Document:

EX-10.3 Stock Option Agreement

 

EXHIBIT 10.3

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (this “Agreement”), is made and effective as of the
10th day of July, 2006 (the “Grant Date”), by and between Catalyst Pharmaceutical
Partners, Inc., a Florida corporation (“Catalyst”), and M. Douglas Winship (the “Optionee”).

WITNESSETH:

     NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, Catalyst hereby grants the Optionee options to purchase shares of Common Stock of
Catalyst, upon the following terms and conditions:

			
	1.	 	GRANT OF OPTION

     Subject to the terms and conditions of this Agreement, Catalyst hereby grants to the Optionee
an option (the “Option”) to purchase an aggregate of one hundred thousand (100,000) shares (the
“Option Shares”) of Catalyst’s common stock, with $0.01 par value per share (“Common Stock”). This
Option is a non-qualified stock option which is not intended to meet the requirements of an
“incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).

			
	2.	 	EXERCISE PRICE

     The exercise price (“Option Price”) of this Option shall be $4.35 per Option Share. The
Option Price of this Option shall be subject to adjustment in the event of changes in the
capitalization of Catalyst, as set forth in Section 9 hereto.

			
	3.	 	TERM AND VESTING OF OPTION

     (a) Option Period. Subject to the provisions of this Section 3 and Section 6 hereof,
this Option shall terminate and all rights to purchase shares hereunder shall cease five years
after the date they become exercisable and are granted pursuant to section 3(b) hereof.

     (b) Vesting and Exercisability. Subject to the provisions of Section 6 hereof, this
Option shall become vested upon the dates (the “Vesting Date”) described in the following schedule:

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Incremental Number of	 	Cumulative Number of
	Date	 	Vested Option Shares	 	Vested Option Shares
	 
	 	 	 	 	 	 	 	 
	July 10, 2007

	 	 	25	%	 	 	25	%
	 
	 	 	 	 	 	 	 	 
	July 10, 2008

	 	 	25	%	 	 	50	%
	 
	 	 	 	 	 	 	 	 
	July 10, 2009

	 	 	25	%	 	 	75	%
	 
	 	 	 	 	 	 	 	 
	July 10, 2010

	 	 	25	%	 	 	100	%

Notwithstanding the foregoing, the Board of Directors of Catalyst (the “Board”) may in its
discretion provide that any vesting requirement or other such limitation on the exercise of this
Option may be rescinded, modified or waived by the Board, in its sole discretion, at any time and
from time to time after the Grant Date, so as to accelerate the time at which this Option may be
exercised.

			
	4.	 	MANNER OF EXERCISE AND PAYMENT

     (a) Exercise. This Option may be exercised to the extent vested as provided in
Section 3 by delivery to Catalyst on any business day, at its principal office, addressed to the
attention of the President, of written notice of exercise, which notice shall specify the number of
shares with respect to which this Option is being exercised, and shall be accompanied by payment in
full of the Option Price of the shares for which this Option is being exercised, in accordance with
Section 4(b) below. The minimum number of shares of Common Stock with respect to which this Option
may be exercised, in whole or in part, at any time shall be the lesser of one hundred (100) shares
or the maximum number of shares available for purchase under this Option at the time of exercise.

     (b) Payment. Payment of the Option Price for the shares of Common Stock purchased
pursuant to the exercise of this Option shall be made in cash or in cash equivalents. An attempt
to exercise any Option granted hereunder other than as set forth above shall be invalid and of no
force and effect.

     (c) Issuance of Certificates. Promptly after the exercise of this Option, Optionee
shall be entitled to the issuance of a certificate or certificates evidencing his ownership of such
shares of Common Stock. An individual holding or exercising an Option shall have none of the
rights of a stockholder until the shares of Common Stock covered thereby are fully paid and issued
to him and, except as provided in Section 9 below, no adjustment shall be made for dividends or
other rights for which the record date is prior to the date of such issuance.

			
	5.	 	TRANSFERABILITY OF OPTION

2

 

     Unless otherwise permitted by the Board in its sole and absolute discretion, this Option shall
not be assignable or transferable by the Optionee, other than by will or the laws of descent and
distribution.

			
	6.	 	TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY

     (a) General. Upon the termination of the employment or other service of the Optionee
with Catalyst, other than by reason of Cause (as defined below), death or “permanent and total
disability” (within the meaning of Section 22(e)(3) of the Code) of the Optionee, this Option shall
expire thirty (30) days following the last day of the Optionee’s employment with Catalyst, or, if
earlier, the date specified in this Agreement. Options will be exercisable only to the extent they
are exercisable on the date the Optionee’s employment or service terminates. Notwithstanding the
foregoing provisions of this Section 6, the Board may provide, in its discretion, that following
the termination of employment or service of Optionee with Catalyst, Optionee may exercise this
Option, in whole or in part, at any time subsequent to such termination of employment or service
and prior to termination of this Option pursuant to Section 3(a) above, either subject to or
without regard to any vesting or other limitation on exercise imposed pursuant to Section 3(b)
above. Unless otherwise determined by the Board, temporary absence from employment or service
because of illness, vacation, approved leaves of absence, military service and transfer of
employment shall not constitute a termination of employment or service with Catalyst.

     (b) Cause. If Catalyst terminates the Optionee’s employment for Cause (as defined
below), all Options granted to Optionee shall terminate upon the date of such termination of
employment or service and Optionee shall have no further right to purchase Common Stock pursuant to
such Options. For purposes of this Agreement, “Cause” means (i) failure or refusal of the Optionee
to perform the duties and responsibilities that Catalyst requires to be performed by him, (ii)
gross negligence or willful misconduct by the Optionee in the performance of his duties, (iii)
commission by the Optionee of an act of dishonesty affecting Catalyst , or the commission of an act
constituting common law fraud or a felony, or (iv) the Optionee’s commission of an act (other than
the good faith exercise of his business judgment in the exercise of his responsibilities) resulting
in material damages to Catalyst. Notwithstanding the above, if Optionee and Catalyst have entered
into an employment or other agreement which defines the term Cause for purposes of such agreement,
“Cause” shall be defined pursuant to the definition in such agreement with respect to such
Optionee’s Options. The Board shall determine whether Cause exists for purposes of this Agreement
and such determination shall be final, conclusive and binding on the Optionee.

     (c) Death or Disability. If Optionee’s employment with Catalyst terminates by reason
of death or “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code),
Optionee, Optionee’s estate or the devisee named in Optionee’s valid last will and testament or
Optionee’s heir at law who inherits the Option (whichever is applicable) has the right, at any time
within a period not to exceed three (3) months after the date of such termination and prior to the
termination of this Option pursuant to Section 3(a) above, to exercise, in whole or in part, any
vested portion of this Option (in accordance with Section 3(b) above) held by Optionee upon such

3

 

termination. Any unvested portion of this Option shall terminate upon Optionee’s termination of
employment or service with Catalyst by reason of death or “permanent and total disability.”

			
	7.	 	FORFEITURE OF GAIN IF TERMINATED FOR CAUSE OR FOR BREACH OF NON-COMPETE AGREEMENT OR
CONFIDENTIALITY AGREEMENT

     If Optionee’s employment or service with Catalyst is terminated for Cause, or if Optionee
violates the terms of any non-compete agreement or any confidentiality agreement entered into by
the Optionee and Catalyst, then the Optionee shall pay to Catalyst any “gains” related to any
Common Stock issued pursuant to the exercise of this Option (“Option Stock”). For purposes of this
Agreement, “gains” shall mean the amount realized on the sale of any Option Stock that was sold
during the one-year period immediately preceding Optionee’s termination of employment or service,
minus the Option Price paid for the Option Stock.

			
	8.	 	REQUIREMENTS OF LAW

     (a) Violations of Law. Catalyst shall not be required to sell or issue any shares of
Common Stock under this Option if the sale or issuance of such shares would constitute a violation
by the individual exercising this Option or Catalyst of any provisions of any law or regulation of
any governmental authority, including without limitation, any federal or state securities laws or
regulations. Any determination in this connection by the Board shall be final, binding, and
conclusive. Catalyst shall not be obligated to take any affirmative action in order to cause the
exercise of this Option or the issuance of shares pursuant thereto to comply with any law or
regulation of any governmental authority.

     (b) Registration. At the time of any exercise of this Option, Catalyst may, if it
shall determine it necessary or desirable for any reason, require the Optionee (or his or her
heirs, legatees or legal representative, as the case may be), as a condition to the exercise
thereof, to deliver to Catalyst a written representation of present intention to purchase the
shares for their own account as an investment and not with a view to, or for sale in connection
with, the distribution of such shares, except in compliance with applicable federal and state
securities laws with respect thereto. In the event such representation is required to be
delivered, an appropriate legend may be placed upon each certificate delivered to the Optionee (or
his or her heirs, legatees or legal representative, as the case may be) upon his or her exercise of
part or all of this Option and a stop transfer order may be placed with the transfer agent. This
Option shall also be subject to the requirement that, if at any time Catalyst determines, in its
discretion, that the listing, registration or qualification of the shares subject to this Option
upon any securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of or in connection with, the
issuance or purchase of the shares thereunder, this Option may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to Catalyst in its sole discretion. Optionee agrees
to execute any “lock-up” or similar agreement required by Catalyst’s underwriters in connection
with Catalyst’s initial public offering. Catalyst shall not be obligated to take any

4

 

affirmative action in order to cause the exercisability or vesting of this Option or to cause the exercise of
this Option or the issuance of shares pursuant thereto to comply with any law or regulation of any
governmental authority.

     (c) Withholding. The Board may make such provisions and take such steps as it may
deem necessary or appropriate for the withholding of any taxes that Catalyst is required by any law
or regulation of any governmental authority, whether federal, state or local, domestic or foreign,
to withhold in connection with the exercise of this Option, including, but not limited to, (i)
the withholding of delivery of shares of Common Stock upon exercise of this Option until the holder
reimburses Catalyst for the amount Catalyst is required to withhold with respect to such taxes,
(ii) the canceling of any number of shares of Common Stock issuable upon exercise of this Option in
an amount sufficient to reimburse Catalyst for the amount it is required to so withhold, (iii)
withholding the amount due from Optionee’s wages or compensation due such person, or (iv) requiring
the Optionee to pay Catalyst cash in the amount Catalyst is required to withhold with respect to
such taxes.

			
	9.	 	EFFECT OF CHANGES IN CAPITALIZATION

     (a) Recapitalization. If the outstanding shares of Common Stock of Catalyst are
increased or decreased or changed into or exchanged for a different number or kind of shares or
other securities of Catalyst by reason of any recapitalization, reclassification, reorganization
(other than as described in 9(b) below), stock split, reverse split, combination of shares,
exchange of shares, stock dividend or other distribution payable in capital stock of Catalyst, or
other increase or decrease in such shares effected without receipt of consideration by Catalyst, an
appropriate and proportionate adjustment shall be made by the Board in the number and kind of
shares of Common Stock issuable upon exercise of this Option, and in the Option Price per share of
this Option.

     (b) Reorganization or Change in Control. In the event of a Reorganization (as defined
below) of Catalyst or a Change in Control (as defined below) of Catalyst, the Board may in its sole
and absolute discretion, provide that (i) this Option is immediately exercisable or vested, without
regard to any limitation imposed pursuant to this Agreement and/or (ii) that this Option
terminates, provided however, that Optionee shall have the right, immediately prior to the
occurrence of such Reorganization or Change in Control and during such reasonable period as the
Board in its sole discretion shall determine and designate, to exercise any vested portion of this
Option in whole or in part. In the event that the Board does not terminate this Option upon a
Reorganization of Catalyst then this Option shall upon exercise thereafter entitle the Optionee to
such number of shares of Common Stock or other securities or property to which a holder of shares
of Common Stock would have been entitled to upon such Reorganization. For purposes of this
Agreement a “Reorganization” of an entity shall be deemed to occur if such entity is a party to a
merger, consolidation, reorganization, or other business combination with one or more entities in
which said entity is not the surviving entity, if such entity disposes of substantially all of its
assets, or if such entity is a party to a spin-off, split-off, split-up or similar transaction;
provided, however, that the transaction shall not be a Reorganization if Catalyst, any Parent or
any Subsidiary is the surviving entity. For purposes of

5

 

this Agreement, a “Change in Control” shall be deemed to occur if any person or group of persons shall acquire direct or indirect
beneficial ownership (whether as a result of stock ownership, revocable or irrevocable proxies or
otherwise) of securities of an entity, pursuant to one or more transactions, such that after
consummation and as a result of such transaction, such person has direct or indirect beneficial
ownership of 50% or more of the total combined voting power of the Common Stock. For purposes of
this Agreement, a “person” shall mean any person, corporation, partnership, joint venture or other
entity or any group (as such term is defined for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than a Parent or Subsidiary, and “beneficial ownership” shall be determined in accordance with Rule 13d-3 under
the Exchange Act.

     (c) Dissolution or Liquidation. Upon the dissolution or liquidation of Catalyst, this
Option shall terminate. In the event of any termination of this Option under this Section 9(c),
Optionee shall have the right, immediately prior to the occurrence of such termination and during
such reasonable period as the Board in its sole discretion shall determine and designate, to
exercise this Option in whole or in part, whether or not this Option was otherwise exercisable at
the time such termination occurs and without regard to any vesting or other limitation on exercise
imposed pursuant to Section 3 above.

     (d) Adjustments. Adjustments under this Section 9 related to stock or securities of
Catalyst shall be made by the Board, whose determination in that respect shall be final, binding,
and conclusive. No fractional shares of Common Stock or units of other securities shall be issued
pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share or unit.

     (e) No Limitations. The grant of this Option hereunder shall not affect or limit in
any way the right or power of Catalyst to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, consolidate, dissolve or liquidate, or to
sell or transfer all or any part of its business or assets.

			
	10.	 	DISCLAIMER OF RIGHTS

     No provision of this Agreement shall be construed to confer upon any individual, including
Optionee, the right to remain in the employ of or to continue in any other contractual relationship
with Catalyst or to interfere in any way with the right and authority of Catalyst either to
increase or decrease the compensation of any individual, including Optionee, at any time, or to
terminate any employment or other relationship between any individual, including Optionee, and
Catalyst.

			
	11.	 	NONEXCLUSIVITY OF THIS AGREEMENT

     This Agreement shall not be construed as creating any limitations upon the right and authority
of the Board to adopt such other incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals or specifically to

6

 

a particular individual or individuals) as the Board in its discretion determines desirable, including, without
limitation, the granting of stock options or stock appreciation rights.

			
	12.	 	MISCELLANEOUS

     (a) Indulgences, Etc. Neither the failure nor any delay on the part of either party
to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party asserted to have
granted such waiver.

     (b) Controlling Law. This Agreement and all questions relating to its validity,
interpretation, performance and enforcement (including, without limitation, provisions concerning
limitations of actions), shall be governed by and construed in accordance with the laws of the
State of Florida, without application to the principles of conflict of laws.

     (c) Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given,
made and received only when personally delivered, one day following the day when deposited with an
overnight courier service for overnight priority service, such as Federal Express, for delivery to
the intended addressee or three days following the day when deposited in the United States mails,
first class postage prepaid, certified or registered mail, and addressed, in the case of Catalyst,
its principal place of business, and, in the case of Optionee, as set forth below Optionee’s
signature on the last page hereof. Any person may alter the address to which communications or
copies are to be sent by giving notice of such change of address in conformity with the provisions
of this Section for the giving of notice.

     (d) Binding Nature of Agreement; Transferability. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns. This Agreement shall not be assignable or transferable by
the Optionee other than by will or the laws of descent and distribution.

     (e) Severability. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.

     (f) Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its interpretation.

7

 

     (g) Number of Days. In computing the number of days for purposes of this Agreement,
all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if
the final day of any time period falls on a Saturday, Sunday or holiday on which federal banks are
or may elect to be closed, then the final day shall be deemed to be the next day which is not a
Saturday, Sunday or such holiday.

     (h) No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the parties and their respective successors and permitted
assigns.

     (i) Entire Agreement; Amendments. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the parties and supersedes any prior understandings,
agreements, or representations by or among the parties, written or oral, that may have related in any way to the subject matter hereof. This Agreement may not be amended,
supplemented or modified in whole or in part except by an instrument in writing signed by the party
or parties against whom enforcement of any such amendment, supplement or modification is sought.

     (j) Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and therefore strict construction
shall be applied against any party. Any reference to any federal, state, local or foreign statute
or law shall be deemed also to refer to the rules and regulations promulgated thereunder, unless
the context requires otherwise. The parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any party has breached any
representation, warranty, or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the party has not breached shall not detract from or mitigate
the fact that the party is in breach of the first representation, warranty or covenant.

     (k) Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed an original and all of which together will constitute one and the same
instrument.

     (l) Pronouns. The use of any gender in this Agreement shall be deemed to include all
genders, and the use of the singular shall be deemed to include the plural and vice versa, wherever
it appears appropriate from the context.

[SIGNATURES ON FOLLOWING PAGE]

8

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	

CATALYST PHARMACEUTICAL PARTNERS, INC.

 	 
	 	By:   	/s/ Patrick J. McEnany 	 
	 	  	Patrick J. McEnany 	 
	 	  	President 	 
	 
	 
	 	OPTIONEE:
	 
	 
	 	/s/ M. Douglas Winship 	 
	 	Name: M. Douglas Winship 	 	 
	 	Address: 	 	 
	 	 	 	 	 

9EX-10.1

 

EXHIBIT 10.1

EXECUTIVE SEVERANCE AND RESTRICTIVE COVENANT AGREEMENT

     This EXECUTIVE SEVERANCE AND RESTRICTIVE COVENANT AGREEMENT (“Agreement”) is made as of this
11th day of December, 2006, by and between LifePoint CSGP, LLC, a Delaware limited liability
company with its principal place of business at 103 Powell Court, Suite 200, Brentwood, Tennessee
(the “Company”), and William F. Carpenter III, a resident of Nashville, Tennessee (“Executive”).

RECITALS:

     WHEREAS, Executive has been an employee of the Company and/or its subsidiaries and affiliates
since 1999, serving most recently as the Executive Vice President, General Counsel and Secretary of
LifePoint Hospitals, Inc. (“LifePoint”), the parent corporation of the Company;

     WHEREAS, effective June 26, 2006, Executive was promoted and appointed to serve as the Chief
Executive Officer and President of LifePoint; and

     WHEREAS, in connection with Executive’s employment by the Company and his services as the
Chief Executive Officer and President of the Company and LifePoint (and such other appointments as
he may hold with their respective subsidiaries and affiliates), the Company and Executive wish to
set forth, among other things, the terms of Executive’s severance benefits and certain related
matters in the event Executive’s employment is terminated, all as set forth herein.

AGREEMENT:

     NOW, THEREFORE, for and in consideration of the mutual promises and covenants set forth below
and other good and valuable consideration, receipt of which is hereby acknowledged, the Company and
Executive do hereby agree as follows:

     1. General.

          (a) Offices and Duties. Executive is employed by the Company and has been appointed to
serve as the Chief Executive Officer and President of LifePoint (and to serve in similar capacities
with certain of their respective subsidiaries and affiliates). As such, Executive shall have such
duties and responsibilities as may be delineated in the bylaws and/or other constituent documents
of the Company and LifePoint (and in the bylaws and/or other constituent documents of any of their
respective applicable subsidiaries or affiliates) and as are directed by the Board of Directors of
LifePoint (the “Board of Directors”), and Executive shall report directly to the Board of
Directors.

          (b) Compensation and Benefits. The Board of Directors (or such committee thereof as
shall have the responsibility for and authority to set the compensation of LifePoint’s and its
subsidiaries’ and affiliates’ executive officers and key employees) shall from time to time set
Executive’s compensation, including his base salary (“Base Salary”) and bonus compensation (“Bonus
Compensation”), and other benefits (including participation in the Company’s equity

1

 

incentive plans and qualified plans (collectively, the “Plans”)). The Base Salary and Bonus
Compensation shall be retroactive to June 26, 2006, the date Executive was appointed to serve as
Chief Executive Officer and President.

          (c) At-Will Employment. Executive recognizes and accepts that, notwithstanding
anything in this Agreement to the contrary, (i) Executive is employed by the Company (and by any of
its subsidiaries and affiliates) on an “at-will” basis, (ii) this Agreement does not guarantee or
otherwise provide for employment and that, at any time and for any reason, Executive may resign or
the Company may terminate Executive’s employment with the Company (and with any of its subsidiaries
and affiliates), and (iii) neither the Company nor any of its subsidiaries and affiliates shall, in
any case, be responsible for any severance pay, termination pay, severance obligations, damages or
any other additional payments or obligations whatsoever arising from the termination of his
employment, above and beyond those specifically provided for or referred to in this Agreement or
otherwise provided by law. The parties further acknowledge and agree that there shall be no
duplication between any payments or other benefits due Executive hereunder and any payments or
benefits paid or to be paid to Executive under any other plan, program, agreement or arrangement.

          (d) Execution of Release Upon Termination. Upon the termination of Executive’s
employment for any reason, Executive shall (or in the event of termination due to Executive’s
death, his estate shall) execute and deliver to the Company the Release of Claims attached hereto
as Exhibit A (the “Release”). The execution and delivery of the Release shall be a
condition to the Company’s obligations to make the payments described in Section 3 hereof to
Executive following the termination of his employment.

     2. Term of Agreement. This Agreement shall continue indefinitely until Executive
terminates his employment with the Company and/or its subsidiaries and affiliates or the Company
terminates Executive’s employment with the Company and/or its subsidiaries and affiliates,
provided that the provisions of Sections 3 and 4 shall survive any termination of this
Agreement.

     3. Termination of Employment.

          (a) Termination for Cause.

     (i) If Executive’s employment is terminated by the Company for Cause, as defined in
Section 3(a)(ii) below, Executive shall receive his Base Salary through the date of such
termination and any earned but unpaid Bonus Compensation for any prior fiscal year, but he
shall not be eligible to receive Base Salary or to participate in any Plans after the date
of such termination except as otherwise required by law and except for the right to receive
benefits which have become vested under any Plans in accordance with the terms of such
Plans. In addition, Executive shall not be eligible to receive any Bonus Compensation for
the Company’s fiscal year during which the date of termination occurs or any later year.

2

 

     (ii) Termination for “Cause” shall mean termination of Executive’s employment with the
Company and its subsidiaries and affiliates by the Board of Directors because of (a)
Executive’s material breach of the terms of this Agreement or repeated failure to perform
his duties in a manner reasonably consistent with the criteria established or directions
given by the Board of Directors; provided, however, that the termination
pursuant to this clause shall be preceded by a written notice providing a reasonable
opportunity for Executive to correct his conduct, if the conduct in question can be
corrected, (b) any action by Executive constituting fraud, self-dealing, embezzlement, or
dishonesty in the course of his employment hereunder, or (c) the conviction of Executive of
a crime involving moral turpitude or any felony.

     (iii) The termination of Executive’s employment shall not be deemed to be for Cause
unless and until there shall have been delivered to Executive a copy of a resolution duly
adopted by the affirmative vote of not less than two-thirds of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after reasonable notice is
provided to Executive and Executive is given an opportunity, together with counsel, to be
heard before the Board), finding that, in the good faith opinion of such Board, Executive is
guilty of the conduct described in any of the subsections set forth in Section 3(a)(ii)
above.

     (iv) The date of termination of employment by the Company under this Section 3(a) shall
be the date specified in a written notice of termination (which date shall be no earlier
than the date of furnishing such notice), or if no such date is specified therein, the date
of receipt by Executive of such written notice of termination.

          (b) Termination Without Cause.

     (i) If Executive’s employment is terminated by the Company without Cause, Executive
shall receive his Base Salary through the date of such termination and any earned but unpaid
Bonus Compensation for any prior fiscal year, and shall further be entitled to receive, as
severance, his then current Base Salary for a period of 24 months following the date of
termination of his employment plus an amount equal to two (2) times Executive’s bonus earned
for the prior fiscal year which bonus amount shall be paid in equal amounts, ratably, over
the 24-month period following the date of termination of his employment. The Company
further agrees to provide Executive with insurance coverage (e.g., medical, dental and life)
commensurate with the coverage provided to Executive immediately prior to the date of
termination for a period of 24 months following the date of termination. Other than as set
forth in the preceding sentences, Executive shall not be eligible to participate in any
Plans after the date of termination except as otherwise required by law and except for the
right to receive benefits which have vested under any Plan in accordance with the terms of
such Plan, and Executive shall not be eligible to receive any Bonus Compensation for the
Company’s fiscal year during which the date of termination occurs or any later year.

3

 

     (ii) The date of termination of employment by the Company under this Section 3(b) shall
be the date specified in a written notice of termination to Executive (which date shall be
no earlier than the date of furnishing such notice) or, if no such date is specified
therein, the date on which such notice is given to Executive.

     (iii) Severance payments under this Section 3(b) shall be made in accordance with the
Company’s then current payroll practice commencing on the next payroll date following the
date of the termination of Executive’s employment under this Section 3(b).

          (c) Termination Upon Death or Disability.

     (i) Upon Executive’s termination of employment as a result of Executive’s death or
Disability (as defined in Section 3(c)(ii) below), he shall receive (or in the case of
death, his estate shall receive) his Base Salary through the date of such termination and
any earned but unpaid Bonus Compensation for any prior year, but he shall have no right to
receive any Base Salary continuation or other severance benefits; provided that in the event
of Disability, Executive shall be entitled to receive payments under any long-term
disability insurance polices maintained by the Company for Executive’s benefit. Executive
shall not be eligible to participate in any Plans after such termination except as otherwise
required by law and except for the right to receive benefits which have vested under any
Plan, and Executive shall not be eligible to receive any Bonus Compensation for the
Company’s fiscal year during which the date of termination occurs or any later year.

     (ii) Termination upon “Disability” shall mean termination of Executive’s employment as
the result of his inability to perform the essential functions of Executive’s position with
the Company and its subsidiaries and affiliates as the result of illness or injury for a
period of six (6) consecutive months.

          (d) Termination by Executive. If Executive resigns or otherwise terminates his
employment (including as a result of retirement) with the Company other than upon his death or
Disability (as defined above), he shall receive his Base Salary through the date of such
termination and any earned but unpaid Bonus Compensation for any prior fiscal year, but he shall
have no right to receive any Base Salary continuation or other severance benefits. Executive shall
not be eligible to participate in any Plans after such termination except as otherwise required by
law and except for the right to receive benefits which have vested under any Plan and Executive
shall not be eligible to receive any Bonus Compensation for the Company’s fiscal year during which
the date of termination occurs or any later year.

          (e) Termination Following a Change In Control. Notwithstanding the foregoing Sections
3(a) through (d), in the event of a Change In Control (as defined in the LifePoint Hospitals, Inc.
Change In Control Severance Plan, as Amended and Restated May 9, 2006) (the “CIC Plan”),
Executive’s eligibility to receive benefits, the determination of what benefits are available to
Executive, all payments of such benefits, and all other rights or claims Executive may have
following a Change in Control shall be governed exclusively by the provisions of the CIC Plan in
effect as of the date of this Agreement.

4

 

          (f) Retirement Defined. Executive acknowledges and agrees that for the purpose of any
pre-existing, current or future Plans, “retirement” shall be deemed to mean only a voluntary
separation by Executive of his employment relationship with the Company, and that any awards made
by the Company to Executive under such Plans following the date hereof shall, unless otherwise
determined by the Board of Directors (or such committee thereof as shall have the responsibility
for and authority to set the compensation of LifePoint’s and its subsidiaries’ and affiliates’
executive officers and key employees), specifically incorporate such provision.

          (g) Withholding Tax. The Company shall be entitled to deduct or withhold from any
payment due Executive hereunder all federal, state and local taxes which the Company is required by
law to deduct or withhold therefrom.

     4. Restrictive Covenants.

          (a) Noncompetition. Executive will not, during the term of his employment with the
Company and any of its subsidiaries or affiliates and for 24 months thereafter (the “Restricted
Period”), without the express written consent of the Company, in any capacity (including, but not
limited to, as an owner, member, partner, shareholder, consultant, advisor, financier, agent,
employee, officer, director, manager or otherwise), directly or indirectly, engage in either (i)
the Business (as defined in Section 4(i) hereinbelow), anywhere within the United States, (ii) the
business of developing and/or operating surgery centers or other diagnostic/imaging centers
primarily in non-urban areas (e.g. within a twenty-five (25) mile radius of any location where the
Company or any of its subsidiaries or affiliates, as of the date of termination, owns, leases,
manages or otherwise maintains an operating facility), (iii) any business involved primarily in the
physician recruitment business that may, as a part of its operation, be engaged in the recruitment
of physicians away from facilities owned or operated by the Company or any of its subsidiaries or
affiliates (excluding recruitment activities that are conducted by means of general solicitation,
such as by way of newspapers or the Internet, that is not targeted to recruit physicians away from
a facility that is owned or operated by the Company), or (iv) any business that would be in
competition with any business operation or venture that was documented as part of the Company’s
strategic plan at the time of Executive’s termination with implementation of such business
operation expected to commence within twelve (12) months after such termination; provided,
however, nothing herein shall prohibit Executive’s ownership of stock in any publicly held
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; and provided, further, Executive shall be entitled
to serve on the board of directors of Psychiatric Solutions, Inc.; and provided further
that nothing herein shall prohibit Executive, during the 24 months following termination of his
employment with the Company, from providing consulting services to any person or entity if and only
if such services relate exclusively to corporate governance issues affecting such person or entity.

          (b) Nonsolicitation. Executive will not, during the Restricted Period, 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,
indirectly or through affiliates, for his own account or for the benefit of any other person or
entity, including without limitation, a person or entity in (i) the Business, or (ii) any business
in

5

 

competition with Company or any of its subsidiaries or affiliates during the Restricted
Period, solicit, divert or induce any of the employees or consultants of the Company or any of its
subsidiaries or affiliates to leave or to work for Executive or any person or entity with which
Executive is connected.

          (c) Confidentiality. Except pursuant to and consistent with his responsibilities as
Chief Executive Officer and President, Executive will not, at any time after the date hereof,
whether directly, indirectly or through affiliates, disclose, communicate or divulge to any person
or entity, or use for the benefit of any person or entity, any secret, confidential or proprietary
knowledge or information with respect to the Company or its subsidiaries and affiliates or the
conduct or details of the business (including, without limitation, the Business) conducted by any
of them, including, but not limited to, the identity of patients or customers (including
third-party payers of any kind or nature) and suppliers; arrangements with patients or customers
and suppliers; specifications relating to patients or customers, suppliers and services; technical
data, know-how and processes; records and compilations of information; computer software; marketing
methods and strategies; pricing; and financial condition and results (collectively, the
“Confidential Information”).

          (d) Nondisparagement. Neither the Company nor Executive will, at any time after the
date hereof, whether directly, indirectly or through affiliates, publish or communicate any
derogatory statements or opinions about the other (and with respect to the Company, including but
not limited to, disparaging or derogatory statements or opinions about LifePoint or any of the
Company’s other subsidiaries or affiliates or any of the Company’s, LifePoint’s or their respective
subsidiaries’ or affiliates’ management, directors or services) to any third party, or otherwise
facilitate or propagate such statements or opinions being made by any third party; provided
that it shall not be a breach of this section for either party to testify truthfully in any
judicial or administrative proceeding or to make statements or allegations in legal filings that
are based on reasonable belief and are not made in bad faith.

          (e) Cooperation. Executive will at any and all times after the date hereof cooperate
with the Company and its subsidiaries and affiliates in all reasonable respects with regard to any
regulatory and litigation matters relating to Executive’s employment or areas of responsibility at
the Company or any of its subsidiaries or affiliates.

          (f) Noncontravention. Executive agrees that at no time will he take any action,
directly or indirectly, to circumvent his respective obligations under, or to deprive the Company
or any of its subsidiaries or affiliates of any right granted by, any provision of this Agreement.
Without limiting the generality of the foregoing, Executive shall not in any way assist or enable
any person or entity to take any action that Executive is prohibited from taking himself pursuant
to this Agreement.

          (g) Breach. Executive and the Company agree that any breach by either party of the
covenants and agreements contained in this Section 4 may result in irreparable injury to the other
(including, with respect to the Company, its subsidiaries and affiliates) for which money damages
may not adequately compensate the injured party and, therefore, in the event of any such breach,
Executive or the Company, as the case may be, shall be entitled (in addition to any other rights
and remedies which it may have at law or in equity) to seek to have an

6

 

injunction issued by any competent court of equity enjoining and restraining Executive or the
Company, as the case may be, and any other person or entity involved therein from continuing such
breach. Executive further acknowledges and agrees that in the event of Executive’s breach of any
covenant or agreement contained in this Section 4, the Company shall have no further obligation to
make any payments then due to him under Section 3 of this Agreement.

          (h) Severability. If any portion of the covenants and agreements contained in this
Section 4, or the application thereof, is construed to be invalid or unenforceable, then the other
portions of such covenant(s) or agreement(s) or the application thereof shall not be affected and
shall be given full force and effect without regard to the invalid or unenforceable portions. If
any covenant or agreement in this Section 4 is held to be unenforceable because of the area
covered, the duration thereof, or the scope thereof, then the court making such determination shall
have the power to reduce the area and/or duration and/or limit the scope thereof, and the covenant
or agreement shall then be enforceable in its reduced form.

          (i) Definition. The term, “Business”, as used in this Agreement, means a business
that is primarily engaged in the non-urban acute care hospital business (either as an existing or
start-up business).

     5. Miscellaneous.

          (a) Waiver of Breach; Severability. The waiver by either party of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other
party. In the event any portion of this Agreement is deemed illegal, unenforceable or void by a
court of competent jurisdiction, this Agreement shall continue in full force and effect without
said portion unless the absence of such materially alters the rights and obligations of the parties
to this Agreement.

          (b) Assignment. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of the Company. This
Agreement is personal to Executive, and he may not assign any of his rights or delegate any of his
duties or obligations under this Agreement except that Executive’s rights hereunder shall inure to
the benefit of, and be binding upon, his beneficiaries, heirs or personal representative.

          (c) Notices. Any notice required or desired to be given under this Agreement shall be
in writing and shall be delivered personally, transmitted by facsimile or mailed by registered
mail, return receipt requested, or delivered by overnight courier service and shall be deemed to
have been given and received on the date of its delivery or transmission, if delivered or sent by
facsimile, and on the third (3rd) full business day following the date of mailing, if mailed, to
each of the parties thereto at the following respective addresses as may be specified in any notice
delivered or mailed as above provided:

     If to Executive:

William F. Carpenter III

4005 Newman Place

Nashville TN 37204

7

 

     Facsimile: (615) 269-8946

     If to the Company, to:

LifePoint Hospitals, Inc.

103 Powell Court, Suite 200

Brentwood, Tennessee

Attention: Chairman of the Board

Facsimile: (615) 372-8500

          (d) Entire Agreement. This instrument, and the instruments referred to herein,
contains the entire agreement of the parties for matters dealt with in this Agreement. It may not
be changed orally but only by an agreement in writing signed by the party against whom enforcement
of any waiver, change, modification, extension or discharge is sought.

          (e) Choice of Law; Arbitration. This Agreement shall be governed and interpreted
under the laws of the State of Tennessee. Except with respect to the parties’ right to obtain
injunctive relief or seek specific performance in connection with breaches of Section 4 herein, the
parties agree that any dispute arising out of this Agreement, which they cannot in good faith
resolve, shall be submitted to binding arbitration in accordance with the rules of the American
Arbitration Association governing commercial arbitration. Such arbitration shall be conducted in
the Nashville, Tennessee metropolitan area. The losing party in any such arbitration proceeding
shall pay the costs of arbitration including the arbitrator’s fees, but each party will pay their
own legal fees.

          (f) Headings. The sections, subjects and headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

          (g) Gender, Etc. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context indicates is appropriate.

          (h) Counterparts. This Agreement may be executed in counterparts, all of which will
be considered one and the same agreement.

[signature page to follow]

8

 

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement, intending to be
legally bound hereby, as of the date first above written.

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	/s/  William F. Carpenter III
 	 
	 	William F. Carpenter III 	 
	 	 	 
	 

	 	 	 	 	 
	 	THE COMPANY:

LifePoint CSGP, LLC

 	 
	 	By:  	/s/  Owen G. Shell, Jr.
 	 
	 	 	Owen G. Shell, Jr. 	 
	 	 	Chairman of the Board 	 
	 

Signature Page to Executive Severance and Restrictive Covenant Agreement

9

 

EXHIBIT A

RELEASE OF CLAIMS

     The undersigned (“Executive”) acknowledges that he has had twenty-one (21) days to decide
whether to execute this Release of Claims (“Release”) and that he has been advised to consult an
attorney before executing this Release. Executive acknowledges that he has seven (7) days from the
date he executes this Release to revoke his signature. Executive understands that if he chooses to
revoke this Release he must deliver his written revocation to the Company before the end of such
seven-day period.

     Executive, for himself, his heirs, successors, administrators, and assigns, hereby releases
and forever extinguishes all claims that he may have had, may now have or may hereafter have
against LifePoint CSGP, LLC, a Delaware limited liability (the “Company”), and its subsidiaries and
affiliates and each of their respective predecessors, subsidiaries, affiliates, directors,
officers, managers, employees, agents, successors, administrators, and assigns, including but not
limited to any claims or liabilities relating to Executive’s employment with the Company and any of
its subsidiaries and affiliates or the termination of his employment relationship with the Company
and any of its subsidiaries and affiliates, including, without limitation, any and all claims
arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act
of 1967 (including the Older Workers Benefit Protection Act), the Civil Rights Acts of 1866 and
1871, the Civil Rights Act of 1991, the Fair Labor Standards Act, the Equal Pay Act, the Employee
Retirement Income Security Act of 1975, the Americans with Disabilities Act, the Family and Medical
Leave Act of 1993, the Tennessee Human Rights Act, and any and all other federal, state or local
laws, statutes, rules and regulations pertaining to employment, as well as any and all claims under
state contract or tort law; provided, that the foregoing release shall not apply to (i) any
actions to enforce rights arising from any representations, covenants or agreements made by the
Company under the Executive Severance and Restrictive Covenant Agreement dated as of December 11,
2006 by and between the Company and Executive, and (ii) any claim by Executive for indemnification
as a former officer or director of the Company or any of its subsidiaries or affiliates.

     Executive further agrees that he waives any and all right to recover any damages or
compensation awarded as a result of any claim, charge or lawsuit brought by any person or local,
state or federal governmental agency on any basis whatsoever related to his former employment,
including, but not limited to, the statutes, ordinances and laws set forth above.

	 	 	 	 	 
	EXECUTIVE:	 	THE COMPANY:
	 	 	LifePoint CSGP, LLC
	 	 	
By:	 	 
	 

 

William F. Carpenter III	 	 	 	 

 

Owen G. Shell, Jr.
Chairman of the Board
	Date:	 	
Date:	 	 
	 

 
	 	 	 	 

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]