EXHIBIT 10.1



 





EXHIBIT 10.1



Execution Copy



CONSULTING AGREEMENT




     Consulting Agreement (the “Agreement”), dated as of August 15, 2004, by
and between LIFEPOINT HOSPITALS, INC., a Delaware corporation (the “Company”),
and MARTIN S. RASH (the “Consultant”).



     WHEREAS, the Consultant is employed by Province Healthcare Company, a
Delaware corporation (“Province”), as its Chief Executive Officer;



     WHEREAS, the Consultant is a party to the Executive Severance Agreement
between the Consultant and Province, dated October 18, 1999 (the “Severance
Agreement”) and the Senior Management Agreement between the Consultant,
Province, Golder, Thoma, Cressey, Rauner Fund IV, LP and Leeway & Company,
dated December 17, 1996, as amended (the “Management Agreement”);



     WHEREAS, the Company and Province have entered into an Agreement and Plan
of Merger, dated August 15, 2004 (the “Merger Agreement”); and



     WHEREAS, following the Closing Date, the parties desire to terminate the
employment relationship of the Consultant with Province, to settle the parties’
rights under the Severance Agreement and the Management Agreement, to enter
into a consulting relationship between the Company and the Consultant upon the
terms and conditions set forth in this Agreement and to bind the Consultant to
certain restrictive covenants in favor of the Company as set forth in this
Agreement.



     NOW, THEREFORE, in consideration of and in reliance upon the foregoing and
the covenants, obligations and agreements contained herein, the parties hereto
agree as follows:



     1.    Termination of Employment. The parties agree that the Consultant’s
employment with Province will terminate effective upon and subject to the
consummation of the transactions contemplated in the Merger Agreement (the
“Effective Time”), and the Consultant hereby agrees to resign from all offices
and positions he holds with Province or any of its subsidiaries as of the
Effective Time. The parties agree that the Consultant’s termination of
employment will be treated as a termination after a change in control for
purposes of the Severance Agreement and will entitle the Consultant to a lump
sum payment of $2,600,000 (the “Lump Sum Payment”) within 10 days of
termination of employment. The Consultant agrees that the Lump Sum Payment and
the other compensation payable under Section 4 hereof shall represent complete
satisfaction of the obligations of Province and the Company under the Severance
Agreement, the Management Agreement and any other severance plan, policy or
arrangement of Province or the Company, and that the Consultant waives any
other rights he may have under the Severance Agreement, the Management
Agreement and any other severance plan, policy or arrangement of Province or
the Company. Notwithstanding the foregoing, the parties hereby agree that
Section 2.2 of the Severance Agreement will continue to apply in accordance
with its terms, provided that Section 2.2 of the Severance Agreement will not
apply to any payment, right or benefit provided to the Consultant under Section
4.1 or 4.4 hereof or any coverage under Section 4.2



 









 







hereof following two years after the Effective Time.



     2.     Consulting
Period. Subject to early termination as provided in Section 5 hereof, the term of this Agreement will begin on the Effective Time and will
end on the date that is twenty-four months following the date of the Effective
Time (the “Consulting Period”).



     3.     Consultancy.



     3.1   Consulting Services.    During the Consulting Period, the Consultant
agrees to be available for up to 20 hours per month to (a) perform transition
and integration services with respect to the transactions contemplated in the
Merger Agreement, (b) identify and develop potential acquisition targets for
the Company and assist with acquisitions by the Company, (c) assist with
government relations and (d) perform any other services related to the
businesses of Province and the Company as reasonably requested (the “Consulting
Services”). The Consultant shall report directly to the Chief Executive
Officer of the Company and shall perform such Consulting Services as directed
by the Chief Executive Officer, which shall be consistent with the Consultant’s
industry standing and expertise. The Consulting Services will be performed at
such times as are reasonably requested by the Company after reasonable
consultation with the Consultant. The Consulting Services will be performed at
the Company’s principal executive offices or at such other locations as may be
reasonably specified by the Company from time to time.



     3.2   Status.    The Consultant acknowledges and agrees that his status at all
times during the Consulting Period shall be that of an independent contractor,
and that he may not, at any time, act as a representative for or on behalf of
the Company for any purpose or transaction, and may not bind or otherwise
obligate the Company in any manner whatsoever without obtaining the prior
written approval of an authorized representative of the Company therefor. The
Consultant hereby waives any rights to be treated as an employee or deemed
employee of the Company or any of its affiliates for any purpose following his
termination of employment at the Effective Time. The parties hereby
acknowledge and agree that the compensation provided for in Section 4 hereof
shall represent fees for the Consultant’s Consulting Services as an independent
contractor, and shall be paid therefor without any deductions or withholdings
taken therefrom for taxes or any other purpose. The Consultant further
acknowledges that the Company makes no warranties as to any tax consequences
regarding payment of compensation under this Agreement, and specifically agrees
that the determination of any tax liability or other consequences of the
payment set forth above is his sole and complete responsibility and that he
will pay all federal, state and local taxes, if any, assessed on such payments,
but will not be responsible for any taxes or penalties imposed by any taxing
authority against the Company for its failure to properly report the
Consultant’s earnings under this Agreement.



     4.     Compensation and Benefits.



     4.1   Consulting Fee.    During the Consulting Period, the Company shall pay
the Consultant a monthly fee of $75,000, payable monthly in arrears (the
“Consulting Fee”).



     4.2   Welfare Coverages.    For a period of twenty-four months following the
Effective Time, the Consultant (and his eligible dependents, if applicable)
will either (i) continue to



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participate, at the Company’s cost, in Company-sponsored group health care,
life insurance, and disability coverages, as in effect from time to time, on
the same basis as applies to active employees of the Company generally or (ii)
be provided with health care, life insurance, and disability coverages
reasonably equivalent to the coverages described in (i). Following the
expiration of such twenty-four month period, the Consultant (and his eligible
dependents) will be eligible for health care continuation “COBRA” coverage
under Section 4980B of the Internal Revenue Code of 1986, as amended.



     4.3   Office
Services. During the Consulting Period, the Consultant will be
provided with office space at the Company’s headquarters.



     4.4   Company
Airplane. During the Consulting Period, the Consultant shall
be permitted the limited, personal use of the Company’s corporate aircraft.
Any such use shall be subject to the Company’s policies for use of corporate
aircraft and shall be scheduled with the prior approval of the Company. Such
use shall be limited to an aggregate of 37.5 hours of air travel during the
Consulting Period. In addition, the Company shall make cash payments to the
Consultant sufficient to make him whole, on an after-tax basis, for all income
taxes imposed on him as a result of such usage.



     4.5   Business
Expenses. All reasonable and necessary business expenses
incurred by the Consultant in the performance of his services hereunder shall
be promptly reimbursed by the Company in accordance with the Company’s standard
expense reimbursement policies applicable to independent contractors, provided
the incurrence of such expenses are approved in advance by the Company.



     5.     Termination
of Consultancy.



     5.1   Termination
Without Cause/Death Disability. The Company or the
Consultant may terminate the Consulting Period and the Consultant’s service
hereunder at any time and for any reason during the Consulting Period. In the
event that the Consulting Period and the Consultant’s service hereunder is
terminated by the Company without Cause (as defined below), or on account of
the Consultant’s death or Disability (as defined below), neither the Consultant
nor the Consultant’s beneficiaries or estate will have any further rights or
claims against the Company under this Agreement, except the right to receive
(i) any unpaid portion of the Consulting Fee provided for in Section 4.1 hereof
to the date of termination, and any other amounts or benefits due to the
Consultant hereunder through the date of termination, (ii) continued monthly
payment of the Consulting Fee until the date that is twenty-four months from
the date of the Effective Time and (iii) the welfare coverages in accordance
with Section 4.2 hereof until the date that is twenty-four months from the date
of the Effective Time. For purposes hereof, “Cause” shall mean (i) the
Consultant’s willful and substantial misconduct, (ii) the Consultant’s gross
neglect of or willful failure to perform the Consulting Services, (iii) the
Consultant’s material breach of any of the agreements contained in Sections 6
hereof, (iv) the commission by the Consultant of a fraudulent act with respect
to the business and affairs of the Company or any subsidiary thereof or (v) the
Consultant’s conviction of (or plea of nolo contendere to) a crime constituting
a felony. It shall be a condition precedent to the Company’s right to
terminate the Consulting Period and the Consultant’s service hereunder for
“Cause” that (1) the Company shall first have given the Consultant written
notice stating with specificity the reason



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for the termination (“breach”) and (2) if such breach is susceptible of cure or
remedy, a period of thirty days from and after the giving of such notice shall
have elapsed without the breaching party having effectively cured or remedied
such breach. For purposes hereof, “Disability” shall mean the Consultant being
rendered incapable of performing his duties hereunder by reason of any
medically determined physical or mental impairment that can be expected to
result in death or that can be expected to last for a period of either (i) six
or more consecutive months from the first date of the Consultant’s absence due
to the disability or (ii) nine months during any twelve-month period.



     5.2   Other
Termination. In the event that the Consulting Period and the
Consultant’s service hereunder is terminated by the Company for Cause or by the
Consultant for any reason other than on account of death or Disability, neither
the Consultant nor the Consultant’s beneficiaries or estate will have any
further rights or claims against the Company under this Agreement, except the
right to receive any unpaid portion of the Consulting Fee provided for in
Section 4.1 hereof to the date of termination, and any other amounts or
benefits due to the Consultant hereunder through the date of termination.



     6.     Restrictive
Covenants.



     6.1   Disclosure
of Information. The Consultant will not, at any time
during or after the Consulting Period, disclose to any person, firm,
corporation or other business entity, except as required by law, any
non-public, proprietary or confidential information concerning the business,
products, clients or affairs of the Company or any subsidiary for any reason or
purpose whatsoever, nor will the Consultant make use of any of such non-public,
proprietary or confidential information for personal purposes or for the
benefit of any person, firm, corporation or other business entity except the
Company or any subsidiary.



     6.2   Noncompetition. The Consultant hereby acknowledges and recognizes
that, during the Consulting Period, the Consultant will be privy to trade
secrets and confidential proprietary information critical to the business of
the Company or any subsidiary, and the Consultant further acknowledges and
recognizes that the Company would find it extremely difficult or impossible to
replace the Consultant. Accordingly, the Consultant agrees that, in
consideration of the benefits to be received by the Consultant hereunder, the
Consultant will not, from and after the date hereof until the second
anniversary of the Effective Time, (i) directly or indirectly, whether as an
officer, director, owner, investor, employee, consultant, partner, affiliate or
other participant, engage in either (A) the acute care hospital business within
a non-urban service area located in the continental United States or (B) any
other business that provides any health care services similar to any health
care services provided by hospitals operated by the Company or any of its
subsidiaries within a twenty (20) mile radius of any location where the Company
or any of its subsidiaries (x) owns, leases, manages or otherwise maintains an
operating facility, (y) engages in any business or (z) during the Consulting
Period, is actively pursuing ownership, leasing, management or maintenance of a
facility (such businesses or activities described in (A) and (B) being
hereinafter called a “Competing Business”) or (ii) assist others in engaging in
any Competing Business in the manner described in the foregoing clause (i);
provided, however, (x) the Consultant may continue to maintain his level of
ownership in the entities set forth on Schedule 6.2, (y) the Consultant may own
stock in any publicly held company listed on a national securities exchange or
whose stock is regularly traded in the over



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the counter market as long as such holding at no time exceeds five percent
(5%) of the total outstanding stock of such company and (z) the Consultant may
own passive interests in a fund that invests in a company conducting business
in the health care industry so long as such holding at no time exceeds a direct
five percent (5%) of the interests of the fund or an indirect five percent (5%)
of the interests of such company, in the case of each of (x) (other than as set
forth on Schedule 6.2), (y) and (z), so long as the Consultant is not an
officer, director, owner, investor, employee, consultant, partner, affiliate or
otherwise a participant in, or associated with, (other than as a result of
ownership in such publicly held company, fund or portfolio company, as
permitted above) such fund or company. For avoidance of doubt, the parties
understand that nothing in this Section 6.2 shall be construed as preventing
the Consultant from investing in an acute care hospital business or other
health care business in an urban service area, provided such business is not
located within a twenty (20) mile radius of any location where the Company or
any of its subsidiaries (x) owns, leases, manages or otherwise maintains an
operating facility, (y) engages in any business or (z) during the Consulting
Period, is actively pursuing ownership, leasing, management or maintenance of a
facility.



     6.3   Nonsolicitation. The Consultant agrees that, in consideration of the
benefits to be received by him hereunder, the Consultant will not, from and
after the date hereof until the second anniversary of the Effective Time,
directly or indirectly solicit, hire or induce any employee, customer, client
or other person doing business with the Company or any subsidiary in any way
alter their relationship or terminate their employment with the Company or any
subsidiary.



     6.4   Reasonableness. The Consultant understands that the foregoing
restrictions may limit the ability of the Consultant to earn a livelihood in a
business similar to the business of the Company, but nevertheless believes that
the Consultant has received and will receive sufficient consideration and other
benefits, as a consultant for the Company and as otherwise provided hereunder,
to justify such restrictions which, in any event (given the education, skills
and ability of the Consultant), the Consultant believes would not prevent the
Consultant from earning a living.



     6.5   Enforcement. The Consultant acknowledges that irreparable damage
would occur in the event of any breach or threatened breach of Section 6 of
this Agreement and that money damages will be inadequate. It is accordingly
agreed that the Company shall be entitled to an injunction or injunctions to
prevent breaches of Section 6 of this Agreement and to enforce specifically the
terms and provisions of Section 6 of this Agreement in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity. It is the desire and
intent of the parties hereto that the provisions of this Agreement be
enforceable to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, to the extent that a restriction contained in this Agreement is
more restrictive than permitted by the laws of any jurisdiction where this
Agreement may be subject to review and interpretation, the terms of such
restriction, for the purpose only of the operation of such restriction in such
jurisdiction, will be the maximum restriction allowed by the laws of such
jurisdiction and such restriction will be deemed to have been revised
accordingly herein. The provisions of this Section 6 shall survive the
termination of the Consulting Period and Consultant’s service hereunder.



     7.   Miscellaneous.



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     7.1   Indemnity. The Company shall indemnify, defend and hold harmless the
Consultant against all losses, claims, damages or liabilities arising out of
actions or omissions of the Consultant in connection with the performance of
the Consulting Services in compliance with this Agreement, except to the extent
that any such loss, claim, damage or liability results from the gross
negligence, willful misconduct or bad faith of the Consultant.



     7.2   Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction will not invalidate or render unenforceable such provision in
any other jurisdiction.



     7.3   Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier, to the persons at the addresses set forth
below (or at such other address as may be provided hereunder), and shall be
deemed to have been delivered as of the date so delivered:



	 	 	 	 	 
	

	 	the Company:
	 	LifePoint Hospitals, Inc.

103 Powell Ct., Suite 200

Brentwood, TN 37027

Facsimile Number: (615) 372-8575

Attention: General Counsel
	 
	 	 	 	 
	

	 	Copy to Counsel:
	 	Dewey Ballantine LLP

1301 Avenue of the Americas

New York, New York 10019

Facsimile Number: (212) 259-6333

Attention: Morton A. Pierce

                 Jack S. Bodner
	 
	 	 	 	 
	

	 	Consultant:
	 	Martin S. Rash

105 Westwood Place, Suite 400

Brentwood, Tennessee 37027

Facsimile Number: (615) 370-9647
	 
	 	 	 	 
	

	 	Copy to Counsel:
	 	Latham & Watkins LLP

505 Montgomery Street, Suite 1900

San Francisco, CA 94111-2562

Facsimile Number: (415) 395-8095

Attention: Paul R. DeMuro







     7.4   Assignment. Except as set forth herein, no rights of any kind under
this Agreement shall, without the prior written consent of the Company, be
transferable to or assignable by the Consultant or any other person, or, except
as provided by applicable law, be subject to alienation, encumbrance,
garnishment, attachment, execution or levy of any kind,



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voluntary or involuntary. This Agreement shall be binding upon and shall
inure to the benefit of the Company and its successors and assigns.



     7.5   Governing
Law; Venue; Waiver of Jury Trial. Regardless of any
conflict of law or choice of law principles that might otherwise apply, the
parties agree that this Agreement shall be governed by and construed in all
respects in accordance with the laws of the State of Delaware. The parties all
expressly agree and acknowledge that the State of Delaware has a reasonable
relationship to the parties and/or this Agreement. The parties hereby
irrevocably submit to the jurisdiction of the courts of the State of Delaware
and the Federal courts of the United States of America located in the State of
Delaware solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this
Agreement, and in respect of the transactions contemplated hereby, and hereby
waive, and agree not to assert, as a defense in any litigation for the
interpretation or enforcement of this Agreement or of any such document, that
it is not subject thereto or that such litigation may not be brought or is not
maintainable in said courts or that the venue thereof may not be appropriate or
that this Agreement or any such document may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with respect
to such litigation shall be heard and determined in such a Delaware State or
Federal court. The parties hereby consent to and grant any such court
jurisdiction over such parties solely for such purpose and over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such litigation in the manner provided in this Section 7.5
or in such other manner as may be permitted by law shall be valid and
sufficient service thereof. Each party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each such party hereby
irrevocably and unconditionally waives any right such party may have to a trial
by jury in respect of any litigation directly or indirectly arising out of or
relating to this Agreement, or the transactions contemplated by this Agreement.
Each party certifies and acknowledges that (i) no representative of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver, (ii) each
party understands and has considered the implications of this waiver, (iii)
each party makes this waiver voluntarily, and (iv) each party has been induced
to enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 7.5.



     7.6   Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.



     7.7   Captions and Sections. The captions contained in this Agreement are
for reference purposes only and are not part of this Agreement. Unless
otherwise indicated, all references to particular Sections shall mean and refer
to the referenced Sections of this Agreement.



     7.8   Entire Agreement. Except as provided in Section 1 hereof, this
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior arrangements or
understandings with respect thereto, written or oral. This Agreement may be
amended only by an agreement in writing signed by the parties hereto. The



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parties hereby agree that Province and its affiliates (now or at any time
in the future) are third-party beneficiaries under this Agreement.



[SIGNATURE PAGE FOLLOWS]




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     INTENDING TO BE LEGALLY BOUND, the parties or their duly authorized
representatives have signed this Agreement as of the date first above written.


	 	 	 	 	 
	 	LIFEPOINT HOSPITALS, INC.

 	 
	 	By:  	/s/ Kenneth C. Donahey
 	 
	 	Name:  	Kenneth C. Donahey 
	 	Its:  	Chairman of the Board, Chief Executive Officer
and President 
	 
	 	CONSULTANT

 	 
	 	/s/ Martin S. Rash
 	 
	 	Martin S. Rash 	 
	 	 	 
	 





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