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Nonqualified Stock Option Agreement

Option Agreement

Nonqualified Stock Option Agreement | Document Parties: LIFEPOINT HOSPITALS, INC. You are currently viewing:
This Option Agreement involves

LIFEPOINT HOSPITALS, INC.

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Title: Nonqualified Stock Option Agreement
Governing Law: Delaware     Date: 4/27/2007
Industry: Healthcare Facilities     Sector: Healthcare

Nonqualified Stock Option Agreement, Parties: lifepoint hospitals  inc.
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Exhibit 10.1

LifePoint Hospitals, Inc.
Nonqualified Stock Option Agreement

Grant Number N <<Option Number>>

      This Agreement is made and entered into by and between LifePoint Hospitals, Inc. (the “Corporation”), and << Participant >> (the “Participant”), in connection with the grant of an Option under the LifePoint Hospitals, Inc. 1998 Long Term Incentive Plan (the “Plan”) that was made on March 1, 2007 (the “Date of Grant”).

     The Corporation established the Plan effective November 5, 1998 and amended and restated the Plan effective June 30, 2005. The Participant is eligible to receive this option, and the Corporation desires to encourage the Participant to own Common Stock for the purposes stated in Article 1 of the Plan. The Option evidenced by this Agreement is intended to be a Nonqualified Option that is subject to the terms of the Plan as amended and restated and the terms and conditions of this Agreement. The right to exercise this Option is subject to certain performance conditions described in Paragraph 1(a). The Participant’s rights under the Option are conditioned on acceptance of the terms contained herein.

     1.  Grant of Option . Subject to the terms and conditions set forth herein, the Corporation has granted to Participant an Option to purchase from the Corporation << Shares >> shares of Common Stock at a price of << Price >> per share. This price is subject to adjustment as provided in Section 3.2 of the Plan. Any unexercised portion of this Option will expire at the close of business on March 1, 2017 or, if sooner, at the time described in Paragraph 6. A portion of this Option may also expire sooner due to a forfeiture described in Paragraph 1(a). Any portion of this Option that expires hereunder is immediately cancelled and of no further force or effect. Otherwise, this Option will become exercisable as follows, except as otherwise provided in the Plan or in Paragraph 6:

          (a) The right to exercise this Option will expire with respect to a percentage of the shares of Common Stock covered by the Option in the event that the Corporation’s earnings per share (“EPS”) from continuing operations reported for the 2007 fiscal year is less than $2.65 per share (fully diluted). The forfeiture, if any, will be calculated as a percentage of the shares of Common Stock covered by this Option in accordance with the following schedule:

 

 

 

 

 

2007 EPS

 

Percentage Forfeited

$2.65 or more per share

 

 

0

%

$2.62 to $2.64

 

 

25

%

$2.59 to $2.61

 

 

40

%

$2.56 to $2.58

 

 

45

%

$2.52 to $2.55

 

 

50

%

$2.50 to $2.51

 

 

55

%

$2.48 to $2.49

 

 

60

%

$2.46 to $2.47

 

 

65

%

$2.44 to $2.45

 

 

70

%

$2.42 to $2.43

 

 

75

%

Below $2.42 per share

 

 

100

%

 


 

The portion of the Option that is not forfeited pursuant to this Paragraph 1(a) is hereinafter referred to as the “Earned Shares” and shall become exercisable in accordance with the conditions of Paragraph 1(b).

          (b) This Option will become exercisable with respect to one-third of the Earned Shares, as determined under Paragraph 1(a), on the first anniversary of the Date of Grant, with respect to two-thirds of the Earned Shares on the second anniversary of the Date of Grant, and will be fully exercisable with respect to the Earned Shares on the third anniversary of the Date of Grant.

     2.  Method of Exercise . The Participant may exercise this Option in whole or in part, from time to time, with respect to the number of whole shares of Common Stock that can be purchased at such time pursuant to Paragraph 1 in accordance with the procedures for exercise that have been established by the Committee. The exercise of this Option is subject to the Participant’s execution of a written stockholders agreement that generally applies to some or all of the stockholders of the Corporation, payment of the exercise price stated in Paragraph 1 in accordance with the terms of the Plan, and arrangement for any required tax withholdings in a method that is acceptable to the Corporation or the Committee.

     3.  Restriction on Transfer of Option . The Option may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by the Participant, except by (i) will or by the laws of descent and distribution or (ii) to a “family member” (as defined below), provided that such transfer is made 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. In the event a Participant becomes legally incapacitated, the Option shall be exercisable by his legal guardian, committee or legal representative. If the Participant dies, the Option shall thereafter be exercisable by the Participant’s executors or administrators. The Option shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Option, shall be null and void and without effect.

          (a) For purposes hereof, a “family member” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the employee’s household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the employee) control the management of assets, and any other entity in which these persons (or the employee) own more than 50% of the voting interests.

          (b) No transfer of an Option by the Participant by will or by laws of descent and distribution shall be effective to bind the Corporation unless the Corporation shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Board may deem necessary to establish the validity of the transfer. During the lifetime of a Participant, except as provided above, the Option shall be exercisable only by the Participant, except that, in the case of a Participant who is legally incapacitated, the Option shall

2


 

be exercisable by the Participant’s guardian or legal representative. In the event of any transfer of an Option to a family member in accordance with the provisions of this Paragraph 3, such family member shall thereafter have all rights that would otherwise be held by such Participant (or by such Participant’s guardian, legal representative or beneficiary), except as otherwise provided herein.

     4.  Status of Participant .

          (a) The Participant shall not have any privileges of a stockholder of the Corporation with respect to any Common Stock subject to (but not yet acquired upon valid exercise of) the Option, nor shall the Corporation have any obligation to issue any dividends or otherwise afford, with respect to such Common Stock, any rights to which holders of Common Stock are entitled, until the date of the issuance to the Participant of a stock certificate evidencing such shares.

  &n


 
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