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þ		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12
HCA INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
o		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
		(1)		Title of each class of securities to which transaction applies:
				Common stock, par value $.01 per share, of HCA Inc. and nonvoting common stock, par value $.01 per share, of HCA Inc. (collectively, the “HCA Common Stock”)
		(2)		Aggregate number of securities to which transaction applies:
				409,547,671 shares of HCA Common Stock; 28,045,175 options to purchase HCA Common Stock; restricted share units with respect to 134,261 shares of HCA Common Stock; Warrants with respect to 16,910 shares of HCA Common Stock.
		(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
				The transaction value was determined based upon the sum of (a) $51.00 per share of 409,547,671 shares of HCA Common Stock, (b) $51.00 minus the weighted average exercise price of $39.40 per share of outstanding options to purchase 24,941,169 shares of HCA Common Stock, (c) $51.00 minus the weighted average exercise price of $20.34 per share of outstanding options to purchase 3,104,006 shares of HCA Common Stock, (d) $51.00 per share of restricted share units with respect to 134,261 shares of HCA Common Stock; and (e) $51.00 minus the exercise price of $2.29 per share of outstanding warrants to purchase 16,910 shares of HCA Common Stock.
		(4)		Proposed maximum aggregate value of transaction:
				$21,279,088,602.46
		(5)		Total fee paid:
				$2,276,862.48
þ		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
		(1)		Amount Previously Paid:
		(2)		Form, Schedule or Registration Statement No.:
		(3)		Filing Party:
		(4)		Date Filed:

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Frederick W. Gluck		Jack O. Bovender, Jr.
Chairman of the Special Committee		Chairman of the Board and Chief Executive Officer

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	1. To consider and vote on a proposal to adopt the Agreement and Plan of Merger (the “merger agreement”), dated as of July 24, 2006, by and among the Company, Hercules Holding II, LLC, a Delaware limited liability company (“Parent”), and Hercules Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), as the merger agreement may be amended from time to time.
	2. To approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement.
	3. To act upon other business as may properly come before the special meeting and any and all adjourned or postponed sessions thereof.

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	By Order of the Board of Directors,
	John M. Franck II
	Vice President and Corporate Secretary

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SUMMARY TERM SHEET			1
	The Merger and the Merger Agreement		1
	The Special Meeting		4
	Other Important Considerations		4
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER			9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			14
THE PARTIES TO THE MERGER			15
	HCA		15
	Parent		15
	Merger Sub		15
THE SPECIAL MEETING			16
	Date, Time and Place of the Special Meeting		16
	Proposals to be Considered at the Special Meeting		16
	Record Date		16
	Voting Rights; Quorum; Vote Required for Approval		16
	Voting and Revocation of Proxies		17
	Rights of Shareholders Who Object to the Merger		18
	Solicitation of Proxies		18
	Other Business		18
	Questions and Additional Information		18
	Availability of Documents		18
SPECIAL FACTORS			19
	Background of the Merger		19
	Reasons for the Merger; Recommendation of the Special Committee and of Our Board of Directors; Fairness of the Merger		27
	Purpose and Reasons for the Merger of Management Investors		31
	Purpose and Reasons for the Merger of Dr. Frist and the Frist Entities		32
	Purpose and Reasons for the Merger of Parent, Merger Sub and the Sponsors		32
	Opinions of Financial Advisors		32
	Position of Management Investors as to Fairness		40
	Position of Dr. Frist and the Frist Entities as to Fairness		41
	Position of Parent, Merger Sub and the Sponsors as to Fairness		42
	Purposes, Reasons and Plans for HCA after the Merger		42
	Certain Effects of the Merger		43
	Effects on the Company if the Merger is Not Completed		45
	Delisting and Deregistration of HCA Common Stock		46
	Accounting		46
	Regulatory Approvals		46
	Financing of the Merger		46
	Guarantees; Remedies		51
	Interests of the Company’s Directors and Executive Officers in the Merger		51
	Material U.S. Federal Income Tax Consequences of the Merger to Our Shareholders		58
	Certain Relationships Between Parent and HCA		59
	Litigation Related to the Merger		60
	Fees and Expenses of the Merger		61

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THE MERGER AGREEMENT (PROPOSAL NO. 1)			62
	The Merger		62
	Merger Consideration		62
	Treatment of Options and Other Awards		62
	Payment for the Shares		63
	Representations and Warranties		64
	Conduct of Business Pending the Merger		65
	Efforts to Complete the Merger		67
	Marketing Period		68
	Conditions to the Merger		69
	Restrictions on Solicitations of Other Offers		70
	Recommendation Withdrawal/Termination in Connection with a Superior Proposal		71
	Termination of the Merger Agreement		72
	Termination Fees		73
	Employee Benefits		74
	Indemnification and Insurance		75
	Amendment, Extension and Waiver		76
DISSENTERS’ RIGHTS OF APPRAISAL			76
IMPORTANT INFORMATION ABOUT HCA			79
	Historical Selected Financial Data		79
	Ratio of Earnings to Fixed Charges		82
	Book Value Per Share		82
	Projected Financial Information		83
	Market Price and Dividend Data		87
	Security Ownership of Certain Beneficial Owners and Management		87
	Prior Stock Purchases		89
	Independent Registered Public Accounting Firm		91
ADJOURNMENT OF THE SPECIAL MEETING (PROPOSAL NO. 2)			91
OTHER MATTERS			91
	Other Matters for Action at the Special Meeting		91
	Future Shareholder Proposals		91
	Householding of Special Meeting Materials		91
WHERE YOU CAN FIND MORE INFORMATION			92
ANNEX A — Agreement and Plan of Merger
ANNEX B — Opinion of Credit Suisse Securities (USA) LLC
ANNEX C — Opinion of Morgan Stanley & Co. Incorporated
ANNEX D — Section 262 of the General Corporation Law of the State of Delaware
ANNEX E — Information Relating to the Sponsors, the Frist Entities and HCA Directors and Executive Officers

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	•	The Parties to the Merger (see page 15). HCA, a Delaware corporation, is one of the leading health care services companies in the United States. Hercules Holding II, LLC, a Delaware limited liability company (“Parent”), was formed solely for the purpose of effecting the merger (as defined below) and the transactions related to the merger. Parent has not engaged in any business except in furtherance of this purpose. Hercules Acquisition Corporation, a Delaware corporation and a direct wholly-owned subsidiary of Parent (“Merger Sub”), was formed solely for the purpose of effecting the merger. Merger Sub has not engaged in any business except in furtherance of this purpose. Parent is currently owned by private equity funds sponsored by Bain Capital Partners, LLC (“Bain”), Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and Merrill Lynch Global Partners, Inc. (d/b/a Merrill Lynch Global Private Equity) (“Merrill Lynch Global Private Equity”) (collectively referred to in this proxy statement as the “sponsors”). The sponsors, collectively, with HCA founder and director Dr. Thomas F. Frist, Jr. and certain entities affiliated with Dr. First (the “Frist Entities”) who have committed to contribute a portion of their shares of HCA Common Stock to Parent in connection with the merger in exchange for a portion of the equity securities of Parent (which right may be assigned, in part, to Dr. Frist and other permitted assignees) are sometimes collectively referred to in this proxy statement as the “Investor Group.”
	•	The Merger. You are being asked to vote to adopt an agreement and plan of merger (the “merger agreement”) providing for the recapitalization of HCA by Parent. Pursuant to the merger agreement, Merger Sub will merge with and into HCA (the “merger”). HCA will be the surviving corporation in the merger (the “surviving corporation”) and will continue to do business as “HCA” following the merger. As a result of the merger, HCA will cease to be an independent, publicly traded company. See “The Merger Agreement” beginning on page 62.
	•	Merger Consideration. If the merger is completed, you will be entitled to receive $51.00 in cash, without interest and less any applicable withholding taxes, for each share of HCA capital stock (consisting of common stock, par value $.01 per share, and nonvoting common stock, par value $.01 per share (collectively, the “HCA Common Stock”)) that you own. See “The Merger Agreement — Merger Consideration” beginning on page 62.
	•	Treatment of Outstanding Options, Restricted Shares and Restricted Share Units. Upon consummation of the merger, except as otherwise agreed by a holder and Parent, all outstanding options to acquire HCA Common Stock will become fully vested and immediately exercisable. All such options (other than certain options held by certain Management Rollover Holders (as defined below under “— Interests of the Company’s Directors and Executive Officers in the Merger”)) not exercised prior to the merger will be cancelled and converted into the right to receive a cash payment equal to the number of shares of HCA Common Stock underlying the options multiplied by the amount (if any) by which $51.00 exceeds the option exercise price, without interest and less any applicable withholding taxes. Additionally, except as otherwise agreed by a holder and Parent, all shares of restricted stock and restricted share units will vest and those shares or units will be

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		cancelled and converted into the right to receive a cash payment equal to the number of outstanding restricted shares or restricted share units multiplied by $51.00 (together with the value of any deemed dividend equivalents accrued but unpaid with respect to restricted share units), without interest and less any applicable withholding taxes. Certain options to purchase HCA Common Stock held by certain of the Management Rollover Holders that are not exercised prior to consummation of the merger will be converted into options to acquire shares of common stock of the surviving corporation. See “Special Factors — Interests of the Company’s Directors and Executive Officers in the Merger” and “The Merger Agreement — Treatment of Options and Other Awards” beginning on pages 51 and 62, respectively.
	•	Conditions to the Merger (see page 69). The consummation of the merger depends on the satisfaction or waiver of a number of conditions, including the following:

	•	the merger agreement must have been adopted by the affirmative vote of the holders of a majority of the outstanding shares of voting HCA Common Stock;
	•	no injunction, judgment, order or law which prohibits, restrains or renders illegal the consummation of the merger shall be in effect;
	•	the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), must have expired or been terminated;
	•	HCA’s and Parent’s and Merger Sub’s respective representations and warranties in the merger agreement must be true and correct as of the closing date in the manner described under the caption “The Merger Agreement — Conditions to the Merger” beginning on page 69; and
	•	HCA and Parent and Merger Sub must have performed in all material respects all obligations that each is required to perform under the merger agreement.

	•	Restrictions on Solicitations of Other Offers (see page 70).

	•	The merger agreement provides that, until 11:59 p.m., New York time, on September 12, 2006 (the “go-shop period”), we were permitted to initiate, solicit and encourage an acquisition proposal for us (including by way of providing information), and enter into and maintain discussions or negotiations concerning an acquisition proposal for us or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, discussions or negotiations. Prior to terminating the merger agreement or entering into an acquisition agreement with respect to any such proposal, the Company was required to comply with certain terms of the merger agreement described under “The Merger Agreement — Recommendation Withdrawal/ Termination in Connection with a Superior Proposal,” including negotiating with Parent and Merger Sub in good faith to make adjustments to the merger agreement and, if required, paying a termination fee, see page 71. We did not receive any acquisition proposals during the go-shop period.
	•	The merger agreement provides that from and after the expiration of the go-shop period, we are generally not permitted to:

	•	initiate, solicit or knowingly encourage (including by way of providing information) the submission of any inquiries, proposals or offers or any other efforts or attempts that constitute or may reasonably be expected to lead to, an acquisition proposal for us or engage in any discussions or negotiations (other than with a person who submitted a proposal prior to the expiration of the go-shop period under certain circumstances) with respect thereto, or otherwise knowingly cooperate with or knowingly assist or participate in, or knowingly facilitate any such inquiries, proposals, discussions or negotiations; or
	•	approve or recommend, or publicly propose to approve or recommend, any acquisition proposal for us or enter into any merger agreement, letter of intent, agreement in principle, share purchase agreement, asset purchase agreement or share exchange agreement, option agreement

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		or other similar agreement providing for or relating to any acquisition proposal for us or enter into any agreement or agreement in principle requiring us to abandon, terminate or fail to consummate the transactions contemplated by the merger agreement or breach our obligations under the merger agreement or propose or agree to do any of the foregoing.

Notwithstanding these restrictions, under certain circumstances, our board of directors (acting through the special committee if such committee still exists) may respond to a bona fide unsolicited written proposal for an alternative acquisition or terminate the merger agreement and enter into an acquisition agreement with respect to a superior proposal, so long as the Company complies with certain terms of the merger agreement described under “The Merger Agreement — Recommendation Withdrawal/ Termination in Connection with a Superior Proposal,” including negotiating with Parent and Merger Sub in good faith to make adjustments to the merger agreement prior to termination and, if required, paying a termination fee, see page 71.

	•	The merger agreement provides that Dr. Frist shall not be prevented from engaging in a due diligence discussion with any third party who has been provided with and has agreed in writing to comply with the limitations described below if specifically requested to do so by the special committee of HCA’s board of directors or Credit Suisse Securities (USA) LLC (“Credit Suisse”). However, other than with respect to public disclosure obligations required by applicable law, (1) Dr. Frist shall not disclose to any such third party any information regarding the transactions contemplated by the merger agreement or any agreements, understandings or arrangements in connection therewith or any assumptions, information, evaluations or views of Parent and its affiliates, and (2) Dr. Frist shall not be permitted to have any discussions, agreements, understandings or arrangements with any third party regarding any participation, investment, involvement or interest of any nature whatsoever in any form of transaction similar to, or in the alternative to, the transactions contemplated by the merger agreement, including the merger.

	•	Termination of the Merger Agreement (see page 72). The merger agreement may be terminated:

	•	By mutual written consent of HCA, on the one hand, and Parent or Merger Sub, on the other hand;
	•	By either HCA, on the one hand, or Parent or Merger Sub, on the other hand, if:

	•	there shall be any final and nonappealable law that makes consummation of the merger illegal or otherwise prohibited;
	•	the merger is not completed on or before December 19, 2006, or (if the “marketing period” (as defined below under “The Merger Agreement — Marketing Period”) has not ended on or before December 19, 2006) on or before January 31, 2007, so long as the failure to complete the merger is not the result of, or caused by, the failure of the terminating party to comply with the terms of the merger agreement; or
	•	our shareholders do not adopt the merger agreement at the special meeting or any adjournment or postponement thereof; or

	•	By Parent or Merger Sub, if:

	•	our board of directors or a committee of our board of directors withdraws, modifies or qualifies, or publicly proposes to withdraw, modify or qualify, in a manner adverse to Parent or Merger Sub, its recommendation that our shareholders adopt the merger agreement, or takes action or makes any public statement in connection with the special meeting inconsistent with such recommendation, or approves or recommends, or resolves to approve or recommend, any takeover proposal by a third party other than the merger; or

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	•	we have breached or failed to perform any of our representations, warranties, covenants or agreements under the merger agreement which would give rise to the failure of certain conditions to closing to be satisfied and where that breach or failure to perform cannot be cured by December 19, 2006 (or January 31, 2007 if the termination date is extended as described above); or

	•	By HCA, if:

	•	prior to obtaining the vote of shareholders at the special meeting, we receive a superior proposal and concurrently enter into a definitive agreement with respect to such superior proposal, provided that we have complied with our obligations under the merger agreement described under “The Merger Agreement — Restrictions on Solicitations of Other Offers” and “The Merger Agreement — Recommendation Withdrawal/Termination in Connection with a Superior Proposal” beginning on pages 70 and 71, respectively, and provided that we have paid the termination fee owed to Parent as described under “The Merger Agreement — Termination Fees” beginning on page 73;
	•	Parent or Merger Sub has breached or failed to perform any of its representations, warranties, covenants or agreements under the merger agreement which would give rise to the failure of certain conditions to closing to be satisfied if that breach or failure to perform cannot be cured by December 19, 2006 (or January 31, 2007 if the termination date is extended as described above); or
	•	certain conditions to closing have been satisfied or waived and Parent has not consummated the merger within five calendar days after the final day of the marketing period.

	•	Termination Fees (see page 73). If the merger agreement is terminated under certain circumstances:

	•	the Company will be obligated to pay a termination fee of $500 million as directed by Parent;
	•	the Company will be obligated to pay the expenses of Parent, up to $50 million; or
	•	Parent will be obligated to pay us a termination fee of $500 million. Each member of the Investor Group, including the Frist Entities but not including Dr. Frist, has agreed severally to guarantee the obligation of Parent to pay this termination fee subject to a cap. This cap is equal to such member’s pro rata share of $500 million, which share is proportionate to its equity commitment to Parent as compared to the equity commitments of the other guarantors.

	•	The Special Committee and its Recommendation. The special committee is a committee of our board of directors that was formed on June 30, 2006 for the purpose of reviewing, evaluating and, as appropriate, negotiating a possible transaction relating to the sale of the Company. The special committee is comprised of five independent and disinterested directors. The members of the special committee are Frederick W. Gluck, Glenda A. Hatchett, Charles O. Holliday, Jr., T. Michael Long and Kent C. Nelson. The special committee unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to and in the best interests of our shareholders (other than Dr. Frist, members of the Frist family and his and their affiliates (including the Frist Entities), holders of shares of HCA Common Stock who are affiliates of Parent and the Management Rollover Holders) (such shareholders being referred to in this proxy statement collectively as the “unaffiliated shareholders”) and recommended to our board of directors that the merger agreement and the transactions contemplated thereby, including the

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		merger, be approved and declared advisable by our board of directors and that our board of directors recommend adoption by the shareholders of the merger agreement. For a discussion of the material factors considered by the board of directors and the special committee in reaching its conclusions and the reasons why the board of directors and the special committee determined that the merger is fair, see “Special Factors — Reasons for the Merger; Recommendation of the Special Committee and of Our Board of Directors; Fairness of the Merger” beginning on page 27.
	•	Board Recommendation. The Company’s board of directors, acting upon the unanimous recommendation of the special committee, recommends that HCA’s shareholders vote “FOR” the adoption of the merger agreement, and “FOR” the adjournment of the special meeting, if necessary, to solicit additional proxies. See “Special Factors — Reasons for the Merger; Recommendation of the Special Committee and of Our Board of Directors; Fairness of the Merger” beginning on page 27.
	•	Share Ownership of Directors and Executive Officers. As of                     , 2006, the record date, the directors and executive officers of HCA (other than Dr. Frist) held and are entitled to vote, in the aggregate, shares of HCA Common Stock representing approximately      % of the outstanding shares of the voting HCA Common Stock. The directors and executive officers have informed HCA that they currently intend to vote all of their shares of HCA Common Stock “FOR” the adoption of the merger agreement and “FOR” the adjournment proposal, if necessary. In addition, the Frist Entities, representing approximately      % of the outstanding shares of the voting HCA Common Stock, have entered into an agreement with the sponsors and certain other equity investors to vote their shares in favor of adopting the merger agreement. It is the current intention of Dr. Frist and members of his immediate family to vote other shares beneficially owned by them, representing approximately  % of the outstanding shares of the voting HCA Common Stock, to adopt the merger agreement, other than approximately 109,000 shares that are held by a charitable foundation formed by Dr. Frist, which will not be voted in the merger. See “The Special Meeting — Voting Rights; Quorum; Vote Required for Approval” beginning on page 16.
	•	Interests of the Company’s Directors and Executive Officers in the Merger. Upon the consummation of the merger, except as may be agreed by a holder or participant and Parent, (1) all stock options held by our directors and officers will vest and all vested and unexercised stock options will generally be cashed out in an amount equal to the excess (if any) of $51.00 over the option exercise price, (2) all shares of restricted stock and restricted share units will vest, become free of restrictions and will be cashed out at $51.00 per share (together with the value of any deemed dividend equivalents accrued but unpaid with respect to restricted share units), (3) all salary amounts withheld on behalf of the participants in the HCA stock purchase plans through the closing date of the merger will be deemed to have been used to purchase HCA Common Stock under the terms of these plans, using the closing date of the merger as the last date of the applicable offering period under these plans, and converted into the right to receive, effectively, a cash payment equal to the number of shares deemed purchased under these plans multiplied by $51.00, and (4) executives who are “covered officers” under the 2006 Senior Officer Performance Excellence Program will be paid their 2006 annual bonus at the target level as provided under such program. In addition, under the Company’s Supplemental Executive Retirement Plan (the “SERP”), upon the consummation of the merger, all current participants will become fully vested in their retirement benefits, the normal retirement age for collecting benefits under the SERP will be reduced from 62 to 60, and current participants will be entitled to certain additional benefits upon certain terminations of employment and to certain protections against the amendment or termination of the SERP. Certain of our executive officers (such officers, together with such other employees who are permitted to invest by the payment of cash and/or contribution of their HCA equity securities to the surviving corporation, are sometimes referred to herein collectively as the “Management Rollover Holders”) have also made commitments to roll over options to purchase HCA Common Stock into and/or otherwise invest in the equity securities of the surviving corporation. The Frist Entities have committed to contribute 15,686,275 shares of HCA Common

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		Stock to Parent in connection with the merger in exchange for a portion of the equity securities of Parent. In addition, Dr. Frist, certain members of his immediate family and certain entities controlled by them may contribute shares of HCA Common Stock to Parent in connection with the commitment by the Frist Entities. The Frist Entities may also invite certain additional investors selected by them to assume a portion of the Frist Entities’ equity commitment (the “Frist Sell-Down”). Participants in the Frist Sell-Down, together with any other assignees of the Frist Entities’ roll over equity commitment, are collectively referred to as the “Frist permitted assignees”. The Frist Sell-Down will reduce the Frist Entities’ equity commitment amount, but the Frist Entities will control in all respects (including voting and disposition) the interests in Parent that the Frist Sell-Down participants are entitled to receive in exchange for funding the Frist Entities’ equity commitments. The surviving corporation will grant new stock options in the surviving corporation to certain of our executive officers, who will also enter into new employment agreements with the surviving corporation and/or become directors of the surviving corporation. The Frist Entities will have the right to designate two directors of Parent’s board of directors after the merger is consummated, and Jack O. Bovender, Jr., the Company’s Chairman and Chief Executive Officer, and Richard M. Bracken, the Company’s President and a current director, will have the right to serve as directors of the surviving corporation so long as they are officers of the surviving corporation. These and other interests of our executive officers and directors, some of which may be different than those of our shareholders generally, are more fully described, together with a description of the total cash payments our executive officers will receive in connection with the merger, under “Special Factors — Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 51.
	•	Opinions of Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. Incorporated. In connection with the proposed merger, the special committee’s financial advisors, Credit Suisse and Morgan Stanley & Co. Incorporated (“Morgan Stanley”), each have delivered an opinion as to the fairness from a financial point of view to the unaffiliated shareholders of the merger consideration to be received by such holders in the merger.

The full text of the opinions of Credit Suisse and Morgan Stanley, which set forth the procedures followed, assumptions made, matters considered and limitations on review undertaken by Credit Suisse and Morgan Stanley, as applicable, in connection with their opinions, are attached as Annex B and Annex C, respectively, to this proxy statement. Credit Suisse and Morgan Stanley provided their opinions for the information and assistance of the special committee in connection with its consideration of the merger, and the opinions of Credit Suisse and Morgan Stanley are not recommendations as to how any shareholder should vote or act with respect to any matter relating to the merger. We encourage you to read the opinions carefully and in their entirety. For a more complete description of the opinions and the review undertaken in connection with such opinions, together with the fees payable to Credit Suisse and Morgan Stanley, see “Special Factors — Opinions of Financial Advisors” beginning on page 32.

	•	Sources of Financing. The merger agreement does not contain any condition relating to the receipt of financing by Parent. HCA and Parent estimate that the total amount of funds necessary to consummate the merger and related transactions, including the new financing arrangements, the refinancing of certain existing indebtedness and the payment of customary fees and expenses in connection with the proposed merger and financing arrangements, will be approximately $26 billion, which is expected to be funded by new credit facilities, private and/or public offerings of debt securities and equity financing. Funding of the equity and debt financing is subject to the satisfaction of the conditions set forth in the commitment letters pursuant to which the financing will be provided. See “Special Factors — Financing of the Merger” beginning on page 46. The following arrangements are in place to provide the necessary financing for the merger, including the payment of related transaction costs, charges, fees and expenses:

	•	Equity Financing. Parent has received roll over commitments from the Frist Entities of 15,686,275 shares of HCA Common Stock which, based on the merger consideration per share of

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		HCA Common Stock, have an aggregate value of $800 million, and equity commitments from the other members of the Investor Group (other than Dr. Frist) totaling $4.5 billion, for aggregate roll over and equity commitments totaling $5.3 billion.
	•	Debt Financing. Parent has received a debt commitment letter from Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, JPMorgan Chase Bank, N.A., J.P. Morgan Securities Inc., Citigroup Global Markets Inc., Merrill Lynch Capital Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated to provide (a) up to $16.80 billion of senior secured credit facilities and (b) up to $5.70 billion of senior secured second lien loans under a bridge facility.

	•	Regulatory Approvals (see page 46). Under the HSR Act, and the rules promulgated thereunder by the Federal Trade Commission (“FTC”), the merger may not be completed until notification and report forms have been filed with the FTC and the Antitrust Division of the Department of Justice (“DOJ”) and the applicable waiting period has expired or been terminated. HCA and Parent filed notification and report forms under the HSR Act with the FTC and the Antitrust Division on August 7, 2006. The waiting period was terminated on August 18, 2006.

	Though not a condition to the consummation of the merger, U.S. federal and state laws and regulations, as well as the laws and regulations of the United Kingdom and Switzerland, may require that we or Parent obtain approvals or certificates of need from, file new license and/or permit applications with, and/or provide notice to, applicable governmental authorities in connection with the merger.

	•	Applicability of Rules Related to “Going Private” Transactions; Position of Dr. Frist, the Frist Entities, Messrs. Bovender and Bracken, Parent, Merger Sub and the Sponsors as to Fairness and Their Reasons for the Merger (see pages 31-32 and 40-42). The requirements of Rule 13e-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), apply to the merger because Dr. Frist and Messrs. Bovender and Bracken are deemed to be engaged in a “going private” transaction under the applicable rules. In addition, the Frist Entities, Parent, Merger Sub and the sponsors could be deemed to be engaged in a “going private” transaction under these rules. To comply with the requirements of Rule 13e-3, our board of directors, Dr. Frist, the Frist Entities, Messrs. Bovender and Bracken, Parent, Merger Sub and the sponsors make certain statements as to, among other matters, their purposes and reasons for the merger, and their belief as to the fairness of the merger to our unaffiliated shareholders.

Each of the special committee and the board of directors has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of our unaffiliated shareholders. In evaluating the merger, the special committee consulted with its independent legal and financial advisors, reviewed a significant amount of information and considered a number of factors and procedural safeguards set forth below in “Special Factors — Reasons for the Merger; Recommendation of the Special Committee and of Our Board of Directors; Fairness of the Merger.” Based upon the foregoing, and consistent with its general recommendation to shareholders, the special committee and our board of directors believe that the merger agreement and the merger are substantively and procedurally fair to our unaffiliated shareholders.

	•	Tax Consequences. The merger will be a taxable transaction for U.S. federal income tax purposes if you are a U.S. person. Your receipt of cash in exchange for your shares of HCA Common Stock in the merger generally will cause you to recognize a gain or loss measured by the difference, if any, between the cash you receive in the merger (determined before the deduction of any applicable withholding taxes) and your adjusted tax basis in your shares of HCA Common Stock. If you are a non-U.S. holder (as defined below) of HCA Common Stock, the merger generally will not be a taxable transaction to you under U.S. federal income tax law unless you have certain connections to the United States. Under U.S. federal income tax law, you will be subject to information reporting on cash received in the merger unless an exemption applies. Backup withholding may also apply with respect to cash you receive in the merger, unless you provide proof

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		of an applicable exemption or a correct taxpayer identification number and otherwise comply with the applicable requirements of the backup withholding rules. You should consult your own tax advisor for a full understanding of how the merger will affect your federal, state and local and/or foreign taxes and, if applicable, the tax consequences of the receipt of cash in connection with the cancellation of your options to purchase shares of HCA Common Stock, your shares of restricted stock and/or your restricted share units, including the transactions described in this proxy statement relating to our other equity compensation and benefit plans. See “Special Factors — Material U.S. Federal Income Tax Consequences of the Merger to Our Shareholders” beginning on page 58.
	•	Appraisal Rights. Under Delaware law, holders of HCA Common Stock who do not vote in favor of adopting the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed, but only if they comply with all requirements of Delaware law, which are summarized in this proxy statement. This appraisal amount could be more than, the same as or less than the amount a shareholder would be entitled to receive under the terms of the merger agreement. Any holder of HCA Common Stock intending to exercise such holder’s appraisal rights, among other things, must submit a written demand for an appraisal to us prior to the vote on the adoption of the merger agreement and must not vote or otherwise submit a proxy in favor of adoption of the merger agreement. Your failure to follow exactly the procedures specified under Delaware law will result in the loss of your appraisal rights. See “The Special Meeting — Rights of Shareholders Who Object to the Merger” and “Dissenters’ Rights of Appraisal” beginning on pages 18 and 76, respectively, and the text of the Delaware appraisal rights statute reproduced in its entirety as Annex D.
	•	Market Price of HCA Common Stock (see page 87). The closing sale price of HCA Common Stock on the New York Stock Exchange (the “NYSE”) on July 18, 2006, the last trading day prior to press reports of rumors regarding a potential acquisition of HCA, was $43.29 per share. The $51.00 per share to be paid for each share of HCA Common Stock in the merger represents a premium of approximately 18% to the closing price on July 18, 2006.

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Q.		When and where is the special meeting?
A.		The special meeting of shareholders of HCA will be held on                     ,                     , 2006, at                     .m. local time, at the Company’s executive offices located at One Park Plaza, Nashville, Tennessee 37203.
Q.		What matters will be voted on at the special meeting?
A.		You will be asked to consider and vote on the following proposals:

	•	to adopt the merger agreement;
	•	to approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement; and
	•	to act upon other business that may properly come before the special meeting or any adjournment or postponement thereof.

Q.		How does HCA’s board of directors recommend that I vote on the proposals?
A.		The board of directors recommends that you vote:

	•	“FOR” the proposal to adopt the merger agreement; and
	•	“FOR” the adjournment proposal.

Q.		Who is entitled to vote at the special meeting?
A.		All holders of HCA Common Stock are entitled to notice, but only shareholders of record holding voting HCA Common Stock as of the close of business on                     , 2006, the record date for the special meeting, are entitled to vote at the special meeting. As of the record date, there were approximately                      shares of voting HCA Common Stock outstanding. Approximately                      holders of record held such shares. Every holder of voting HCA Common Stock is entitled to one vote for each such share the shareholder held as of the record date.

Please note that space limitations make it necessary to limit attendance at the special meeting to shareholders. Registration will begin at                                         .m., local time. If you attend, please note that you may be asked to present valid picture identification. “Street name” holders will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date. Cameras, recording devices and other electronic devices are not permitted at the meeting.

Q.		What vote is required for HCA’s shareholders to adopt the merger agreement? How do HCA’s directors and officers intend to vote?
A.		An affirmative vote of the holders of a majority of all outstanding shares of HCA Common Stock entitled to vote on the matter is required to adopt the merger agreement. Our directors and executive officers have informed us that they currently intend to vote all of their shares of HCA Common Stock for the adoption of the merger agreement. In addition, the Frist Entities (representing approximately      % of the voting HCA Common Stock outstanding) have entered into an agreement with the

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		sponsors and certain other equity investors pursuant to which they have agreed to vote their shares in favor of the adoption of the merger agreement. It is also the current intention of Dr. Frist and members of his immediate family to vote other shares beneficially owned by them, representing approximately           % of the outstanding shares of the voting HCA Common Stock, to adopt the merger agreement, other than approximately 109,000 shares that are held by a charitable foundation formed by Dr. Frist, which will not be voted in the merger.
Q.		What vote is required for HCA’s shareholders to approve the proposal to adjourn the special meeting, if necessary, to solicit additional proxies?

A.	The proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies requires the affirmative vote of the holders of a majority of the shares of HCA Common Stock present or represented by proxy at the meeting and entitled to vote on the matter.

Q.		Who is soliciting my vote?
A.		This proxy solicitation is being made and paid for by HCA. In addition, we have retained Georgeson Inc. to assist in the solicitation. We will pay Georgeson Inc. approximately $20,000 plus out-of-pocket expenses for its assistance. Our directors, officers and employees may also solicit proxies by personal interview, mail, e-mail, telephone, facsimile or by other means of communication. These persons will not be paid additional remuneration for their efforts. We will also request brokers and other fiduciaries to forward proxy solicitation material to the beneficial owners of shares of HCA Common Stock that the brokers and fiduciaries hold of record. We will reimburse them for their reasonable out-of-pocket expenses.
Q.		What do I need to do now?
A.		Even if you plan to attend the special meeting, after carefully reading and considering the information contained in this proxy statement, if you hold your shares in your own name as the shareholder of record, please vote your shares by completing, signing, dating and returning the enclosed proxy card; using the telephone number printed on your proxy card; or using the Internet voting instructions printed on your proxy card. You can also attend the special meeting and vote, or change your prior vote, in person. Do NOT enclose or return your stock certificate(s) with your proxy. If you hold your shares in “street name” through a broker, bank or other nominee, then you received this proxy statement from the nominee, along with the nominee’s proxy card which includes voting instructions and instructions on how to change your vote.
Q:		How do I vote? How can I revoke my vote?
A:		You may vote by signing and dating each proxy card you receive and returning it in the enclosed prepaid envelope or as described below if you hold your shares in “street name.” If you return your signed proxy card, but do not mark the boxes showing how you wish to vote, your shares will be voted “FOR” the proposal to adopt the merger agreement and “FOR” the adjournment proposal. You have the right to revoke your proxy at any time before the vote taken at the special meeting:

	•	if you hold your shares in your name as a shareholder of record, by notifying our Vice President and Corporate Secretary, John M. Franck II, at One Park Plaza, Nashville, Tennessee 37203;
	•	by attending the special meeting and voting in person (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person at the meeting);
	•	by submitting a later-dated proxy card; or
	•	if you have instructed a broker, bank or other nominee to vote your shares, by following the directions received from your broker, bank or other nominee to change those instructions.

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Q:		Can I vote by telephone or electronically?
A:		If you hold your shares in your name as a shareholder of record, you may vote by telephone or electronically through the Internet by following the instructions included with your proxy card.

	If your shares are held by your broker, bank or other nominee, often referred to as held in “street name,” please check your proxy card or contact your broker, bank or nominee to determine whether you will be able to vote by telephone or electronically.

Q.		If my shares are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?
A.		Your broker, bank or other nominee will only be permitted to vote your shares if you instruct your broker, bank or other nominee how to vote. You should follow the procedures provided by your broker, bank or other nominee regarding the voting of your shares. If you do not instruct your broker, bank or other nominee to vote your shares, your shares will not be voted and the effect will be the same as a vote against the adoption of the merger agreement and will not have an effect on the proposal to adjourn the special meeting.
Q:		What do I do if I have money in the HCA Stock Fund of the HCA 401(k) Plan?
A:		If you have money invested in the HCA Stock Fund of the HCA 401(k) Plan, you do not actually own shares of HCA Common Stock. You are instead credited with equivalent shares, which consist of your interest in both shares of HCA Common Stock and cash that are held by the HCA Stock Fund of the 401(k) Plan. The number of equivalent shares you hold on any given day is equal to your interest in the value of the HCA Common Stock and the cash held by the HCA Stock Fund, divided by the closing market price per share of HCA Common Stock on the NYSE on that day.

In accordance with the 401(k) Plan, the shares held in the HCA Stock Fund are typically voted at the direction of our plan administration committee, which is made up of certain members of our management, and not by individual plan participants. However, the plan administration committee has determined to engage an independent fiduciary to vote the shares held in the HCA Stock Fund in connection with the merger. Additionally, the plan administration committee has decided to offer participants pass-through voting rights based on a participant’s interest — or equivalent shares — in the HCA Stock Fund. You may exercise these pass-through voting rights only by completing and returning the voting instruction card for participants in the HCA Stock Fund of the HCA 401(k) Plan you received with this proxy statement in accordance with the procedures included therewith, or by following the instructions for voting by telephone or the Internet described in the voting instruction card, and before the deadline noted below. If your voting instructions are received by 6:00 a.m., local time, in Nashville, Tennessee on                     , 2006, the independent fiduciary will submit a proxy that reflects your instructions. If your voting instructions are not received by the date and time specified above, the independent fiduciary will vote the shares of HCA Common Stock allocable to your interest in the HCA Stock Fund in accordance with its independent and sole discretion, and all such shares will be voted in the same manner. Your voting instructions will be kept confidential as required by the terms of the HCA 401(k) Plan. You may not vote in person at the special meeting.

Q.		What do I do if I receive more than one proxy or set of voting instructions?
A.		If you also hold shares in “street name,” directly as a record holder or otherwise through the Company’s stock purchase plans, or if you have money invested in the HCA Stock Fund of the HCA 401(k) Plan, you may receive more than one proxy and/or set of voting instructions relating to the special meeting. These should each be voted and/or returned separately as described elsewhere in this proxy statement in order to ensure that all of your shares are voted.

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Q.		How are votes counted?
A.		For the proposal to adopt the merger agreement, you may vote FOR, AGAINST or ABSTAIN. Abstentions will not be counted as votes cast or shares voting on the proposal to adopt the merger agreement, but will count for the purpose of determining whether a quorum is present. If you abstain, it will have the same effect as if you vote against the adoption of the merger agreement. In addition, if your shares are held in the name of a broker, bank or other nominee, your broker, bank or other nominee will not be entitled to vote your shares in the absence of specific instructions. These non-voted shares, or “broker non-votes,” will be counted for purposes of determining a quorum, but will have the same effect as a vote against the adoption of the merger agreement.

	For the proposal to adjourn the special meeting, if necessary, to solicit additional proxies, you may vote FOR, AGAINST or ABSTAIN. Abstentions and broker non-votes will count for the purpose of determining whether a quorum is present, but abstentions and broker non-votes will not count as shares present and entitled to vote on the proposal to adjourn the meeting. As a result, abstentions and broker non-votes will have no effect on the vote to adjourn the meeting, which requires the vote of the holders of a majority of the shares of HCA Common Stock present or represented by proxy at the meeting and entitled to vote on the matter.
	If you sign your proxy card without indicating your vote, your shares will be voted “FOR” the adoption of the merger agreement and “FOR” the adjournment of the special meeting, if necessary, to solicit additional proxies, and in accordance with the recommendations of our board of directors on any other matters properly brought before the special meeting for a vote.

Q:		Who will count the votes?
A:		A representative of our transfer agent, National City Bank, will count the votes and act as an inspector of election. Questions concerning stock certificates or other matters pertaining to your shares may be directed to National City Bank at 1-800-622-6757.
Q.		When is the merger expected to be completed? What is the “marketing period”?
A.		We are working toward completing the merger as quickly as possible, and we anticipate that it will be completed in the fourth quarter of 2006. In order to complete the merger, we must obtain shareholder approval and the other closing conditions under the merger agreement must be satisfied or waived (as permitted by law). In addition, Parent is not obligated to complete the merger until the expiration of a 20-business day “marketing period” that it may use to complete its financing for the merger. The marketing period begins to run after we have obtained the shareholder approval and satisfied other conditions under the merger agreement; provided that if the marketing period would not end on or before December 19, 2006, the marketing period will commence no earlier than January 2, 2007. See “The Merger Agreement — Marketing Period” and “The Merger Agreement — Conditions to the Merger” beginning on pages 68 and 69, respectively.
Q.		Should I send in my stock certificates now?
A.		No. After the merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your HCA Common Stock certificates for the merger consideration. If your shares are held in “street name” by your broker, bank or other nominee you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your “street name” shares in exchange for the merger consideration. Please do not send your certificates in now.
Q.		How can I obtain additional information about HCA?
A.		We will provide a copy of our Annual Report to Shareholders and/or our Annual Report on Form 10-K for the year ended December 31, 2005, excluding certain of its exhibits, and other filings,

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		including our reports on Form 10-Q, with the Securities and Exchange Commission (“SEC”) without charge to any shareholder who makes a written or oral request to the Office of Investor Relations, HCA Inc., One Park Plaza, Nashville, Tennessee 37203; (615) 344-9551. Our Annual Report on Form 10-K and other SEC filings also may be accessed on the world wide web at http://www.sec.gov or on the Investor Relations page of the Company’s website at http://www.hcahealthcare.com. Our website address is provided as an inactive textual reference only. The information provided on our website is not part of this proxy statement, and therefore is not incorporated by reference. For a more detailed description of the information available, please refer to “Where You Can Find More Information” beginning on page 92.

Q.	Who can help answer my questions?

A.	If you have additional questions about the merger after reading this proxy statement, please call our proxy solicitor, Georgeson Inc., toll-free at (888) 264-7052 (banks and brokerage firms call collect at (212) 440-9800).

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	•	the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;
	•	the outcome of any legal proceedings that have been or may be instituted against HCA and others relating to the merger agreement;
	•	the inability to complete the merger due to the failure to obtain shareholder approval or the failure to satisfy other conditions to consummation of the merger;
	•	the failure to obtain the necessary debt financing arrangements set forth in commitment letters received in connection with the merger;
	•	the failure of the merger to close for any other reason;
	•	risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger;
	•	the effect of the announcement of the merger on our customer relationships, operating results and business generally;
	•	the ability to recognize the benefits of the merger;
	•	the amount of the costs, fees, expenses and charges related to the merger and the actual terms of certain financings that will be obtained for the merger;
	•	the impact of the substantial indebtedness incurred to finance the consummation of the merger;

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Date:	, 2006

Time:	.m., local time

Place:	One Park Plaza Nashville, Tennessee 37203

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	•	if you hold your shares in your name as a shareholder of record, by notifying our Vice President and Corporate Secretary, John M. Franck II, at One Park Plaza, Nashville, Tennessee 37203;
	•	by attending the special meeting and voting in person (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person at the meeting);
	•	by submitting a later-dated proxy card; or
	•	if you have instructed a broker, bank or other nominee to vote your shares, by following the directions received from your broker, bank or other nominee to change those instructions.

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	The Special Committee

	•	its belief that the merger was more favorable to unaffiliated shareholders than the alternative of remaining a stand-alone, independent company, because of the uncertain returns to such shareholders if the Company remained independent in light of the Company’s business, operations, financial condition, strategy and prospects (taking into account, in particular, management’s financial projections of the future financial performance and earnings of the Company (see “Important Information About HCA — Projected Financial Information”); recent industry trends, as discussed with McKinsey, management and the special committee’s financial advisors; McKinsey’s analyses, which forecasted earnings before interest, taxes, depreciation and amortization growth through 2009 that was lower than management’s forecast for the same period (see “Important Information About HCA — Projected Financial Information”); and the analyses reviewed with the special committee’s financial advisors on July 17, 2006), as well as the risks involved in achieving those returns, the nature of the industry in which the Company competes, and general industry, economic, market and regulatory conditions, both on an historical and on a prospective basis;
	•	its belief that the merger was more favorable to unaffiliated shareholders than the potential value that might result from other alternatives available to the Company, including the alternatives of pursuing other strategic initiatives such as additional stock repurchases, spin-offs or divestitures of selected assets, potential acquisitions or a leveraged recapitalization, given the potential rewards, risks and uncertainties associated with those alternatives, as reviewed with the special committee’s financial advisors on July 17, 2006 (see “Special Factors—Background of the Merger” beginning on page 19);
	•	the special committee’s belief that $51.00 per share was at the high end of the range that could be payable in a leveraged buyout transaction involving the Company, as reviewed by Credit Suisse and Morgan Stanley with the special committee in connection with their financial analyses described in “Opinions of Financial Advisors — Financial Analyses”;
	•	the fact that the Company’s performance during the second quarter of 2006, and its prospects for the remainder of 2006 and 2007, could result in a decrease in the Company’s stock price, at least in the short to medium term;
	•	McKinsey’s analysis that the Company’s EBITDA growth through 2009 would be lower than that currently being forecast by management and that, while improvements in the Company’s operating performance could yield EBITDA results in excess of those forecast by either McKinsey or management, the achievement of such improvements was uncertain and would be subject to execution risk (see “Important Information About HCA — Projected Financial Information”);
	•	the current and historical market prices of the HCA Common Stock, including the market price of the HCA Common Stock relative to those of other industry participants and general market indices, including the fact that the Company has generally traded in-line with other industry

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		participants and that the stock price performance of the Company and other industry participants had declined as compared to the S&P 500 Index since the second quarter of 2005; the fact that the cash merger price of $51.00 per share represented a premium of approximately 18% to the closing share price of the HCA Common Stock on July 18, 2006, the last trading day prior to press reports of rumors regarding a potential acquisition of the Company, and the special committee’s belief that the cash merger price of $51.00 per share would represent a greater premium to the Company’s stock price following the announcement of the Company’s second quarter earnings;
	•	the information contained in the financial presentations of Credit Suisse and Morgan Stanley, including the separate opinions of Credit Suisse and Morgan Stanley as to the fairness, from a financial point of view, to the unaffiliated shareholders, of the merger consideration to be received by such holders in the merger (see “Special Factors — Opinions of Financial Advisors”);
	•	the efforts made by the special committee and its advisors to negotiate and execute a merger agreement favorable to the Company;
	•	the financial and other terms and conditions of the merger agreement as reviewed by the special committee, including the fact that the merger would not be subject to a financing condition, and the fact that they were the product of negotiations between the parties;
	•	the fact that the merger consideration is all cash, so that the transaction allows the Company’s unaffiliated shareholders to immediately realize a fair value, in cash, for their investment and provides such shareholders certainty of value for their shares;
	•	the fact that the terms of the merger agreement provided the Company a 50-day post-signing go-shop period during which the Company solicited additional interest in transactions involving the Company and, after such 50-day period, permit the Company to respond to unsolicited proposals under certain circumstances (for additional information regarding the results of the Company’s solicitations during the go-shop period see page 26 of this proxy statement in the section “—Background of the Merger”);
	•	the fact that, subject to compliance with the terms and conditions of the merger agreement, the Company is permitted to change its recommendation or terminate the merger agreement, prior to the adoption of the merger agreement by our shareholders, in order to approve an alternative transaction proposed by a third party that is a “superior proposal” as defined in the merger agreement, upon the payment to Parent of: (i) a $300 million termination fee (representing approximately 1.4% of the total equity value of the transaction) in the event that such proposal was made during the 50-day go-shop period, or (ii) a $500 million termination fee (representing approximately 2.4% of the total equity value of the transaction) in the event that such proposal was made by a third-party after the end of the go-shop period;
	•	the fact that members of the Company’s management who plan to participate in the transaction did not commit to be exclusive to the sponsors and are therefore available to enter into discussions and arrangements with any subsequent bidder for the Company, and the fact that Dr. Frist can, subject to certain limitations, participate in due diligence discussions with third parties who are contemplating making a proposal to acquire the Company;
	•	the availability of appraisal rights to holders of the HCA Common Stock who comply with all of the required procedures under Delaware law, which allows such holders to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery;
	•	the commitment made by Parent and Merger Sub to treat the Company’s employees in a fair and equitable manner, including to provide (for one year from the effective date of the merger) each employee of the Company with at least the same level of salary or hourly wage rate, commission structure and opportunities, and/or cash bonus opportunities under annual programs (other than equity-based compensation or award opportunities) that was provided to such employee immediately prior to the merger and to provide employee severance, pension and welfare benefits (other than equity-based benefits) to employees that are no less favorable in the aggregate than those provided to employees immediately prior to the merger; and

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	•	the fact that the Company would not have to establish damages in the event of a failure of the merger to be consummated under certain circumstances in light of the $500 million termination fee payable by Parent.

	•	the fact that, other than for customary fees payable to members of the special committee (that were not contingent on the special committee’s recommendation of a transaction or the consummation of a transaction), the directors (other than Dr. Frist and Messrs. Bovender and Bracken) will not receive any consideration in connection with the merger that is different from that received by any other unaffiliated shareholder of the Company;
	•	the fact that negotiations were conducted under the oversight of a special committee comprised solely of independent directors who are not employees of the Company and who have no financial interest in the merger that is different from that of the unaffiliated shareholders of the Company;
	•	the fact that the special committee retained and received advice and assistance from its own independent financial and legal advisors in evaluating, negotiating and recommending the terms of the merger agreement;
	•	the fact that the special committee had ultimate authority to decide whether or not to proceed with a transaction or any alternative thereto, subject to our board of directors’ approval of the merger agreement;
	•	the fact that the financial and other terms and conditions of the merger agreement were the product of negotiations between the special committee and its independent advisors, on the one hand, and the sponsors and their advisors, on the other hand;
	•	the fact that the opinions of Credit Suisse and Morgan Stanley each address the fairness, from a financial point of view, to the unaffiliated shareholders, of the merger consideration to be received by such holders in the merger;
	•	the fact that the Company is permitted under certain circumstances to solicit and respond to inquiries regarding acquisition proposals and, upon payment of a termination fee, to terminate the merger agreement in order to complete a superior transaction; and
	•	the fact that under Delaware law, the shareholders of the Company have the right to demand appraisal of their shares.

	•	the risks and costs to the Company if the merger does not close, including the diversion of management and employee attention, potential employee attrition and the potential effect on the Company’s business and its relationships with physicians and patients;

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	•	the fact that the Company’s unaffiliated shareholders will not participate in any future earnings or growth of the Company and will not benefit from any appreciation in value of the Company, including any appreciation in value that could be realized as a result of improvements to the Company’s operations;
	•	the terms of Dr. Frist’s and management’s participation in the merger and the fact that Dr. Frist and the Company’s executive officers have interests in the transaction that are different from, or in addition to, those of the Company’s other shareholders;
	•	the restrictions on the conduct of the Company’s business prior to the completion of the merger, requiring the Company to conduct its business only in the ordinary course, subject to specific limitations, which may delay or prevent the Company from undertaking business opportunities that may arise pending completion of the merger;
	•	the fact that an all cash transaction would be taxable to the Company’s shareholders that are U.S. persons for U.S. federal income tax purposes; and
	•	the fact that the Company is entering into a merger agreement with a newly formed corporation with essentially no assets and, accordingly, that its remedy in connection with a breach of the merger agreement by Parent or Merger Sub, even a breach that is deliberate or willful, is limited to $500 million.

	Our Board of Directors

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	Opinion of Credit Suisse Securities (USA) LLC

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	Opinion of Morgan Stanley & Co. Incorporated

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	•	reviewed certain publicly available financial statements and other information of HCA;
	•	reviewed certain internal financial statements and other financial and operating data concerning HCA prepared by the management of HCA;
	•	reviewed certain financial projections of HCA prepared by the management of HCA;
	•	discussed the past and current operations and financial condition and the prospects of HCA with senior executives of HCA;
	•	reviewed the reported prices and trading activity for HCA Common Stock;
	•	compared the financial performance of HCA and the prices and trading activity of HCA Common Stock with that of certain other comparable publicly traded companies and their securities;
	•	reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;
	•	participated in discussions and negotiations among representatives of the special committee and the Investor Group and their financial and legal advisors;
	•	reviewed the merger agreement, the debt and equity financing commitments provided to Parent by certain lending institutions and private equity funds, the commitments by the Frist Entities to contribute shares of HCA Common Stock to Parent, each substantially in the form of the drafts dated July 23, 2006, and certain related documents; and
	•	performed such other analyses and considered other such factors as Morgan Stanley deemed appropriate.

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	Financial Analyses

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	Discounted Cash Flow Analysis

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Implied Per Share Equity		Per Share
Reference Range For HCA		Merger Consideration
$43.16 - $58.01		$	51.00

	Selected Companies Analysis

	•	Tenet Healthcare Corporation
	•	Triad Hospitals, Inc.
	•	Universal Health Services, Inc.

	•	Health Management Associates, Inc.
	•	Community Health Systems, Inc.
	•	LifePoint Hospitals, Inc.

Selected

Selected

Selected

Selected

Companies

Companies

Companies

Companies

(All)

(All)

(Urban)

(Rural)

Metric

Low

High

Mean

Mean

Enterprise Value/2006E EBITDA

6.4x

9.4x

7.8x

7.9x

Enterprise Value/2007E EBITDA

5.8x

8.4x

7.0x

6.9x

Price/2006E Earnings

13.6x

19.2x

16.4x

15.1x

Price/2007E Earnings

12.1x

16.9x

14.5x

13.2x

Implied Per Share Equity		Per Share
Reference Range For HCA		Merger Consideration
$36.00 - $46.00		$	51.00

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	Selected Transactions Analysis

	•	Welsh, Carson, Anderson & Stowe
	•	LifePoint Hospitals, Inc.
	•	The Blackstone Group (led by)
	•	Texas Pacific Group (led by)
	•	HCA Inc.
	•	Triad Hospitals, Inc.
	•	Tenet Healthcare Corporation
	•	Forstmann Little & Co. (affiliates of)

	•	Select Medical Corporation
	•	Province Healthcare Company
	•	Vanguard Health Systems, Inc.
	•	IASIS Healthcare Corporation
	•	Health Midwest
	•	Quorum Health Group, Inc.
	•	OrNda HealthCorp
	•	Community Health Systems, Inc.

Selected

Selected

Selected

Selected

Transactions

Transactions

Transactions

Transactions

Metric

Low

High

Median

Mean

Enterprise Value/Last twelve months EBITDA

8.1x

12.1x

9.4x

9.8x

Enterprise Value/Last twelve months Revenue

1.0x

2.4x

1.3x

1.5x

Implied Per Share Equity		Per Share
Reference Range For HCA		Merger Consideration
$45.00 - $55.00		$	51.00

	•	the median premiums paid in all-cash U.S. public company transactions with a value greater than $50 million, as well as all-cash U.S. public company transactions with a value greater than $5 billion, both over the period from December 31, 2000 to present, and leveraged buyout transactions with a value greater than $3 billion worldwide over the last ten years;

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	•	the low and high trading prices of HCA Common Stock during the 52-week period ended July 21, 2006;
	•	publicly available research analysts’ price targets for HCA; and
	•	the theoretical purchase prices that could be paid by a hypothetical financial buyer in a leveraged buyout of HCA.

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	•	an extraordinary corporate transaction following consummation of the merger involving HCA’s corporate structure, business or management, such as a merger, reorganization or liquidation,
	•	the relocation of any material operations or sale or transfer of a material amount of assets, or
	•	any other material changes in its business.

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		Ownership Prior to the Merger(1)																Ownership After the Merger(2)
		Net Book Value								Earnings								Net Book Value								Earnings
		$ in								$ in								$ in								$ in
Name		thousands				%				thousands				%				thousands				%				thousands				%
Thomas F. Frist, Jr., M.D.(3)		$	198,833				4.12%			$	27,759				4.12%			$	724,871				15.02%			$	101,199				15.02%
Frisco, Inc.(4)		$	96,038				1.99%			$	13,408				1.99%			$	375,949				7.79%			$	52,486				7.79%
Frisco Partners(4)		$	17,856				0.37%			$	2,493				0.37%			$	48,743				1.01%			$	6,805				1.01%
Jack O. Bovender, Jr.		$	3,861				0.08%			$	539				0.08%			$	22,682				0.47%			$	3,167				0.47%
Richard M. Bracken		$	1,930				0.04%			$	270				0.08%			$	11,100				0.23%			$	1,550				0.23%
Private equity funds advised by Bain			N/A				N/A				N/A				N/A			$	1,282,279				26.57%			$	179,019				26.57%
Private equity funds advised by KKR			N/A				N/A				N/A				N/A			$	1,282,279				26.57%			$	179,019				26.57%
Private equity funds advised by Merrill Lynch Global Private Equity			N/A				N/A				N/A				N/A			$	1,282,279				26.57%			$	179,019				26.57%

(1)	Based upon beneficial ownership as of August 31, 2006, excluding any options (whether or not exercisable), and HCA’s net book value at June 30, 2006 and net income for the six months ended June 30, 2006.
(2)	Based upon the agreed upon equity investments and HCA’s net book value at June 30, 2006 and net income for the six months ended June 30, 2006, and without giving effect to any additional indebtedness to be incurred in connection with the merger or the assignment by the Frist Entities of any portion of their equity commitment to the Frist permitted assignees.
(3)	Includes beneficial ownership of the shares of HCA Common Stock held by the Frist Entities.
(4)	The figures used to calculate the Frist Entities’ ownership after the merger represent the Frist Entities’ expected roll over equity commitment as of September 14, 2006 and are subject to change in accordance with the Frist Entities’ roll over equity commitment letter.

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	Equity Financing

	Debt Financing

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	•	Bank of America, JPMCB, CGMI and MLCC have each severally and not jointly committed to provide (each committing to 25%) to HCA and, in the case of the European Term Facility (as defined below), one or more of its subsidiaries, up to $16.80 billion of senior secured credit facilities, for the purpose of financing the merger, repaying or refinancing certain existing indebtedness of HCA and its subsidiaries, paying fees and expenses incurred in connection with the merger and providing ongoing working capital and for other general corporate purposes of the surviving corporation and its subsidiaries; and
	•	CGMI, Banc of America Bridge, JPMCB and MLCC have each severally and not jointly committed to provide (each committing to 25%) to HCA, up to $5.70 billion of senior secured second lien loans under a bridge facility, for the purpose of financing the merger, repaying or refinancing certain existing indebtedness of HCA and its subsidiaries and paying fees and expenses incurred in connection with the merger.

	Conditions Precedent to the Debt Commitments

	Senior Secured Credit Facilities

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	High-Yield Debt Financing

	Bridge Facility

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	•	Frist Sell-Down. Under the interim investors agreement, prior to the consummation of the merger, the Frist Entities may decrease the amount of HCA Common Stock that they have agreed to contribute to Parent by up to $100 million (with each share being valued at $51.00) by assigning a portion of their commitment to one or more third parties, so long as the Frist Entities control the

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		equity interests of Parent received by the third parties in all respects (including voting and disposition).
	•	Voting Agreement. In the interim investors agreement, the Frist Entities have agreed to vote all of the shares of HCA Common Stock that are beneficially owned by them in favor of the adoption of the merger agreement.
	•	Governance of Parent Prior to the Merger. Pending consummation of the merger, the members of the Investor Group (but not including Dr. Frist) agreed that any three out of four of the private equity funds sponsored by KKR, Bain, and Merrill Lynch Global Private Equity and the Frist Entities (the “Requisite Investors”) may cause Parent to act or refrain from acting in order to comply with its obligations, satisfy its closing conditions or exercise its rights under the merger agreement. The approval of the Requisite Investors is also required for Parent to enforce its rights under any of the equity commitment letters executed by members of the Investor Group (other than Dr. Frist). The consent of all members of the Investor Group (other than Dr. Frist) is required to approve any of the following actions:

	•	any amendment to the merger agreement that has an impact on any member of the Investor Group (other than Dr. Frist) that is different from the impact on the other members of the Investor Group (other than Dr. Frist) in a manner that is materially adverse to such member;
	•	any modification or amendment to the merger agreement so as to increase or modify the form of the merger consideration or increase in any way the obligations of any member of the Investor Group (other than Dr. Frist) under the limited guarantees of the members of the Investor Group (other than Dr. Frist); and
	•	any modification or waiver, in a manner adverse to Parent or the members of the Investor Group (other than Dr. Frist), of any provisions in the merger agreement relating to the termination fee or any financing contingency or condition.

If the Requisite Investors are willing to agree to proceed with or take any action with respect to the matters described in the second and third clauses above and any member of the Investor Group (other than Dr. Frist) declines to agree to such action, the Requisite Investors may nevertheless proceed with such matter if they first terminate the declining member’s participation in the transaction without any further liability under its equity commitment letter or guarantee.

	•	Standstill Provision. Under the interim investors agreement, until the earlier of the closing and the termination of the merger agreement, the Frist Entities and the other members of the Investor Group (other than Dr. Frist) may not enter into any agreement, arrangement or understanding or have discussions with any other potential investor(s) or acquirer(s) of the Company or any of its representatives with respect to an alternative transaction involving the Company without the prior approval of the Requisite Investors. If the Frist Entities do not consent to a modification or amendment to the merger agreement so as to increase or modify the form of the merger consideration or to increase the obligations under the several limited guarantees of the members of the Investor Group (other than Dr. Frist), or if the Frist Entities fail to contribute the roll over shares to Parent, and in either case the merger agreement is subsequently terminated, the foregoing standstill agreement will continue to apply to the Frist Entities for a period of one year following the earlier of the closing and the termination of the merger agreement.
	•	Right to Designate Directors of Parent. Under the interim investors agreement, if the merger is consummated, the Frist Entities will have the right to designate two directors on Parent’s board of directors. The ability of the Frist Entities and other members of the Investor Group (other than Dr. Frist) to designate directors will be adjusted to reflect changes in the ownership of Parent by the members of the Investor Group (other than Dr. Frist).
	•	Termination Fee. Pursuant to the interim investors agreement, the Frist Entities are entitled to receive a pro rata share of any termination fee paid by the Company or any of its affiliates as

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		directed by Parent pursuant to the merger agreement, net of any expenses of Parent and the Investor Group (other than Dr. Frist) that are required to be shared by all members of the Investor Group (other than Dr. Frist). See “The Merger Agreement — Termination Fees.”

	HCA Equity Compensation and Bonus Plans

	•	all unvested stock options will vest and be cancelled and converted into the right to receive a cash payment equal to the number of outstanding options multiplied by the amount (if any) by which $51.00 exceeds the option exercise price,
	•	all shares of restricted stock and restricted share units will vest and be cancelled and converted into the right to receive a cash payment equal to the number of outstanding restricted shares multiplied by $51.00 (and, with respect to restricted share units, the value of any deemed dividend equivalents accrued but unpaid with respect to such restricted share units), and
	•	all salary amounts withheld on behalf of the participants in the Employee Stock Purchase Plan and Management Stock Purchase Plan through the closing date of the merger will be deemed to have been used to purchase HCA Common Stock under the terms of these plans, using the closing date of the merger as the last date of the applicable offering period under these plans, and converted into the right to receive, effectively, a cash payment equal to the number of shares deemed purchased under these plans multiplied by $51.00.

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																		Other
		Vested and Unvested																								Cash Payment
		Stock Options								Restricted Shares								Stock								for Other
																		Purchase				PEP Bonus				Beneficially				Total Cash
Name		Number(1)				Cash Payment				Number				Cash Payment				Payment(2)				Payment				Owned Shares				Payment(1)
Jack O. Bovender, Jr.			2,266,410			$	27,998,743				165,075			$	8,418,825			$	28,929			$	1,944,300			$	7,378,323			$	45,769,120
Richard M. Bracken			1,112,812			$	10,497,804				85,239			$	4,347,189			$	37,873			$	954,800			$	4,441,845			$	20,279,511
R. Milton Johnson			501,739			$	6,322,243				52,203			$	2,662,353			$	33,485			$	450,200			$	1,253,325			$	10,721,606
Samuel N. Hazen			663,641			$	6,955,770				56,394			$	2,876,094			$	35,182			$	473,200			$	2,324,070			$	12,664,316
Robert A. Waterman			406,624			$	6,937,589				42,695			$	2,177,445			$	35,182			$	394,300			$	2,705,754			$	12,250,270
Other 17 senior executive officers			4,003,577			$	48,213,199				455,300			$	23,220,300			$	239,937			$	1,529,700			$	29,321,277			$	102,524,413
Dr. Thomas F. Frist, Jr.			29,898			$	177,389				9,088	(3)		$	463,488				—				—			$	65,427,849	(4)		$	66,068,726
Total of all executive officers and Dr. Frist			8,984,701			$	107,102,738				865,994			$	44,165,694			$	421,303			$	5,746,500			$	112,852,443			$	270,337,712

(1)	With respect to Messrs. Bovender, Bracken, Johnson, Hazen, Waterman and other executive officers, amounts reflect the payments that would be received if such officers were to receive the merger consideration for all equity held by such officers and do not exclude amounts such officers may reinvest and/or roll over pursuant to the equity roll over commitments described on page 55 of this proxy statement.
(2)	Based on estimated payroll deductions through November 30, 2006 and stock prices as of August 31, 2006.
(3)	Includes restricted share units.
(4)	Amounts exclude 15,686,275 shares which will be contributed to Parent in connection with the merger in exchange for a portion of the equity securities of Parent as described on page 51 of this proxy statement.

	HCA Supplemental Executive Retirement Plan

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	New Arrangements with the Surviving Corporation After Closing

	Equity Roll Over Commitments

Name		Equity Commitment
Jack O. Bovender, Jr.			$20.0 million
Richard M. Bracken			$10.0 million
R. Milton Johnson			$ 6.0 million
Samuel N. Hazen			$ 5.5 million
W. Paul Rutledge			$ 3.0 million
Beverly B. Wallace			$ 2.0 million
Charles J. Hall			$

	New Stock Option Plan

	Employment Agreements

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	Board of Directors Representation

	HCA Director Compensation Arrangements and Other Interests

	Indemnification and Insurance

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	•	a citizen or resident of the United States;
	•	a corporation created or organized under the laws of the United States or any of its political subdivisions;
	•	a trust that (i) is subject to the supervision of a court within the United States and the control of one or more U.S. persons or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or
	•	an estate that is subject to U.S. federal income tax on its income regardless of its source.

	U.S. Holders

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	•	the gain is effectively connected with a trade or business of the non-U.S.  holder in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment of the non-U.S. holder);
	•	the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or
	•	HCA is or has been a “United States real property holding corporation” for U.S. federal income tax purposes and the non-U.S. holder owned more than 5% of HCA’s Common Stock at any time during the five years preceding the merger.

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		Amount to
Description		be Paid
SEC filing fee		$	2,276,863
Printing, proxy solicitation and mailing expenses
Financial, legal, accounting and tax advisory fees and expenses
Miscellaneous expenses
Total		$

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	•	shares held in treasury or owned by Parent, including shares that are contributed to Parent in exchange for shares of Parent’s capital stock and shares (including restricted shares) otherwise acquired by Parent pursuant to agreements with shareholders of the Company, that will be cancelled,
	•	shares held by subsidiaries of Parent or HCA, which will remain outstanding after consummation of the merger, and
	•	shares held by holders who have properly demanded and perfected their appraisal rights.

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	•	corporate organization and existence;
	•	corporate power and authority to enter into and perform its obligations under, and enforceability of, the merger agreement;
	•	required regulatory filings and consents and approvals of governmental entities;
	•	the absence of conflicts with or defaults under organizational documents, other contracts and applicable laws and judgments;
	•	finder’s fees; and
	•	information supplied for inclusion in this proxy statement.

	•	capital structure;
	•	documents filed with the SEC;
	•	undisclosed liabilities;
	•	absence of certain changes or events since December 31, 2005;
	•	litigation;
	•	tax matters;
	•	compliance with the Employee Retirement Income Securities Act of 1974, as amended, and other employee benefit matters;
	•	compliance with applicable laws;
	•	contracts with affiliates; and
	•	state takeover statutes and the absence of a rights plan.

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	•	conduct our business in the ordinary course consistent with past practice and comply with all applicable laws in all material respects; and
	•	preserve substantially intact our business organizations and capital structures, maintain in effect all material permits that are required to carry on our business, keep available the services of our present officers and key employees and maintain our relationships with providers, suppliers and others with which we have significant business relationships.

	•	adopt any change in our organizational or governing documents;
	•	merge or consolidate with any person (other than the merger and other than such transactions solely among us and/or our wholly-owned domestic subsidiaries that would not result in a material increase in our tax liability);
	•	sell, lease or otherwise dispose of a material amount of assets or securities, including by merger, consolidation, asset sale or other business combination (including by formation of a material joint venture), other than such transactions solely among us and/or our wholly-owned domestic subsidiaries that would not result in a material increase in our tax liability;
	•	(i) make any material acquisition, by purchase or other acquisition of stock or other equity interests, by merger, consolidation or other business combination (including by formation of a material joint venture); or (ii) make any material property transfers or material purchases of any property or assets, in or from any person, in each case, other than such transactions solely among us and/or our wholly-owned subsidiaries;
	•	other than in connection with drawdowns or repayments with respect to existing credit facilities in the ordinary course of business consistent with past practice, redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify in any material respect the terms of, indebtedness for borrowed money or assume, guarantee or endorse or otherwise become responsible for, whether directly, contingently or otherwise, the obligations of any person, other than the incurrence,

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		assumption or guarantee of indebtedness (i) between us, on the one hand, and any of our subsidiaries, on the other hand, or (ii) not in excess of $10,000,000 in the aggregate;
	•	offer, place or arrange any issue of debt securities or commercial bank or other credit facilities that would reasonably be expected to compete with or impede the debt financing or cause the breach of any provisions of the debt financing commitments or cause any condition set forth in the debt financing commitments not to be satisfied;
	•	make any material loans, advances or capital contributions to, or investments in, any other person in excess of $20,000,000 in the aggregate for all such loans, advances, contributions and investments, except for (i) transactions solely among us and/or our wholly-owned subsidiaries, or (ii) as required by our existing contracts;
	•	authorize any capital expenditures in excess of $20,000,000 in the aggregate, other than expenditures provided for in our budget for the remaining portion of fiscal year 2006 and for any portion of fiscal year 2007 prior to the closing date of the merger;
	•	pledge or otherwise encumber shares of our or our subsidiaries’ capital stock or other voting securities;
	•	mortgage or pledge any of our material assets, tangible or intangible, or create, assume or suffer to exist any lien thereupon, other than certain liens permitted under the merger agreement;
	•	enter into or amend any contract with any of our or our subsidiaries’ executive officers, directors or other affiliates or any person beneficially owning 1% or more of our capital stock or the voting power of the capital stock;
	•	enter into, renew, extend, amend or terminate any contract that is or would be material to us and our subsidiaries, taken as a whole, other than in the ordinary course of business consistent with past practice;
	•	(i) split, combine or reclassify any of our securities or amend the terms of any of our securities, (ii) declare, establish a record date for, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of our securities other than (x) a dividend or distribution by a wholly-owned subsidiary to its parent corporation in the ordinary course of business, (y) payment on September 1, 2006 of the previously declared regularly quarterly dividend of $0.17 per share, and (z) payment of a regular quarterly dividend not to exceed $0.17 per share for the fourth quarter of 2006; provided, that the record date for such dividend shall be no earlier than December 1, 2006 and that no such dividend shall be payable if the effective time of the merger occurs on or prior to the record date; (iii) issue or offer to issue any of our securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any of our securities, other than in connection with (A) the exercise of our options outstanding on the date of the merger agreement in accordance with their original terms, (B) the withholding of our securities to satisfy tax obligations with respect to our options or restricted shares, (C) the acquisition by us of our securities in connection with the net exercise of options in accordance with the terms thereof and (D) acquisitions by or issuances to our benefit plans in the ordinary course of business consistent with past practice;
	•	except as required pursuant to existing written agreements or benefit plans in effect on the date of the merger agreement or as required by applicable law, (i) adopt, amend in any material respect or terminate any benefit plan, (ii) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any benefit plan, (iii) except in connection with promotions or new hires made in the ordinary course of business consistent with past practice, increase in any manner the cash compensation or welfare or pension benefits of employees, or (iv) change any actuarial or other assumption used to calculate funding obligations with respect to any benefit plan or change the manner in which contributions to any benefit plan are made or determined;

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	•	settle or compromise any litigation, or release, dismiss or otherwise dispose of any claim or arbitration, other than settlements or compromises of litigation, claims or arbitration that do not exceed $10,000,000 in the aggregate (net of insurance recoveries) and do not impose any material restrictions on our or any of our subsidiaries’ business or operations or any of our joint ventures;
	•	other than in the ordinary course of business consistent with past practice or except to the extent required by law, make or change any material tax election, settle or compromise any material tax liability of ours or any of our subsidiaries, agree to an extension of the statute of limitations with respect to the assessment or determination of our or our subsidiaries’ material taxes, file any amended tax return with respect to any material tax, enter into any closing agreement with respect to any material tax or surrender any right to claim a material tax refund;
	•	make any change in financial accounting methods or method of tax accounting, principles or practices materially affecting our or our material subsidiaries’ reported consolidated assets, liabilities or results of operations, except insofar as may have been required by a change in U.S. generally accepted accounting principles or law;
	•	adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of us or any of our material subsidiaries, or enter into a letter of intent or agreement in principle with respect thereto, (other than the merger and other than such transactions solely among us and/or our wholly-owned domestic subsidiaries that would not result in a material increase in our or our subsidiaries’ tax liability);
	•	take any action or fail to take any action that is intended to, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede our ability to consummate the merger or the other transactions contemplated by the merger agreement; or
	•	authorize, agree or commit to do any of the foregoing.

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	•	Parent has certain financial information required to be provided by the Company under the merger agreement in connection with Parent’s financing of the merger; and
	•	both the mutual closing conditions and the conditions to the obligations of Parent and Merger Sub (other than delivery of an officer’s certificate by the Company) to complete the merger are satisfied.

	•	to use reasonable best efforts to arrange the debt financing as promptly as practicable and to satisfy on a timely basis all conditions applicable to Parent in any definitive agreements entered into relating to the debt financing; and
	•	in the event that any portion of the debt financing becomes unavailable on the terms and conditions contemplated in the debt financing commitments, to use its reasonable best efforts to arrange alternative financing on terms no less favorable to Parent (as determined in its reasonable judgment) as promptly as practicable but no later than the last day of the marketing period, or if earlier, the end date described in “— Termination of the Merger Agreement.”

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	•	the merger agreement must have been adopted by the affirmative vote of the holders of a majority of all outstanding shares of voting HCA Common Stock;
	•	any applicable waiting period (and any extension thereof) under the HSR Act shall have expired or been terminated; and
	•	no temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any court or agency of competent jurisdiction or other statute, law, rule, legal restraint or prohibition shall be in effect preventing the merger.

	•	our representations and warranties with respect to (i) our capitalization and our compliance with a Corporate Integrity Agreement between us and the Office of Inspector General of the United States must each be true in all material respects as of the effective time of the merger as if made at and as of the effective time; and (ii) the identification of our “unrestricted subsidiaries” under the indenture governing our outstanding public notes must be true and correct in all respects as of the effective time of the merger as if made at and as of the effective time, except where the failure to be so true and correct has not had a material adverse effect on Parent’s ability to obtain debt financing for the merger on the terms and conditions set forth in the debt financing commitments described under “Special Factors — Financing of the Merger;”
	•	all other representations and warranties made by us in the merger agreement, with the exception of those listed above, must be true and correct as of the effective time of the merger as if made at and as of such time (without giving effect to any qualification as to “Material Adverse Effect” set forth in such representations and warranties), except where the failure to be so true and correct, individually and in the aggregate, has not had, and would not reasonably be expected to have, a material adverse effect on us; provided that any representations made by us as of a specific date need only be so true and correct (subject to such qualifications) as of the date made;
	•	we must have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, we are required to perform under the merger agreement at or prior to the closing date; and
	•	we must deliver to Parent and Merger Sub at closing a certificate with respect to the satisfaction of the foregoing conditions relating to representations, warranties, obligations, covenants and agreements.

	•	the representations and warranties made by Parent and Merger Sub in the merger agreement that are qualified as to materiality must be true and correct as of the effective time of the merger as if made at and as of such time and those which are not so qualified must be true and correct in all material respects as of the effective time of the merger as if made at and as of such time, except where the failure of such representations and warranties to be so true would not prevent consummation of the merger; provided that any representations made by Parent and Merger Sub as of a specific date need only be so true and correct as of the date made;
	•	Parent and Merger Sub must have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be performed by them under the merger agreement at or prior to the closing date; and

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	•	Parent’s and Merger Sub’s delivery to us at closing of a certificate with respect to the satisfaction of the foregoing conditions relating to representations, warranties, obligations, covenants and agreements.

	•	initiate, solicit and encourage any acquisition proposal for us (including by way of providing information), provided that we shall promptly provide to Parent any material non-public information concerning us or our subsidiaries that is provided to any person given such access which was not previously provided to Parent; and
	•	enter into and maintain discussions or negotiations concerning an acquisition proposal for us or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, discussions or negotiations.

	•	initiate, solicit or knowingly encourage (including by way of providing information) the submission of any inquiries, proposals or offers or any other efforts or attempts that constitute or may reasonably be expected to lead to, any acquisition proposal for us or engage in any discussions or negotiations with respect thereto or otherwise knowingly cooperate with or knowingly assist or participate in, or knowingly facilitate any such inquiries, proposals, discussions or negotiations; or
	•	approve or recommend, or publicly propose to approve or recommend, any acquisition proposal for us or enter into any merger agreement, letter of intent, agreement in principle, share purchase agreement, asset purchase agreement or share exchange agreement, option agreement or other similar agreement providing for or relating to any acquisition proposal for us or enter into any agreement or agreement in principle requiring us to abandon, terminate or fail to consummate the transactions contemplated by the merger agreement or breach our obligations under the merger agreement or propose or agree to do any of the foregoing.

	•	we receive from such party an acquisition proposal not solicited in violation of the prohibitions described above and which the board of directors (acting through the special committee if such committee still exists) concludes in good faith to be bona fide;
	•	our board of directors (acting through the special committee if such committee still exists) concludes in good faith, after consultation with legal counsel and financial advisors, that the acquisition proposal constitutes or could reasonably be expected to result in a superior proposal; and

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	•	after consultation with its outside counsel, our board of directors (acting through the special committee if such committee still exists) determines in good faith that the failure to take such action could violate its fiduciary duties under applicable law.

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	•	by mutual written consent of HCA, on the one hand, and Parent and Merger Sub, on the other hand;
	•	by either HCA, on the one hand, or Parent or Merger Sub, on the other hand, if:

	•	the merger is not consummated on or before December 19, 2006 (the “end date”), or if the marketing period has not ended on or before December 19, 2006, the end date shall be extended to January 31, 2007 (and in such event, the term “end date” shall mean January 31, 2007), unless the failure of the merger to be completed by such date is the result of, or caused by, the failure of the party seeking to exercise such termination right to perform or observe any of the covenants or agreements of such party set forth in the merger agreement;
	•	there is any final and nonappealable law that makes consummation of the merger illegal or otherwise prohibited; or
	•	our shareholders, at the special meeting or at any adjournment thereof, fail to adopt the merger agreement;

	•	by Parent or Merger Sub if:

	•	we have breached any of our representations, warranties, covenants or agreements under the merger agreement which would give rise to the failure of certain conditions to closing and where that breach is incapable of being cured, or is not cured, on or before December 19, 2006, or, if the marketing period has not ended on or before December 19, 2006, by January 31, 2007; provided that neither Parent nor Merger Sub is then in material breach of the merger agreement so as to cause certain conditions to closing to not be satisfied; or
	•	our board of directors or any committee of our board of directors (i) withdraws (or modifies or qualifies in a manner adverse to Parent or Merger Sub), or publicly proposes to withdraw (or modify or qualify in a manner adverse to Parent or Merger Sub), its recommendation that the shareholders of the Company adopt the merger agreement or takes any other action or makes any other public statement in connection with the special meeting inconsistent with such recommendation; (ii) shall have approved or recommended to our shareholders an acquisition proposal for us other than the merger contemplated by the merger agreement, or shall have resolved to effect the foregoing; or (iii) we fail to include the recommendation in our proxy statement in connection with the merger;

	•	by HCA if:

	•	Parent or Merger Sub has breached any of its representations, warranties, covenants or agreements under the merger agreement which would give rise to the failure of certain conditions to closing and where that breach is incapable of being cured, or is not cured, on or before December 19, 2006, or, if the marketing period has not ended on or before December 19, 2006, by January 31, 2007, provided that HCA is not in material breach of the

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		merger agreement so as to cause the closing conditions relating to Parent and Merger Sub’s obligations to consummate the merger not to be satisfied;
	•	prior to obtaining shareholder approval, we terminate the merger agreement in order to enter into an agreement with respect to a superior proposal and provided that we concurrently with doing so pay to Parent and Merger Sub the termination fee as described below; or
	•	if all conditions to the obligations of Parent and Merger Sub (other than delivery of an officer’s certificate) have been satisfied and Parent fails to consummate the merger no later than five calendar days after the final day of the marketing period.

	Payable by HCA

	•	we terminate the merger agreement, prior to the shareholders meeting, because we receive an acquisition proposal which we determine to be a superior proposal, but only after we have provided notice to Parent regarding the superior proposal and provided Parent with at least a five calendar day period, during which time we must negotiate in good faith with Parent, to enable Parent to make an offer that results in the other acquisition proposal no longer being a superior proposal;
	•	Parent or Merger Sub terminates the merger agreement because (i) our board of directors or any committee of our board of directors withdraws (or modifies or qualifies in a manner adverse to Parent or Merger Sub), or publicly proposes to withdraw (or modify or qualify in a manner adverse to Parent or Merger Sub), its recommendation that our shareholders adopt the merger agreement or takes any other action or makes any other public statement in connection with the special meeting inconsistent with such recommendation; (ii) our board of directors or any committee of our board of directors shall have approved or recommended to our shareholders an acquisition proposal for us other than the merger contemplated by the merger agreement, or shall have resolved to effect the foregoing; or (iii) we fail to include in our proxy statement the recommendation of our board of directors that our shareholders adopt the merger agreement; or
	•	we, on the one hand, or Parent or Merger Sub, on the other hand, terminate the merger agreement because our shareholders, at the special meeting or at any adjournment thereof at which the merger agreement is voted on, fail to adopt the merger agreement or we terminate the merger agreement in accordance with its terms after our shareholders have failed to adopt the merger agreement; and

	•	prior to the shareholders meeting, an acquisition proposal involving the purchase of not less than a majority of our outstanding voting securities has been publicly announced or publicly

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		made known and not publicly withdrawn at least two business days prior to the shareholder meeting; and
	•	within twelve months after such termination, we or any of our subsidiaries enter into an agreement with respect to, or consummate, any acquisition proposal involving the purchase of not less than a majority of our outstanding voting securities (whether or not the same as that originally announced or consummated).

	•	Parent or Merger Sub terminates the merger agreement due to a material breach of our representations, warranties, covenants or agreements such that the closing conditions would not be satisfied and such breach has not been cured within the specified time (or we terminate the merger agreement in accordance with its terms after the agreement was terminable because of such a breach); and

	•	prior to the event giving rise to such breach, an acquisition proposal involving the purchase of not less than a majority of our outstanding voting securities has been publicly announced or publicly made known; and
	•	within twelve months after such termination, we or any of our subsidiaries enter into an agreement with respect to, or consummate, any acquisition proposal involving the purchase of not less than a majority of our outstanding voting securities (whether or not the same as that originally announced or consummated).

	Payable by Parent

	•	we terminate the merger agreement because the merger is not completed on or before December 19, 2006, or, if the marketing period has not ended on or before December 19, 2006, January 31, 2007, unless the failure of the merger to be completed by such date is the result of, or caused by, our failure to perform or observe any of our covenants or agreements set forth in the merger agreement and at the time of termination the mutual closing conditions and closing conditions required by Parent and Merger Sub have been satisfied;
	•	we terminate the merger agreement because Parent or Merger Sub has breached any of its representations, warranties, covenants or agreements under the merger agreement which would give rise to the failure of certain of the Company’s conditions to closing and where that breach is incapable of cure, or is not cured, within the specified time and at the time of termination no facts exist which would cause the closing conditions to the obligations of Parent and Merger Sub not to be satisfied; or
	•	we terminate the merger agreement because certain conditions to the obligations of Parent and Merger Sub have been satisfied and Parent fails to consummate the merger no later than five calendar days after the final day of the marketing period.

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	•	extend the time for the performance of any of the obligations or other acts of the other parties;
	•	waive any inaccuracies in the representations and warranties of the other parties contained in the merger agreement or in any document delivered pursuant to the merger agreement; or
	•	subject to the requirements of applicable law, waive compliance with any of the agreements or conditions contained in the merger agreement.

	•	You must deliver to the Company a written demand for appraisal of your shares before the vote with respect to the merger is taken. This written demand for appraisal must be in addition to and separate from any proxy or vote abstaining from or voting against the adoption of the merger agreement. Voting against or failing to vote for the adoption of the merger agreement by itself does not constitute a demand for appraisal within the meaning of Section 262.

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	•	You must not vote in favor of the adoption of the merger agreement. A vote in favor of the adoption of the merger agreement, by proxy, over the Internet, by telephone or in person, will constitute a waiver of your appraisal rights in respect of the shares so voted and will nullify any previously filed written demands for appraisal. If you fail to comply with either of these conditions and the merger is completed, you will be entitled to receive the cash payment for your shares of HCA Common Stock as provided for in the merger agreement, but you will have no appraisal rights with respect to your shares of HCA Common Stock.

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																						As of and for the
																						Six Months Ended
		As of and for the Years Ended December 31,																				June 30,
		2005				2004				2003				2002				2001				2006				2005
																						(Unaudited)
		(Dollars in millions, except per share amounts)
Summary of Operations:
Revenues		$	24,455			$	23,502			$	21,808			$	19,729			$	17,953			$	12,775			$	12,252
Salaries and benefits			9,928				9,419				8,682				7,952				7,279				5,216				4,906
Supplies			4,126				3,901				3,522				3,158				2,860				2,205				2,093
Other operating expenses			4,039				3,797				3,676				3,341				3,238				2,032				1,953
Provision for doubtful accounts			2,358				2,669				2,207				1,581				1,376				1,273				1,115
(Gains) losses on investments			(53	)			(56	)			(1	)			2				(63	)			(100	)			(31	)
Equity in earnings of affiliates			(221	)			(194	)			(199	)			(206	)			(158	)			(108	)			(106	)
Depreciation and amortization			1,374				1,250				1,112				1,010				1,048				697				701
Interest expense			655				563				491				446				536				382				329

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																						As of and for the
																						Six Months Ended
		As of and for the Years Ended December 31,																				June 30,
		2005				2004				2003				2002				2001				2006				2005
																						(Unaudited)
		(Dollars in millions, except per share amounts)
Gains on sales of facilities			(78	)			—				(85	)			(6	)			(131	)			(5	)			(29	)
Impairment of long-lived assets			—				12				130				19				17				—				—
Government settlement and investigation related costs			—				—				(33	)			661				327				—				—
Impairment of investment securities			—				—				—				168				—				—				—
Loss on retirement of debt			—				—				—				—				28				—				—
			22,128				21,361				19,502				18,126				16,357				11,592				10,931
Income before minority interests and income taxes			2,327				2,141				2,306				1,603				1,596				1,183				1,321
Minority interests in earnings of consolidated entities			178				168				150				148				119				101				89
Income before income taxes			2,149				1,973				2,156				1,455				1,477				1,082				1,232
Provision for income taxes			725				727				824				622				591				408				413
Reported net income			1,424				1,246				1,332				833				886				674				819
Goodwill amortization, net of income taxes			—				—				—				—				69				—				—
Adjusted net income		$	1,424			$	1,246			$	1,332			$	833			$	955			$	674			$	819
Basic earnings per share:
Reported net income		$	3.25			$	2.62			$	2.66			$	1.63			$	1.69			$	1.67			$	1.88
Goodwill amortization, net of income taxes			—				—				—				—				0.13				—				—
Adjusted net income		$	3.25			$	2.62			$	2.66			$	1.63			$	1.82			$	1.67			$	1.88
Shares used in computing basic earnings per share (in thousands)			438,619				475,620				501,799				511,824				524,112				403,366				435,626
Diluted earnings per share:
Reported net income		$	3.19			$	2.58			$	2.61			$	1.59			$	1.65			$	1.64			$	1.84
Goodwill amortization, net of income taxes			—				—				—				—				0.13				—				—
Adjusted net income		$	3.19			$	2.58			$	2.61			$	1.59			$	1.78			$	1.64			$	1.84
Shares used in computing diluted earnings per share (in thousands)			445,785				483,663				510,874				525,219				538,177				409,731				443,739
Cash dividends declared per common share		$	0.60			$	0.52			$	0.08			$	0.08			$	0.08			$	0.34			$	0.30
Financial Position:
Assets		$	22,225			$	21,840			$	21,400			$	19,059			$	18,073			$	23,120			$	21,718
Working capital			1,320				1,509				1,654				766				957				1,874				1,866
Long-term debt, including amounts due within one year			10,475				10,530				8,707				6,943				7,360				11,664				9,360
Minority interests in equity of consolidated entities			828				809				680				611				563				901				801
Company-obligated mandatorily redeemable securities of affiliate holding solely Company securities			—				—				—				—				400				—				—
Shareholders’ equity			4,863				4,407				6,209				5,702				4,762				4,826				6,117

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																						As of and for the
																						Six Months Ended
		As of and for the Years Ended December 31,																				June 30,
		2005				2004				2003				2002				2001				2006				2005
																						(Unaudited)
		(Dollars in millions, except per share amounts)
Cash Flow Data:
Cash provided by operating activities		$	3,159			$	2,954			$	2,292			$	2,648			$	1,352			$	771			$	1,691
Cash used in investing activities			(1,681	)			(1,688	)			(2,862	)			(1,740	)			(1,300	)			(795	)			(758	)
Cash (used in) provided by financing activities			(1,400	)			(1,347	)			650				(934	)			(342	)			424				(494	)
Operating Data:
Number of hospitals at end of period(a)			175				182				184				173				178				176				183
Number of freestanding outpatient surgical centers at end of period(b)			87				84				79				74				76				92				84
Number of licensed beds at end of period(c)			41,265				41,852				42,108				39,932				40,112				41,300				42,013
Weighted average licensed beds(d)			41,902				41,997				41,568				39,985				40,645				41,259				41,903
Admissions(e)			1,647,800				1,659,200				1,635,200				1,582,800				1,564,100				823,900				840,200
Equivalent admissions(f)			2,476,600				2,454,000				2,405,400				2,339,400				2,311,700				1,235,900				1,256,100
Average length of stay (days)(g)			4.9				5.0				5.0				5.0				4.9				4.9				5.0
Average daily census(h)			22,225				22,493				22,234				21,509				21,160				22,451				23,029
Occupancy(i)			53	%			54	%			54	%			54	%			52	%			54	%			55	%
Emergency room visits(j)			5,415,200				5,219,500				5,160,200				4,802,800				4,676,800				2,658,100				2,737,400
Outpatient surgeries(k)			836,600				834,800				814,300				809,900				804,300				423,600				427,200
Inpatient surgeries(l)			541,400				541,000				528,600				518,100				507,800				269,300				271,900
Days revenues in accounts receivable(m)			50				48				52				52				49				48				47
Gross patient revenues(n)		$	78,662			$	71,279			$	62,626			$	53,542			$	44,947			$	42,438			$	39,441
Outpatient revenues as a % of patient revenues(o)			36	%			37	%			37	%			37	%			37	%			36	%			37	%

(a)		Excludes seven facilities in 2006, 2005, 2004, and 2003; and six facilities in 2002 and 2001 that are not consolidated (accounted for using the equity method) for financial reporting purposes. Three hospitals located on the same campus were consolidated and counted as one hospital in 2005.
(b)		Excludes facilities that are not consolidated (accounted for using the equity method) for financial reporting purposes.
(c)		Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state licensing agency.
(d)		Weighted average licensed beds represents the average number of licensed beds, weighted based on periods owned.
(e)		Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general measure of inpatient volume.
(f)		Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure (admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume. Equivalent admissions for 2004 were reclassified to conform to the 2005 presentation.
(g)		Represents the average number of days admitted patients stay in our hospitals.
(h)		Represents the average number of patients in our hospital beds each day.

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(i)		Represents the percentage of hospital licensed beds occupied by patients. Both average daily census and occupancy rate provide measures of the utilization of inpatient rooms.
(j)		Represents the number of patients treated in our emergency rooms.
(k)		Represents the number of surgeries performed on patients who were not admitted to our hospitals. Pain management and endoscopy procedures are not included in outpatient surgeries.
(l)		Represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain management and endoscopy procedures are not included in inpatient surgeries.
(m)		Revenues per day is calculated by dividing the revenues for the period by the days in the period. Days revenues in accounts receivable is then calculated as accounts receivable, net of the allowance for doubtful accounts, at the end of the period divided by revenues per day.
(n)		Gross patient revenues are based upon our standard charge listing. Gross charges/ revenues typically do not reflect what our hospital facilities are paid. Gross charges/ revenues are reduced by contractual adjustments, discounts and charity care to determine reported revenues.
(o)		Represents the percentage of patient revenues related to patients who are not admitted to our hospitals. Patient revenues for 2004 were reclassified to conform to the 2005 presentation.

		Years Ended								Six Months Ended
		December 31,								June 30,
		2005				2004				2006				2005
		(Unaudited)
		(Dollars in millions)
EARNINGS:
Income before minority interests and income taxes		$	2,327			$	2,141			$	1,183			$	1,321
Fixed charges, exclusive of capitalized interest			785				686				449				394
		$	3,112			$	2,827			$	1,632			$	1,715
FIXED CHARGES
Interest charged to expense		$	655			$	563			$	382			$	329
Interest portion of rental expense			130				123				67				65
Fixed charges, exclusive of capitalized interest			785				686				449				394
Capitalized interest			25				28				19				12
		$	810			$	714			$	468			$	406
Ratio of earnings to fixed charges			3.84				3.96				3.49				4.22

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		Initial Management Projections
		2006				2007				2008
		(In millions)
Revenues		$	25,645			$	27,464			$	29,370
EBITDA(1)			4,446				4,740				5,068

(1)	Represents net income before gains on sales of facilities, depreciation and amortization, interest expense, minority interests in earnings of consolidated entities and provision for income taxes.

		2006				2007				2008
		(Dollars in millions)
Revenue growth(1)			4.9	%			7.1	%			6.9	%
Salaries and benefits(2)			40.5	%			40.6	%			40.7	%
Supplies(2)			16.9	%			17.0	%			17.1	%
Provision for doubtful accounts(2)			10.4	%			10.5	%			10.6	%
Investment gains(3)		$	50			$	0			$	0
Share-based compensation costs(4)		$	105				N/A				N/A
Reduction of malpractice reserve(5)		$	75				N/A				N/A
Capital expenditures		$	1,800			$	1,800			$	1,800

(1)	Expressed as a percentage change over the prior year.
(2)	Expressed as a percentage of projected revenues.
(3)	Represents estimated gains on sales of investments by the Company’s insurance subsidiary.
(4)	Represents the estimated noncash share-based compensation costs related to stock options, restricted stock and stock purchase plans. No explicit assumption was used for 2007 or 2008.
(5)	A substantial portion of the Company’s professional liability risks are insured through a wholly-owned insurance subsidiary. The assumption represents the estimated malpractice reserve reductions. No explicit assumption was used for 2007 or 2008.

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		Revised Management Projections
		2006				2007				2008				2009
		(In millions)
Revenues		$	25,554			$	27,299			$	29,231			$	31,261
EBITDA			4,399				4,471				4,666				4,876

		Final Management Projections
		2006				2007				2008				2009				2010				2011
		(In millions)
Revenues		$	25,403			$	27,071			$	28,995			$	31,027			$	33,215			$	35,602
EBITDA			4,327				4,330				4,517				4,716				4,965				5,223

		2006				2007				2008				2009				2010				2011
		(Dollars in millions)
Equivalent admissions growth(1)(2)			0.6	%			1.3	%			1.4	%			1.2	%			1.4	%			1.4	%
Revenue per equivalent admission growth(1)			5.5	%			5.6	%			5.6	%			5.8	%			5.7	%			5.8	%
Salaries and benefits(3)			41.1	%			41.0	%			40.7	%			40.3	%			39.9	%			39.4	%
Supplies(3)			16.9	%			17.2	%			17.5	%			17.8	%			18.1	%			18.4	%
Provision for doubtful accounts(3)			10.4	%			10.9	%			11.4	%			12.0	%			12.6	%			13.4	%
Investment gains(4)		$	139			$	50			$	50			$	50			$	50			$	50
Share-based compensation costs(5)		$	105			$	140			$	175			$	210			$	210			$	210
Reduction of malpractice reserve(6)		$	135			$	25			$	25			$	25			$	25			$	25
Capital expenditures		$	1,779			$	1,800			$	1,500			$	1,500			$	1,500			$	1,500

(1)	Expressed as a percentage change over the prior year. Equivalent admissions growth is presented on a same facility basis.
(2)	Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure (admission) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume.
(3)	Expressed as a percentage of projected revenues.
(4)	Represents estimated gains on sales of investments by the Company’s insurance subsidiary.
(5)	Represents the estimated noncash share-based compensation costs related to stock options, restricted stock and stock purchase plans.

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(6)	A substantial portion of the Company’s professional liability risks are insured through a wholly-owned insurance subsidiary. The assumption represents the estimated malpractice reserve reductions.

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											Cash
											Dividend
			High				Low				Declared
FISCAL YEAR ENDED DECEMBER 31, 2004
	First Quarter		$	46.60			$	38.98			$	0.13
	Second Quarter		$	43.24			$	38.00			$	0.13
	Third Quarter		$	42.30			$	36.44			$	0.13
	Fourth Quarter		$	41.64			$	34.70			$	0.13
FISCAL YEAR ENDED DECEMBER 31, 2005
	First Quarter		$	54.10			$	38.97			$	0.15
	Second Quarter		$	58.60			$	52.14			$	0.15
	Third Quarter		$	57.17			$	45.59			$	0.15
	Fourth Quarter		$	52.74			$	45.30			$	0.15
FISCAL YEAR ENDED DECEMBER 31, 2006
	First Quarter		$	51.92			$	45.56			$	0.17
	Second Quarter		$	46.50			$	41.80			$	0.17
	Third Quarter (through September 12, 2006)		$	50.25			$	42.46			$	0.17

	•	each person who is known by us to own beneficially more than 5% of the outstanding shares of our common stock;

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	•	each of our current directors and executive officers;
	•	all of our directors and executive officers as a group; and
	•	each of the private equity funds sponsored by Bain, KKR and Merrill Lynch Global Private Equity and each person controlling such funds, together with each associate and majority-owned subsidiary thereof, in each case who beneficially owns outstanding shares of HCA Common Stock.

						No. of Option
Name of Beneficial Owner		Number of Shares				Shares(1)				Percent
Dodge & Cox			38,875,471	(2)			—				10.0
C. Michael Armstrong			12,163				8,453				*
Magdalena H. Averhoff, M.D			9,607				29,129				*
Jack O. Bovender, Jr.			309,748	(3)			1,825,784				*
Richard M. Bracken			172,334	(4)			917,960				*
Martin Feldstein			10,709				15,902				*
Thomas F. Frist, Jr., M.D			16,868,955	(5)			22,612				4.4
Frederick W. Gluck			22,647				48,415				*
Glenda A. Hatchett			15,755				29,328				*
Samuel N. Hazen			101,964	(6)			546,190				*
Charles O. Holliday, Jr.			8,791				21,650				*
R. Milton Johnson			77,778	(7)			384,288				*
T. Michael Long			16,282				33,415				*
John H. McArthur			10,094				14,975				*
Kent C. Nelson			14,504				48,415				*
Frank S. Royal, M.D			100,817				33,415				*
Harold T. Shapiro			13,677				35,712				*
Robert A. Waterman			95,749	(8)			330,273				*
HCA Benefit Plans			16,512,171	(9)			—				4.3
All directors and executive officers as a group (34 persons)			18,867,976	(10)			7,326,725				6.6
Merrill Lynch & Co., Inc.			3,411,132	(11)			234,300				*
Brian Renaud			4,181	(12)			—				*

	*	Less than one percent.

	(1)	Includes shares issuable upon exercise of options within 60 days of August 31, 2006.

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	(2)	Information based on a Schedule 13G filed by Dodge & Cox with the SEC on April 10, 2006. Dodge & Cox is an investment advisor registered under section 203 of the Investment Advisers Act of 1940 and reports sole voting power as to 36,399,371 shares of HCA Common Stock, shared voting power as to 405,100 shares of HCA Common Stock and sole dispositive power as to 38,875,471 shares of HCA Common Stock. Dodge & Cox reports its address as 555 California Street, 40th Floor, San Francisco, California 94104.
	(3)	Includes 111 shares beneficially owned in employee plans.
	(4)	Includes 6,812 shares beneficially owned in employee plans.
	(5)	Includes 20,766 shares beneficially owned in employee plans. Also includes 5,558,602 shares with respect to which Dr. Frist has sole voting and investment power and 11,244,129 shares with respect to which Dr. Frist has shared voting and investment power. Also includes 45,498 shares as to which Dr. Frist may be deemed the beneficial owner which are owned of record by Dr. Frist’s wife. Does not include approximately 6.9 million shares held by Dr. Frist’s adult children and certain entities related to the Frist family, which shares may be deemed to be beneficially owned by the Frist family as a group within the meaning of Section 13(d) under the Exchange Act as a result of the transactions contemplated by the merger agreement and the interim investors agreement.
	(6)	Includes 1,943 shares beneficially owned in employee plans.
	(7)	Includes 1,001 shares beneficially owned in employee plans.
	(8)	Includes 111 shares beneficially owned in employee plans.
	(9)	As of August 31, 2006, represents shares beneficially owned by employees and former employees participating in the HCA 401(k) Plan.

(10)	Includes 70,654 shares beneficially owned in employee plans.
(11)	As of September 11, 2006, Merrill Lynch & Co., Inc., through its subsidiaries, is the beneficial owner of an aggregate of 3,411,132 shares of which 234,300 shares are issuable upon exercise, exchange or conversion of other securities. Neither Merrill Lynch Global Private Equity, ML Global Private Equity Fund, L.P., its investment vehicle, nor the general partner or limited partner of ML Global Private Equity Fund, L.P. hold any shares. One or more of Merrill Lynch & Co., Inc. and its subsidiaries (the “Merrill Entities”) may directly or indirectly beneficially own 10% or more of the equity securities of other entities. The Merrill Entities generally do not have unfettered access to information about associates in which they have a minority position. Each such Merrill Entity has disclosed, to the extent known after reasonable inquiry, the beneficial ownership of the securities of HCA by each such Merrill Entity’s associates as required under Item 1008 of Regulation M-A.
(12)	Brian Renaud is a managing director of MLGPE LTD and holds 4,181 shares in “Consults” accounts for which he is the beneficial owner, but over which he does not exercise investment discretion.

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		Quarter Ended
		9/30/04												12/31/04
										Number of												Number of
		Range of Price($)				Average Price($)				Shares				Range of Price($)				Average Price($)				Shares
Jack O. Bovender, Jr.			31.24				31.24				2,420				—				—				—
Richard M. Bracken			31.24-38.49				31.24				3,963				25.44-39.90				25.44				22,792
Thomas F. Frist, Jr., M.D.			38.49				38.49				10				39.90				39.90				9

		Quarter Ended
		3/31/05												6/30/05
										Number of												Number of
		Range of Price($)				Average Price($)				Shares				Range of Price($)				Average Price($)				Shares
Jack O. Bovender, Jr.			26.80-29.08				26.81				502,601				—				—				—
Richard M. Bracken			29.08-54.16				29.09				4,257				26.80-54.16				29.09				327,629
Thomas F. Frist, Jr., M.D.			48.94				48.94				8				54.16				54.16				8

		Quarter Ended
		9/30/05												12/31/05
										Number of												Number of
		Range of Price ($)				Average Price ($)				Shares				Range of Price ($)				Average Price ($)				Shares
Jack O. Bovender, Jr.			38.14				38.14				2,040				—				—				—
Richard M. Bracken			38.14-49.55				38.16				2,676				52.13				52.13				4
Thomas F. Frist, Jr., M.D.			49.55				49.55				9				52.13				52.13				9

		Quarter Ended
		3/31/06												6/30/06
										Number of												Number of
		Range of Price ($)				Average Price ($)				Shares				Range of Price ($)				Average Price ($)				Shares
Jack O. Bovender, Jr.			37.41				37.41				2,092				—				—				—
Richard M. Bracken			37.41-47.90				37.43				2,744				37.78-45.10				37.84				567
Thomas F. Frist, Jr., M.D.			47.90				47.90				9				45.10				45.10				11

		Quarter Ended(1)
		9/30/06
										Number of
		Range of Price ($)				Average Price ($)				Shares
Jack O. Bovender, Jr.			34.02				34.02				2,367
Richard M. Bracken			34.02				34.02				3,100
Thomas F. Frist, Jr., M.D.			—				—				—

(1)	Through August 31, 2006.

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HCA Filings:		Periods
Annual Report on Form 10-K		Year ended December 31, 2005
Proxy Statement on Form 14A		Filed April 13, 2006
Quarterly Reports on Form 10-Q		Quarters ended March 31, 2006 and June 30, 2006
Current Reports on Form 8-K		Filed January 13, 2006, February 1, 2006, February 7, 2006, February 8, 2006, April 17, 2006, April 25, 2006, June 1, 2006, July 25, 2006 and August 21, 2006

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		Page
ARTICLE I DEFINITIONS			1
Section 1.1.  Definitions			1
Section 1.2.  Terms Generally			6
ARTICLE II THE MERGER			7
Section 2.1.  The Merger			7
Section 2.2.  Closing			7
Section 2.3.  Effective Time			7
Section 2.4.  Effects of the Merger			7
Section 2.5.  Organizational Documents			7
Section 2.6.  Directors and Officers of Surviving Corporation			7
ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS			8
Section 3.1.  Conversion of Securities			8
Section 3.2.  Payment of Cash for Merger Shares			9
Section 3.3.  Treatment of Options and Other Awards			10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY			12
Section 4.1.  Corporate Existence and Power			12
Section 4.2.  Corporate Authorization			12
Section 4.3.  Governmental Authorization			13
Section 4.4.  Non-Contravention			13
Section 4.5.  Capitalization			13
Section 4.6.  Company Subsidiaries and Joint Ventures			14
Section 4.7.  Reports and Financial Statements			14
Section 4.8.  Undisclosed Liabilities			15
Section 4.9.  Disclosure Documents			15
Section 4.10. Absence of Certain Changes or Events			16
Section 4.11. Litigation			16
Section 4.12. Taxes			16
Section 4.13. ERISA			17
Section 4.14. Compliance With Laws			18
Section 4.15. Finders’ Fees			18
Section 4.16. Opinion of Financial Advisors			18
Section 4.17. Affiliate Transactions			18
Section 4.18. Rights Agreement; Anti-Takeover Provisions			18

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		Page
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB			19
Section 5.1.  Corporate Existence and Power			19
Section 5.2.  Corporate Authorization			19
Section 5.3.  Governmental Authorization			19
Section 5.4.  Non-Contravention			19
Section 5.5.  Disclosure Documents			19
Section 5.6.  Finders’ Fees			20
Section 5.7.  Financing			20
Section 5.8.  Equity Rollover Commitment			20
Section 5.9.  Guarantees			21
Section 5.10. Operations of Parent and Merger Sub			21
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER			21
Section 6.1.  Conduct of the Company and Subsidiaries			21
Section 6.2.  Conduct of Parent and Merger Sub			23
Section 6.3.  No Control of Other Party’s Business			23
ARTICLE VII ADDITIONAL AGREEMENTS			24
Section 7.1.  Stockholder Meeting; Proxy Material			24
Section 7.2.  Reasonable Best Efforts			25
Section 7.3.  Access to Information			26
Section 7.4.  Solicitation			26
Section 7.5.  Director and Officer Liability			30
Section 7.6.  Takeover Statutes			30
Section 7.7.  Public Announcements			31
Section 7.8.  Notice of Current Events			31
Section 7.9.  Employee Matters			31
Section 7.10. Financing			32
Section 7.11. Actions with Respect to Existing Debt			34
Section 7.12. Actions with Respect to Foundation Options and HTI Warrant			35
Section 7.13. Insurance Matters			35
Section 7.14. Section 16(b)			35
Section 7.15. Resignation of Directors			35
ARTICLE VIII CONDITIONS TO THE MERGER			35
Section 8.1.  Conditions to the Obligations of Each Party			35
Section 8.2.  Conditions to the Obligations of Parent and Merger Sub			35
Section 8.3.  Conditions of the Obligations of the Company			36
ARTICLE IX TERMINATION			36
Section 9.1.  Termination			36
Section 9.2.  Termination Fee			37
Section 9.3.  Effect of Termination			39

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		Page
ARTICLE X MISCELLANEOUS			39
Section 10.1.  Notices			39
Section 10.2.  Representations and Warranties			40
Section 10.3.  Expenses			41
Section 10.4.  Amendment			41
Section 10.5.  Waiver			41
Section 10.6.  Successors and Assigns			41
Section 10.7.  Governing Law			41
Section 10.8.  Counterparts; Effectiveness; Third Party Beneficiaries			41
Section 10.9.  Severability			41
Section 10.10. Entire Agreement			42
Section 10.11. Remedies			42
Section 10.12. Jurisdiction			42
Section 10.13. Authorship			43

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	“Acceptable Confidentiality Agreement” has the meaning set forth in Section 7.4(f)(i).
	“Affiliate” means, with respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
	“Agreement” has the meaning set forth in the Preamble.
	“Business Day” means any day other than the days on which banks in New York, New York are not required or authorized to close.
	“Certificate” has the meaning set forth in Section 3.1(c).
	“Certificate of Merger” has the meaning set forth in Section 2.3.

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	“CIA” has the meaning set forth in Section 4.14(b).
	“Closing” has the meaning set forth in Section 2.2.
	“Closing Date” has the meaning set forth in Section 2.2.
	“Code” means the Internal Revenue Code of 1986, as amended.
	“Common Stock” has the meaning set forth in Section 3.1(a).
	“Company” has the meaning set forth in the Preamble.
	“Company Acquisition Proposal” has the meaning set forth in Section 7.4(f)(ii).
	“Company Benefit Plans” has the meaning set forth in Section 4.13(a).
	“Company Disclosure Letter” has the meaning set forth in the preamble to Article IV.
	“Company Employees” means any current, former or retired employee, officer, consultant, independent contractor or director of the Company or any of its Subsidiaries.
	“Company Joint Venture” means the Persons or other joint venture arrangements set forth in Section 4.6(b) of the Company Disclosure Letter.
	“Company Options” means outstanding options to acquire Shares from the Company granted under the Company Stock Plans.
	“Company Proxy Statement” has the meaning set forth in Section 4.9.
	“Company SEC Reports” has the meaning set forth in Section 4.7(a).
	“Company Securities” has the meaning set forth in Section 4.5(b).
	“Company Stockholder Meeting” has the meaning set forth in Section 7.1(a).
	“Company Stock Plans” means the Company’s 2005 Equity Incentive Plan, the Columbia/ HCA Healthcare Corporation Outside Directors Stock and Incentive Compensation Plan, as amended, the Amended and Restated Columbia/ HCA Healthcare Corporation 1992 Stock and Incentive Plan, the Colombia/ HCA Healthcare Corporation 2000 Equity Incentive Plan, the HCA-Hospital Corporation of America Nonqualified Initial Option Plan and the Value Health, Inc. 1991 Stock Plan, as amended.
	“Compensation” has the meaning set forth in Section 7.9(a).
	“Confidentiality Agreements” means the Confidentiality Agreement with each of (i) Bain Capital Partners, LLC, dated April 22, 2006, as supplemented by the addendum dated May 26, 2006, (ii) Kohlberg Kravis Roberts & Co. L.P., dated April 22, 2006, as supplemented by the addendum dated May 26, 2006 and (iii) Merrill Lynch Global Partners, Inc., dated April 23, 2006, as supplemented by the addendum dated May 26, 2006.
	“Contract” has the meaning set forth in Section 4.4.
	“Current Employee” has the meaning set forth in Section 7.9(a).
	“Current Policy” has the meaning set forth in Section 7.5(b).
	“Damages” has the meaning set forth in Section 7.5(a).
	“Debt Financing” has the meaning set forth in Section 5.7.
	“Debt Financing Commitments” has the meaning set forth in Section 5.7.
	“Debt Tender Offers” has the meaning set forth in Section 7.11.
	“DGCL” has the meaning set forth in Section 2.1.

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	“Dissenting Shares” has the meaning set forth in Section 3.1(d).
	“DOJ” has the meaning set forth in Section 7.2(b).
	“Effective Time” has the meaning set forth in Section 2.3.
	“Employee Benefit Plan” has the meaning set forth in Section 3(3) of ERISA.
	“End Date” has the meaning set forth in Section 9.1(b)(i).
	“Equity Financing” has the meaning set forth in Section 5.7.
	“Equity Financing Commitments” has the meaning set forth in Section 5.7.
	“Equity Rollover Commitment” has the meaning set forth in Section 5.8.
	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
	“Excluded Party” has the meaning set forth in Section 7.4(b).
	“Financing” has the meaning set forth in Section 5.7.
	“Financing Commitments” has the meaning set forth in Section 5.7.
	“Foundation Options” means outstanding options to purchase Shares from the Company granted pursuant to Stock Pledge Agreements, dated as of October 9, 1997 and February 25, 1999, between Columbia/ HCA Healthcare Inc. and Columbia/ HCA Healthcare Foundation, Inc.
	“FTC” has the meaning set forth in Section 7.2(b).
	“GAAP” means United States generally accepted accounting principles.
	“Go Shop Termination Fee” means $300,000,000.
	“Governmental Authority” means any nation or government or any agency, public or regulatory authority, instrumentality, department, commission, court, arbitrator, ministry, tribunal or board of any nation or government or political subdivision thereof, in each case, whether foreign or domestic and whether national, supranational, federal, provincial, state, regional, local or municipal.
	“Guarantees” has the meaning set forth in Section 5.9.
	“Guarantors” has the meaning set forth in Section 5.9.
	“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
	“HTI Warrant” means the warrant to purchase 16,910 Shares for an exercise price of $2.29 per Share exercisable until September 17, 2007.
	“Indenture” means the Indenture, dated as of December 15, 1993, by and between Columbia Healthcare Corporation and The First National Bank of Chicago, as supplemented by (i) the First Supplemental Indenture dated as of May 25, 2000, by and between HCA — The Healthcare Company (successor-in-interest to Columbia Healthcare Corporation) and Bank One Trust Company, N.A. (successor-in-interest to The First National Bank of Chicago), (ii) the Second Supplemental Indenture, dated as of July 1, 2001, by and between HCA Inc. (successor-in-interest to HCA — The Healthcare Company) and Bank One Trust Company, N.A. and (iii) the Third Supplemental Indenture, dated as of December 5, 2001, by and between HCA Inc. and The Bank of New York (successor trustee to Bank One Trust Company, N.A).
	“Insurance Amount” has the meaning set forth in Section 7.5(b).
	“Intercompany Debt” means any loan, advance or other obligation solely among the Company and/or any of its wholly-owned Subsidiaries.

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	“Knowledge” means the actual knowledge of the Persons set forth in Section 1.1 of the Company Disclosure Letter.
	“Law” means applicable, statutes, common laws, rules, ordinances, regulations, codes, orders, judgments, injunctions, writs, decrees, governmental guidelines or interpretations having the force of law or bylaws, in each case, of a Governmental Authority.
	“Liens” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset.
	“Marketing Period” has the meaning set forth in Section 7.10(b).
	“Material Adverse Effect on the Company” means any event, state of facts, circumstance, development, change, effect or occurrence (an “Effect”) that is materially adverse to the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, other than (i) any Effect resulting from (A) changes in general economic or political conditions or the securities, credit or financial markets in general, (B) general changes or developments in the industries in which the Company and its Subsidiaries operate, including general changes in law or regulation across such industries, (C) the announcement of this Agreement or the pendency or consummation of the Merger, including any labor union activities related thereto, (D) the identity of Parent or any of its Affiliates as the acquiror of the Company, (E) compliance with the terms of, or the taking of any action required by, this Agreement or consented to by Parent, (F) any acts of terrorism or war (other than any of the foregoing that causes any damage or destruction to or renders unusable any facility or property of the Company or any of its Subsidiaries), (G) changes in generally accepted accounting principles or the interpretation thereof, or (H) any weather related event, except, in the case of the foregoing clauses (A) and (B), to the extent such changes or developments referred to therein would reasonably be expected to have a materially disproportionate impact on the Company and its Subsidiaries, taken as a whole, relative to other for profit participants in the industries and in the geographic markets in which the Company conducts its businesses after taking into account the size of the Company relative to such other for profit participants, or (ii) any failure to meet internal or published projections, forecasts or revenue or earning predictions for any period (provided that the underlying causes of such failure shall be considered in determining whether there is a Material Adverse Effect on the Company).
	“Material Subsidiaries” means the Subsidiaries of the Company set forth in Section 4.1 of the Company Disclosure Letter.
	“Merger” has the meaning set forth in the Recitals.
	“Merger Consideration” has the meaning set forth in Section 3.1(c).
	“Merger Shares” has the meaning set forth in Section 3.1(c).
	“Merger Sub” has the meaning set forth in the Preamble.
	“New Financing Commitments” has the meaning set forth in Section 5.7.
	“Notice Period” has the meaning set forth in Section 7.4(d)(ii).
	“Nonvoting Common Stock” has the meaning set forth in Section 3.1(a).
	“No-Shop Period Start Date” has the meaning set forth in Section 7.4(a).
	“OIG” has the meaning set forth in Section 4.14(b).
	“Other Antitrust Laws” means any Law, other than the HSR Act, enacted by any Governmental Authority relating to antitrust matters or regulating competition.
	“Parent” has the meaning set forth in the Preamble.
	“Parent Expenses” has the meaning set forth in Section 9.2(c).

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	“Paying Agent” has the meaning set forth in Section 3.2(a).
	“Permits” means any licenses, franchises, permits, certificates, consents, approvals or other similar authorizations of, from or by a Governmental Authority possessed by or granted to or necessary for the ownership of the material assets or conduct of the business of, the Company or its Subsidiaries.
	“Permitted Liens” means (i) Liens for Taxes, assessments and governmental charges or levies not yet due and payable or that are being contested in good faith and by appropriate proceedings; (ii) mechanics, carriers’, workmen’s, repairmen’s, materialmen’s or other Liens or security interests that secure a liquidated amount that are being contested in good faith and by appropriate proceedings; or (iii) leases, subleases and licenses (other than capital leases and leases underlying sale and leaseback transactions); (iv) Liens imposed by applicable Law; (v) pledges or deposits to secure obligations under workers’ compensation Laws or similar legislation or to secure public or statutory obligations; (vi) pledges and deposits to secure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature, in each case in the ordinary course of business; (vii) easements, covenants and rights of way (unrecorded and of record) and other similar restrictions of record, and zoning, building and other similar restrictions, in each case that do not adversely affect in any material respect the current use of the applicable property owned, leased, used or held for use by the Company or any of its Subsidiaries; (viii) Liens the existence of which are specifically disclosed in the notes to the consolidated financial statements of the Company included in any Company SEC Report filed prior to the date of this Agreement; and (x) any other Liens that do not secure a liquidated amount, that have been incurred or suffered in the ordinary course of business and that would not, individually or in the aggregate, have a material effect on the Company or the ability of Parent to obtain the Debt Financing.
	“Person” means any individual, corporation, company, limited liability company, partnership, association, trust, joint venture or any other entity or organization, including any government or political subdivision or any agency or instrumentality thereof.
	“Preferred Stock” has the meaning set forth in Section 4.5(a).
	“Proceeding” has the meaning set forth in Section 4.11.
	“Recommendation” has the meaning set forth in Section 7.1(a).
	“Recommendation Withdrawal” has the meaning set forth in Section 7.1(a).
	“Representatives” has the meaning set forth in Section 7.4(a).
	“Required Financial Information” has the meaning set forth in Section 7.10(a).
	“Requisite Stockholder Vote” has the meaning set forth in Section 4.2(a).
	“Restricted Share” has the meaning set forth in Section 3.3(b).
	“RSU” has the meaning set forth in Section 3.3(c).
	“Schedule 13E-3” has the meaning set forth in Section 4.9.
	“SERP” has the meaning set forth in Section 7.9(c).
	“SEC” means the United States Securities and Exchange Commission.
	“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
	“Shares” has the meaning set forth in Section 3.1(a).
	“Short-Dated Notes” has the meaning set forth in Section 7.11.

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	“Special Committee” means a committee of the Company’s Board of Directors, the members of which are not affiliated with Parent or Merger Sub and are not members of the Company’s management, formed for the purpose of, among other things, evaluating, and making a recommendation to the full Board of Directors of the Company with respect to, this Agreement and the Merger.
	“Stock Purchase” has the meaning set forth in Section 3.3(d).
	“Subsidiary”, with respect to any Person, means any other Person of which the first Person owns, directly or indirectly, securities or other ownership interests having voting power to elect a majority of the board of directors or other persons performing similar functions (or, if there are no such voting interests, more than 50% of the equity interests of the second Person). With respect to the Company, Subsidiary shall not include any Company Joint Venture.
	“Superior Proposal” has the meaning set forth in Section 7.4(f)(iii).
	“Surviving Corporation” has the meaning set forth in Section 2.1.
	“Surviving Corporation Plan” has the meaning set forth in Section 7.9(b).
	“Takeover Statute” has the meaning set forth in Section 4.18.
	“Tax” means (i) all federal, state, local, foreign and other taxes (including withholding taxes), customs, duties, imposts and other similar governmental charges of any kind or nature whatsoever, together with any interest and any penalties, additions or additional amounts with respect thereto, (ii) any liability for payment of amounts described in clause (i) whether as a result of transferee liability, joint and several liability for being a member of an affiliated, consolidated, combined, unitary or other group for any period, or otherwise by operation of law, and (iii) any liability for the payment of amounts described in clause (i) or (ii) as a result of any tax sharing, tax indemnity or tax allocation agreement or any other express or implied agreement to pay or indemnify any other Person.
	“Tax Return” means any return, declaration, report, statement, information statement or other document filed or required to be filed with respect to Taxes, including any claims for refunds of Taxes, any information returns and any amendments or supplements of any of the foregoing.
	“Termination Fee” means $500,000,000, except (i) in the event that this Agreement is terminated by the Company pursuant to Section 9.1(c)(ii) in order to enter into a definitive agreement with respect to a Company Acquisition Proposal with an Excluded Party, or (ii) in the event that this Agreement is terminated by Parent or Merger Sub pursuant to Section 9.1(d)(ii) in a circumstance in which the event giving rise to the right of termination is based on the submission to the Company of a Company Acquisition Proposal by an Excluded Party, in which cases the Termination Fee shall mean the Go Shop Termination Fee.

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	(a) Each share of Common Stock, par value $.01 per share, of the Company (the “Common Stock”) and each share of Nonvoting Common Stock, par value $.01 per share, of the Company (the “Nonvoting Common Stock” and, together with the shares of Common Stock, the “Shares”) held by the Company as treasury stock or otherwise owned by Parent immediately prior to the Effective Time (including any Shares acquired by Parent immediately prior to the Effective Time pursuant to the Equity Rollover Commitment or other agreements with holders of Shares (including Restricted Shares)) shall be canceled and retired and shall cease to exist, and no payment or distribution shall be made or delivered with respect thereto. Each Share owned by any wholly-owned Subsidiary of Parent or any wholly-owned Subsidiary of the Company shall remain outstanding after the Effective Time.
	(b) Each share of common stock, par value $.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly issued, fully paid and non-assessable share of common stock of the Surviving Corporation.
	(c) Each Share (including any Restricted Shares) issued and outstanding immediately prior to the Effective Time (other than Shares to be canceled or to remain outstanding pursuant to Section 3.1(a) and Dissenting Shares), automatically shall be canceled and converted into the right to receive $51.00 in cash, without interest (the “Merger Consideration”), payable to the holder thereof upon surrender of the stock certificate formerly representing such Share (a “Certificate”) in the manner provided in Section 3.2. Such Shares, other than those canceled or that remain outstanding pursuant to Section 3.1(a) and Dissenting Shares, sometimes are referred to herein as the “Merger Shares.”
	(d) Notwithstanding any provision of this Agreement to the contrary, if required by the DGCL (but only to the extent required thereby), Shares that are issued and outstanding immediately prior to the Effective Time (other than Shares to be canceled pursuant to Section 3.1(a)) and that are held by holders of such Shares who have not voted in favor of the adoption of this Agreement or consented thereto in writing and who have properly exercised appraisal rights with respect thereto in accordance with, and who have complied with, Section 262 of the DGCL (the “Dissenting Shares”) will not be convertible into the right to receive the Merger Consideration, and holders of such Dissenting Shares will be entitled to receive payment of the fair value of such Dissenting Shares in accordance with the provisions of such Section 262 unless and until any such holder fails to perfect or effectively withdraws or loses its rights to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, such Dissenting Shares will thereupon be treated as if they had been converted into and have become exchangeable for, at the Effective Time, the right to receive the Merger Consideration, without any interest thereon, and the Surviving Corporation shall remain liable for payment of the Merger Consideration for such Shares. At the Effective Time, any holder of Dissenting Shares shall cease to have any rights with respect thereto, except the rights provided in Section 262 of the DGCL and as provided in the previous sentence. The Company will give Parent (i) notice of any demands received by the Company for appraisals of Shares and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to such notices and demands. The Company shall not, except with the

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	prior written consent of Parent, make any payment with respect to any demands for appraisal or settle any such demands.
	(e) If between the date of this Agreement and the Effective Time the number of outstanding Shares is changed into a different number of shares or a different class (other than the conversion of any shares of Nonvoting Common Stock to shares of Common Stock), by reason of any stock dividend, subdivision, reclassification, recapitalization, split-up, combination, exchange of shares or the like, other than pursuant to the Merger, the amount of Merger Consideration payable per Share shall be correspondingly adjusted.
	(f) For the avoidance of doubt, the parties acknowledge and agree that the contribution of Shares (including Restricted Shares) to Parent pursuant to the Equity Rollover Commitment or other agreements with holders of Shares (including Restricted Shares) shall be deemed to occur immediately prior to the Effective Time and prior to any other above-described event.

	(b) As promptly as practicable after the Effective Time, the Surviving Corporation shall send, or cause the Paying Agent to send, to each record holder of Merger Shares entitled to receive the Merger Consideration a letter of transmittal and instructions for exchanging their Merger Shares for the Merger Consideration payable therefor. The letter of transmittal will be in customary form and will specify that delivery of Certificates (or effective affidavits of loss in lieu thereof) will be effected, and risk of loss and title will pass, only upon delivery of the Certificates (or effective affidavits of loss in lieu thereof) to the Paying Agent. Upon surrender of Certificate or Certificates (or effective affidavits of loss in lieu thereof) to the Paying Agent together with a properly completed and duly executed letter of transmittal and any other documentation that the Paying Agent may reasonably require, the record holder thereof shall be entitled to receive the Merger Consideration payable in exchange therefor, less any amounts required to be withheld for Tax. Until so surrendered and exchanged, each such Certificate shall, after the Effective Time, be deemed to represent only the right to receive the Merger Consideration, and until such surrender and exchange, no cash shall be paid to the holder of such outstanding Certificate in respect thereof.
	(c) If payment is to be made to a Person other than the registered holder of the Merger Shares formerly represented by the Certificate or Certificates surrendered in exchange therefor, it shall be a condition to such payment that the Certificate or Certificates so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the Person requesting such payment

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	shall pay to the Paying Agent any applicable stock transfer taxes required as a result of such payment to a Person other than the registered holder of such Merger Shares or establish to the reasonable satisfaction of the Paying Agent that such stock transfer taxes have been paid or are not payable.
	(d) After the Effective Time, there shall be no further transfers on the stock transfer books of the Company of the Shares that were outstanding immediately prior to the Effective Time other than to settle transfers of Shares that occurred prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Paying Agent, such shares shall be canceled and exchanged for the consideration provided for, and in accordance with the procedures set forth, in this Article III.
	(d) If any cash deposited with the Paying Agent remains unclaimed twelve months after the Effective Time, such cash shall be returned to the Surviving Corporation upon demand, and any holder who has not surrendered such holder’s Certificates for the Merger Consideration prior to that time shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration. Notwithstanding the foregoing, none of Merger Sub, the Company, the Surviving Corporation or the Paying Agent shall be liable to any holder of Certificates for any amount paid to a public official pursuant to any applicable unclaimed property laws. Any amounts remaining unclaimed by holders of Certificates as of a date immediately prior to such time that such amounts would otherwise escheat to or become property of any Governmental Authority shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation on such date, free and clear of any claims or interest of any Person previously entitled thereto.
	(f) No dividends or other distributions with respect to capital stock of the Surviving Corporation with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate, including Dissenting Shares.
	(g) From and after the Effective Time, the holders of Shares (other than Dissenting Shares) outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Shares, other than the right to receive the Merger Consideration as provided in this Agreement.
	(h) In the event that any Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed, in addition to the posting by such holder of any bond in such reasonable amount as the Surviving Corporation or the Paying Agent may direct as indemnity against any claim that may be made against the Surviving Corporation with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the proper amount of the Merger Consideration in respect thereof entitled to be received pursuant to this Agreement.
	(i) Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the Merger Consideration otherwise payable hereunder and any amounts to be paid hereunder in respect of Company Options or RSUs any amounts required to be deducted and withheld under any applicable Tax Law. To the extent any amounts are so withheld, such withheld amounts shall be timely paid to the applicable Tax authority and shall be treated for all purposes as having been paid to the holder from whose Merger Consideration (or amounts payable hereunder with respect to Company Options or RSUs) the amounts were so deducted and withheld.

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	(b) As of the Effective Time, except as otherwise agreed by Parent and a holder of Restricted Shares with respect to such holder’s Restricted Shares, each Share outstanding immediately prior to the Effective Time subject to vesting or other lapse restrictions pursuant to any Company Stock Plan or any applicable restricted stock award agreement (each a “Restricted Share”) which is outstanding immediately prior to the Effective Time shall vest and become free of such restrictions as of the Effective Time and shall, as of the Effective Time, be canceled and converted into the right to receive the Merger Consideration in accordance with Section 3.1(c).
	(c) The Company shall use reasonable best efforts to ensure that except as otherwise agreed by Parent and a holder of RSUs with respect to such holder’s RSUs, (i) immediately prior to the Effective Time, each award of a right under any Company Stock Plan entitling the holder thereof to Restricted Shares, shares of Common Stock or cash equal to or based on the value of Common Stock (collectively, “RSUs”) which, in each case, is outstanding as of the Effective Time, shall vest and become free of any lapse restriction (without regard to whether the RSUs are then vested or the applicable restrictions have lapsed) and, as of the Effective Time be canceled, and (ii) at the Effective Time, the holder thereof shall be entitled to receive an amount in cash equal to the (1) product of (A) the number of shares previously subject to such RSU and (B) the Merger Consideration, and the (2) the value of any deemed dividend equivalents accrued but unpaid with respect to such RSUs, less any amounts required to be withheld under any applicable Law. All payments with respect to canceled RSUs shall be made by the Paying Agent (or such other agent reasonably acceptable to Parent as the Company shall designate prior to the Effective Time) as promptly as reasonably practicable after the Effective Time from funds deposited by or at the direction of the Surviving Corporation to pay such amounts in accordance with Section 3.2(a).
	(d) At the Effective Time, except as otherwise agreed by Parent and a participant, all amounts withheld by the Company on behalf of the participants in the HCA Employee Stock Purchase Plan and the HCA Inc. Amended and Restated Management Stock Purchase Plan (the “Stock Purchase Plans”, and such participants, the “Participants”)) from the beginning of the applicable existing salary deferral periods through the Effective Time will be deemed to have been used to purchase Common Stock pursuant to the terms of the Stock Purchase Plans, using the Effective Time as the last date of the applicable offering period under the Stock Purchase Plans (the “Deemed Purchase”) and each such share of Common Stock will be deemed to have been cancelled and converted into the right to receive the Merger Consideration, such that, as of the Effective Time, on a net basis, each Participant shall be entitled to receive, without interest and less any amounts required to be deducted and withheld under any applicable Law, (i) refund by the Company of all deferrals made to the Stock Purchase Plans by the Participant during the applicable existing salary deferral periods and (ii) an amount in cash equal to the excess (if any) of (A) the product of (1) the number of Shares that the Participant is deemed to have acquired pursuant to the terms of the applicable Stock Purchase Plan pursuant to the applicable Deemed Purchase and (2) the Merger Consideration, over (B) the aggregate amount of the Participant’s purchase price deemed to have been paid in the Deemed Purchase (such cash amount described in (ii) being the “Net SPP Payment”). All Net SPP Payments shall be paid by the Paying Agent (or such other agent reasonably acceptable to Parent as the Company shall designate prior to the Effective Time) as promptly as reasonably practicable after the Effective Time from funds deposited by or at the direction of the Surviving Corporation to pay such amounts in accordance with Section 3.2(a). However, in connection with the foregoing, if and to the extent permitted by the applicable Stock Purchase Plan, on or after the date of this Agreement, in no event (i) shall any person who is not currently participating in any Stock Purchase Plan be permitted to begin participating in any Stock Purchase Plan, and (ii) shall any person who is currently participating in any Stock Purchase Plan be permitted to increase the amount of salary that may otherwise be deferred and deemed used to purchase shares of Common Stock under any Stock Purchase Plan from that level of salary deferral amount in effect as of the date of this Agreement;

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	and provided, further, that in no event may any new salary deferral period commence after the date hereof and prior to the Effective Time.
	(e) Prior to the Effective Time, the Company will adopt such resolutions and will take such other actions as may be reasonably required to effectuate the actions contemplated by this Section 3.3, without paying any consideration or incurring any debts or obligations on behalf of the Company or the Surviving Corporation.

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(b) This Agreement has been duly and validly executed and delivered by the Company and, assuming the due and valid execution and delivery of this Agreement by Parent and Merger Sub, constitutes a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the enforcement of creditors’ rights generally and general equitable principles.

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	(b) Except as set forth in this Section 4.5, except with respect to the Stock Purchase Plans and except for the 21,000,000 shares of Common Stock which have been reserved for issuance upon the conversion of the shares of Nonvoting Common Stock, there have not been reserved for issuance, and there are no outstanding (i) shares of capital stock or other voting securities of the Company; (ii) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of the Company or its Subsidiaries, other than Company Options, Foundation Options and HTI Warrants; (iii) Company Options or other rights or options to acquire from the Company or its Subsidiaries, or obligations of the Company or its Subsidiaries to issue, any shares of capital stock, voting securities or securities convertible into or exchangeable for shares of capital stock or voting securities of the Company or such Subsidiary, as the case may be; or (iv) equity equivalent interests in the ownership or earnings of the Company or its Subsidiaries or other similar rights (the items in clauses (i) through (iv) collectively, “Company Securities”). There are no outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any Company Securities. There are no preemptive rights of any kind which obligate the Company or any of its Subsidiaries to issue or deliver any Company Securities. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or by which it is bound relating to the voting or registration of any shares of capital stock of the Company or any of its Subsidiaries or preemptive rights with respect thereto.
	(c) Other than the issuance of Shares upon exercise of Company Options, since June 30, 2006 to the date of this Agreement, the Company has not declared or paid any dividend or distribution in respect of any Company Securities, and neither the Company nor any of its Subsidiaries has issued, sold, repurchased, redeemed or otherwise acquired any Company Securities, and their respective Boards of Directors have not authorized any of the foregoing.
	(d) Neither the Company nor any of its Subsidiaries has entered into any commitment, arrangement or agreement, or are otherwise obligated, to contribute capital, loan money or otherwise provide funds or make additional investments in any Company Joint Venture or any other Person, other than Intercompany Debt and any such commitment, arrangement or agreement in the ordinary course of business consistent with past practice.
	(e) No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders of the Company may vote are outstanding.

(b) Section 4.6(b) of the Company Disclosure Letter sets forth a list of all Company Joint Ventures. All equity interests of any Subsidiary of the Company and the Company Joint Ventures held by the Company or any other Subsidiary of the Company are validly issued, fully paid and non-assessable and were not issued in violation of any preemptive or similar rights, purchase option, call, or right of first refusal or similar rights. All such equity interests are free and clear of any Liens or any other limitations or restrictions on such equity interests (including any limitation or restriction on the right to vote, pledge or sell or otherwise dispose of such equity interests) other than Permitted Liens.

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	(b) Each of the consolidated financial statements of the Company and its Subsidiaries included (or incorporated by reference) in the Company SEC Reports (including the related notes and schedules, where applicable) fairly presents (subject, in the case of the unaudited statements, to the absence of notes and normal year-end audit adjustments as permitted by the rules related to Quarterly Reports on Form 10-Q promulgated under the Exchange Act), in all material respects, the results of the consolidated operations and changes in stockholders’ equity and cash flows and consolidated financial position of the Company and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth. Each of such consolidated financial statements (including the related notes and schedules, where applicable) complies in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto and each of such financial statements (including the related notes and schedules, where applicable) were prepared in accordance with GAAP consistently applied during the periods involved, except in each case as indicated in such statements or in the notes thereto or, in the case of unaudited statements, as permitted by the rules related to Quarterly Reports on Form 10-Q promulgated under the Exchange Act.
	(c) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, the management of the Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors of the Company (x) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (y) any fraud, known to the Company, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

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	(a) All Tax Returns required to be filed by or with respect to the Company, any of its Subsidiaries, or any Company Joint Venture have been properly prepared and timely filed, and all such Tax Returns (including information provided therewith or with respect thereto) are true, correct and complete, except for Tax Returns as to which the failure to so file or be true, complete and correct would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Company.
	(b) The Company, its Subsidiaries and the Company Joint Ventures have fully and timely paid all Taxes (whether or not shown to be due on the Tax Returns referred to in Section 4.12(a)), except for Taxes being contested in good faith and for which adequate reserves have been established in accordance with GAAP and for Taxes as to which the failure to pay would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Company, and have made adequate provision in the applicable financial statements in accordance with GAAP for any material Tax that is not yet due and payable for all taxable periods, or portions thereof, ending on or before the date of this Agreement.
	(c) No audit or other proceeding by any Governmental Authority is pending or threatened in writing with respect to any Taxes due from or with respect to the Company or any of its Subsidiaries

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	or any Company Joint Venture, except for such audits and proceedings that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on the Company.
	(d) There are no Tax sharing agreements (or similar agreements) under which the Company, any of its Subsidiaries or, to the Company’s Knowledge, any Company Joint Venture could be liable for the Tax liability of an entity that is neither the Company nor any or its Subsidiaries, nor, to the Company’s Knowledge, any Company Joint Venture, except for such agreements that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on the Company.
	(e) Neither the Company nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement.
	(f) None of the Company or any of its Subsidiaries has entered into a “listed transaction” that has given rise to a disclosure obligation under Section 6011 of the Code and the Treasury Regulations promulgated thereunder and that has not been disclosed in the relevant Tax Return of the Company or relevant Subsidiary.

	(b) There has been no amendment to, announcement by the Company or any of its Subsidiaries relating to, or change in employee participation or coverage under, any Company Benefit Plan that would increase materially the annual expense of maintaining such plan above the level of the expense incurred therefor for the most recent fiscal year. No Company Benefit Plan or Company Stock Plan exists that could (i) result in the payment to any Company Employee of any money or other property, (ii) accelerate or provide any other rights or benefits (including funding of compensation or benefits through a trust or otherwise) to any Company Employee, or (iii) limit or restrict the ability of the Company or its Subsidiaries to merge, amend or terminate any Company Benefit Plan, in each case, as a result of the execution of this Agreement or otherwise related in any way to the transactions contemplated by this Agreement; and no such payment would reasonably be expected to constitute a material parachute payment within the meaning of Code Section 280G.
	(c) Schedule 4.13(c) of the Company Disclosure Letter sets forth a list of all material Company Benefit Plans. The Company has made available to Parent true and complete copies of all material Company Benefit Plans.
	(d) All Company Options have been granted in accordance with the terms of the applicable Company Stock Plan and applicable Law (including, without limitation, Section 409A of the Code), with an exercise price at least equal to the fair market value of the underlying Common Stock on the

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	date of any such grant, except for such failures, if any, to be so granted which would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on the Company.

	(b) The Company is, and at all times since December 14, 2000 has been, in compliance in all material respects with the requirements of the Corporate Integrity Agreement (the “CIA”), dated as of December 14, 2000, between the Company and the Office of Inspector General of the United States Department of Health and Human Services (the “OIG”).
	(c) The Company has not received any written, or to the Company’s Knowledge, oral notice from the OIG that the Company is not in compliance in all material respects with the terms of the CIA.
	(d) The Company and each Subsidiary of the Company has and maintains in full force and effect, and is in compliance with, all Permits and all orders from Governmental Authorities necessary for the Company and each Subsidiary to carry on their respective businesses as currently conducted, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

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	(a) adopt any change in its organizational or governing documents;
	(b) merge or consolidate the Company or any of its Subsidiaries with any Person (other than the Merger and other than such transactions solely among the Company and/or its wholly-owned domestic Subsidiaries that would not result in a material increase in the Tax liability of the Company or its Subsidiaries;
	(c) sell, lease or otherwise dispose of a material amount of assets or securities, including by merger, consolidation, asset sale or other business combination (including by formation of a material Company joint venture), other than such transactions solely among the Company and/or its wholly-owned domestic Subsidiaries that would not result in a material increase in the Tax liability of the Company or its Subsidiaries;
	(d) (i) make any material acquisition, by purchase or other acquisition of stock or other equity interests, by merger, consolidation or other business combination (including by formation of a material Company joint venture); or (ii) make any material property transfers or material purchases of any property or assets, in or from any Person, in each case, other than such transactions solely among the Company and/or wholly-owned Subsidiaries of the Company;

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	(e) other than in connection with drawdowns or repayments with respect to existing credit facilities in the ordinary course of business consistent with past practice, redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify in any material respect the terms of, indebtedness for borrowed money or assume, guarantee or endorse or otherwise become responsible for, whether directly, contingently or otherwise, the obligations of any Person, other than the incurrence, assumption or guarantee of indebtedness (i) between the Company, on the one hand, and any of its Subsidiaries, on the other hand, or (ii) not in excess of $10,000,000 in the aggregate;
	(f) offer, place or arrange any issue of debt securities or commercial bank or other credit facilities that would reasonably be expected to compete with or impede the Debt Financing or cause the breach of any provisions of the Debt Financing Commitments or cause any condition set forth in the Debt Financing Commitments not to be satisfied;
	(g) make any material loans, advances or capital contributions to, or investments in, any other Person in excess of $20,000,000 in the aggregate for all such loans, advances, contributions and investments, except for (i) transactions solely among the Company and/or wholly-owned Subsidiaries of the Company, or (ii) as required by existing contracts set forth in Section 6.1(g) of the Company Disclosure Letter;
	(h) authorize any capital expenditures in excess of $20,000,000 in the aggregate, other than expenditures provided for in the Company’s budget for the remaining portion of fiscal year 2006 (a copy of which 2006 budget has been provided to Parent) and for any portion of fiscal year 2007 prior to the Closing Date (a copy of which budget has been provided to Parent);
	(i) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries;
	(j) mortgage or pledge any of its material assets, tangible or intangible, or create, assume or suffer to exist any Lien thereupon (other than Permitted Liens);
	(k) enter into or amend any Contract with any executive officer, director or other Affiliate of the Company or any of its Subsidiaries or any Person beneficially owning 1% or more of the Shares or the voting power of the Shares;
	(l) enter into, renew, extend, amend or terminate any Contract that is or would be material to the Company and its Subsidiaries, taken as a whole, other than in the ordinary course of business consistent with past practice;
	(m) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, establish a record date for, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (x) a dividend or distribution by a wholly-owned Subsidiary of the Company to its parent corporation in the ordinary course of business, (y) payment on September 1, 2006 of the previously declared regularly quarterly dividend of $0.17 per Share, and (z) payment of a regular quarterly dividend not to exceed $0.17 per share for the fourth quarter of 2006; provided, that the record date for such dividend shall be no earlier than December 1, 2006 and that no such dividend shall be payable if the Effective Time occurs on or prior to the record date; (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) the exercise of Company Options outstanding on the date of this Agreement in accordance with their original terms, (B) the withholding of Company Securities to satisfy Tax obligations with respect to Company Options or Restricted Shares, (C) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof and (D) acquisitions by or issuances to Company Benefit Plans identified in Section 6.1(m) of the Company Disclosure Letter in the ordinary course of business consistent with past practice;

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	(n) except as required pursuant to existing written agreements or Company Benefit Plans in effect on the date of this Agreement or as required by applicable Law, (i) adopt, amend in any material respect or terminate any Company Benefit Plan, (ii) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (iii) except in connection with promotions or new hires made in the ordinary course of business consistent with past practice, increase in any manner the cash compensation or welfare or pension benefits of Company Employees, or (iv) change any actuarial or other assumption used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which contributions to any Company Benefit Plan are made or determined;
	(o) settle or compromise any litigation, or release, dismiss or otherwise dispose of any claim or arbitration, other than settlements or compromises of litigation, claims or arbitration that do not exceed $10,000,000 in the aggregate (net of insurance recoveries) and do not impose any material restrictions on the business or operations of the Company or any of its Subsidiaries or any Company Joint Venture;
	(p) other than in the ordinary course of business consistent with past practice or except to the extent required by Law, make or change any material Tax election, settle or compromise any material Tax liability of the Company or any of its Subsidiaries, agree to an extension of the statute of limitations with respect to the assessment or determination of material Taxes of the Company or any of its Subsidiaries, file any amended Tax Return with respect to any material Tax, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund;
	(q) make any change in financial accounting methods or method of Tax accounting, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Material Subsidiaries, except insofar as may have been required by a change in GAAP or Law;
	(r) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its Material Subsidiaries, or enter into a letter of intent or agreement in principle with respect thereto, (other than the Merger and other than such transactions solely among the Company and/or its wholly-owned domestic Subsidiaries that would not result in a material increase in the Tax liability of the Company or its Subsidiaries);
	(s) take any action or fail to take any action that is intended to, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement; or
	(t) authorize, agree or commit to do any of the foregoing.

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(b) In connection with the Company Stockholder Meeting, the Company will (i) as promptly as reasonably practicable (and, with respect to filing with the SEC, in any event within 15 Business Days from the date of this Agreement) prepare and file with the SEC the Company Proxy Statement, (ii) respond as promptly as reasonably practicable to any comments received from the SEC with respect to such filings and will provide copies of such comments to Merger Sub promptly upon receipt, (iii) as promptly as reasonably practicable prepare and file (after Parent and Merger Sub have had a reasonable opportunity to review and comment on) any amendments or supplements necessary to be filed in response to any SEC comments or as required by Law, (iv) use its reasonable best efforts to have cleared by the SEC and will thereafter mail to its stockholders as promptly as reasonably practicable, the Company Proxy Statement and all other customary proxy or other materials for meetings such as the Company Stockholder Meeting, (v) to the extent required by applicable Law, as promptly as reasonably practicable prepare, file and distribute to the stockholders of the Company any supplement or amendment to the Company Proxy Statement if any event shall occur which requires such action at any time prior to the Company Stockholder Meeting, and (vi) otherwise use commercially reasonable efforts to comply with all requirements of Law applicable to the Company Stockholder Meeting and the Merger. Parent and Merger Sub shall cooperate with the Company in connection with the preparation and filing of the Company Proxy Statement, including furnishing the Company upon request with any and all information as may be required to be

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set forth in the Company Proxy Statement under the Exchange Act. The Company will provide Parent and Merger Sub a reasonable opportunity to review and comment upon the Company Proxy Statement, or any amendments or supplements thereto, prior to filing the same with the SEC. In connection with the filing of the Company Proxy Statement, the Company and Merger Sub will cooperate to (i) concurrently with the preparation and filing of the Company Proxy Statement, jointly prepare and file with the SEC the Schedule 13E-3 relating to the Merger and the other transactions contemplated hereby and furnish to each other all information concerning such party as may be reasonably requested in connection with the preparation of the Schedule 13E-3, (ii) respond as promptly as reasonably practicable to any comments received from the SEC with respect to such filings and will consult with each other prior to providing such response, (iii) as promptly as reasonably practicable after consulting with each other, prepare and file any amendments or supplements necessary to be filed in response to any SEC comments or as required by Law, (iv) have cleared by the SEC the Schedule 13E-3 and (v) to the extent required by applicable Law, as promptly as reasonably practicable prepare, file and distribute to the stockholders of the Company any supplement or amendment to the Schedule 13E-3 if any event shall occur which requires such action at any time prior to the Company Stockholders Meeting.

(b) Each of Parent and Merger Sub, on the one hand, and the Company, on the other hand, shall, in connection with the efforts referenced in Section 7.2(a) to obtain all requisite approvals and authorizations for the transactions contemplated by this Agreement, use its reasonable best efforts to (i) cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party; (ii) keep the other party reasonably informed of any communication received by such party from, or given by such party to, the Federal Trade Commission (the “FTC”), the Antitrust Division of the Department of Justice (the “DOJ”) or any other Governmental Authority and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the transactions contemplated hereby; and (iii) permit the other party to review any communication given by it to, and consult with each other in advance of any meeting or conference with, the FTC, the DOJ or any other Governmental Authority or, in connection with any proceeding by a private party, with any other person, and to the extent permitted by the FTC, the DOJ or such other applicable Governmental Authority or other Person, give the other party the opportunity to attend and participate in such meetings and conferences.

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	(c) In furtherance and not in limitation of the covenants of the parties contained in Sections 7.2(a) and (b), if any objections are asserted with respect to the transactions contemplated hereby under any Law or if any suit is instituted (or threatened to be instituted) by the FTC, the DOJ or any other applicable Governmental Authority or any private party challenging any of the transactions contemplated hereby as violative of any Law or which would otherwise prevent, materially impede or materially delay the consummation of the transactions contemplated hereby, each of Merger Sub and the Company shall use its reasonable best efforts to resolve any such objections or suits so as to permit consummation of the transactions contemplated by this Agreement, including in order to resolve such objections or suits which, in any case if not resolved, would reasonably be expected to prevent, materially impede or materially delay the consummation of the Merger or the other transactions contemplated hereby; provided, however, that no party shall be required to, and the Company may not (without the prior written consent of Merger Sub) take any such actions to resolve any such objections or suits which actions would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Company.
	(d) Subject to the obligations under Section 7.2(c), in the event that any administrative or judicial action or proceeding is instituted (or threatened to be instituted) by a Governmental Authority or private party challenging the Merger or any other transaction contemplated by this Agreement, or any other agreement contemplated hereby, each of Merger Sub and the Company shall cooperate in all respects with each other and use its respective reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement.

	(b) No investigation by any of the parties or their respective Representatives shall affect the representations, warranties, covenants or agreements of the other parties set forth herein.
	(c) All information obtained pursuant to this Section 7.3 shall be kept confidential in accordance with the applicable Confidentiality Agreement.

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	(b) Subject to Section 7.4(c), from the No-Shop Period Start Date until the Effective Time or, if earlier, the termination of this Agreement in accordance with Article IX, none of the Company, the Company’s Subsidiaries nor any of their respective Representatives shall, directly or indirectly, (A) initiate, solicit or knowingly encourage (including by way of providing information) the submission of any inquiries, proposals or offers or any other efforts or attempts that constitute or may reasonably be expected to lead to, any Company Acquisition Proposal or engage in any discussions or negotiations with respect thereto or otherwise knowingly cooperate with or knowingly assist or participate in, or knowingly facilitate any such inquiries, proposals, discussions or negotiations, or (B) approve or recommend, or publicly propose to approve or recommend, a Company Acquisition Proposal or enter into any merger agreement, letter of intent, agreement in principle, share purchase agreement, asset purchase agreement or share exchange agreement, option agreement or other similar agreement providing for or relating to a Company Acquisition Proposal or enter into any agreement or agreement in principle requiring the Company to abandon, terminate or fail to consummate the transactions contemplated hereby or breach its obligations hereunder or propose or agree to do any of the foregoing. Subject to Section 7.4(c) and except with respect to any Company Acquisition Proposal received prior to the No-Shop Period Start Date with respect to which the requirements of Sections 7.4(c)(i), (ii) and (iii) have been satisfied as of the No-Shop Period Start Date (any such Person so submitting a Company Acquisition Proposal, an “Excluded Party”), as determined, with respect to any Excluded Party, by the Special Committee no later than the later of (i) the No-Shop Period Start Date and (ii) the Business Day following the date on which the Company received such Excluded Party’s written Company Acquisition Proposal (it being understood, that following the No-Shop Period Start Date until such time as the Special Committee determines that a Person is an Excluded Party, the Company shall not be permitted to take any action with respect to such Person that it would be prohibited from taking with respect to a non-Excluded Party pursuant to Section 7.4(c)), on the No-Shop Period Start Date the Company shall immediately cease and cause to be terminated any solicitation, encouragement, discussion or negotiation with any Persons conducted theretofore by the Company, its Subsidiaries or any Representatives with respect to any Company Acquisition Proposal. Notwithstanding anything contained in Section 7.4 to the contrary, any Excluded Party shall cease to be an Excluded Party for all purposes under this Agreement at such time as the Company Acquisition Proposal made by such party fails, in the reasonable judgment of the Special Committee, to satisfy the requirements of Section 7.4(c).
	(c) Notwithstanding anything to the contrary contained in Section 7.4(b), if at any time following the date of this Agreement and prior to obtaining the Requisite Stockholder Vote, (i) the Company has received a written Company Acquisition Proposal from a third party that the Board of Directors of the Company (acting through the Special Committee if such committee still exists) believes in good faith to be bona fide, (ii) the Board of Directors of the Company (acting through the Special Committee if such committee still exists) determines in good faith, after consultation with its independent financial advisors and outside counsel, that such Company Acquisition Proposal constitutes or could reasonably be expected to result in a Superior Proposal and (iii) after consultation with its outside counsel, the Board of Directors of the Company (acting through the Special Committee if such committee still exists) determines in good faith that the failure to take such action could violate its fiduciary duties under applicable Law, then the Company may (A) furnish information with respect to the Company and its Subsidiaries to the Person making such Company Acquisition Proposal and (B) participate in discussions or negotiations with the Person making such Company Acquisition Proposal regarding such Company Acquisition Proposal; provided, that the Company (x) will not, and will not allow Company Representatives to, disclose any non-public information to such Person without entering into an Acceptable Confidentiality Agreement, and (y) will promptly provide to Parent any non-public information concerning the Company or its Subsidiaries provided to such other Person which was not previously provided to Parent. Notwithstanding anything to the contrary contained in Section 7.4(b) or this Section 7.4(c), prior to

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	obtaining the obtaining the Requisite Stockholder Vote, the Company shall be permitted to take the actions described in clauses (A) and (B) above with respect to any Excluded Party. From and after the No-Shop Period Start Date, the Company shall promptly (within one Business Day) notify Parent in the event it receives a Company Acquisition Proposal from a Person or group of related Persons, including the material terms and conditions thereof, and shall keep Parent apprised as to the status and any material developments, discussions and negotiations concerning the same on a current basis (and in any event no later than 48 hours after the occurrence of such developments, discussions or negotiations). Without limiting the foregoing, the Company shall promptly (within one Business Day) notify Parent orally and in writing if it determines to begin providing information or to engage in negotiations concerning a Company Acquisition Proposal from a Person or group of related Persons pursuant to this Section 7.4(c). Within 24 hours of the No-Shop Period Start Date, the Company shall notify Parent of the number of Excluded Parties and provide Parent a written summary of the material terms and conditions of each Company Acquisition Proposal received from any Excluded Party.
	(d) Notwithstanding anything in this Agreement to the contrary, if, at any time prior to obtaining the Requisite Stockholder Vote, the Company receives a Company Acquisition Proposal which the Board of Directors of the Company (acting through the Special Committee, if such committee still exists) concludes in good faith constitutes a Superior Proposal after giving effect to all of the adjustments which may be offered by Parent pursuant to clause (ii) below, the Board of Directors of the Company (acting through the Special Committee, if such committee still exists) may (x) effect a Recommendation Withdrawal and/or (y) terminate this Agreement to enter into a definitive agreement with respect to such Superior Proposal if the Board of Directors of the Company (acting through the Special Committee, if such committee still exists) determines in good faith, after consultation with outside counsel, that failure to take such action could violate its fiduciary duties under applicable Law; provided, however that the Company shall not terminate this Agreement pursuant to the foregoing clause (y), and any purported termination pursuant to the foregoing clause (y) shall be void and of no force or effect, unless concurrently with such termination the Company pays the Termination Fee payable pursuant to Section 9.2(a); and provided, further, that the Board of Directors may not effect a Recommendation Withdrawal pursuant to the foregoing clause (x) or terminate this Agreement pursuant to the foregoing clause (y) unless:

	(i) the Company shall have provided prior written notice to Parent and Merger Sub, at least five calendar days in advance (the “Notice Period”), of its intention to effect a Recommendation Withdrawal in response to such Superior Proposal or terminate this Agreement to enter into a definitive agreement with respect to such Superior Proposal, which notice shall specify the material terms and conditions of any such Superior Proposal (including the identity of the party making such Superior Proposal), and shall have contemporaneously provided a copy of the relevant proposed transaction agreements with the party making such Superior Proposal and other material documents; and
	(ii) prior to effecting such Recommendation Withdrawal or terminating this Agreement to enter into a definitive agreement with respect to such Superior Proposal, the Company shall, and shall cause its financial and legal advisors to, during the Notice Period, negotiate with Parent and Merger Sub in good faith (to the extent Parent and Merger Sub desire to negotiate) to make such adjustments in the terms and conditions of this Agreement so that such Company Acquisition Proposal ceases to constitute a Superior Proposal.

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	(e) The Company agrees that any violations of the restrictions set forth in this Section 7.4 by any Representative of the Company or any of its Subsidiaries, shall be deemed to be a breach of this Section 7.4 by the Company.
	(f) As used in this Agreement, the term:

	(i) “Acceptable Confidentiality Agreement” means a confidentiality and standstill agreement that contains provisions that are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreements;
	(ii) “Company Acquisition Proposal” means any inquiry, proposal or offer from any Person or group of Persons other than Parent, Merger Sub or their respective Affiliates relating to any direct or indirect acquisition or purchase of a business that constitutes 15% or more of the net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole, or 15% or more of any class or series of Company Securities, any tender offer or exchange offer that if consummated would result in any Person or group of Persons beneficially owning 15% or more of any class or series of capital stock of the Company, or any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company (or any Subsidiary or Subsidiaries of the Company whose business constitutes 15% or more of the net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole);
	(iii) “Superior Proposal” means a Company Acquisition Proposal that the Board of Directors of the Company (acting through the Special Committee, if such committee still exists) in good faith determines, would, if consummated, result in a transaction that is more favorable from a financial point of view to the stockholders of the Company than the transactions contemplated hereby (x) after receiving the advice of a financial advisor (who shall be a nationally recognized investment banking firm), (y) after taking into account the likelihood of consummation of such transaction on the terms set forth therein (as compared to the terms herein) and (z) after taking into account all appropriate legal (with the advice of outside counsel), financial (including the financing terms of any such proposal), regulatory or other aspects of such proposal and any other relevant factors permitted by applicable Law; provided that for purposes of the definition of “Superior Proposal”, the references to “15% or more” in the definition of Company Acquisition Proposal shall be deemed to be references to “a majority”.

	(g) Nothing contained in this Section 7.4 or elsewhere in this Agreement shall prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14d-9 and 14e-2(a) promulgated under the Exchange Act; provided, any such disclosure (other than a “stop, look and listen” letter or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act) shall be deemed to be a Recommendation Withdrawal unless the Board of Directors of the Company (acting through the Special Committee if such committee still exists) expressly publicly reaffirms at least two Business Days prior to the Company Stockholder Meeting its recommendation in favor of the adoption of this Agreement.
	(h) The parties hereby agree that, in order to facilitate any due diligence process that one or more third parties, who have been provided with and have agreed in writing to comply with the subject matter limitations of this section, may undertake in connection with a Company Acquisition Proposal, Dr. Thomas F. Frist, Jr. (“Dr. Frist”) shall not be prevented from engaging in a due diligence discussion with each such third party regarding the Company if specifically requested to do so by the Special Committee or Credit Suisse Securities (USA) LLC; provided, however,that the parties acknowledge and agree that except for public disclosure obligations required by applicable law, (i) Dr. Frist shall not be permitted to disclose to such third party any information regarding the transactions contemplated by this Agreement, or any agreements, understandings or arrangements in connection therewith or any assumptions, information, evaluations or views of Parent and its Affiliates and (ii) Dr. Frist shall not be permitted to have any discussions, agreements, understandings or arrangements with any third party regarding any participation, investment, involvement or interest of

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	any nature whatsoever in any form of transaction similar to, or in the alternative to, the transactions contemplated by this Agreement, including the Merger.

	(a) From and after the Effective Time, the Surviving Corporation shall to the greatest extent permitted by Law to indemnify and hold harmless (and comply with all of the Company’s and its Subsidiaries’ existing obligations to advance funds for expenses) (i) the present and former officers and directors thereof against any and all costs or expenses (including reasonable attorneys’ fees and expenses), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative (“Damages”), arising out of, relating to or in connection with any acts or omissions occurring or alleged to occur prior to or at the Effective Time, including, without limitation, the approval of this Agreement, the Merger or the other transactions contemplated by this Agreement or arising out of or pertaining to the transactions contemplated by this Agreement; and (ii) such persons against any and all Damages arising out of acts or omissions in connection with such persons serving as an officer, director or other fiduciary in any entity if such service was at the request or for the benefit of the Company or any of its Subsidiaries.
	(b) As of the Effective Time, the Company shall have purchased, and, following the Effective Time, the Surviving Corporation shall maintain, a tail policy to the current policy of directors’ and officers’ liability insurance maintained on the date hereof by the Company (the “Current Policy”) which tail policy shall be effective for a period from the Effective Time through and including the date six years after the Closing Date with respect to claims arising from facts or events that existed or occurred prior to or at the Effective Time, and which tail policy shall contain substantially the same coverage and amount as, and contain terms and conditions no less advantageous, in the aggregate, than the coverage currently provided by the Current Policy; provided, however, that in no event shall the Surviving Corporation be required to expend annually in excess of 300% of the annual premium currently paid by the Company under the Current Policy (the “Insurance Amount”); provided, however, that if the premium of such insurance coverage exceeds the Insurance Amount, the Company shall be obligated to obtain, and the Surviving Corporation shall be obligated to maintain, a policy with the greatest coverage available for a cost not exceeding the Insurance Amount.
	(c) This Section 7.5 shall survive the consummation of the Merger and is intended to be for the benefit of, and shall be enforceable by, present or former directors or officers of the Company or its Subsidiaries, their respective heirs and personal representatives and shall be binding on the Surviving Corporation and its successors and assigns. In the event that the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person (including by dissolution), then, and in each such case, Parent shall cause proper provision to be made so that the successors and assigns of the Surviving Corporation assume and honor the obligations set forth in this Section 7.5. The agreements and covenants contained herein shall not be deemed to be exclusive of any other rights to which any such present or former director or officer is entitled, whether pursuant to Law, contract or otherwise. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to the Company or any of its Subsidiaries or their respective officers, directors and employees, it being understood and agreed that the indemnification provided for in this Section 7.5 is not prior to or in substitution for any such claims under any such policies.

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	(a) Without limiting any additional rights that any Company Employee employed by the Company or any of its Subsidiaries at the Effective Time (“Current Employee”) may have under any Company Benefit Plan, the Surviving Corporation and each of its Subsidiaries, for the period commencing at the Effective Time and ending on the first anniversary thereof, shall maintain for each Current Employee (i) his or her salary or hourly wage rate, commission structure and opportunities, and/or target cash bonus opportunities under annual programs (but, except as otherwise agreed with Parent or the Surviving Corporation, excluding any equity or equity equivalent award opportunities, and any other equity-based compensation) (collectively, “Compensation”), that in the aggregate are no less favorable than, and (ii) severance, pension and welfare benefits (excluding any value attributable to any equity-based benefits) provided under the Company Benefit Plans that in the aggregate are no less favorable than, the Compensation and benefits, as applicable, maintained for and provided to such Current Employees immediately prior to the Effective Time; provided, however, that subject to the foregoing and Section 7.9(c), nothing herein shall prevent the amendment or termination of any Company Benefit Plans or interfere with the Surviving Corporation’s right or obligation to make such changes as are necessary to conform with applicable Law. Nothing in this Section 7.9 shall limit the right of the Surviving Corporation or any of its Subsidiaries to terminate the employment of any Current Employee at any time.
	(b) As of and after the Effective Time, the Surviving Corporation shall give Current Employees full credit for all purposes (but not benefit accruals under any newly-established defined benefit pension plans, except for vacation and severance, if applicable, under the Company Benefit Plans), under any new employee compensation and incentive plans, benefit (including vacation) plans, programs, policies and arrangements maintained for the benefit of Current Employees as of and after the Effective Time by the Surviving Corporation or any of its Subsidiaries for the Company Employees’ service with the Company, its Subsidiaries and their predecessor entities (each, a “Surviving Corporation Plan”) to the same extent recognized by the Company immediately prior to the Effective Time. With respect to each Surviving Corporation Plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), the Surviving Corporation or its Subsidiaries shall (i) cause there to be waived any pre-existing condition or eligibility limitations and (ii) give effect, for the

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	applicable plan year in which the Closing occurs, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, Current Employees under similar plans maintained by the Company and its Subsidiaries immediately prior to the Effective Time.
	(c) In connection with the foregoing, (i) prior to the Effective Time, the Company shall take all actions necessary to eliminate any obligation of the Company or any of its Subsidiaries to make any contributions to any grantor trust maintained for the benefit of participants with respect to obligations under the Company Supplemental Executive Retirement Plan (the “SERP”) or any other non-qualified retirement plan, and (ii) prior to the Effective Time, the Company shall take all actions necessary to provide that the SERP shall, except as may be required by applicable Law, in no event be terminated, or amended in a manner that would adversely affect any of the participants in the SERP as of the date hereof, at least until such time as each such participant has become fully vested in the maximum benefit available to each such participant under the SERP (including achieving the maximum years of service under the SERP).
	(d) At the Effective Time, each of the nine “Covered Officers” (as defined in the Company’s 2005 Equity Incentive Plan) who are participants in the Company’s 2006 Senior Officer Performance Excellence Program (the “PEP”) will be paid out in cash at the level of their “2006 Target” bonus amount set forth in the PEP, pursuant to the terms of the Company’s 2005 Equity Incentive Plan. The Company may take all actions necessary to effectuate the provisions of this Section 7.9(d).
	(e) The provisions of this Section 7.9 are for the sole benefit of the parties to this Agreement and nothing herein, expressed or implied, is intended or shall be construed to confer upon or give to any person (including for the avoidance of doubt any Company Employees), other than the parties hereto and their respective permitted successors and assigns, any legal or equitable or other rights or remedies (with respect to the matters provided for in this Section 7.9) under or by reason of any provision of this Agreement.

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(b) Parent shall use its reasonable best efforts to arrange the Debt Financing as promptly as practicable taking into account the expected timing of the Marketing Period and the End Date on the terms and conditions described in the Debt Financing Commitments, including using reasonable best efforts to (i) negotiate definitive agreements with respect thereto on the terms and conditions contained therein or on other terms no less favorable to Parent and (ii) to satisfy on a timely basis all conditions applicable to Parent in such definitive agreements that are within its control. In the event that all conditions to the Financing Commitments (other than in connection with the Debt Financing, the availability or funding of any of the Equity Financing) have been satisfied in Parent’s good faith judgment, and subject in the case of bridge financing to the fifth sentence of this Section 7.10(b), Parent shall use its reasonable best efforts to cause the lenders and the other Persons providing such Financing to fund the Financing required to consummate the Merger on the Closing Date (including by taking enforcement action to cause such lenders and other Persons providing such Financing to fund such Financing). In the event any portion of the Debt Financing becomes unavailable on the terms and conditions contemplated in the Debt Financing Commitments, Parent shall use its reasonable best efforts to arrange to obtain alternative financing from alternative sources on terms no less favorable to Parent (as determined in the reasonable judgment of Parent) as promptly as practicable following the occurrence of such event but no later than the final day of the Marketing Period or if, earlier, the End Date. Parent shall keep the Company reasonably apprised of material developments relating to the Financing. For the avoidance of doubt, in the event that (x) all or any portion of the Debt Financing structured as high yield financing has not been consummated, (y) all closing conditions contained in Article VIII (other than those contained in Section 8.2(c) and

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Section 8.3(c)) shall have been satisfied or waived and (z) the bridge facilities contemplated by the Debt Financing Commitments (or alternative bridge financing obtained in accordance with this Agreement) are available on the terms and conditions described in the Debt Financing Commitments (or replacements thereof), then Parent shall cause the proceeds of such bridge financing to be used to replace such high yield financing no later than the final day of the Marketing Period or, if earlier, the End Date. For purposes of this Agreement, “Marketing Period” shall mean the first period of 20 consecutive Business Days after the date hereof throughout which (A) Parent shall have the Required Financial Information that the Company is required to provide to Parent pursuant to Section 7.10(a) and (B) the conditions set forth in Section 8.1 shall be satisfied and nothing has occurred and no condition exists that would cause any of the conditions set forth in Sections 8.2(a) or 8.2(b) to fail to be satisfied assuming the Closing were to be scheduled for any time during such 20 consecutive Business Day period; provided, that if the Marketing Period has not ended on or prior to December 19, 2006, the Marketing Period shall commence no earlier than January 2, 2007; and provided, further, that the “Marketing Period” shall not be deemed to have commenced if, prior to the completion of the Marketing Period, Ernst &Young LLP shall have withdrawn its audit opinion with respect to any financial statements contained in the Company SEC Reports.

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	(a) Stockholder Approval. This Agreement shall have been adopted by the Requisite Stockholder Vote.
	(b) Regulatory Approval. Any applicable waiting period under the HSR Act (and any extension thereof) relating to the Merger shall have expired or been terminated.
	(c) No Injunctions or Restraints; Illegality. No temporary restraining order, preliminary or permanent injunction or other judgment or order issued by a court or agency of competent jurisdiction or other Law shall be in effect which prohibits, restrains or renders illegal the consummation of the Merger.

	(a) Representations and Warranties. The representations and warranties (i) set forth in Section 4.5 shall be true and correct in all material respects as of the Effective Time as if made at and as of such time, (ii) set forth in Section 4.6(a) shall be true and correct in all respects as of the

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	Effective Time as if made at and as of such time, except in the case of this clause (ii) where the failure to be so true and correct has not had a material adverse effect on Parent’s ability to obtain the Debt Financing on the terms and conditions set forth in the Debt Financing Commitments, (iii) set forth in Section 4.14(b) shall be true and correct in all material respects as of the Effective Time as if made at and as of such time, and (iv) set forth in Article IV, other than those described in clauses (i), (ii) and (iii) above, shall be true and correct as of the Effective Time as if made at and as of such time (without giving effect to any qualification as to “Material Adverse Effect” set forth therein), except in the case of this clause (iv) where the failure to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect on the Company; provided that representations made as of a specific date shall be required to be so true and correct (subject to such qualifications) as of such date only.
	(b) Performance of Obligations of the Company. The Company shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by it hereunder.
	(c) Officer’s Certificate. Parent and Merger Sub shall have received a certificate signed by a senior officer of the Company certifying as to the matters set forth in Section 8.2(a) and Section 8.2(b).

	(a) Representations and Warranties. The representations and warranties of Parent and Merger Sub contained in this Agreement that are qualified as to materiality shall be true and correct as of the Effective Time as if made at and as of such time and those which are not so qualified shall be true and correct in all material respects as of the Effective Time as if made at and as of such time, except where the failure of such representations and warranties to be so true would not prevent the consummation of the Merger; provided that representations made as of a specific date shall be required to be true as of such date only.
	(b) Performance of Obligations of Parent and Merger Sub. Parent and Merger Sub shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, required to be performed by or complied with by it hereunder.
	(c) Officer’s Certificate. The Company shall have received a certificate signed by a senior officer of Parent and Merger Sub certifying as to the matters set forth in Section 8.3(a) and Section 8.3(b).

	(a) by mutual written consent of the Company, on the one hand, and Parent or Merger Sub, on the other hand;
	(b) by either the Company, on the one hand, or Parent or Merger Sub, on the other hand, if:

(i) the Effective Time shall not have occurred on or before December 19, 2006, or if the Marketing Period has not ended on or before December 19, 2006 (the “End Date”), the End Date shall be extended to January 31, 2007 (and in such event the term “End Date” shall mean January 31, 2007); unless the failure of the Effective Time to occur by such date is the result of, or caused by, the failure of the party seeking to exercise such termination right to perform or observe any of the covenants or agreements of such party set forth in this Agreement;

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	(ii) there shall be any final and nonappealable Law that makes consummation of the Merger illegal or otherwise prohibited; or
	(iii) at the Company Stockholder Meeting or any adjournment thereof at which this Agreement has been voted upon, the stockholders of the Company fail to adopt this Agreement by the Requisite Stockholder Vote;

	(c) by the Company:

	(i) if a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement shall have occurred which would cause any of the conditions set forth in Sections 8.3(a) or (b) not to be satisfied, and such breach is incapable of being cured by the End Date; provided, however, that the Company is not then in material breach of this Agreement so as to cause any of the conditions set forth in Section 8.1, 8.2(a) or 8.2(b) not to be satisfied;
	(ii) prior to obtaining the Requisite Stockholder Vote, in accordance with, and subject to the terms and conditions of, Section 7.4(d); or
	(iii) if all of the conditions set forth in Sections 8.1, 8.2(a) and 8.2(b) have been satisfied and Parent has failed to consummate the Merger no later than 5 calendar days after the final day of the Marketing Period.

	(d) by Parent or Merger Sub, if:

	(i) a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred which would cause any of the conditions set forth in Sections 8.2(a) or (b) not to be satisfied, and such breach is incapable of being cured by the End Date; provided, however, that neither Parent nor Merger Sub is then in material breach of this Agreement so as to cause any of the conditions set forth in Section 8.1, 8.3(a) or 8.3(b) not to be satisfied; or
	(ii) the Board of Directors of the Company or any committee thereof (A) shall have effected a Recommendation Withdrawal, or publicly proposed to effect a Recommendation Withdrawal, (B) shall have approved or recommended to the stockholders of the Company a Company Acquisition Proposal other than the Merger, or shall have resolved to effect the foregoing or (C) the Company fails to include the Recommendation in the Company Proxy Statement.

(b) In the event that this Agreement is terminated by Parent or Merger Sub, on the one hand, or the Company, on the other hand, pursuant to Section 9.1(b)(iii) (or is terminated by the Company pursuant to a different section of Section 9.1 at a time when this Agreement was terminable pursuant to Section 9.1(b)(iii)) or by Parent or Merger Sub pursuant to Section 9.1(d)(i) (or is terminated by the Company pursuant to a different section of Section 9.1 at a time when this Agreement was terminable pursuant to Section 9.1(d)(i)) and, at any time after the date of this Agreement and prior to the Company Stockholder Meeting (in the case of a termination pursuant to Section 9.1(b)(iii)) or prior to the breach giving rise to the right of termination (in the case of a termination pursuant to Section 9.1(d)(i)), a bona fide, written Company Acquisition Proposal involving the purchase of not less than a majority of the outstanding voting securities of the Company shall have been publicly announced or publicly made known and, in the case of termination pursuant to Section 9.1(b)(iii), not publicly withdrawn at least two Business Days prior to the

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	Company Stockholder Meeting, and, if within twelve months after such termination pursuant to Section 9.1(b)(iii) or Section 9.1(d)(i) the Company or any of its Subsidiaries enters into a definitive agreement with respect to, or consummates, any Company Acquisition Proposal involving the purchase of not less than a majority of the outstanding voting securities of the Company (whether or not the same as that originally announced or consummated), then, on the date of such execution or consummation, the Company shall pay the Termination Fee as directed in writing to Parent, less the amount of any Parent Expenses previously paid to Parent by the Company.
	(c) In the event that this Agreement is terminated by Parent or Merger Sub, on the one hand, or the Company, on the other hand, pursuant to Section 9.1(b)(iii) (or is terminated by the Company pursuant to a different section of Section 9.1 at a time when this Agreement was terminable pursuant to Section 9.1(b)(iii)) or by Parent or Merger Sub pursuant to Section 9.1(d)(i) (or is terminated by the Company pursuant to a different section of Section 9.1 hereof at a time when this Agreement was terminable pursuant to Section 9.1(d)(i)) under circumstances in which the Termination Fee is not payable pursuant to this Section 9.2, then the Company shall pay as promptly as possible (but in any event within two Business Days) following receipt of an invoice therefor all of Parent’s actual and reasonably documented out-of-pocket fees and expenses (including reasonable legal fees and expenses) actually incurred by Parent and its Affiliates on or prior to the termination of this Agreement in connection with the transactions contemplated by this Agreement (“Parent Expenses”) as directed by Parent in writing, which amount shall not be greater than $50 million; provided, that the existence of circumstances which could require the Termination Fee to become subsequently payable by the Company pursuant to Section 9.2(b) shall not relieve the Company of its obligations to pay the Parent Expenses pursuant to this Section 9.2(c); and provided, further that the payment by the Company of Parent Expenses pursuant to this Section 9.2(c) shall not relieve the Company of any subsequent obligation to pay the Termination Fee pursuant to Section 9.2(b) except to the extent indicated in Section 9.2(b).
	(d) In the event that this Agreement is terminated by the Company pursuant to (i) Section 9.1(b)(i) and at the time of such termination the conditions set forth in Sections 8.1, 8.2(a) and 8.2(b) have been satisfied, (ii) Section 9.1(c)(i) and at the time of such termination there is no state of facts or circumstances that would reasonably be expected to cause the conditions set forth in Section 8.1, 8.2(a) and 8.2(b) not to be satisfied on or prior to the End Date, or (iii) Section 9.1(c)(iii), then Parent shall pay the Company the Termination Fee as promptly as possible (but in any event within two Business Days) following such termination by the Company.
	(e) Any amount that becomes payable pursuant to Section 9.2(a), 9.2(b) or 9.2(c) or 9.2(d) shall be paid by wire transfer of immediately available funds to an account designated by the party entitled to receive such payment.
	(f) Each of the Company, Parent and Merger Sub acknowledges that the agreements contained in this Section 9.2 are an integral part of the transactions contemplated by this Agreement, that without these agreements the Company, Parent and Merger Sub would not have entered into this Agreement, and that any amounts payable pursuant to this Section 9.2 do not constitute a penalty. If the Company fails to pay as directed in writing by Parent any amounts due to Parent or Merger Sub pursuant to this Section 9.2 within the time periods specified in this Section 9.2 or Parent fails to pay the Company any amounts due to the Company pursuant to this Section 9.2 within the time periods specified in this Section 9.2, the Company or Parent, as applicable, shall pay the costs and expenses (including reasonable legal fees and expenses) incurred by Parent or the Company, as applicable, in connection with any action, including the filing of any lawsuit, taken to collect payment of such amounts, together with interest on such unpaid amounts at the prime lending rate prevailing during such period as published in The Wall Street Journal, calculated on a daily basis from the date such amounts were required to be paid until the date of actual payment. Notwithstanding anything to the contrary in this Agreement, the Company’s right to receive payment of the Termination Fee from Parent pursuant to this Section 9.2 or the guarantee thereof pursuant to the Guarantees shall be the sole and exclusive remedy of the Company and its Subsidiaries against Parent, Merger Sub, the

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Guarantors and any of their respective former, current, or future general or limited partners, stockholders, managers, members, directors, officers, Affiliates or agents for the loss suffered as a result of the failure of the Merger to be consummated, and upon payment of such amount, none of Parent, Merger Sub, the Guarantors or any of their respective former, current, or future general or limited partners, stockholders, managers, members, directors, officers, Affiliates or agents shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by this Agreement (except that Parent shall also be obligated with respect to the second sentence of this Section 9.2(f) and the indemnification and reimbursement obligations of Parent contained in Sections 7.10(a) and 7.11, and that Parent and Merger Sub shall also be obligated with respect to the provisions of Sections 7.3(c) and the last sentence of Section 7.10(a), it being understood that no other Person (including the Guarantors) shall have any liability or obligation under or with respect to such Sections 7.3(c) and such last sentence of Section 7.10(a).

	ML Global Private Equity Fund, L.P.
	c/o Merrill Lynch Global Private Equity
	Four World Financial Center, Floor 23
	New York, NY 10080
	Attention: George A. Bitar
	Christopher Birosak
	Fax: (212) 449-1119
	c/o:
	Bain Capital Fund IX, L.P.
	c/o Bain Capital Partners, LLC
	111 Huntington Avenue
	Boston, MA 02199
	Attention: Chris Gordon
	Fax: (617) 516-2010

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	c/o:
	KKR Millennium Fund, L.P.
	c/o Kohlberg Kravis Roberts & Co. L.P.
	2800 Sand Hill Road, Suite 200
	Menlo Park, CA 94025
	Attention: James C. Momtazee
	Fax: (650) 233-6584

	Simpson Thacher & Bartlett LLP
	425 Lexington Avenue
	New York, New York 10017
	Attention: David J. Sorkin, Esq.
	Fax: (212) 455-2502

	HCA Inc.
	One Park Plaza
	Nashville, TN 37203
	Attention: General Counsel
	Fax: (615) 344-1531

	Bass, Berry & Sims PLC
	AmSouth Center
	315 Deaderick Street
	Suite 2700
	Nashville, Tennessee 37238
	Attention: James H. Cheek III, Esq.
	J. Page Davidson, Esq.
	Fax: (615) 742-6293
	Shearman & Sterling LLP
	599 Lexington Avenue
	New York, New York 10022
	Attention: Clare O’Brien, Esq.
	Creighton O’M. Condon, Esq.
	Fax: (212) 848-7179

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(b) The parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement were not performed by the Company in accordance with the terms hereof and that, prior to the termination of this Agreement pursuant to Section 9.1, Parent and Merger Sub shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity. The parties acknowledge that the Company shall not be entitled to an injunction or injunctions to prevent breaches of this Agreement by Parent or Merger Sub or to enforce specifically the terms and provisions of this Agreement and that the Company’s sole and exclusive remedy with respect to any such breach shall be the remedy set forth in Sections 9.2(d) and 10.11(a); provided, however, that the Company shall be entitled to specific performance against Parent and Merger Sub to prevent any breach by Parent or Merger Sub of Section 7.3(c) and the last sentence of Section 7.10(a).

	(a) In any action or proceeding between any of the parties arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement, each of the parties hereto: (i) irrevocably and unconditionally consents and submits, for itself and its property, to the exclusive jurisdiction and venue of the Court of Chancery of the State of Delaware (or, in the case of any claim as to which the federal courts have exclusive subject matter jurisdiction, the Federal court of the United States of America, sitting in Delaware); (ii) agrees that all claims in respect of such action or proceeding must be commenced, and may be heard and determined, exclusively in the Court of Chancery of the State of Delaware (or, if applicable, such Federal court); (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in the Court of Chancery of the State of Delaware (and, if applicable, such Federal court); and (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in the Court of Chancery of the State of Delaware (or, if applicable, such Federal court). Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.1. Nothing in this Agreement shall affect the right of any party to this Agreement to serve process in any other manner permitted by law.
	(b) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY

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	UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.12.

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	HCA INC.
	By: /s/ Jack O. Bovender, Jr.

	Name: Jack O. Bovender, Jr.
	Title: Chairman and Chief Executive Officer
	HERCULES HOLDING II, LLC
	By: /s/ Chris Gordon

	Name: Chris Gordon
	Title: President
	HERCULES ACQUISITION CORPORATION
	By: /s/ Chris Gordon

	Name: Chris Gordon
	Title: President

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	Very truly yours,
	Credit Suisse Securities (USA) LLC

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	(i) reviewed certain publicly available financial statements and other information of the Company;
	(ii) reviewed certain internal financial statements and other financial and operating data concerning the Company prepared by the management of the Company;
	(iii) analyzed certain financial projections prepared by the management of the Company;
	(iv) discussed the past and current operations and financial condition and the prospects of the Company with senior executives of the Company;
	(v) reviewed the reported prices and trading activity for the Shares;
	(vi) compared the financial performance of the Company and the prices and trading activity of the Shares with that of certain other comparable publicly-traded companies and their securities;
	(vii) reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;
	(viii) participated in discussions and negotiations among representatives of the Special Committee and Buyer and their financial and legal advisors;
	(ix) reviewed the Merger Agreement, the debt and equity financing commitments provided to Buyer by certain lending institutions and private equity funds (the “Financing Agreements”), the

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	commitments by Frisco, Inc. and Frisco Partners to contribute Shares to Buyer in connection with the Merger, each substantially in the form of the drafts dated July 23, 2006, and certain related documents; and
	(x) performed such other analyses and considered such other factors as we have deemed appropriate.

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	Very truly yours,
	MORGAN STANLEY & CO. INCORPORATED

	By:	/s/ Michael J. Boublik

	Michael J. Boublik
	Managing Director

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	(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of § 251 of this title.
	(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except:

	a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
	b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders;
	c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or
	d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph.

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	(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.

	(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
	(2) If the merger or consolidation was approved pursuant to § 228 or § 253 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given,

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	provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.

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		c/o National City Bank Shareholder Services Operations Locator 5352 P. O. Box 94509 Cleveland, OH 44101-4509		Vote by Telephone   Have your proxy card available when you call the Toll-Free number 1-888-693-8683 using a touch-tone telephone and follow the simple instructions to record your vote.                              Vote by Internet   Have your proxy card available when you access the website http://www.cesvote.com and follow the simple instructions to record your vote.                                 Vote by Mail   Please mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to: National City Bank, P.O. Box 535800, Pittsburgh, PA 15253.

Vote by Telephone		Vote by Internet		Vote by Mail
Call Toll-Free using a		Access the Website and		Return your proxy
Touch-Tone phone:		Cast your vote:		in the Postage-Paid
1-888-693-8683		http://www.cesvote.com		envelope provided

		This proxy is solicited on behalf of the Board of Directors of HCA Inc. for the Special Meeting of Shareholders on         , 2006.

	Signature
	Signature
	Date: _______________________________________, 2006
	Please date this proxy and sign your name exactly as it appears on this form. Where there is more than one owner, each should sign. When signing as an attorney, administrator, executor, guardian, or trustee, please add your title as such. If executed by a corporation, the proxy should be signed by a duly authorized officer. If a partnership, please sign in partnership name by an authorized person.

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	If you do not vote by telephone or Internet, please sign and date

HCA INC.		PROXY

1.	ADOPTION OF THE AGREEMENT AND PLAN OF MERGER DATED JULY 24, 2006 BY AND AMONG HERCULES HOLDING II, LLC, HERCULES ACQUISITION CORPORATION, AND HCA INC., AS DESCRIBED IN THE PROXY STATEMENT.

o  FOR		o  AGAINST		o  ABSTAIN

2.	APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT VOTES AT THE TIME OF THE MEETING TO ADOPT THE MERGER AGREEMENT.

o  FOR		o  AGAINST		o  ABSTAIN

3.	IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.

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		c/o National City Bank Shareholder Services Operations Locator 5352 P. O. Box 94509 Cleveland, OH 44101-4509		Vote by Telephone   Have your voting instruction card available when you call the Toll-Free number 1-888-693-8683 using a touch-tone telephone and follow the simple instructions to record your vote.                              Vote by Internet   Have your voting instruction card available when you access the website http://www.cesvote.com and follow the simple instructions to record your vote.                                 Vote by Mail   Please mark, sign and date your voting instruction card and return it in the postage-paid envelope provided or return it to: National City Bank, P.O. Box 535800, Pittsburgh PA 15253-9937.

Vote by Telephone		Vote by Internet		Vote by Mail
Call Toll-Free using a		Access the Website and		Return your voting instruction card
Touch-Tone telephone:		Cast your vote:		in the Postage-Paid
1-888-693-8683		http://www.cesvote.com		envelope provided

		Voting Instructions to the Independent Fiduciary of the HCA Stock Fund of the HCA 401(k) Plan for the Special Meeting of HCA Inc. Shareholders on         , 2006

	Signature
	Date: _______________________________________, 2006
	Please date this card and sign your name exactly as it appears to the left.

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	If you do not vote by telephone or Internet, please sign and date this

HCA INC.		VOTING INSTRUCTIONS

1.	ADOPTION OF THE AGREEMENT AND PLAN OF MERGER DATED JULY 24, 2006 BY AND AMONG HERCULES HOLDING II, LLC, HERCULES ACQUISITION CORPORATION, AND HCA INC., AS DESCRIBED IN THE PROXY STATEMENT.

o  FOR		o  AGAINST		o  ABSTAIN

2.	APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT VOTES AT THE TIME OF THE MEETING TO ADOPT THE MERGER AGREEMENT.

o  FOR		o  AGAINST		o  ABSTAIN

3.	IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.

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		c/o National City Bank Shareholder Services Operations Locator 5352 P. O. Box 94509 Cleveland, OH 44101-4509		Vote by Telephone   Have your voting instruction card available when you call the Toll-Free number 1-888-693-8683 using a touch-tone telephone and follow the simple instructions to record your vote.                              Vote by Internet   Have your voting instruction card available when you access the website http://www.cesvote.com and follow the simple instructions to record your vote.                                 Vote by Mail   Please mark, sign and date your voting instruction card and return it in the postage-paid envelope provided or return it to: National City Bank, P.O. Box 535800, Pittsburgh PA 15253-9937.

Vote by Telephone		Vote by Internet		Vote by Mail
Call Toll-Free using a		Access the Website and		Return your voting instruction card
Touch-Tone telephone:		cast your vote:		in the Postage-Paid
1-888-693-8683		http://www.cesvote.com		envelope provided

		Voting Instructions to the Record Keeper of the HCA Employee Stock Purchase Plan and the Triad Hospitals, Inc. Employee Stock Purchase Plan for the Special Meeting of HCA Inc. Shareholders on         , 2006

	Signature
	Date: _______________________________________, 2006
	Please date this card and sign your name exactly as it appears to the left.

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Table of Contents

	If you do not vote by telephone or Internet, please sign and date this

HCA INC.		VOTING INSTRUCTIONS

1.	ADOPTION OF THE AGREEMENT AND PLAN OF MERGER DATED JULY 24, 2006 BY AND AMONG HERCULES HOLDING II, LLC, HERCULES ACQUISITION CORPORATION, AND HCA INC., AS DESCRIBED IN THE PROXY STATEMENT.

o  FOR		o  AGAINST		o  ABSTAIN

2.	APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT VOTES AT THE TIME OF THE MEETING TO ADOPT THE MERGER AGREEMENT.

o  FOR		o  AGAINST		o  ABSTAIN

3.	IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.