AGREEMENT TO COOPERATE AND
GENERAL RELEASE
This Agreement to
Cooperate and General Release (the “Agreement”) is made
and entered into on May 4, 2007 by Michael J. Culotta, an
individual resident of the State of Tennessee (“Mr.
Culotta”), and LifePoint Hospitals, CSGP, LLC, a Delaware
limited liability company (together with LifePoint Hospitals, Inc.,
a Delaware corporation, the “Company”).
WHEREAS,
Mr. Culotta was employed at-will by the Company as its Chief
Financial Officer from November 2001 until his voluntary
resignation on Thursday, April 26, 2007 (the
“Resignation Date”);
WHEREAS,
Mr. Culotta submitted voluntarily his resignation to the
Company to pursue other interests effective upon the close of
business on the Resignation Date and has decided to refrain from
seeking employment with the Company or any of its subsidiaries or
affiliates after the Resignation Date; and,
WHEREAS,
Mr. Culotta and the Company recognize, in light of
Mr. Culotta’s resignation, the desirability of
clarifying the benefits that Mr. Culotta will receive from the
Company and each desire to make various, additional mutual
covenants.
THEREFORE, in
consideration of the premises and mutual promises herein contained,
it is agreed as follows:
1.
Resignation; Cooperation .
(a) The
parties confirm and acknowledge that Mr. Culotta voluntarily
resigned as an employee and officer of the Company and all of its
subsidiaries and affiliates, effective at 8:00 AM Central Time on
the Resignation Date. Mr. Culotta promises and agrees to
execute any additional document or documents necessary, if any, to
effect his resignation from the Company and/or any of its
subsidiaries or affiliates within two business days of any written
request by the Company to do so. Mr. Culotta acknowledges and
agrees that he holds no claim, right or interest in reinstatement
or future employment with the Company and/or any of its
subsidiaries or affiliates.
(b) As a
material inducement to the Company to make the payments described
herein, Mr. Culotta agrees to be available, either in person
or telephonically at the Company’s option, to assist and
cooperate fully with the Company so as to ensure a smooth and
seamless transition of the responsibilities held, and information
learned, by Mr. Culotta while employed by the Company to one
or more persons designated by the Company. Mr. Culotta also
agrees to answer any question(s) asked of him by any officer of the
Company that relates to any function of the Company for which Mr.
Culotta was responsible while employed by the Company. Further,
Mr. Culotta recognizes that the Company is or may be involved
in litigation and other business matters unrelated to litigation
from time to time, and agrees to provide his full cooperation with
any of the Released Parties in the defense or prosecution of one or
more existing or future court
actions,
governmental investigations, arbitrations, mediations or other
legal or equitable matters or proceedings, and all business
matters, which involve any of them or any of their employees,
officers or directors. Mr. Culotta acknowledges and
understands that his obligations of cooperation under this Section
1(b) are not limited in time and may include, but shall not be
limited to, the need for or availability for testimony in
deposition, affidavit, trial, mediation or arbitration, as well as
preparation for that testimony, and consultation for other business
matters unrelated to litigation. Mr. Culotta agrees that he
will be available at the Company’s reasonable request for any
meetings or conferences deemed necessary in connection with any
matters within this Section 1(b), and in preparation for the
defense or prosecution of any such other matters or proceedings,
and the Company agrees to endeavor to schedule
Mr. Culotta’s availability at mutually agreeable times,
dates and locations. Other than the consideration identified in
Section 2, Mr. Culotta shall receive no additional
compensation for time spent assisting the Company pursuant to this
Section 1(b), provided, however, that if Mr. Culotta
shall be required to travel in excess of fifty (50) miles from
his principal residence pursuant to this Section 1(b), the
Company shall reimburse Mr. Culotta for his reasonable travel,
meal and lodging expenses pursuant to its existing policies and
procedures for same.
2.
Consideration and Payment; Release of Claims
.
(a) In
consideration of, and in exchange for, Mr. Culotta’s
promises and covenants made in this Agreement and beginning on the
next regularly scheduled pay day after Mr. Culotta executes
this Agreement, the Company agrees to pay Mr. Culotta the
total gross amount of $802,500 (“the “Payment”),
which represents eighteen months of Mr. Culotta’s annual
salary as of the Resignation Date, subject to
Mr. Culotta’s full compliance with this Agreement. The
Payment will be made, pro rata and subject to all applicable
withholding taxes, on each of the Company’s regularly
scheduled paydays beginning on the next payday after
Mr. Culotta executes the Agreement, and shall continue
thereafter for thirty-nine pay periods. Having voluntarily resigned
his position, Mr. Culotta acknowledges and agrees that the
Company is not otherwise obligated to provide him with any of the
benefits set forth in Section 2(a).
(b) Except to
the extent provided otherwise herein, Mr. Culotta shall not,
from the Resignation Date forward, participate in the
Company’s 401(k); retirement and/or thrift plan; cafeteria
plan; or, any other benefit or stock grant, award or option plan
sponsored by the Company. Mr. Culotta shall, however, be
entitled to any funds accrued in such plans prior to the
Resignation Date (less any outstanding principal loan balance,
where applicable), to the extent and in accordance with the terms
of the plans. Mr. Culotta’s health and welfare plan
participation will cease as of the Resignation Date, except that
Mr. Culotta may elect to exercise his rights under COBRA to
continue applicable medical and dental coverage in accordance with
the applicable plan and Mr. Culotta shall be solely
responsible for the premiums therefore. Except as herein expressly
stated, Mr. Culotta shall not be entitled to any other
benefits or compensation from the Company at any time after the
Resignation Date, including but not limited to any accrued but
unused vacation or PTO time.
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(c) The
parties acknowledge and agree that all of Mr. Culotta’s
Options (as such term is defined by the 1998 Long Term Incentive
Plan) that are vested as of the Resignation Date remain vested and
are exercisable no later than three months after the Resignation
Date, and that all of Mr. Culotta’s Options that were
not vested on the Resignation Date are forfeited effective as of
the Resignation Date. The parties acknowledge and agree that all
rights and options to purchase the Company’s stock under the
Management Stock Purchase Plan cease and all unvested shares are
forfeited as of the Resignation Date and that Mr. Culotta
shall receive, within thirty days of the date he executes this
Agreement, the lesser of the market value of the stock or the
amount of salary used to purchase stock. The parties also
acknowledge and agree that all shares of restricted stock held by
Mr. Culotta on the date of this Agreement are unvested and
are, therefore, forfeited.
(d) Mr. Culotta
hereby forever settles, releases, compromises, reaches accord and
satisfaction, waives, remises, discharges, and acquits the Company
and its predecessors, successors, purchasers, subsidiaries, assigns
or affiliates and the officers, agents, directors, or employees of
any of them, or any successors, purchasers, or predecessors of any
of them (collectively, the “Released Parties”) from
each and every claim which exists as of the date of this Agreement,
whether known or unknown, or which Mr. Culotta at any time
hereafter may have relating to his employment by the Company
including, but not limited to the separation of said employment and
any right or claim under federal or state law or any political
subdivision thereof, including but not limited to Title VII of the
Civil Rights Act of 1964 which prohibits discrimination in
employment based on race, color, national origin, religion or sex;
the Americans with Disabilities Act which prohibits discrimination
in employment based upon physical or mental disabilities; the
Family and Medical Leave Act; and any other federal, state or local
laws or regulations prohibiting employment discrimination or
protecting employee rights, as well as claims for any other
tortious or unlawful conduct, including but not limited to slander,
defamation and intentional or tortious interference with contract
or a prospective business relationship, up to the date of the
execution of this Agreement (“the Claims”). The
foregoing release of Claims shall not include Company’s
obligations, responsibilities or undertakings pursuant to this
Agreement.
(e) Mr. Culotta
fully understands and agrees that this Agreement may be pled by the
Released Parties as a complete defense to any of the Claims which
may be hereafter asserted by him or on his behalf in any suit,
claim, or grievance proceeding against the Released Parties, for or
on account of any of the Claims up to and including the present
time of execution hereof.
3.
Restrictive Covenants of Mr. Culotta .
(a) For a
period of eighteen months following the Resignation Date
(“the Identified Period”), Mr. Culotta agrees that
he will not, in any capacity (including, but not limited to, as an
owner, member, partner, shareholder, consultant, advisor,
financier, agent, employee, officer, director, manager or
otherwise), whether directly or indirectly, engage in a Competitive
Activity (as such term is hereinafter defined). As used in this
Agreement, the term “Competitive Activity” shall mean
and refer to: (i) any person or entity (including their
successors (including any successor(s) that results from any
business combination, sale or merger), assigns and transferees,
whether by operation of law or otherwise) that, whether on the
Resignation Date or
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at any time
within the Identified Period, derives more than fifty percent of
its revenues from one or more non-urban acute care hospitals (and
associated outpatient healthcare facilities) (together, a
“Non-Urban Hospital”) anywhere in the United States;
(ii) any person or entity (including their successors
(including any success
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