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:
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2007 EPS
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Percentage
Forfeited
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0
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%
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25
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%
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40
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%
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45
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%
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50
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%
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55
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%
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60
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%
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65
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%
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70
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%
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75
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%
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100
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%
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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.
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