EXHIBIT 10.1
LIFEPOINT HOSPITALS, INC.
1998 LONG-TERM INCENTIVE PLAN
AS AMENDED AND RESTATED EFFECTIVE JUNE 30, 2005
LIFEPOINT HOSPITALS, INC.
1998 LONG-TERM INCENTIVE PLAN
AS AMENDED AND RESTATED EFFECTIVE JUNE 30, 2005
TABLE OF CONTENTS
1. Purpose of The Plan.......................................................3
2. Definitions...............................................................3
3. Shares of Common Stock Subject to the Plan................................5
3.1. Number of Shares....................................................5
3.2. Adjustments.........................................................5
4. Administration of the Plan................................................6
4.1. Committee Members...................................................6
4.2. Discretionary Authority.............................................6
4.3. Changes to Awards...................................................6
5. Award Eligibility, Features and Restrictions...............................6
5.1. Terms of Awards.....................................................6
5.2. Section 162(m) Awards...............................................6
5.3. Deferral of Compensation............................................7
5.4. Rights as Stockholder...............................................7
5.5. Issuance and Delivery of Shares.....................................7
5.6. Section 83(b) Election..............................................8
6. Stock Options.............................................................8
6.1. Grant of Option.....................................................8
6.2. Exercise Price......................................................8
6.3. Vesting; Term of Option.............................................8
6.4. Option Exercise; Withholding........................................8
6.5. Limited Transferability of Non-qualified Options....................9
6.6. Additional Rules for Incentive Stock Options........................9
(a) Annual Limits.....................................................9
(b) Termination of Employment.........................................9
(c) Other Terms and Conditions; Nontransferability....................9
(d) Disqualifying Dispositions.......................................10
6.7. Restrictions on Transfer of Stock...................................10
6.8. Restrictions on Repricing of Options................................10
7. Stock Appreciation Rights................................................10
7.1. Grant of SARs......................................................10
7.2. Payment of SARs....................................................10
8. Restricted Stock Award...................................................10
8.1. Grant of Restricted Stock Awards...................................11
8.2. Vesting Requirements...............................................11
9. Performance Awards.......................................................11
9.1. Grant of Performance Awards........................................11
9.2. Payment of Performance Awards......................................11
9.3. Performance Criteria...............................................11
10. Restricted Stock Units................................................11
10.1. Grant of Restricted Stock Units.....................................11
10.2. Payment of Restricted Stock Units...................................12
i
11. Dividend Equivalent Award..............................................12
11.1. Grant of a Dividend Equivalent Awards..............................12
11.2. Payment of Dividend Equivalent Awards..............................12
12. Change in Control.....................................................12
12.1. Effect of Change in Control........................................12
12.2. Definition of Change in Control....................................13
13. Award Agreements......................................................15
13.1. Form of Agreement..................................................15
13.2. Forfeiture Events..................................................15
14. General Provisions....................................................15
14.1. No Assignment or Transfer; Beneficiaries...........................15
14.2. Deferrals of Payment...............................................15
14.4. Employment or Service..............................................15
14.6. Tax Withholding....................................................15
14.7. Unfunded Plan......................................................16
14.8. Other Compensation and Benefit Plans...............................16
14.9. Plan Binding on Transferees........................................16
14.10. Construction and Interpretation....................................16
14.11. Severability.......................................................16
14.12. Governing Law......................................................16
15. Effective Date, Termination and Amendment..............................16
15.1 Effective Date; Shareholder Approval...............................16
15.2. Termination........................................................17
15.3. Amendment..........................................................17
LIFEPOINT HOSPITALS, INC.
1998 LONG-TERM INCENTIVE PLAN
AS AMENDED AND RESTATED EFFECTIVE JUNE 30, 2005
RECITALS:
WHEREAS, LifePoint Hospitals, Inc. (the "Corporation") established the
LifePoint Hospitals, Inc. 1998 Long-Term Incentive Plan (the "Plan") effective
November 5, 1998;
WHEREAS, since the Plan was established, the Corporation has become a
separate entity from HCA Inc. (f.k.a. Columbia/HCA) through a spin-off
transaction, and the equity securities of the Corporation have become
publicly-traded on the Nasdaq National Market; and
WHEREAS, the Corporation desires to amend and restate the Plan,
subject to approval of its stockholders, to: (i) eliminate references to
Columbia/HCA, (ii) increase the number of shares of the Corporation's common
stock that are available for awards, (iii) set limits on the number of shares in
the Plan that may be subject to certain time-lapse awards, (iv) revise the
provisions regarding performance based compensation in the Plan so that they are
consistent with the Corporation's Executive Performance Incentive Plan, (v) add
requirements for termination of employment or termination of award as a
condition to receiving additional rights upon the change in control of the
Corporation, (vi) modify the types of equity incentive awards available under
the Plan by eliminating phantom stock awards, adding restricted stock units, and
clarifying certain terms to comply with section 409A of the Internal Revenue
Code so that awards effectively defer compensation, and (vii) eliminate
provisions for automatic expiration of the Plan so that it will continue until
terminated by the Corporation;
NOW, THEREFORE, the Plan is hereby amended and restated as follows, to
be effective with respect to awards granted on and after June 30, 2005, provided
that the terms of the Plan prior to such amendment shall apply to all awards
previously granted:
1. PURPOSE OF THE PLAN
The purpose of the Plan is to promote the interests of the Corporation
and its stockholders by strengthening the Corporation's ability to attract,
motivate, and retain personnel upon whose judgment, initiative, and efforts the
financial success and growth of the business of the Corporation largely depend,
to offer such personnel additional incentives to put forth maximum efforts for
the success of the business, and to afford them an opportunity to acquire a
proprietary interest in the Corporation through stock ownership and other
rights.
2. DEFINITIONS
Wherever the following capitalized terms are used in this Plan, they
shall have the meanings specified below:
(a) "Award" means an award of an Option, Restricted Stock Award, Stock
Appreciation Right, Performance Award, Restricted Stock Unit or Dividend
Equivalent Award under the Plan.
(b) "Award Agreement" means an agreement entered into between the
Corporation and a Participant setting forth the terms and conditions of an Award
granted to a Participant.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Change in Control" shall have the meaning specified in Section 12
hereof.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the committee of the Board appointed to
administer the Plan and shall consist of two or more directors of the
Corporation (i) none of whom shall be officers or employees of the Corporation,
and (ii) each of whom (to the extent deemed necessary or appropriate by the
Board) is an "outside director" within the meaning of section 162(m) of the
Code, a "non-employee director" within the meaning of Rule 16b-3 of the
Securities Exchange Act of 1934 and an "independent director" under the listing
standards of The Nasdaq Stock Market. The members of the Committee shall be
appointed by and serve at the pleasure of the Board. If the applicable Board
shall so direct, designated members of the applicable Committee shall act as a
separate subcommittee, which shall administer the Plan as to all Section 162(m)
Awards. In such event, all references herein to the applicable Committee
relating to Section 162(m) Awards shall be considered to refer only to the
applicable separate subcommittee.
(g) "Common Stock" means the common stock of the Corporation.
(h) "Corporation" means LifePoint Hospitals, Inc., a Delaware
corporation, and its predecessors.
(i) "Date of Grant" means the date on which an Award under the Plan is
made by the Committee, or such later date as the Committee may specify to be the
effective date of the Award.
(j) "Dividend Equivalent Award" means an Award under Section 11 hereof
entitling the Participant to receive payments with respect to dividends declared
on the Common Stock.
(k) "Eligible Person" means any person who is an Employee of the
Corporation or any of its Subsidiaries and, in the case of Awards other than
Incentive Stock Options, any consultant or other independent contractor (not
including any non-employee outside director) providing services to the
Corporation or a Subsidiary.
(l) "Employee" means any person who is employed as a common-law
employee.
(m) "Fair Market Value" of a share of Common Stock as of a given date
shall mean the closing sales price of the Common Stock on the Nasdaq Stock
Market on the trading day immediately preceding the date as of which the Fair
Market Value is to be determined, or, in the absence of any reported sales of
Shares on such date, on the first preceding date on which any such sale shall
have been reported (in either case, as reported in the Two Star Edition of The
Wall Street Journal). If the Common Stock is not listed on the Nasdaq Stock
Market on the date as of which Fair Market Value is to be determined, the
Committee shall in good faith determine the Fair Market Value in whatever manner
it considers appropriate.
(n) "Incentive Stock Option" means an option to purchase Common Stock
that is intended to qualify as an incentive stock option under section 422 of
the Code and the Treasury Regulations thereunder.
(o) "Non-qualified Stock Option" means an option to purchase Common
Stock that is not an Incentive Stock Option.
(p) "Option" means an Incentive Stock Option or a Non-qualified Stock
Option granted under Section 6 hereof.
(q) "Participant" means any Eligible Person who holds an outstanding
Award under the Plan.
(r) "Plan" means the LifePoint Hospitals, Inc. 1998 Long-Term
Incentive Plan as set forth herein, as it may be amended from time to time.
(s) "Performance Award" means an Award under Section 9 hereof
entitling a Participant to a payment based on the Fair Market Value of a share
of Common Stock (a "Performance Share") or based on specified dollar units (a
"Performance Unit") at the end of a performance period upon the satisfaction of
conditions specified in the Award.
(t) "Restricted Stock Award" means an Award under Section 8 hereof
entitling a Participant to shares of Common Stock that are nontransferable and
subject to forfeiture until specific conditions established by the Committee are
satisfied.
(u) "Restricted Stock Unit" means an Award under Section 10 hereof
entitling a Participant to a payment of Common Stock at the completion of a
vesting or performance period.
(v) "Section 162(m) Award" means any Award that is intended to qualify
for the performance-based compensation exemption under section 162(m) of the
Code.
(w) "Stock Appreciation Right" or "SAR" means an Award under Section 7
hereof entitling a Participant to receive an amount, representing the difference
between the base price per share of the right and the Fair Market Value of a
share of Common Stock on the date of exercise.
(x) "Subsidiary" means an entity (whether or not a corporation) that
is wholly or majority owned or controlled, directly or indirectly, by the
Corporation, or any other affiliate of the Corporation that is so designated,
from time to time, by the Committee; provided, however, that with respect to
Incentive Stock Options, the term "Subsidiary" shall include only an entity that
qualifies under section 424(f) of the Code as a "subsidiary corporation" with
respect to the Corporation.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
3.1. Number of Shares. Subject to the following provisions of this
Section 3, the aggregate number of shares of Common Stock that may be issued
pursuant to all Awards under the Plan is 13,625,000 shares of Common Stock;
provided, however, that no more than 2,125,000 of such shares of Common Stock
may be issued pursuant to Performance Awards, Restricted Stock Units and
Restricted Stock Awards in the aggregate. The shares of Common Stock to be
delivered under the Plan will be made available from authorized but unissued
shares of Common Stock or issued shares that have been reacquired by the
Corporation. To the extent that an Award is forfeited, the shares of Common
Stock covered thereby will no longer be charged against the foregoing maximum
share limitations and may again be made subject to Awards under the Plan
pursuant to such limitations.
3.2. Adjustments. If there shall occur any recapitalization,
reclassification, stock dividend, stock split, reverse stock split, or other
distribution with respect to the shares of Common Stock, or other change in
corporate structure affecting the Common Stock, the Committee may, in the manner
and to the extent that it deems appropriate and equitable to the Participants
and consistent with the terms of this Plan, cause an adjustment to be made in
(i) the maximum number and kind of shares provided in Section 3.1 hereof, (ii)
the maximum number and kind of shares set forth in Sections 6.1, 7.1, 8.1 and
9.4 hereof,
(iii) the number and kind of shares of Common Stock, share units, or other
rights subject to then outstanding Awards, (iv) the price for each share or unit
or other right subject to then outstanding Awards, (v) the performance targets
or goals applicable to any outstanding Performance Awards (subject to such
limitations as are considered appropriate for Section 162(m) Awards), or (vi)
any other terms of an Award that are affected by the event. Notwithstanding the
foregoing, in the case of Incentive Stock Options, any such adjustments shall be
made in a manner consistent with the requirements of section 424(a) of the Code
and, to the extent considered advisable by the Committee, in a manner consistent
with the requirements of section 162(m) of the Code.
4. ADMINISTRATION OF THE PLAN
4.1. Committee Members. The Plan shall be administered by the
Committee. The Committee shall have such powers and authority as may be
necessary or appropriate for the Committee to carry out its functions as
described in the Plan. No member of the Committee shall be liable for any action
or determination made in good faith by the Committee with respect to the Plan or
any Award thereunder.
4.2. Discretionary Authority. Subject to the express limitations of
the Plan, the Committee shall have authority in its discretion to determine the
Eligible Persons to whom, and the time or times at which, Awards may be granted,
the number of shares, units or other rights subject to each Award, the exercise,
base or purchase price of an Award (if any), the time or times at which an Award
will become vested, exercisable or payable, the performance criteria,
performance goals and other conditions of an Award, the duration of the Award,
and all other terms of the Award. The Committee shall also have discretionary
authority to interpret the Plan, to make all factual determinations under the
Plan, and to make all other determinations necessary or advisable for Plan
administration. The Committee may prescribe, amend, and rescind rules and
regulations relating to the Plan. All interpretations, determinations, and
actions by the Committee shall be final, conclusive, and binding upon all
parties.
4.3. Changes to Awards. The Committee shall have the authority,
subject to the provisions of, to effect, at any time and from time to time, (i)
the cancellation of any or all outstanding Awards and the grant in substitution
therefor of new Awards covering the same or different numbers of shares of
Common Stock and having an exercise or base price which may be the same as or
different than the exercise or base price of the cancelled Awards; provided,
however, that, as provided in Section 6.8, the Committee may not lower the
exercise price of an Option that has been granted hereunder, nor replace or
regrant the Option through cancellation without stockholder approval, or (ii)
the amendment of the terms of any and all outstanding Awards; provided, however,
that no such action by the Committee may adversely impair the rights of a
Participant (or any permitted transferee) under any outstanding Award without
the consent of the Participant (or transferee). The Committee may in its
discretion accelerate the vesting or exercisability of an Award at any time or
on the basis of any specified event.
5. AWARD ELIGIBILITY, FEATURES AND RESTRICTIONS
5.1. Terms of Awards. All Eligible Persons are eligible to be
designated by the Committee to receive an Award under the Plan. The Committee
has authority, in its sole discretion, to determine and designate from time to
time those Eligible Persons who are to be granted Awards, the types of Awards to
be granted and the number of shares or units subject to the Awards that are
granted under the Plan. Each Award will be evidenced by an Award Agreement
between the Corporation and the Participant that shall include such terms and
conditions (consistent with the Plan) as Committee may determine; provided,
however, that failure to issue an Award Agreement shall not invalidate an Award.
5.2. Section 162(m) Awards. For any Award, other than an Option or
SAR, that the Committee determines should be a Section 162(m) Award, the grant
of the Award and its terms shall be
made pursuant to the LifePoint Hospitals, Inc. Executive Performance Incentive
Plan, and the terms thereof shall control over any inconsistent provision of
this Plan with regard to such Section 162(m) Awards.
5.3 Deferral of Compensation. Generally, the Corporation intends for
compensation income to be deferred until the time and to the extent that Awards
are exercised or become vested. Therefore, notwithstanding any provision herein
to the contrary, the Committee is authorized to make Awards that include terms
that are consistent with or necessary for satisfaction of the requirements for
compensation deferral under section 409A of the Code.
5.4. Rights as Stockholder. Unless otherwise stated in an Award
Agreement, a Participant will at the time an Award is granted have all rights of
a stockholder with respect to any shares of Common Stock that are transferred
pursuant to a Performance Share Award or Restricted Stock Award. Such rights
include the right to vote the shares and receive all dividends and other
distributions paid or made with respect thereto. A Participant shall not have
stockholder rights until shares of Common Stock are transferred upon the
exercise of an Option or SAR or upon the vesting of Restricted Stock Units.
Except as provided in Section 3.2 hereof, no adjustment or other provision shall
be made for dividends or other stockholder rights until a Participant has become
a stockholder with respect to an Award, except to the extent that the Award
Agreement is a Dividend Equivalent Award, or otherwise provides for dividend
payments or similar economic benefits.
5.5. Issuance and Delivery of Shares. Shares of Common Stock that are
transferred or become transferable pursuant to an Award shall be issued as
specified in this Section, but subject to the restrictions specified herein
and/or in an Award Agreement.
(a) Date of Issuance. Shares of Common Stock to be issued
pursuant to an Award shall be delivered to Participants by the Corporation (or
its transfer agent) as soon as administratively feasible after (i) a Participant
receives a Restricted Stock Award or Performance Share Award, or the Date of
Exercise with respect to an Option or SAR, or the vesting of Restricted Stock
Units, and (ii) all conditions for transfer of Stock specified in an Award have
occurred; provided, however, that the Corporation may condition the delivery of
shares on the Participant's execution of any applicable stockholder agreement or
agreement described in paragraph (d) of this Section that the Corporation
requires at the time of exercise; and provided further that the Corporation may
delay the delivery of Stock until all restrictions specified in an Award have
lapsed and the Common Stock is no longer subject to a substantial risk of
forfeiture.
(b) Transfer Restrictions. Common Stock granted under any
Restricted Stock or Performance Award may not be transferred, assigned or
subject to any encumbrance, pledge, or charge until all applicable restrictions
are removed or have expired, unless otherwise allowed by the Committee. The
Committee may require the Participant to enter into an escrow agreement
providing that the certificates representing the shares granted or sold under
the Award will remain in the physical custody of the Corporation or an escrow
holder until all restrictions are removed or have expired. The Committee may
also require that shares subject to an Award be listed in "book" form and not
certificated until vested. Failure to satisfy any applicable restrictions shall
result in the subject shares of the Award being forfeited and returned to the
Corporation, with any purchase price paid by the Participant to be refunded,
unless otherwise provided by the Committee. The Committee may require that
certificates representing the shares granted under an Award bear a legend making
appropriate reference to the restrictions imposed.
(c) Securities Law Compliance. Notwithstanding anything
herein to the contrary, no Award shall be exercisable, no Common 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 or state
laws and regulations (including, without limitation, withholding tax
requirements), federal and state securities laws and regulations and the rules
of all securities exchanges or self-regulatory organizations on which the
Corporation's shares may be listed. The Corporation shall have the right to rely
on an opinion of its counsel as to such compliance. Any certificate issued to
evidence shares of Stock issued pursuant to this Plan may bear such legends and
statements as the Committee upon advice of counsel may deem advisable to assure
compliance with federal or state laws and regulations.
(d) Representations by Participants. As a condition to the
receipt of or the transfer of Common Stock pursuant to an Award, the Corporation
may require a Participant to represent and warrant at the time that the shares
are being acquired only for investment and without any present intention to sell
or distribute such shares. At the option of the Corporation, a stop transfer
order against any shares of stock may be placed on the official stock books and
records of the Corporation, 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 Corporation) 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 federal or state securities laws. This
provision shall not obligate the Corporation or any Subsidiary to undertake
registration of options or stock hereunder.
5.6. Section 83(b) Election. The Committee may provide in an Award
Agreement that the Award is conditioned upon the Participant's refraining from
making an election with respect to the Award under section 83(b) of the Code.
Irrespective of whether an Award is so conditioned, if a Participant makes an
election pursuant to section 83(b) of the Code with respect to a Restricted
Stock Award, the Participant shall be required to promptly file a copy of such
election with the Corporation.
6. STOCK OPTIONS
6.1. Grant of Option. An Option may be granted to any Eligible Person
selected by the Committee; provided, however, that only Employees of the
Corporation or a Subsidiary shall be eligible to receive Incentive Stock
Options. Subject to the applicable provisions of section 422 of the Code, each
Option shall be designated, in the discretion of the Committee, as an Incentive
Stock Option or a Non-qualified Stock Option. The maximum number of shares of
Common Stock that may be granted under Options to any Participant during any
calendar year shall be limited to 700,000 shares (subject to adjustment as
provided in Section 3.2 hereof).
6.2. Exercise Price. The exercise price under any Option shall be
determined by the Committee; provided, however, that the exercise price per
share under an Option shall not be less than 100% of the Fair Market Value per
share of the Common Stock on the Date of Grant.
6.3. Vesting; Term of Option. The Committee, in its sole discretion,
shall prescribe the time or times at which, or the conditions upon which, an
Option or portion thereof shall become vested and exercisable, and may
accelerate the exercisability of any Option at any time. The period during which
a vested Option may be exercised shall be ten years from the Date of Grant,
unless a shorter exercise period is specified by the Committee in an Award,
subject to such limitations as may apply under an Award relating to the
termination of a Participant's employment or other service with the Corporation
or any Subsidiary.
6.4. Option Exercise; Withholding. Subject to such terms and
conditions as shall be specified in an Award, an Option may be exercised in
whole or in part at any time during the term thereof by written notice to the
Corporation, together with payment of the aggregate exercise price therefor.
Payment
of the exercise price shall be made (i) in cash or by cash equivalent, (ii) at
the discretion of the Committee, in shares of Common Stock acceptable to the
Committee, valued at the Fair Market Value of such shares on the date of
exercise, (iii) at the discretion of the Committee, by a delivery of a notice
that the Participant has placed a market sell order (or similar instruction)
with a broker with respect to shares of Common Stock then issuable upon exercise
of the Option, and that the broker has been directed to pay a sufficient portion
of the net proceeds of the sale to the Corporation in satisfaction of the Option
exercise price (conditioned upon the payment of such net proceeds), (iv) at the
discretion of the Committee, by a combination of the methods described above, or
(v) by such other method as may be approved by the Committee and set forth in
the Award. As an additional condition to the exercise of any Award, the
Participant shall at the time of exercise pay to the Corporation the full amount
of any and all applicable income tax and employment tax amounts required to be
withheld in connection with such exercise, payable under such of the methods
described above for the payment of the exercise price of the Options as may be
approved by the Committee.
6.5. Limited Transferability of Non-qualified Options. All Options
shall be nontransferable except (i) upon the Participant's death, by the
Participant's will or the laws of descent and distribution or (ii) in the case
Non-qualified Stock Options only, on a case-by-case basis as may be approved by
the Committee in its discretion, in accordance with the terms provided below. An
Award Agreement for a Non-qualified Stock Option may provide that the
Participant shall be permitted to, during his or her lifetime and subject to the
prior approval of the Committee at the time of proposed transfer, transfer all
or part of the Option to the Participant's family member (as defined in the
Award Agreement in a manner consistent with the requirements for registration on
SEC Form S-8, if applicable). Any such transfer shall be subject to the
condition that it is made by the Participant for estate planning, tax planning,
donative purposes or pursuant to a domestic relations order, and no
consideration (other than nominal consideration) is received by the Participant
therefor. The transfer of a Non-qualified Stock Option may be subject to such
other terms and conditions as the Committee may in its discretion impose from
time to time, including a condition that the portion of the Option to be
transferred be vested and exercisable by the Participant at the time of the
transfer. Subsequent transfers of an Option shall be prohibited other than by
will or the laws of descent and distribution upon the death of the transferee.
6.6. Additional Rules for Incentive Stock Options.
(a) Annual Limits. To the extent that the aggregate Fair
Market Value of Stock with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year (under
all stock incentive plans of the Corporation and its Subsidiaries) exceeds
$100,000 (or the amount specified in section 422 of the Code), determined as of
the date an Incentive Stock Option is granted, such Options shall be treated as
Nonqualified Options. This provision shall be applied by taking Incentive Stock
Options into account in the order in which they were granted.
(b) Termination of Employment. An Award of an Incentive Stock
Option may provide that such Option may be exercised not later than three months
following termination of employment of the Participant with the Corporation and
all Subsidiaries, subject to special rules relating to death and disability, as
and to the extent determined by the Committee to be appropriate with regard to
the requirements of section 422 of the Code and Treasury Regulations thereunder.
(c) Other Terms and Conditions; Nontransferability. Any
Incentive Stock Option granted hereunder shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as are deemed
necessary or desirable by the Committee, which terms, together with the terms of
this Plan, shall be intended and interpreted to cause such Incentive Stock
Option to qualify as an "incentive stock option" under section 422 of the Code.
Such terms shall include, if applicable, limitations on Incentive Stock Options
granted to 10% owners of the Corporation. Unless otherwise stated in an
Award Agreement, an Option that is intended to be an Incentive Stock Option
shall be treated as a Non-qualified Stock Option to the extent that certain
requirements applicable to "incentive stock options" under the Code are not be
satisfied. An Incentive Stock Option shall by its terms be nontransferable
otherwise than by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of a Participant only by such Participant.
(d) Disqualifying Dispositions. If shares of Common Stock
acquired by exercise of an Incentive Stock Option are disposed of within two
years following the Date of Grant or one year following the transfer of such
shares to the Participant upon exercise, the Participant shall, promptly
following such disposition, notify the Corporation in writing of the date and
terms of such disposition and provide such other information regarding the
disposition as the Committee may reasonably require.
6.7. Restrictions on Transfer of Stock. The Committee may, in its sole
discretion, impose in any Award of an Option restrictions on the transferability
of the shares of Common Stock issued upon exercise of such Option. If any such
restrictions are imposed, the Committee may require the Participant to enter
into an escrow agreement providing that the certificates representing the shares
subject to such transfer restrictions will remain in the physical custody of an
escrow holder until such restrictions are removed or have expired. The Committee
may require that certificates representing the shares subject to such
restrictions bear a legend making appropriate reference to the restrictions
imposed. Subject to any restrictions imposed in accordance with this Section
6.7, the Participant will have all rights of a stockholder with respect to any
such shares acquired upon an Option exercise, including the right to vote the
shares and receive all dividends and other distributions paid or made with
respect thereto.
6.8. Restrictions on Repricing of Options. With respect to an Option
that has been granted hereunder, the exercise price may not be lowered, nor may
the Option be replaced or regranted through cancellation without stockholder
approval.
7. STOCK APPRECIATION RIGHTS
7.1. Grant of SARs. A Stock Appreciation Right granted to a
Participant is an Award in the form of a right to receive, upon surrender of the
right but without other payment, an amount based on appreciation in the Fair
Market Value of the Common Stock over a base price established for the Award,
exercisable at such time or times and upon conditions as may be approved by the
Committee. Each SAR will be based on a number of shares of Common Stock, and the
limitations specified in Section 3.1 will be calculated by reference to the
number of shares covered by each SAR. The base price of an SAR shall not be less
than 100% of the Fair Market Value of the Common Stock covered by the SAR on the
Date of Grant. The period for exercise will be determined by the Committee but
shall not be for a period that exceeds ten years after the Date of Grant.
7.2. Payment of SARs. An SAR will entitle the holder, upon exercise of
the SAR, to receive payment of an amount determined by multiplying: (i) the
excess of the Fair Market Value of a share of Common Stock on the date of
exercise of the SAR over the base price of such SAR, by (ii) the number of
shares as to which such SAR is exercised. Payment of the amount determined under
the foregoing shall be made (1) in shares of Common Stock valued at their Fair
Market Value on the date of exercise, or (2) cash, but only to the extent
specified in an SAR Award by the Committee in its sole discretion, and provided
that such cash payments are determined to be permissible for purposes of
deferral of compensation under section 409A of the Code.
8. RESTRICTED STOCK AWARD
8.1. Grant of Restricted Stock Awards. Award of Restricted Stock to a
Participant represents shares of Common Stock that are issued subject to such
restrictions on transfer and other incidents of ownership and such forfeiture
conditions as the Committee may determine. The Committee may, in connection with
any Restricted Stock Award, require the payment of a specified purchase price.
8.2. Vesting Requirements. The restrictions imposed on shares granted
under a Restricted Stock Award shall lapse in accordance with the vesting
requirements specified by the Committee in the Award Agreement. Such vesting
requirements may be based on the continued employment of the Participant with
the Corporation or its Subsidiaries for a specified time period or periods,
provided that any such restriction shall not be scheduled to lapse in its
entirety earlier than the first anniversary of the Date of Grant. Such vesting
requirements may also be based on the attainment of specified business goals or
measures established by the Committee. Except for Section 162(m) Awards, the
performance criteria upon which the vesting of a Restricted Stock Award is
conditioned shall be determined by the Committee in its sole discretion.
9. PERFORMANCE AWARDS
9.1. Grant of Performance Awards. The Committee may grant Performance
Awards under the Plan, which shall be represented by units denominated on the
Date of Grant either in shares of Common Stock (Performance Shares) or in
dollars (Performance Units). At the time a Performance Award is granted, the
Committee shall determine, in its sole discretion, one or more performance
periods and performance goals to be achieved during the applicable performance
periods, as well as such other restrictions and conditions as the Committee
deems appropriate. In the case of Performance Units, the Committee shall also
determine a target unit value or a range of unit values for each Award. No
performance period shall exceed ten years from the Date of Grant. The
performance goals applicable to a Performance Award grant may be subject to such
later revisions as the Committee shall deem appropriate to reflect significant
unforeseen events, such as changes in law, accounting practices or unusual or
nonrecurring items or occurrences. The Committee's authority to make such
adjustments shall be subject to such limitations as the Committee deems
appropriate in the case of a Performance Award that is a Section 162(m) Award.
The maximum amount of compensation that may be payable to a Participant during
any one calendar year under a Performance Unit Award shall be $4.2 million.
9.2. Payment of Performance Awards. At the end of the performance
period, the Committee shall determine the extent to which performance goals have
been attained, or a degree of achievement between minimum and maximum levels, in
order to establish the level of payment to be made, if any, and shall determine
if payment is to be made in the form of cash or shares of Common Stock (valued
at their Fair Market Value at the time of payment) or a combination of cash and
shares of Common Stock. Payments of Performance Awards shall generally be made
as soon as practicable following the end of the performance period.
9.3. Performance Criteria. Except for Section 162(m) Awards, the
performance criteria upon which the payment or vesting of a Performance Award is
conditioned shall be determined by the Committee in its sole discretion.
10. RESTRICTED STOCK UNITS
10.1. Grant of Restricted Stock Units. A Restricted Stock Unit is an
Award to receive a number of shares of Common Stock upon the achievement of
performance or other conditions that are stated in the Award. A Restricted Stock
Unit shall be subject to such restrictions and conditions as the
Committee shall determine. On the Date of Grant, the Committee shall determine,
in its sole discretion, the installment or other vesting period of the
Restricted Stock Unit, and/or performance conditions, and the maximum value of
the Restricted Stock Unit, if any. No vesting period shall exceed 10 years from
the Date of Grant. A Restricted Stock Unit may be granted, at the discretion of
the Committee, together with a Dividend Equivalent Award covering the same
number of shares.
10.2. Payment of Restricted Stock Units. A Participant shall be
entitled to payment on the vesting date or dates provided in an Award and shall
receive shares of Common Stock as Restricted Stock Units become vested, as
stated in the terms of the Award.
11. DIVIDEND EQUIVALENT AWARD
11.1. Grant of a Dividend Equivalent Awards. A Dividend Equivalent
Award granted to a Participant is an Award in the form of a right to receive
cash payments determined by reference to dividends declared on the Common Stock
from time to time during the term of the Award, which shall not exceed 10 years
from the Date of Grant. Dividend Equivalent Awards may be granted on a
stand-alone basis or in tandem with other Awards. Dividend Equivalent Awards
granted on a tandem basis shall expire at the time the underlying Award is
exercised or otherwise becomes payable to the Participant, or expires.
11.2. Payment of Dividend Equivalent Awards. Dividend Equivalent
Awards shall be payable in cash or in shares of Common Stock, valued at their
Fair Market Value on either the date the related dividends are declared or the
date the Dividend Equivalent Awards are paid to a Participant, as determined by
the Committee. Dividend Equivalent Awards shall be payable to a Participant as
soon as practicable following the time dividends are declared and paid with
respect to the Common Stock, or at such later date as the Committee shall
specify in the Award Agreement. Dividend Equivalent Awards granted with respect
to Options intended to qualify as a Section 162(m) Award shall be payable
regardless of whether the Option is exercised.
12. CHANGE IN CONTROL
12.1. Effect of Change in Control. Unless stated otherwise in an Award
Agreement, the provisions of this Section 12.1 will apply to outstanding Awards
at the time of a Change in Control to the extent of rights under such Awards
that have not been previously forfeited. The surviving corporation or entity or
acquiring corporation or entity, or affiliate of such corporation or entity, may
assume any Awards outstanding under the Plan or substitute similar equity and
incentive awards (including an award to acquire the same consideration paid to
the stockholders in the transaction described in this Section 12) for those
outstanding under the Plan.
(a) In the event that any surviving corporation or entity or acquiring
corporation or entity in a Change in Control, or affiliate of such corporation
or entity, does not assume such Awards and does not substitute similar awards
for those outstanding under the Plan, then (i) all Awards outstanding shall,
immediately prior to the Change in Control event, become fully vested to the
extent not previously forfeited and, with respect to Options and SARs, fully
exercisable, and (ii) any Options or SARs that are not exercised shall be
terminated upon the completion of the transaction that is the Change in Control
event.
(b) In the event that any surviving corporation or entity or acquiring
corporation or entity in a Change in Control, or affiliate of such corporation
or entity, assumes Awards outstanding under the Plan at the time of the Change
in Control, or substitutes Awards with similar stock awards (including an award
to acquire the same consideration paid to the stockholders in the transaction
described in this Section 12 for those outstanding under the Plan), and the
employment of a Participant is terminated without Cause or for Good Reason
within 18 months after the effective date of the Change in Control event, all
Awards held by such Participant shall become fully vested to the extent not
previously forfeited and, with respect to Options and SARs, fully exercisable.
The terms "Cause" and "Good Reason" shall have the same meanings as the same or
similar terms in any written employment agreement between the Participant and
the Corporation or Subsidiary or as specified in an Award Agreement. In the
absence of such a written agreement, such terms shall be defined as follows for
purposes of this Section 12:
(1) "Cause" means involuntary termination of
employment due to: (i) conviction of a crime of moral
turpitude that adversely affects the reasonable business
interests of the Corporation, (ii) commission of an act of
fraud, embezzlement, or material dishonesty against the
Corporation or any Subsidiary, or (iii) intentional neglect
of the responsibilities of employment, and such neglect
remains uncorrected for more than 30 days following written
notice from the Corporation detailing the acts of neglect.
(2) "Good Reason" means voluntary termination of
employment by the Participant because the terms of employment
are modified so that the position is not substantially
equivalent to the position held immediately prior to the time
of the Change in Control. A position is "substantially
equivalent" if it is the same or better than the position to
which it is being compared. A position is not substantially
equivalent unless (i) the cash compensation offered is the
same or higher than that earned immediately prior to the
Change in Control, (ii) deferred compensation, incentive and
equity compensation, and health and welfare benefits are, in
the aggregate, similar to those provided immediately prior to
the Change in Control, and (iii) the position does not
require the Participant to relocate or to commute more than
30 miles each way to the place of employment. The
Participant's right to voluntarily terminate employment for
"Good Reason" expires 180 days after beginning employment in
the position that is not "substantially equivalent" to the
Participant's prior position.
12.2. Definition of Change in Control. For purposes hereof, a "Change in
Control" shall be deemed to have occurred upon the occurrence of any of the
following after the date on which the Corporation becomes a publicly-held
Corporation:
(a) An acquisition (other than directly from the
Corporation) of any voting securities of the Corporation (the "Voting
Securities") by any "Person" (as the term Person is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act")) immediately after which such Person has "Beneficial Ownership" (within
the meaning of Rule 13d-3 promulgated under the 1934 Act) of 20% or more of the
combined voting power of the then outstanding Voting Securities; provided,
however, that in determining whether a Change in Control has occurred, Voting
Securities which are acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof) maintained by (A) the
Corporation or (B) any corporation or other Person of which a majority of the
voting power or the equity securities or equity interests is owned directly or
indirectly by the Corporation (a "Control Subsidiary"), or (ii) the Corporation
or any Control Subsidiary.
(b) The individuals who, as of the date the Corporation
issues any class of equity securities required to be registered under section 12
of the 1934 Act, are members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board; provided, however, that
if the election or nomination for election by the Corporation's stockholders of
any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided, further, however, that no individual
shall be considered a member of the Incumbent Board if (i) such individual
initially assumed office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the 1934 Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest or
(ii) such individual was designated by a Person who has entered into an
agreement with the Corporation to effect a transaction described in clause (a)
or (c) of this Section 12.2; or
(c) Consummation, after approval by stockholders of the
Corporation, of:
(1) A merger, consolidation or reorganization involving
the Corporation, unless,
(A) The stockholders of the Corporation,
immediately before such merger, consolidation or
reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at
least 75% of the combined voting power of the outstanding
Voting Securities of the corporation resulting from such
merger or consolidation or reorganization or its parent
corporation (the "Surviving Corporation") in substantially the
same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or
reorganization;
(B) The individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation; and
(C) No Person (other than the Corporation,
any Control Subsidiary, any employee benefit plan (or any
trust forming a part thereof) maintained by the Corporation,
the Surviving Corporation or any Control Subsidiary, or any
Person who, immediately prior to such merger, consolidation or
reorganization, had Beneficial Ownership of 20% or more of the
then outstanding Voting Securities) has Beneficial Ownership
of 20% or more of the combined voting power of the Surviving
Corporation's then outstanding Voting Securities.
(2) A complete liquidation or dissolution of the
Corporation; or
(3) The sale or other disposition of all or
substantially all of the assets of the Corporation to any
Person (other than a transfer to a Control Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Corporation which, by
reducing the number of Voting Securities outstanding, increased the proportional
number of shares Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Corporation, and after
such share acquisition by the Corporation, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
13. AWARD AGREEMENTS
13.1. Form of Agreement. Each Award under this Plan shall be evidenced
by an Award Agreement in a form approved by the Committee setting forth the
number of shares of Common Stock, units or other rights (as applicable) subject
to the Award, the exercise, base, or purchase price (if any) of the Award, the
time or times at which an Award will become vested, exercisable or payable, the
duration of the Award, and in the case of Performance Awards, the applicable
performance criteria and goals. The Award Agreement shall also set forth other
material terms and conditions applicable to the Award as determined by the
Committee consistent with the limitations of this Plan. Award Agreements
evidencing Awards that are Section 162(m) Awards shall contain such terms and
conditions as may be necessary to meet the applicable requirements of section
162(m) of the Code and the LifePoint Hospitals, Inc. Executive Performance
Incentive Plan. Award Agreements evidencing Incentive Stock Options shall
contain such terms and conditions as may be necessary to meet the applicable
provisions of section 422 of the Code.
13.2. Forfeiture Events. The Committee may specify in an Award that
the Participant's rights, payments and benefits with respect to an Award shall
be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events shall include, but
shall not be limited to, termination of employment for cause, violation of
material Corporation or Subsidiary policies, breach of noncompetition,
confidentiality or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Corporation or any Subsidiary.
14. GENERAL PROVISIONS
14.1. No Assignment or Transfer; Beneficiaries. Except as provided in
Section 6.5 hereof, Awards under the Plan shall not be assignable or
transferable, except by will or by the laws of descent and distribution, and
during the lifetime of a Participant, the Award shall be exercised only by such
Participant or by his guardian or legal representative. Notwithstanding the
foregoing, the Committee may provide in the terms of an Award Agreement that the
Participant shall have the right to designate a beneficiary or beneficiaries who
shall be entitled to any rights, payments or other specified under an Award
following the Participant's death.
14.2. Deferrals of Payment. Notwithstanding any other provisions of
the Plan, the Committee may permit a Participant to defer the receipt of payment
of cash or delivery of shares of Common Stock that would otherwise be due to the
Participant by virtue of the exercise of a right or the satisfaction of vesting
or other conditions with respect to an Award. If any such deferral is to be
permitted by the Committee, the Committee shall establish the rules and
procedures relating to such deferral, including, without limitation, the period
of time in advance of payment when an election to defer may be made, the time
period of the deferral and the events that would result in payment of the
deferred amount, the interest or other earnings attributable to the deferral and
the method of funding, if any, attributable to the deferred amount. Such
deferrals are also subject to any additional requirements of section 409A of the
Code.
14.4. Employment or Service. Nothing in the Plan, in the grant of any
Award or in any Award Agreement shall confer upon any Eligible Person the right
to continue in the capacity in which he is employed by, or otherwise serves, the
Corporation or any Subsidiary.
14.6. Tax Withholding. Upon any taxable event that occurs with respect
to the grant, exercise or lapse of restrictions with respect to an Award, or
otherwise, the Participant shall, upon
notification of the amount due and as a condition to exercise of an Award, pay
to the Corporation amounts necessary to satisfy applicable federal, state and
local withholding tax requirements or shall otherwise make arrangements
satisfactory to the Corporation for such requirements. Generally, such
withholding requirements shall not apply to the exercise of an Incentive Stock
Option, or to a disqualifying disposition of Stock that is acquired with an
Incentive Stock Option, unless the Committee gives the Participant notice that
withholding described in this Section is required. The Award Agreement may
specify the manner in which the withholding obligation shall be satisfied with
respect to the particular type of Award.
14.7. Unfunded Plan. The adoption of this Plan and any setting aside
of cash amounts or shares of Common Stock by the Corporation with which to
discharge its obligations hereunder shall not be deemed to create a trust or
other funded arrangement. The benefits provided under this Plan shall be a
general, unsecured obligation of the Corporation payable solely from the general
assets of the Corporation, and neither a Participant nor the Participant's
permitted transferees or estate shall have any interest in any assets of the
Corporation by virtue of this Plan, except as a general unsecured creditor of
the Corporation. Notwithstanding the foregoing, the Corporation shall have the
right to implement or set aside funds in a grantor trust, subject to the claims
of the Corporation's creditors, to discharge its obligations under the Plan.
14.8. Other Compensation and Benefit Plans. The adoption of the Plan
shall not affect any other stock incentive or other compensation plans in effect
for the Corporation or any Subsidiary, nor shall the Plan preclude the
Corporation from establishing any other forms of stock incentive or other
compensation for employees of the Corporation or any Subsidiary. The amount of
any compensation deemed to be received by a Participant pursuant to an Award
shall not constitute compensation with respect to which any other employee
benefits of such Participant are determined, including, without limitation,
benefits under any bonus, pension, profit sharing, life insurance or salary
continuation plan, except as otherwise specifically provided by the terms of
such plan.
14.9. Plan Binding on Transferees. The Plan shall be binding upon the
Corporation, its transferees and assigns, and the Participant, his executor,
administrator and permitted transferees and beneficiaries.
14.10. Construction and Interpretation. Whenever used herein, nouns in
the singular shall include the plural, and the masculine pronoun shall include
the feminine gender. Headings of Articles and Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.
14.11. Severability. If any provision of the Plan or any Award
Agreement shall be determined to be illegal or unenforceable by any court of law
in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.
14.12. Governing Law. The validity and construction of this Plan and
of the Award Agreements shall be governed by the laws of the State of Delaware.
15. EFFECTIVE DATE, TERMINATION AND AMENDMENT
15.1. Effective Date; Stockholder Approval. The Effective Date of this
amendment and restatement of the Plan shall be June 30, 2005, the date of
approval by the stockholders of the Corporation.
15.2. Termination. The Plan shall continue until terminated by the
Board in its sole discretion. No termination of the Plan shall adversely affect
any Award theretofore granted without the consent of the Participant or the
permitted transferee of the Award.
15.3. Amendment. The Board may at any time and from time to time and
in any respect, amend or modify the Plan; provided, however, that no amendment
or modification of the Plan shall be effective without the consent of the
Corporation's stockholders that would (i) change the class of Eligible Persons
under the Plan, (ii) increase the number of shares of Common Stock reserved for
issuance under the Plan in accordance with Section 3.1 hereof, (iii) allow the
grant of Options at an exercise price below Fair Market Value, (iv) increase the
aggregate number of shares of Common Stock that may be granted pursuant to
Restricted Stock Awards, Performance Awards, Restricted Stock Units and Dividend
Equivalent Awards in accordance with Section 3.1 hereof, (v) modify the terms of
Section 6.8 hereof to permit Option repricing, or (vi) require approval of the
Corporation's stockholders under the listing requirements of the Nasdaq Stock
Market or the exchange or trading system through which Common Stock may be
listed or traded at the time of the amendment. No amendment or modification of
the Plan shall adversely affect any Award theretofore granted without the
consent of the Participant or permitted transferee of the Award. Notwithstanding
anything to the contrary herein, the Board may amend the Plan without further
consent or approval to the extent necessary under section 409A of the Code so
that Awards issued hereunder will effectively defer compensation in the manner
contemplated under each respective Award.
EXECUTION PAGE
IN WITNESS WHEREOF, the undersigned officer of the Corporation has duly
executed this amended and restated LifePoint Hospitals, Inc. 1998 Long-Term
Incentive Plan on this the _____ day of July, 2005, but to be effective as
provided herein..
LIFEPOINT HOSPITALS, INC.
By: /s/ William F. Carpenter III
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Its: Executive Vice President
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