LIFEPOINT HOSPITALS, INC. 1998 LONG-TERM INCENTIVE PLAN

 

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                                                                    EXHIBIT 10.1

 

 

 

 

 

 

 

 

 

 

 

 

                            LIFEPOINT HOSPITALS, INC.

                          1998 LONG-TERM INCENTIVE PLAN

 

 

 

 

                 AS AMENDED AND RESTATED EFFECTIVE JUNE 30, 2005

 

 

 

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                            LIFEPOINT HOSPITALS, INC.

                          1998 LONG-TERM INCENTIVE PLAN

 

                 AS AMENDED AND RESTATED EFFECTIVE JUNE 30, 2005

 

                                TABLE OF CONTENTS

 

 

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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

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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

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                            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.

 

 

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          (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.

 

 

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          (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,

 

 

 

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(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

 

 

 

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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.