EXHIBIT 10.17
LifePoint Hospitals, Inc.
Employee Stock Purchase Plan
Preamble
WHEREAS, LifePoint Hospitals, Inc. (the "Company") desires to establish
a plan through which employees of the Company and its affiliates may purchase
from the Company shares of its common stock; and
WHEREAS, the Company intends that the plan be an "employee stock
purchase plan" within the meaning of section 423 of the Internal Revenue Code of
1986, and has designed the plan to conform to the provisions of Rule 16b-3 of
the Exchange Act;
NOW, THEREFORE, the Company hereby establishes the LifePoint Hospitals,
Inc. Employee Stock Purchase Plan (the "Plan"), effective January 1, 2002, to
provide an option to purchase the common stock of the Company to eligible
employees, as described herein.
Article I.
Purpose of Plan
The purpose of the Plan is to secure for the Company and its
shareholders the benefits of the incentive inherent in the ownership of the
Company's common stock by present and future employees of the Company and its
Affiliates.
Article II.
Definitions.
2.1 Affiliate. A business entity that is:
(a) controlled by the Company and is (i) a "parent corporation,"
as defined in section 424(e) of the Code, (ii) a "subsidiary
corporation," as defined in section 424(f) of the Code, or
(iii) a limited liability company or other entity whose
employees are deemed to be employed by a "parent corporation"
or "subsidiary corporation" because either (1) such entity is
disregarded pursuant to Treasury Regulation ss. 301.7701-2(a)
or (2) such entity has elected to be taxed as a corporation
under federal tax procedures; and
(b) designated to be an Affiliate by the Company pursuant to
Section 5.3.
2.2 Agreement. An agreement between a Participant and the Company
or an Affiliate through which the Participant elects to exercise the Options
granted to him hereunder and authorizes payment of the Option exercise price.
2.3 Board. The board of directors of the Company.
2.4 Code. The Internal Revenue Code of 1986, as amended.
2.5 Committee. The committee designated by the Board as the
"compensation committee" or is otherwise designated by the Board to administer
the Plan.
2.6 Company. LifePoint Hospitals, Inc. and its successors and
assigns.
2.7 Compensation. An employee's regular salary earned during an
Exercise Period from employment with the Company or one of its Affiliates.
Compensation shall not include overtime pay, bonuses, commissions and amounts
subject to taxation under section 83 of the Code. Compensation shall include
amounts elected under a salary reduction agreement pursuant to a plan described
in
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section 125 of the Code or a deferred compensation plan, and amounts excluded
from taxable income under section 402(g) of the Code.
2.8 Eligible Employee. An employee of the Company or an Affiliate,
except for the following:
(a) An employee who has been employed by the Company or Affiliate
for less than three months.
(b) An employee whose customary employment is 20 hours or less per
week.
(c) An employee whose customary employment is for five months or
less in a calendar year.
(d) An employee who would own more than 5% of the total combined
voting power of all classes of stock of the Company or an
Affiliate at the time such employee would be granted an
Option. For the purpose of determining if an employee owns
more than 5% of such stock, he shall be deemed to own (i) any
stock owned (directly or indirectly) by or for his brothers
and sisters (whether by whole or half blood), spouse,
ancestors or lineal descendants, (ii) any stock owned
(directly or indirectly) by or for a corporation, partnership,
estate or trust of which such individual is a shareholder,
partner or beneficiary in proportion to his interest in such
corporation, partnership, estate or trust, and (iii) any stock
the individual may purchase under an outstanding stock option.
2.9 Exchange Act. The Securities Exchange Act of 1934, as amended.
2.10 Exercise Date. The last day of an Exercise Period.
2.11 Exercise Period. The six-month period during which an Eligible
Employee may elect to exercise an Option and make payment through payroll
deduction, pursuant to Article 3. Each Exercise Period shall begin with each
successive Grant Date and expire on the Exercise Date that is in the six-month
period that includes such Grant Date.
2.12 Fair Market Value. On any given date, Fair Market Value shall
be the applicable description below (unless, where appropriate, the Committee
determines in good faith the fair market value of the Stock to be otherwise):
(a) If the Stock is traded on a trading exchange (e.g., the New
York Stock Exchange) or is reported on the Nasdaq National
Market System or another Nasdaq automated quotation system or
the OTC Bulletin Board System, Fair Market Value shall be
determined by reference to the price of the Stock on such
exchange or system with respect to the date for which Fair
Market Value is being determined.
(b) If the Stock is not traded on a recognized exchange or
automated trading system, Fair Market Value shall be the value
determined in good faith by the Committee or the Board.
2.13 Grant Date. The first Grant Date shall be January 1, 2002.
Thereafter, a new Grant Date shall occur each succeeding July 1st and
January 1st.
2.14 Option. The right that is granted hereunder to a Participant
to purchase from the Company a stated number of shares of Stock at the exercise
price specified in Article III.
2.15 Participant. An Eligible Employee who has elected to exercise
an Option and participate in the Plan in accordance with Article 3.
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2.16 Payroll Account. A bookkeeping account to which is added the
amounts withheld on behalf of each Participant under regular payroll deductions
authorized by Participants hereunder, and reduced by amounts due to the Company
to pay the exercise price of Options exercised hereunder.
2.17 Plan. The LifePoint Hospitals, Inc. Employee Stock Purchase
Plan.
2.18 Stock. The common stock of the Company.
Article III.
Grant And Exercise Of Options.
3.1 General Conditions. On each Grant Date, each employee who is
an Eligible Employee on such date shall, without further action of the
Committee, be granted an Option to purchase a number of whole shares Stock that,
in the aggregate, have an exercise price (described in Section 3.1(a)) that is
not more than 10% of his Compensation during the Exercise Period; provided
further that no Eligible Employee may be granted an Option which permits his
rights to purchase Stock under the Plan and all other employee stock purchase
plans (described in section 423(b) of the Code) of the Company and its
Affiliates to accrue at a rate that exceeds $25,000 of Fair Market Value of such
Stock (determined on the date that the Option is granted) for each calendar year
in which such Option is outstanding at any time. Each Option grant is subject to
the following terms and conditions:
(a) The exercise price of each Option shall be 85% of Fair Market
Value of each share of Stock that is subject to the Option,
based on the Stock's Fair Market Value that is determined on
the Grant Date or, if less, on the Exercise Date.
(b) Each Option, or portion thereof, that is not exercised during
an Exercise Period shall expire at the end of the Exercise
Period in which the Option was granted, unless it expires
sooner pursuant to Section 3.1(c).
(c) Each Option that has not yet expired pursuant to
Section 3.1(b) shall expire on the date that the Eligible
Employee terminates employment with the Company and all of its
Affiliates or revokes his election pursuant to Section 3.9;
provided, however, if termination is due to the death or
disability (as determined by the Committee) of the Eligible
Employee, the Option will not expire unless the Participant
(or his personal representative) elects to revoke his election
pursuant to Section 3.9.
(d) A right to purchase Stock which has accrued under one Option
granted hereunder may not be carried over to any other Option.
(e) Each Participant must utilize the securities brokerage firm
selected by the Company or the Committee for holding shares of
Stock purchased hereunder and for transacting all dispositions
of such Stock. By electing to exercise an Option granted
hereunder, an Eligible Employee expressly consents to the
administrative arrangement established by the Company or
Committee with such securities brokerage firm.
3.2 Right to Exercise. An Option shall be exercisable on the last
day of the Exercise Period that includes the Grant Date on which the Option was
granted. An Eligible Employee must exercise an Option while he is an employee of
the Company or an Affiliate or within the periods that are specified herein
after termination of employment.
3.3 Method of Exercise. To exercise an Option, an Eligible
Employee shall execute an Agreement in the form and manner prescribed by the
Committee, and shall pay the exercise price in the manner described in
Section 3.4.
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3.4 Payment of Exercise Price. An Eligible Employee who desires to
exercise an Option must timely execute an Agreement in the form and manner
prescribed by the Committee prior to the applicable Exercise Period. The
Agreement shall provide for authorization of deductions from the Eligible
Employee's regular payroll that is credited to a Payroll Account. Amounts
credited to a Participant's Payroll Account shall be accumulated and reserved
for payment of the exercise price of Options granted hereunder.
(a) An Agreement to begin participation in the Plan must be
executed by the Participant within the time prescribed by the
Committee prior to the Exercise Period for which it is to be
effective. If the Agreement is not timely executed, it shall
take effect upon the next following Exercise Period. An
Agreement to participate may be modified at any time prior to
the applicable Exercise Period.
(b) Except for a revocation described in Section 3.9, a
Participant may not modify his election to participate in the
Plan during an Exercise Period for which the election is
effective. Otherwise, any modification must be made by timely
providing the Committee written notice in the form prescribed
by the Committee. Such modification shall be effective for the
first Exercise Period administratively feasible following such
written notice or, if later, the date specified in the notice.
(c) Each Participant's election specified under an Agreement shall
remain in effect (as last modified) for successive Exercise
Periods until modified or revoked by the Participant in
accordance with this Article III.
3.5 Issuance of Stock. The Company shall issue whole shares of
Stock to a Participant, unless the Participant timely revoked an election to
exercise the Option pursuant to Section 3.9, as follows:
(a) The Company shall determine the number of whole shares of
Stock to be issued to each Participant for each Exercise
Period by dividing the balance of such Participant's Payroll
Account by the applicable exercise price of the Option.
(b) The Company shall deduct from a Participant's Payroll Account
the amount necessary to purchase the greatest number of whole
shares of Stock that can be acquired under the applicable
Option.
(c) Any amounts remaining in the Payroll Account after deducting
the exercise price for whole shares of Stock shall be refunded
to the Participant as soon as administratively feasible
following the Exercise Date.
(d) A Participant who has made contributions to a Payroll Account
and has revoked his election to exercise an Option under the
terms of Section 3.9 may obtain a refund of the amounts held
in his Payroll Account by requesting such payment in the time
and manner specified by the Committee. A Participant who has
terminated employment shall be paid any amounts remaining in
his Payroll Account after the expiration of all Options
hereunder.
3.6 Nontransferability. Any Option granted under this Plan shall
not be transferable except by will or by the laws of descent and distribution.
Only the Participant to whom an Option is granted may exercise such Option,
unless he is deceased. No right or interest of a Participant in any Option shall
be liable for, or subject to, any lien, obligation or liability of such
Participant.
3.7 Shareholder Rights. No Participant shall have any rights as a
stockholder with respect to shares subject to his Option prior to the time that
such Option is exercised.
3.8 Issuance and Delivery of Shares. Shares of Stock issued
pursuant to the exercise of Options hereunder shall be delivered to the
brokerage firm selected by the Committee to be held on
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account for each Participant as soon as administratively feasible after a
Participant exercises an Option hereunder and executes any applicable
shareholder agreement that the Company requires at the time of exercise.
3.9 Revocation of Election. A Participant may revoke the election
to exercise an Option by giving written notification of such revocation to the
Committee in a timely manner prior to the end of the applicable Exercise Period.
After revocation, the Participant may not thereafter commence participation
until the following Grant Date.
Article IV.
Stock Subject To Plan.
4.1 Source of Shares. Upon the exercise of an Option, the Company
shall deliver to the Participant authorized but unissued shares of Stock or
shares of Stock held in treasury.
4.2 Maximum Number of Shares. The maximum aggregate number of
shares of Stock that may be issued pursuant to the exercise of Options is
100,000, subject to increases and adjustments as provided in Article 6.
4.3 Forfeitures. If an Option is terminated, in whole or in part,
the number of shares of Stock allocated to such Option or portion thereof may be
reallocated to other Options to be granted under this Plan.
Article V.
Administration Of The Plan.
5.1 General Authority. The Plan shall be administered by the
Committee. The express grant in the Plan of any specific power to the Committee
shall not be construed as limiting any power or authority of the Committee. No
member of the Committee shall be liable for any act done in good faith with
respect to this Plan or any Agreement or Option. The Company shall bear all
expenses of Plan administration. The Committee or its delegate has full and
absolute discretionary authority to make determinations regarding Options
hereunder. Any such determinations shall be conclusive and binding on all
persons. In addition to all other authority vested with the Committee under the
Plan, the Committee shall have complete discretionary authority to:
(a) Interpret and construe all provisions of this Plan;
(b) Prescribe the form of any Agreement and notice and manner for
executing or giving the same;
(c) Adopt, amend, and rescind rules for Plan administration; and
(d) Make all determinations it deems advisable for the
administration of this Plan.
5.2 Persons Subject to Section 16(b). Notwithstanding anything in
the Plan to the contrary, the Board, in its absolute discretion, may bifurcate
the Plan so as to restrict, limit or condition the use of any provision of the
Plan to Participants who are members of the Committee subject to Section 16(b)
of the Exchange Act without so restricting, limiting or conditioning the Plan
with respect to other Participants.
5.3 Designation of Affiliates. The Company may from time to time
designate an entity it controls to be a participating entity in the Plan in a
manner that is consistent with Treasury Regulation ss. 1.423-2(c)(4). Each
entity that is so designated shall be an Affiliate for purposes of this Plan.
Such designation shall be evidenced by the express inclusion of the entity as an
Affiliate within Section 2.1, the intentional act of the Company or the
Committee to communicate in writing the grant of Options hereunder to employees
of an entity, or such other written document that is
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intended to evidence such designation. The Company or Committee may rescind the
designation of an entity as an Affiliate by adopting a writing that is intended
to evidence such rescission.
Article VI.
Adjustment Upon Corporate Changes.
6.1 Adjustments to Shares. The maximum number and kind of shares
of stock with respect to which Options hereunder may be granted and which are
the subject of outstanding Options shall be adjusted by way of increase or
decrease as the Committee determines (in its sole discretion) to be appropriate,
in the event that:
(a) the Company or an Affiliate effects one or more stock
dividends, stock splits, reverse stock splits, subdivisions,
consolidations or other similar events;
(b) the Company or an Affiliate engages in a transaction to which
section 424 of the Code applies; or
(c) there occurs any other event which in the judgment of the
Committee necessitates such action. Provided, however, that if
an event described in paragraph (a) or (b) occurs, the
Committee shall make adjustments to the limits on Options and
on the award of Options specified hereunder that are
proportionate to the modifications of the Stock that are on
account of such corporate changes.
6.2 Substitution of Options on Merger or Acquisition. The
Committee may grant Options in substitution for stock awards, stock options,
stock appreciation rights or similar awards held by an individual who becomes an
employee of the Company or an Affiliate in connection with a transaction to
which section 424(a) of the Code applies. The terms of such substituted Options
shall be determined by the Committee in its sole discretion, subject only to the
limitations of Article 4.
6.3 No Preemptive Rights. The issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
for cash or property, or for labor or services rendered, either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, outstanding Options.
6.4 Fractional Shares. Only whole shares of Stock may be acquired
through the exercise of an Option. The Company will return to each Participant's
Payroll Account any amount tendered in the exercise of an Option remaining after
the maximum number of whole shares have been purchased.
Article VII.
Legal Compliance Conditions.
7.1 General. No Option shall be exercisable, no Stock shall be
issued, no certificates for shares of Stock shall be delivered, and no payment
shall be made under this Plan except in compliance with all federal and state
laws and regulations (including, without limitation, withholding tax
requirements), federal and state securities laws and regulations and the rules
of all national securities exchanges or self-regulatory organizations on which
the Company's shares may be listed. The Company shall have the right to rely on
an opinion of its counsel as to such compliance. No Option shall be exercisable,
no Stock shall be issued, no certificate for shares shall be delivered and no
payment shall be made under this Plan until the Company has obtained such
consent or approval as the Committee may deem advisable from any regulatory
bodies having jurisdiction over such matters.
7.2 Stock Holding Periods. In order for tax treatment under
section 421(a) of the Code to apply to Stock acquired hereunder, the Participant
is generally required to hold such shares of Stock
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for two years after the Grant Date of an Option through which shares of Stock
were acquired and for one year after the transfer of Stock to the Participant. A
person holding Stock acquired hereunder who disposes of shares prior to the
expiration of such holding periods shall notify the Company of such disposition
in writing.
7.3 Stock Legends. Any certificate issued to evidence shares of
Stock for which an Option is exercised may bear such legends and statements as
the Company or Committee may deem advisable to assure compliance with federal
and state laws and regulations. Such legends and statements may include, but are
not limited to, restrictions on transfer prior to the expiration of the holding
periods described in Section 7.2.
7.4 Representations by Participants. As a condition to the
exercise of an Option, the Company may require a Participant to represent and
warrant at the time of any such exercise that the shares are being purchased
only for investment and without any present intention to sell or distribute such
shares. At the option of the Company, a stop transfer order against any shares
of stock may be placed on the official stock books and records of the Company,
and a legend indicating that the stock may not be pledged, sold or otherwise
transferred unless an opinion of counsel was provided (concurred in by counsel
for the Company) and stating that such transfer is not in violation of any
applicable law or regulation may be stamped on the stock certificate in order to
assure exemption from registration. The Committee may also require such other
action or agreement by the Participants as may from time to time be necessary to
comply with the federal and state securities laws. This provision shall not
obligate the Company or any Affiliate to undertake registration of options or
stock hereunder.
Article VIII.
General Provisions.
8.1 Effect on Employment. Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or an Affiliate or in any way affect any right and power of the
Company or an Affiliate to terminate the employment of any employee at any time
with or without assigning a reason therefor.
8.2 Unfunded Plan. The Plan, insofar as it provides for grants,
shall be unfunded, and the Company shall not be required to segregate any assets
that may at any time be represented by grants under this Plan. Any liability of
the Company to any person with respect to any grant under this Plan shall be
based solely upon contractual obligations that may be created hereunder. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.
8.3 Rules of Construction. Headings are given to the articles and
sections of this Plan solely as a convenience to facilitate reference. The
masculine gender when used herein refers to both masculine and feminine. The
reference to any statute, regulation or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.
8.4 Governing Law. The internal laws of the State of Tennessee
shall apply to all matters arising under this Plan, to the extent that federal
law does not apply.
8.5 Compliance With Section 16 of the Exchange Act. With respect
to persons subject to Section 16 of the Exchange Act, transactions under this
Plan are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of this Plan or
action by Committee fails to so comply, it shall be deemed null and void to the
extent permitted by law and deemed advisable by the Committee.
8.6 Amendment. The Board may amend or terminate this Plan at any
time; provided, however, an amendment that would have a material adverse effect
on the rights of a Participant under an outstanding Option is not valid with
respect to such Option without the Participant's
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consent, except as necessary for Options to maintain qualification under the
Code; and provided further that, to the extent that such approval is required
for compliance with Rule 16b-3 of the Exchange Act, the provisions of the Plan
relating to the number of shares granted to persons subject to section 16(b) of
the Exchange Act, the timing of such grants and the determination of the
exercise price shall not be amended more than once every six months, other than
to comport with changes in the Code, the Employee Retirement Income Security Act
of 1974, or the rules thereunder. Provided further that the shareholders of the
Company must, within 12 months before of after the adoption thereof, approve any
amendment that increases the number of shares of Stock in the aggregate which
may be issued pursuant to Options granted under the Plan.
8.7 Effective Date of Plan. This Plan shall be effective and
Options may be granted under this Plan on January 1, 2002, provided that no
Option will be effective or exercisable unless and until this Plan is approved
by shareholders of the Company in a manner that satisfies Treasury Regulation
ss. 1.423-2 within 12 months of the date that the Board took action to adopt the
Plan. All Options granted under the Plan will become void immediately following
the 12-month anniversary of the date the Board adopted the Plan if such approval
by shareholders has not yet been obtained.
IN WITNESS WHEREOF, the undersigned officer has executed this Plan on
this the day of , 2002.
LIFEPOINT HOSPITALS, INC.
By:
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Its:
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