Document:

Universal Health Services, Inc. Non-Employee Directors' Fees

 Exhibit 10.1 
  
 Universal Health Services, Inc. Non-Employee Directors’ Fees 
 (Effective September 28, 2005) 
  

				
	 Annual Retainer Non-Employee Directors
	  	$	40,000
		
	 Committee Chair Retainer
	  	 	 
	 Audit
	  	$	10,000
	 Compensation
	  	$	5,000
	 Nominating and Governance
	  	$	5,000
		
	 Committee Member Retainer
	  	 	 
	 Audit (excluding chair)
	  	$	2,500
		
	 Committee Meeting Fees
 (Meetings in excess of 30 minutes)
	  	$	1,000

  
 All fees will be paid in cash.Form of Stock Option Agreement for Non-Employee Directors

 Exhibit 10.2 
  
 UNIVERSAL HEALTH SERVICES, INC. 
 2005 STOCK INCENTIVE PLAN 
 STOCK OPTION AGREEMENT 
  
 OPTION AGREEMENT, made as of the
     day of                     , 200    , by and between UNIVERSAL
HEALTH SERVICES, INC., a Delaware corporation (the “Company”), and
                    , a non-employee director of the Company (the “Optionee”), residing at
                            . 
  
 WITNESSETH: 
  
 WHEREAS, pursuant to the Company’s 2005 Stock Incentive Plan (the “Plan”), the Company desires to afford the Optionee an
opportunity to purchase shares of the Company’s Class B Common Stock, par value $.01 per share (the “Common Stock”), as hereinafter provided. 
  
 NOW, THEREFORE, in consideration of the premises and of the mutual promises hereinafter contained, the parties hereto agree
as follows: 
  
 1. Grant of Option. The Company
hereby grants to the Optionee an option (the “Option”) to purchase all or any part of an aggregate of              shares of Common Stock on the terms and conditions
hereinafter set forth. The Option is not intended to be an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. 
  
 2. Exercise Price. The purchase price of the shares of Common Stock covered by the Option shall be
$             per share, which is not less than one hundred percent (100%) of the fair market value of a share of Common Stock on the date of grant. Payment shall be made in the
manner prescribed in Paragraph 6 hereof. 
  
 3. Term of
Option. The term of the Option shall be for a period of five (5) years from the date hereof, subject to earlier termination as provided in Paragraph 5 hereof. The Option shall be exercisable by the Optionee as follows: [(i) after the
Option has been outstanding for              (from the date of grant), the Optionee may purchase      percent (    %) of the
total shares subject to the Option; (ii) after the Option has been outstanding for             , the Optionee may purchase up to      percent
(    %) of the total shares subject to the Option; (iii) after the Option has been outstanding for             , the Optionee may purchase up to
     percent (    %) of the total shares subject to the Option; and (iv) after the Option has been outstanding for
            , the Optionee may exercise the Option as to any or all of the shares subject thereto] Notwithstanding the preceding sentence, the Option shall immediately become
fully exercisable upon a Change in Control (as defined in the Plan) of the Company. 
  
 4. Nontransferability. The Option may not be assigned or transferred except upon the Optionee’s death to a beneficiary designated by the Optionee in a manner prescribed or approved for this purpose
by the Committee or, if no designated beneficiary shall survive the Optionee, pursuant to the Optionee’s will or by the laws of descent and distribution, and the Option may be exercised during the Optionee’s lifetime only by the Optionee.
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.

 5. Termination of Service. Upon the termination of the Optionee’s service with the Company
for any reason other than death or disability (as determined by the Board), (i) that portion of the Option, if any, which is not then exercisable shall immediately terminate, and (ii) that portion of the Option, if any, which is then
exercisable may be exercised by the Optionee during the ninety (90) day period following such termination of service, but in no event later than the expiration date of the Option, and shall thereupon terminate. Upon the termination of the
Optionee’s service with the Company on account of death or disability (as determined by the Board), the Option shall be immediately and automatically accelerated and become fully exercisable and shall remain exercisable by the Optionee (or by
the Optionee’s personal representative, heir or legatee, in the event of death) during the one (1) year period following such termination of service, but in no event later than the expiration date of the Option, and shall thereupon
terminate. 
  
 6. Method of Exercising Option. To
the extent exercisable, the Option may be exercised in whole or in part by delivering to the Secretary of the Company (a) a written notice specifying the number of shares to be purchased, and (b) payment in full of the exercise price,
together with the amount, if any, deemed necessary by the Company to enable it to satisfy any tax withholding obligations attributable to the exercise. The exercise price shall be payable in cash or by check, by means of a cashless exercise
procedure, in the form of unrestricted shares of Common Stock (to the extent of the Fair Market Value thereof) or, subject to applicable law, by any other form of consideration deemed appropriate by the Committee. 
  
 7. Notices. Each notice relating to this Agreement shall be in
writing and delivered in person or by first class mail, postage prepaid, to the proper address. Each notice shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it at its principal office,
367 South Gulph Road, P.O. Box 61558, King of Prussia, Pennsylvania 19406-0958 (Attention: Corporate Secretary). Each notice to the Optionee or other person or persons then entitled to exercise the Option shall be addressed to the Optionee or such
other person or persons at the Optionee’s address set forth in the heading of this Agreement. Anyone to whom a notice may be given under this Agreement may designate a new address by notice to that effect. 
  
 8. Provisions of Plan Control. The provisions of the Plan, the
terms of which are incorporated in this Agreement, shall govern if and to the extent that there are inconsistencies between those provisions and the provisions hereof. The Optionee acknowledges receipt of a copy of the Plan prior to the execution of
this Agreement. 
  
 9. Enforceability. This
Agreement shall be binding upon the Optionee, his/her estate, his/her personal representatives and beneficiaries. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereto and supersedes any and
all prior agreements and understandings between the parties hereto. This Agreement may not be modified, other than as provided in the Plan, except by written instrument executed by the parties hereto. 
  

 -2- 

 10. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to its principles of conflict of laws. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 
  

			
	UNIVERSAL HEALTH SERVICES, INC.
		
	By:	 	  

	 	 	Name: Steve Filton
	 	 	Title: Sr. Vice President and CFO

			
		
	By:	 	  

	 	 	Name:
	 	 	 

  

 -3-Separation Agreement and General Release

 Exhibit 10.1 
  
 SEPARATION AGREEMENT 
 AND 
 GENERAL RELEASE 
  
 TO: John Bert Watson 
  
 This Separation Agreement and General Release (the “Agreement”) is executed on the dates given on the signature pages by and between Sunset
Financial Resources, Inc. (“Sunset” or the “Company”) and John Bert Watson (“Executive,” “you” or “I”). 
  
 RECITALS 
  
 WHEREAS, Sunset and Executive entered into an Employment Agreement dated February 6, 2004 (“Employment Agreement”); and 
  
 WHEREAS, Executive shall resign from Sunset and all of its affiliates
as an officer, employee and as Chairman and member of the Board of Directors (the “Board”), effective September 27, 2005; and 
  
 WHEREAS, the parties agree that Executive’s separation from employment is the result of a mutual agreement between Executive and Sunset; and

  
 WHEREAS, Executive and the Company agree to provide
each other with a general release of claims as contained herein. 
  
 NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 I. Separation of Employment 
  
 A. Except as otherwise provided herein, Sunset and Executive hereby
agree that Executive’s employment shall be separated as of September 27, 2005 (“Separation Date”) and that neither shall thereafter have any liabilities, rights, duties or obligations to the other party under or in connection with
Executive’s employment with the Company, except as provided in this Agreement. 
  
 B. Sunset and Executive hereby waive any rights to prior notification of termination of Executive’s employment. 
  
 C. Executive hereby resigns, effective on the Separation Date, as an officer and employee of Sunset and as Chairman and member of the Board of
Sunset, and as an officer, manager, employee or similar functionary of all entities related to Sunset. 
  

					
	 	 	 	 	 /s/ JW

	Page 1	 	 	 	EMPLOYEE’S INITIALS

 D. Executive agrees to waive any notice issues with respect to the special meeting of
Sunset’s Board on August 24, 2005. 
  
 E. Executive
and Sunset agree that Executive received two stock option grants on March 22, 2004: Executive received an ISO grant of 23,076 options at a $13 per share exercise price and of those ISO options, 7,692 have vested as of the Separation Date. Executive
also received an NSO grant of 93,924 at a $13 per share exercise price and of those NSO options, 31,308 have vested as of the Separation Date. Therefore, Executive and Sunset agree that Executive holds 39,000 vested stock options and 78,000 unvested
stock options as of the Separation Date. Pursuant to the terms of the applicable option agreement, Executive’s unvested stock options shall be forfeited on September 27, 2005 and Executive must exercise his vested options on or before October
27, 2005 or such vested options shall be forfeited. These and all other terms of Executive’s stock options shall be governed by the terms and conditions of the applicable stock option agreement and plan. 
  
 II. Special Compensation, Benefits and Consideration 
  
 In consideration for Executive’s release of claims, as well as his
other promises contained herein, Sunset agrees to provide Executive with the following benefits: 
  

	 	A.	Sunset agrees to pay to Executive the total amount of $ 375,000, less applicable taxes and lawful deductions, payable in one lump sum payment within ten (10) days of the
Effective Date of the Agreement (as defined in subsection IV(N) below). 

  

	 	B.	As further consideration for Executive’s release of claims, Sunset agrees to waive enforcement of the non-competition provision contained in Section 9(b) of the
Employment Agreement; 

  

	 	C.	Sunset agrees to continue at its expense for a period of twelve (12) months following the Separation Date Executive’s family health and dental insurance coverage in the
form of Florida Mini-Cobra continuation benefits. Executive agrees that the Company, at its discretion, may pay the continuation premiums directly to the insurance company or reimburse Executive for his payment of the continuation premiums.
Executive further agrees that he will be required to timely submit the necessary paperwork to obtain such continuation benefits. After the expiration of twelve months following the Separation Date, any continuation of dental and health insurance
benefits for Executive and his family will be at Executive’s own expense. 

  

	 	D.	Sunset agrees to provide Executive with a general release of claims as detailed in Section III(C). 

  
 Executive understands and agrees that the compensation recited in this Section II constitutes the full compensation from
Sunset to Executive, and no other payments are due to Executive. The parties agree that Section 4 (Termination) of the Employment Agreement shall not apply to Executive’s separation and shall have no effect and be unenforceable as of the
Effective Date of this Agreement (as defined below). 
  

					
	 	 	 	 	 /s/ JW

	Page 2	 	 	 	EMPLOYEE’S INITIALS

 III. Mutual General Release 
  
 A. In return for the consideration referenced in this Agreement, I, John Bert Watson, agree to the following:

  
 I agree, on behalf of myself and all of my heirs or personal
representatives, to release Sunset, its parent companies, subsidiaries, all affiliates of each, predecessors and successors, and all of its present or former officers, trust managers, directors, managers, representatives, employees, agents,
attorneys, employee benefit programs, and the trustees, administrators, fiduciaries and insurers of such programs (collectively the “Company Released Parties”), from any and all claims for relief of any kind, whether known to me or
unknown, which in any way arise out of or relate to my employment at Sunset or any of the Company Released Parties, the separation of my employment at Sunset or any of the Company Released Parties, any agreements between Sunset or any of the Company
Released Parties and me, including but not limited to the Employment Agreement, and concerning any set of facts or events occurring at any time up to the Effective Date of this Agreement, including, but not limited to, any and all claims of
discrimination of any kind, and any contractual, tort or other common law claims. This settlement and waiver includes all such claims, whether for breach of contract, quasi-contract, implied contract, quantum meruit, unjust enrichment, compensation,
deferred compensation, equity interest, any tort claims, any and all claims under any applicable federal laws, including, but not limited to, the Age Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1991, 42 U.S.C. § 1981, the Americans with Disabilities Act, as amended, the Equal Pay Act, as amended, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act of 1974,
as amended, the Family and Medical Leave Act, as amended, the Fair Labor Standards Act, as amended, the Sarbanes-Oxley Act, or under any applicable state or local laws or ordinances or any other legal restrictions on Sunset’s rights, including
the Florida Civil Rights Act. 
  
 I further agree to release
Sunset and the Company Released Parties from any and all claims that I may have regarding the employment of George Deehan or his appointment as President of the Company. Specifically, I agree that the employment of George Deehan and his appointment
as President of the Company, effective August 8, 2005, and his service in that position, shall not be considered a breach by the Company of any provision of the Employment Agreement and shall not constitute “Good Reason” as defined in
paragraph 1(h) of the Employment Agreement. 
  
 B. I
further agree not to file a suit of any kind against Sunset or any of the Company Released Parties relating to my employment at Sunset or any of the Company Released Parties, the separation thereof, any agreements between Sunset or any of the
Company Released Parties and me, including but not limited to the Employment Agreement, any set of facts or events occurring up to the Effective Date of this Agreement, or to participate voluntarily in any employment-related claim brought by any
other party against Sunset or any of the Company Released Parties. Even if a court rules that I may file a lawsuit against Sunset or any of the Company Released Parties arising from my employment at Sunset or any of the Company 
  

					
	 	 	 	 	 /s/ JW

	Page 3	 	 	 	EMPLOYEE’S INITIALS

 Released Parties, or the separation thereof, or based on any other set of facts or events occurring prior to the
Effective Date of this Agreement, I agree not to accept any money damages or any other relief in connection with any such lawsuit. I understand that this Agreement and General Release effectively waives any right I might have to sue Sunset or any of
the Company Released Parties for any claim arising out of my employment at Sunset or any of the Company Released Parties, the separation of my employment, any agreements between Sunset or the Company Released Parties and me, including but not
limited to the Employment Agreement, or based on any other set of facts or events occurring prior to the Effective Date of this Agreement. 
  
 However, this release does not waive my rights to enforce this Agreement. In addition, this release does not give up my rights, if any, to COBRA benefits
under the Company’s standard benefit programs applicable to me. Further, this release does not waive my rights to vested 401(k) monies, vested stock options, my final paycheck, reimbursement of any outstanding business expense amounts (in
accordance with Sunset’s existing reimbursement policies) or my rights to indemnification, if any, under Sunset’s declaration of trust or bylaws. 
  
 C. In return for the consideration referenced in this Agreement, Sunset agrees to the following: 
  
 Except as set forth in the last paragraph of this Section, Sunset agrees, on
behalf of itself and all of its parent companies, subsidiaries, affiliates, predecessors and successors, to release Executive and his heirs (collectively the “Executive Released Parties”), from any and all claims for relief of any kind,
whether known to it or unknown, which in any way arise out of or relate to Executive’s employment at Sunset or any of the Company Released Parties, the separation of Executive’ s employment at Sunset or any of the Company Released Parties,
or any agreements between Sunset or any of the Company Released Parties and Executive, including but not limited to the Employment Agreement, and concerning any set of facts or events occurring at any time up to the Effective Date of this Agreement.

  
 Except as set forth in the last paragraph of this Section,
Sunset further agrees not to file a suit of any kind against Executive or any of the Executive Released Parties relating to Executive’s employment at Sunset, the separation thereof, any agreements between Sunset or any of the Company Released
Parties and Executive, including but not limited to the Employment Agreement, or to participate voluntarily in any employment-related claim brought by any other party against Executive or any of the Executive Released Parties. Except as set forth in
the last paragraph, even if a court rules that Sunset may file a lawsuit against Executive or any of the Executive Released Parties arising from Executive’s employment at Sunset or any of the Company Released Parties, or the separation thereof,
or based on any other set of facts or events occurring prior to the Effective Date of this Agreement, Sunset agrees not to accept any money damages or any other relief in connection with any such lawsuit. Sunset understands that this Agreement and
General Release effectively waives any right it might have to sue Executive or any of the Executive Released Parties for any claim arising out of Executive’s employment at Sunset or any of the Company Released Parties, any agreements between
Sunset or the Company Released Parties and Executive, including but not limited to the Employment Agreement, or the separation of Executive’s employment, or based on any other set of facts or events occurring prior to the Effective Date of this
Agreement, except as set forth in the last paragraph of this Section. 
  

					
	 	 	 	 	 /s/ JW

	Page 4	 	 	 	EMPLOYEE’S INITIALS

 Notwithstanding the generality of the foregoing, nothing contained herein shall release the Executive
Released Parties from any claim relating to (i) a breach by Executive of any provision of any agreement that pursuant to the Separation Agreement survives the execution thereof, including but not limited to confidentiality agreements with Sunset or
any of its affiliates, (ii) Executive’s obligations set forth herein, or (iii) Executive’s fraud, willful misconduct or gross negligence. 
  
 IV. Restrictive Covenants and Miscellaneous Provisions 
  
 A. While I understand that I have had such an obligation since I began my employment with Sunset or any of the Released Parties, I confirm that I
shall not disclose any of the trade secrets or other confidential or restricted information of Sunset or any of the Released Parties and shall not make use of such trade secrets or confidential or restricted information in any fashion at any time,
including in any future employment, task, work or business. 
  
 B. I agree to comply at all times after the Separation Date with all provisions of Section 9 of the Employment Agreement, with the exception of Section 9(b), regardless of the nature of my separation, which provisions include
covenants concerning the non-disclosure of confidential information and a prohibition on the inducement or employment of employees, agents, or consultants of the Company. I acknowledge and agree that Sections 9 (with the exception of Section 9(b))
and 10 of the Employment Agreement shall survive the separation of my employment, regardless of the separation reason and shall survive the execution of this Agreement. 
  
 C. I understand and agree that Sunset shall have the right to and will terminate payment for the continued insurance
benefits as provided in Section II(C) and/or sue me for breach of this Agreement if I violate the provisions of Section IV(B), or otherwise fail to comply with this Agreement. I further acknowledge that but for my agreements to comply with my
obligations described in this Section and this Agreement, Sunset would not provide me with the compensation, benefits and consideration set forth in Section II. 
  

D. The parties agree that Section 4 (Termination) of the Employment Agreement shall not apply to Executive’s separation and shall have no
effect and be unenforceable as of the Effective Date of this Agreement. 
  
 E. I warrant that I have returned to Sunset all company property in my possession, including, but not limited to, company files, work product, computer equipment, computer software, cell phones, pagers, corporate credit cards,
identification cards, manuals, company documents and company keys. I further agree to cooperate and work with the Chief Operating Officer to ensure my compliance with this Section IV(E). 
  
 F. I understand that the short-term disability, long-term disability and life insurance coverage provided by Sunset,
if any, will end on September 27, 2005. I also understand that Sunset will not pay for any business-related or other charges incurred by me after September 27, 2005, unless such expenses are expressly approved in advance by the Chief Executive
Officer or 
  

					
	 	 	 	 	 /s/ JW

	Page 5	 	 	 	EMPLOYEE’S INITIALS

 Board of Sunset. I further understand that I will cease to accrue vacation time as of September 27, 2005. Executive shall
be paid for any accrued, unused vacation within fourteen (14) days after the Effective Date of this Agreement. 
  
 G. This Agreement does not constitute an admission of any kind by Sunset, but is simply an accommodation that offers certain extra benefits to
which I would not otherwise be entitled in return for my agreeing to and signing this document. 
  
 H. I agree not to voluntarily make the terms and conditions or the circumstances surrounding this Agreement known to anyone other than an attorney
and/or tax consultant from whom I receive counseling, or, if I am married, to my spouse, or except as otherwise required by law. I acknowledge that any such person must agree not to further disclose the terms of this Agreement. 
  
 I. Sunset agrees not to voluntarily make the terms and conditions or
the circumstances surrounding this Agreement known to anyone other than its attorneys and/or tax consultants from whom it receives counseling, or except as otherwise required by law or the rules of the New York Stock Exchange. 
  
 J. I agree not to make any statements that disparage the reputation of
Sunset or any of the Released Parties, or their services. I further agree not to take any action to interfere with or damage the Company’s relationship with its vendors, lenders, brokers and/or clients. I agree that any breach or violation of
this non-disparagement and non-interference provision shall entitle Sunset to terminate this Agreement and/or sue me on this Agreement for the immediate recovery of any damages caused by such breach. 
  
 K. Sunset agrees not to make any statements that disparage the
reputation of Executive. Sunset agrees that any breach or violation of this non-disparagement provision shall entitle Executive to sue Sunset on this Agreement for the immediate recovery of any damages caused by such breach. 
  
 L. I acknowledge that in the course of my employment with the Company,
I have gained knowledge and experience and/or was a witness to events and circumstances that may arise in the Company’s defense or prosecution of subsequent proceedings. I agree to cooperate fully with the Company, including without limitation
providing truthful testimony, and to appear upon the Company’s reasonable request as a witness and/or consultant in defending or prosecuting claims of all kinds, including but not limited to any litigation, administrative actions or
arbitrations, at the Company’s expense. 
  
 M. The
venue for the litigation of any dispute arising out of this Agreement shall be a court of competent jurisdiction in Duval County, Florida. If either party files a lawsuit in state court arising out of this Agreement, the other party may remove the
lawsuit to federal court to the extent jurisdiction exists. Florida law shall govern the interpretation and enforcement of this Agreement. 
  
 N. I am entering into this Agreement freely and voluntarily. I have carefully read and understand all of the provisions of this Agreement. I
understand that it sets forth the entire 
  

					
	 	 	 	 	 /s/ JW

	Page 6	 	 	 	EMPLOYEE’S INITIALS

 agreement between me and the Company and I represent that no other statements, promises, or commitments of any kind,
written or oral, have been made to me by the Company, or any of its agents, to cause me to accept it. I acknowledge that I have been advised to consult legal counsel concerning this Agreement prior to signing the Agreement, and that I have had
sufficient opportunity to do so. I understand that I may have up to twenty-one (21) days from the date of this letter to consider this Agreement. I understand that if I sign this Agreement, I will then have seven (7) days to cancel it if I so
choose. I may cancel this Agreement by delivering a written notice of cancellation to the Board of Directors, Sunset Financial Resources, Inc., 10245 Centurion Parkway, Suite 305, Jacksonville, Florida 32256. However, if I elect to cancel this
Agreement, I understand I will not be entitled to any of the benefits, compensation, or other consideration referenced in this Agreement. I realize this Agreement is not effective or enforceable until the seven-day period expires without revocation.
I understand that this Agreement will not become effective until the eighth day after I sign the Agreement without revocation (the “Effective Date”). I understand that Sunset will have no duty to pay me or provide me with the compensation
and benefits listed in Section II until the Effective Date of this Agreement. 
  
 I acknowledge acceptance of this Agreement by my signature below: 
  

			
	 /s/ John Bert Watson

	 	 September 27, 2005

	 John Bert Watson
	 	Date

  
 Agreed to and accepted on behalf of
Sunset Financial Resources, Inc.: 
  

			
	By:	 	 /s/ George Deehan

	Name:	 	George Deehan
	Title:	 	President
	
	Date: September 27, 2005

  

					
	 	 	 	 	 /s/ JW

	Page 7	 	 	 	EMPLOYEE’S INITIALS

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