LifePoint Hospitals, Inc.


Nonqualified Stock Option
Agreement


 


Grant
Number <<Option Number>>


 


This
Agreement is made and entered into by and between LifePoint Hospitals, Inc. (the “Company”), 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 <<Date of Grant>> (the “Date of Grant”).


 


The Company 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 Company 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 and conditions
of the Plan and this Agreement. 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 Company has granted to Participant an Option to purchase
from the Company <<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 <<Expiration Date>> or, if sooner, at the time described in Paragraph 6. Any portion of
this Option that expires hereunder is immediately cancelled and of no further force or effect. Except as otherwise provided in
Paragraph 6 or in the Plan, this Option is exercisable at any time prior to the date it expires with respect to the number of shares
of Common Stock that have become exercisable under the following schedule: this Option will become exercisable with respect to
one-third of the shares covered hereunder on the first anniversary of the Date of Grant, with respect to two-thirds of the shares
on the second anniversary of the Date of Grant, and will be fully exercisable 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 Company, 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 Company or the Committee. In the event the Participant’s employment with the Company is terminated by
reason of death or Disability as described in Paragraph 6(b), the Participant’s Option shall be automatically exercised through
payment by “cashless exercise,” as described herein, on the last day of the Exercise Period (as described in Paragraph
6(b)), if such Option has not been exercised prior to such date. For purposes of this Paragraph 2, payment by “cashless exercise”
means a payment of the exercise price pursuant to the Company withholding a portion of the number of shares subject to the Option
having an aggregate fair market value as of the date of exercise equal to the aggregate purchase price of such Option. The remaining
shares, if any, will be distributed to the Participant or, as applicable, his beneficiaries.


 




    	 



    	 



    

 


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 Company
unless the Company 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 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 Company with respect to any Common Stock subject to (but not
yet acquired upon valid exercise of) the Option, nor shall the Company 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.


 


(b)          Nothing
in this Agreement or the Option shall confer upon the Participant any right to continue as an employee of the Company or to interfere
in any way with the right of the Company to terminate the Participant’s employment at any time.


 




    	 



    	 



    

 


5.          Adjustments.
If at any time while the Option is outstanding, 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 the Company’s
capital or debt structure affecting the Common Stock, including merger, consolidation, conveyance of any or all assets, dissolution,
liquidation, windup or other reorganization, the number and kind of Common Stock and/or the exercise price of such Option shall
be adjusted in accordance with the provisions of the Plan.


 


6.          Termination
of Service.


 


(a)          Except
as provided in subsection (b) below, if Participant’s employment with the Company or Subsidiary is terminated for any reason
prior to the occurrence of any otherwise applicable vesting date provided in Paragraph 1, the Participant shall forfeit his interest
in the Option to the extent that it has not yet become vested and exercisable, but shall have the right to exercise the vested
portion of the Option until the expiration of the Option term or, if sooner, through the appropriate period specified below:


 


(i)          If
Participant’s employment is terminated for any reason other than Cause (as defined below), death, Disability (as defined
below), normal retirement (as defined below), or early retirement (as defined below), the Participant shall retain the right to
exercise the Option, to the extent exercisable on the date of such termination, for three months after the effective date of such
termination, and thereupon the Option shall expire.


 


(ii)          If
Participant’s employment is terminated due to death or Disability (as defined below), the Option shall immediately, as of
the date of termination, become fully (100%) vested and exercisable. The Participant shall retain the right to exercise the Option
for one year after the effective date of such termination of service (the “Exercise Period”), and the Option shall
be automatically exercised in a cashless method as described in Paragraph 2 on the last day of the Exercise Period if it has not
been exercised prior to such date by the Participant or, as applicable, his beneficiaries. For purposes hereof, “Disability”
shall mean the inability of the Participant, after reasonable accommodation, to perform Participant’s required duties for
a period equal to or in excess of the waiting period under the Company’s long-term disability insurance policy, as determined
in good faith by the Board.


 


(iii)          In
the event the Participant’s employment shall terminate by normal retirement (i.e., termination after the Participant has
attained age 65, or has attained age 55 with 10 years of service), the Option may be exercised within 36 months after the Participant’s
retirement, to the extent exercisable on the date of the Participant’s retirement, and thereupon the Option shall expire;
provided, however, that if the Participant is also eligible for early retirement pursuant to subsection (b) below and the Participant
agrees to be bound by the noncompete provision in subsection (b) below, this subsection (a)(iii) shall not apply and the terms
of subsection (b) will apply instead.


 




    	 



    	 



    

 


(iv)          If
Participant’s service as an employee is terminated by the Company for Cause (as defined below), any portion of this Option
that is vested as of such termination date shall remain exercisable for 30 calendar days following such termination. For purposes
hereof, “Cause” shall mean: (A) the conviction of the Participant of a felony under the laws of the United States or
any state thereof, whether or not appeal is taken, as determined by the Board of Directors in good faith; (B) the conviction of
the Participant for a violation of criminal law involving the Company and its business that materially damages the Company as determined
by the Board in good faith; (C) the willful misconduct of the Participant, or the willful or continued failure by the Participant
(except in the case of a Disability) to substantially perform his duties hereunder, in either case which has a material adverse
effect on the Company as determined by the Board in good faith; (D) the willful fraud or material dishonesty of the Participant
in connection with the performance of the Participant’s duties to the Company and involving the finances of the Company as
determined by the Board in good faith; (E) the Participant’s repeated use of alcohol in a manner which in the opinion of
the Board materially impairs the ability of the Participant to effectively perform the Participant’s duties and obligations
owed to the Company, or the illegal use, possession, or sale of, or impaired performance due to the illegal use of, controlled
substances; or (F) a violation of the Company’s policies on sexual or other illegal harassment of a Company employee by the
Participant as determined by the Board in good faith; provided, however, in no event shall the Participant’s
employment be considered to have been terminated for “Cause” unless and until the Participant receives written notice
from the Company stating the acts or omissions constituting Cause and the Participant has the opportunity to cure to the Company’s
satisfaction any such acts or omissions (in the case of (C), (D) or (E) above) within 30 days of the Participant’s receipt
of such notice. 


 


(b)          Notwithstanding
any other provision of this Agreement, if the Participant terminates employment with the Company on or after his early retirement
date, which is the date he attains age 62 and has completed at least five (5) years of continuous employment with the Company,
this Award will continue to vest pursuant to the schedule set forth in Paragraph 1 above and the Participant shall have the right
to exercise the vested portion of the Option until the expiration of the original Option term; provided, however, that, during
the period (the “Restricted Period”) beginning on the date the Participant terminates employment after his early retirement
date (the “Retirement Date”) and continuing until the date the Option is fully vested pursuant to the schedule set
forth in Paragraph 1 above, the Participant 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).  If
the Participant fails to comply with this provision, the Participant will forfeit any unvested Options as of the date the Participant
violates this provision. As used in this Agreement, the term “Competitive Activity” shall mean and refer to: 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 Retirement Date or at any time within the
Restricted 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”).  Nothing in this subsection (b) shall prohibit
the Participant’s ownership of stock in any publicly held company (other than the Company) listed on a national securities
exchange or whose shares of stock are regularly traded in the over the counter market as long as such holding at no time exceeds
two percent (2%) of the total outstanding stock of such company.  


 




    	 



    	 



    

 


7.          Investment
Representation. Upon the exercise of the Option at a time when there is not in effect a registration statement under the Securities
Act of 1933 relating to the Common Stock, the Participant hereby represents and warrants, and by virtue of such exercise shall
be deemed to represent and warrant, to the Company that the Common Stock shall be acquired for investment and not with a view to
the distribution thereof, and not with any present intention of distributing the same, and the Participant shall provide the Company
with such further representations and warranties as the Company may require in order to ensure compliance with applicable federal
and state securities, blue sky and other laws. No Common Stock shall be purchased upon the exercise of the Option unless and until
the Company and/or the Participant shall have complied with all applicable federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies having jurisdiction, unless the Committee has received
evidence satisfactory to it that the Participant may acquire such shares pursuant to an exemption from registration under the applicable
securities laws. Any determination in this connection by the Committee shall be final, binding, and conclusive. The Company reserves
the right to legend any certificate for shares of Common Stock, conditioning sales of such shares upon compliance with applicable
federal and state securities laws and regulations.


 


8.          Change
in Control. Upon the occurrence of a Change in Control, as defined in Section 12.2 of the Plan, the Participant’s rights
under this Option shall be limited by the provisions of this Paragraph 8, notwithstanding any contrary provisions contained in
Section 13.1 of the Plan:


 


(a)          Notwithstanding
the provisions of the Plan regarding the acceleration of the right to exercise this Option upon a Change in Control, a portion
of the acceleration of vesting described in the Plan shall not occur with respect to this Option to the extent such acceleration
of vesting would cause the Participant or holder thereof to realize less income, net of taxes, after deducting the amount of excise
taxes that would be imposed pursuant to section 4999 of the Code, than if accelerated vesting of that portion of the Option did
not occur. This limitation shall not apply to the extent that the stockholders of the Company or the acquirer approve the acceleration
of vesting hereunder in a manner that satisfies section 280G(b)(5)(B) of the Code, or to the extent that the Participant is a party
to an agreement in which the Participant is fully indemnified or otherwise held harmless for the taxes that result from section
4999 of the Code.


 


(b)          Except
as modified by this Paragraph 8, the provisions of Article 12 of the Plan shall otherwise apply to this Option upon the occurrence
of a Change in Control.


 




    	 



    	 



    

 


9.          Committee
Authority. Any question concerning the interpretation of this Agreement, any adjustments required to be made under the Plan
and any controversy that may arise under the Plan or this Agreement shall be determined by the Committee in its sole discretion.
Such decision by the Committee shall be final and binding.


 


10.          Plan
Controls. Except as expressly provided herein, the terms of this Agreement are governed by the terms of the Plan as it exists
on the date of this Agreement and as the Plan is amended from time to time. A copy of the Plan, and any amendments thereto, has
been delivered or made available to the Participant and shall be deemed to be a part of this Agreement as if fully set forth herein.
In the event of any conflict between the provisions of the Agreement and the provisions of the Plan, the terms of the Plan shall
control, except as expressly stated otherwise. For purposes of this Agreement, the defined terms in the Plan shall have the same
meaning in this Agreement, except where the context otherwise requires. The terms “Article” or “Section”
generally refer to provisions within the Plan. The term “Paragraph” generally refers to a provision of this Agreement.


 


11.          Notices.
Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only
upon receipt thereof at the Company’s office at 103 Powell Court, Suite 200, Brentwood, Tennessee 37027, or at such other
address as the Company may designate by notice to the Participant. Any notice hereunder by the Company shall be given to the Participant
in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on
file with the Company.


 


12.          Information
Confidential. As partial consideration for granting of this Option, the Participant agrees that he or she will keep confidential
all information and knowledge that the Participant has relating to the manner and amount of his or her participation in the Plan;
provided, however, that such information may be disclosed as required by law and may be given in confidence to the Participant’s
spouse, tax and financial advisors, or to a financial institution to the extent that such information is necessary to secure a
loan.


 


13.          Governing
Law. This Award Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving
effect to the choice of law principles thereof.


 


In
Witness Whereof, the Company has adopted this instrument as the Agreement to govern the terms of the Option described
herein. The Participant acknowledges and consents to the terms of this Agreement by accepting the grant of this Option and/or
by signifying acceptance electronically through the administrative system adopted by the Company.


 


	 	LifePoint Hospitals, Inc.
	 	 
	 	 
	 	Executive Vice President, Chief
	 	Administrative Officer