
alter any of the parties’ respective rights or obligations hereunder.

IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement as
of the date first above written.

 

HEALTH MANAGEMENT ASSOCIATES, INC. By:   /s/ Timothy R. Parry  

Timothy R. Parry

SVP and General Counsel

 

 

/s/ Gary D. Newsome Gary D. Newsome, Optionee