LIFEPOINT HOSPITALS, INC. INDEMNIFICATION AGREEMENT
Exhibit 10.1
This INDEMNIFICATION AGREEMENT is made and entered into as of the 28th day of August, 2008
(this “Agreement”) by and between LifePoint Hospitals, Inc., a Delaware corporation (the
“Company”), and [l] (“Indemnitee”).
WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company and its related entities;
WHEREAS, in order to induce Indemnitee to provide, or continue to provide, services to the
Company and its related entities, the Company wishes to provide for the indemnification of, and the
advancement of expenses to, Indemnitee to the maximum extent permitted by law;
WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining liability
insurance for directors, officers, employees, agents and fiduciaries, the significant increases in
the cost of such insurance and the general reductions in the coverage of such insurance;
WHEREAS, the Company and Indemnitee recognize the substantial increase in corporate litigation
in general, subjecting directors, officers, employees, agents and fiduciaries to expensive
litigation risks and the limitations of coverage of liability insurance;
WHEREAS, the Company and Indemnitee desire to continue to have in place the additional
protection provided by an indemnification agreement and to provide indemnification and advancement
of Expenses (as defined below) to Indemnitee to the maximum extent permitted by Delaware law;
WHEREAS, the Board of Directors has determined that contractual indemnification as set forth
herein is not only reasonable and prudent but also promotes the best interests of the Company and
its stockholders;
WHEREAS, the Company desires and has requested Indemnitee to serve or continue to serve as a
director, officer, employee, agent or fiduciary of the Company or any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise free from undue
concern for unwarranted claims for damages arising out of or related to such services;
WHEREAS, Indemnitee is willing to serve, continue to serve or to provide additional service
for or on behalf of the Company on the condition that Indemnitee is furnished with the indemnity
provide for herein; and
WHEREAS, in view of the considerations set forth above, the Company desires that Indemnitee
shall be indemnified and advanced Expenses by the Company as set forth herein;
NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following meanings:
“By-laws” means the Second Amended and Restated By-laws of the Company, as such may be
amended.
“Certificate” means the Amended and Restated Certificate of Incorporation of the
Company, as such may be amended.
“Corporate Status” describes the status of a person who is or was a member of the
Board of Directors of the Company (the “Board”) or is or was otherwise a director, officer,
employee or agent or fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person is or was serving at
the request of the Company.
“Disinterested Director” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is sought by the Indemnitee.
“Expenses” shall include attorneys’ fees, retainers, court costs, transcript costs,
fees of experts, filing fees, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses and obligations of any nature whatsoever paid or incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating, or being or preparing to
be a witness in a Proceeding.
“Independent Legal Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of Delaware corporation law and neither presently is, nor in the past five
(5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to
either such party (other than with respect to matters concerning Indemnitee under this Agreement)
or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not include any person
who, under the applicable standards of professional conduct then prevailing, would have a conflict
of interest in representing either the Company or the Indemnitee in an action to determine the
Indemnitee’s rights under this Agreement.
“Proceeding” includes any threatened, pending or completed action, suit, arbitration,
proceeding, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought by or in the right of the
Company or otherwise and whether civil, criminal, administrative or investigative, in which an
Indemnitee was, is or will be involved as a party or otherwise, by reason of (i) the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, (ii) any
action taken by Indemnitee or of any inaction on Indemnitee’s part while acting in a Corporate
Status or (iii) the fact that
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Indemnitee is or was serving at the request of the Company as a director, officer, employee or
agent or fiduciary of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise. Any of the foregoing proceedings described in the immediately preceding
sentence (i) shall be deemed a Proceeding, whether or not Indemnitee is acting or serving in any
such capacity at the time any liability or expense is incurred for which indemnification can be
provided under this Agreement and (ii) shall include any Proceeding pending or threatened on or
before the date of this Agreement; provided, however, that such definition shall
exclude a Proceeding initiated by an Indemnitee pursuant to Section 9 to enforce
Indemnitee’s rights under this Agreement. For purposes hereof, threatened Proceedings shall
include, without limitation, any proceeding if any person (including the Company or any
governmental agent or agency) who may attempt to commence such a proceeding has manifested to the
Company, any entity as to which Indemnitee has a Corporate Status, any director, officer, employee,
agent or fiduciary of the Company or any of the foregoing or Indemnitee (i) an awareness of facts
that such person believes may form the basis for a Proceeding and (ii) that it may so attempt to
commence such a Proceeding, without regard to whether such manifestation is written, oral or
otherwise or such belief is reasonable.
2. INTERPRETATION OF AGREEMENT; REQUEST TO SERVE. It is understood and agreed that
the parties hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification, including advancement of Expenses, to the Indemnitee to the fullest extent now or
hereafter permitted by law. It also is understood and agreed that the parties intend that the
obligations of the Company to provide indemnification, including advancement of Expenses, shall be
interpreted broadly in favor of providing on a timely basis such indemnification and advancement of
Expenses to Indemnitee in a manner which favors resolving any disagreements over the right thereto
or procedures therefor in a manner which is prompt and cost-efficient to Indemnitee. For the
avoidance of doubt, in addition to any separate oral or written confirmation or request that the
Company may make, the Company expressly confirms (i) that Indemnitee is, or was, serving at the
request of the Company as a director, officer, employee or agent or fiduciary of (a) any
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in which
the Company owns or owned at least 25% of the common or preferred equity (or such percentage of any
similar ownership interest) at any time during any such service or provides or provided to
Indemnitee any compensation for or right to reimbursement of any expenses or costs in respect of
such service and (b) of any employee benefit plan for the benefit of any officers, directors,
employees or agents of the Company, any of its subsidiaries or any enterprise described in clause
(a) as to which Indemnitee provides any service, and (ii) that any such service commencing after
the date hereof shall be deemed to be at the request of the Company.
3. INDEMNITY. The Company hereby agrees to hold harmless and indemnify (including the
advancement of Expenses) the Indemnitee to the fullest extent authorized or permitted by law,
including without limitation, to the fullest extent authorized by Article Thirteenth of the
Company’s Certificate (“Article Thirteenth”) as the same exists on the date hereof
(or as such Certificate or the By-laws may hereafter be amended, but only to the extent that such
amendment authorizes or permits the Company to provide broader indemnification rights than
authorized or permitted prior to such
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amendment). In furtherance of the foregoing indemnification, and without limiting the
generality thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section 3(a) if, by
reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding (including Proceedings arising out of or relating to Indemnitee’s
Corporate Status) other than a Proceeding by or in the right of the Company. Pursuant to this
Section 3(a), the Indemnitee shall be indemnified against all Expenses, judgments,
penalties, fines and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses, judgments, penalties,
fines or amounts paid in settlement) actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful.
(b) Proceedings by or in the Right of the Company. The Indemnitee shall be entitled
to the rights of indemnification provided in this Section 3(b) if, by reason of Indemnitee
Corporate Status, Indemnitee is, or is threatened to be made, a party to or participant in any
Proceeding (including Proceedings arising out of or relating to Indemnitee’s Corporate Status)
brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this
Section 3(b), the Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company; provided, however, that, if
applicable law so provides, no indemnification against such Expenses shall be made in respect of
any claim, issue or matter in such Proceeding as to which the Indemnitee shall have been finally
adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the
State of Delaware shall determine that such indemnification may be made.
(c) Indemnification for Expenses if Indemnitee is a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and is successful, on the
merits or otherwise, in any Proceeding (including Proceedings arising out of or relating to
Indemnitee’s Corporate Status), Indemnitee shall be indemnified to the maximum extent permitted by
law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection therewith. If the Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall indemnify the Indemnitee against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section 3 and without
limitation, the termination of any claim, issue or matter in such a Proceeding by
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dismissal, with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
4. ADDITIONAL INDEMNITY. In addition to, and without regard to any limitations on,
the indemnification provided for in Section 3, the Company shall and hereby does indemnify
and hold harmless the Indemnitee against all Expenses, judgments, penalties, fines and amounts paid
in settlement (including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, judgments, penalties, fines or amounts paid in settlement)
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf if, by reason of
Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding including a Proceeding by or in the right of the Company and
Proceedings arising out at or relating to Indemnitee’s Corporate Status, and will promptly advance
Expenses to Indemnitee upon request. The only limitation that shall exist upon the Company’s
obligations pursuant to this Section 4 shall be that the Company shall not be obligated to
make any payment to Indemnitee that is finally determined (under the procedures, and subject to the
presumptions, set forth in Sections 8 and 9 hereof) to be unlawful or contrary to public
policy.
5. CONTRIBUTION IN THE EVENT OF JOINT LIABILITY.
(a) Whether or not the indemnification provided in Sections 3 and 4 hereof is
available, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or
would be if joined in such Proceeding), Company shall pay the entire amount of any judgment,
penalty, fine or settlement (including all interest, assessments and other charges paid or payable
in connection with or in respect of such Expenses, judgments, penalties, fines or amounts paid in
settlement) of such Proceeding without requiring Indemnitee to contribute to such payment and the
Company hereby waives and relinquishes any right of contribution it may have against Indemnitee.
The Company shall not enter into any settlement of any Proceeding in which the Company is jointly
liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides
for a full and final release of all claims asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding
subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion
of any judgment or settlement in any threatened, pending or completed Proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company
shall contribute an amount equal to 100% of the amount of Expenses, judgments, penalties, fines and
amounts paid in settlement (including all interest, assessments and other charges paid or payable
in connection with or in respect of such Expenses, judgments, penalties, fines or amounts paid in
settlement) actually and reasonably incurred and paid or payable by Indemnitee. If the Company is
prohibited by law from paying 100% of such Expenses, judgments, penalties, fines and amounts, then
the Company shall contribute to the amount of Expenses, judgments, penalties, fines and amounts
paid in settlement (including all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments, penalties, fines or amounts paid in
settlement) actually and
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reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits
received by the Company and all officers, directors or employees of the Company other than
Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on
the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding
arose; provided, however, that the proportion determined on the basis of relative
benefit may, to the extent necessary to conform to law, be further adjusted by reference to the
relative fault of the Company and all officers, directors or employees of the Company other than
Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on
the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in
such Expenses, judgments, penalties, fines or settlement amounts (including all interest,
assessments and other charges paid or payable in connection with or in respect of such Expenses,
judgments, penalties, fines or amounts paid in settlement), as well as any other equitable
considerations which the law may require to be considered. The relative fault of the Company and
all officers, directors or employees of the Company other than Indemnitee who are jointly liable
with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the
other hand, shall be determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the degree to which their
liability is primary or secondary, and the degree to which their conduct is active or passive.
(c) To the maximum extent permitted by law, the Company shall indemnify and hold Indemnitee
harmless from any claims of contribution which may be brought by officers, directors, employees,
agents or fiduciaries of the Company who may be jointly liable with Indemnitee, including claims of
contribution for Expenses, judgments, penalties, fines and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in connection with or in respect of
such Expenses, judgments, penalties, fines or amounts paid in settlement).
(d) To the extent relevant, all presumptions and burdens of proof and persuasion set forth in
this Agreement that affect determinations as to the right to indemnification shall be applicable
similarly to any determination or obligation as to matters of contribution pursuant to this
Section 5.
6. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status (or
arising out of the same or relating thereto), a witness in any Proceeding to which Indemnitee is
not a party, the Company shall indemnify the Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
7. ADVANCEMENT OF EXPENSES.
(a) Notwithstanding any other provision of this Agreement, the Company shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by
reason of Indemnitee’s Corporate Status (including any Proceeding arising out of or relating to
Indemnitee’s Corporate Status) within fifteen
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(15) days after the receipt by the Company of a written statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall be preceded or accompanied by an undertaking in the form
attached hereto as Exhibit A, manually executed by Indemnitee.
(b) The Company shall not, as a condition precedent to or otherwise in connection with any
request to advance Expenses, assert any right to any condition, covenant, undertaking, agreement,
warranty or other term not set forth in Section 7(a) or in Exhibit A hereto. Any
advances and undertakings to repay pursuant to this Section 7 shall be unsecured and
interest free.
(c) Notwithstanding anything herein or in Exhibit A, the Certificate or the By-laws to
the contrary, the Company shall not make or seek to make any determination that Indemnitee is not
permitted to be indemnified in respect of a Proceeding under applicable law unless (i) Indemnitee
has expressly requested to be indemnified pursuant to Section 8(a) of this Agreement or
Article Thirteenth; (ii) Indemnitee has not so requested on or before the 90th day prior
to the expiration of the statute of limitations in respect of the claim for indemnification in
respect of the Proceeding for which indemnification may be sought; or (iii) a final determination
of a court of competent jurisdiction is made with respect to the Proceeding for which
indemnification may be sought (as to which all rights of appeal have been exhausted or lapsed).
8. PROCEDURES AND PRESUMPTIONS FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
To better ensure that the intentions of the parties hereto are achieved, the parties agree that the
following procedures and presumptions shall apply in the event of any question as to whether
Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification under this Agreement which may, at the option of Indemnitee,
include indemnification under Article Thirteenth, Indemnitee shall submit to the Company a written
request for the same, together with a brief summary of the Proceeding as to which indemnification
is sought. The Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 8(a) hereof, other than a request solely for advancement of Expenses pursuant to
Section 7(a), a determination, if (but only if) required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in the specific case by one of the following three
methods, which shall be at the election of Indemnitee to the extent permitted by law: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum, or (ii) by
Independent Legal Counsel in a written opinion, or (iii) by the stockholders of the Company. In
the event that the Company fails or is unable to implement an election by Indemnitee it shall
promptly communicate the same to
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Indemnitee, and Indemnitee shall be afforded a right to seek a determination by another method
set forth in the proceeding sentence, provided, however that nothing in this
sentence shall preclude Indemnitee from seeking any remedy available to it in respect of such
failure or inability.
(c) If the determination of entitlement to indemnification is to be made by Independent Legal
Counsel pursuant to Section 8(b) hereof, the Independent Legal Counsel shall be selected as
provided in this Section 8(c). The Independent Legal Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by the Board). Indemnitee
or the Company, as the case may be, may, within 15 days after such written notice of selection
shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection; provided, however, that such objection may be asserted
only on the ground that the Independent Legal Counsel so selected does not meet the requirements of
“Independent Legal Counsel” as defined in Section 1 of this Agreement, and the objection
shall set forth with particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Legal Counsel. If a written objection
is made and substantiated, the Independent Legal Counsel selected may not serve as Independent
Legal Counsel unless and until such objection is withdrawn or a court has determined that such
objection is without merit. If, within 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 8(a) hereof, no Independent Legal Counsel shall
have been selected and not objected to, either the Company or Indemnitee may seek judicial
resolution of any objection which shall have been made by the Company or Indemnitee to the other’s
selection of Independent Legal Counsel and/or for the appointment as Independent Legal Counsel of a
person selected by the court or by such other person as the court shall designate, and the person
with respect to whom all objections are so resolved or the person so appointed shall act as
Independent Legal Counsel under Section 8(b) hereof. The Company shall pay any and all
reasonable fees and expenses of Independent Legal Counsel incurred by such Independent Legal
Counsel in connection with acting pursuant to Section 8(b) hereof. The Company shall pay
all reasonable fees and expenses incident to the procedures of this Section 8(c),
regardless of the manner in which such Independent Legal Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume (unless there is clear and
convincing evidence to the contrary) that (i) Indemnitee is entitled to indemnification if
Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of
this Agreement and (ii) all items that Indemnitee has identified as Expenses, individually and in
the aggregate, and for which Indemnitee has sought indemnification, including any request for
advancement thereof, are reasonable and entitled to indemnification. The Company shall not deny or
delay the advancement or indemnification of any Expenses for which Indemnitee has sought
indemnification on the basis that such Expenses are not reasonable or are otherwise not subject to
indemnification unless it shall have first sustained its burden of proof and burden of persuasion
to rebut the presumption set forth above in a final determination of a court of competent
jurisdiction (as to which all rights of appeal have been exhausted or
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lapsed). Anyone seeking to overcome this presumption shall have the burden of proof and the
burden of persuasion, by clear and convincing evidence.
(e) Indemnitee shall be presumed to have acted in good faith if Indemnitee’s action is based
on the records or books of account of the Company, including financial statements, or on
information supplied to Indemnitee by the officers of the Company in the course of their duties, or
on the advice of legal counsel for the Company, the Board or any committee of the Board or on
information or records given or reports made to the Company by an independent certified public
accountant, by a financial advisor or by an appraiser or other expert selected with reasonable care
by the Company, the Board or any committee of the Board. In addition, the knowledge and/or
actions, or failure to act, of any director, officer, employee, agent or fiduciary of the Company
shall not be imputed to Indemnitee for purposes of determining the right to indemnification under
this Agreement. Whether or not the foregoing provisions of this Section 8(e) are
satisfied, it shall in any event be presumed (unless there is clear and convincing evidence to the
contrary) that Indemnitee has at all times acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking
to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear
and convincing evidence.
(f) The Company acknowledges that a settlement or other disposition short of final judgment
may be successful if it permits a party to avoid expense, delay, distraction, disruption and
uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is
resolved in any manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such Proceeding with or without payment of money or other consideration)
it shall be presumed (unless there is clear and convincing evidence to the contrary) that
Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to
overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and
convincing evidence.
(g) If the person, persons or entity empowered or selected under Section 8(b) to
determine whether Indemnitee is entitled to indemnification shall not have made a determination
within thirty (30) days after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, thereto; provided, however, that the
foregoing provisions of this Section 8(g) shall not apply if the determination of
entitlement to indemnification is to be made by the stockholders pursuant to Section 8(b)
of this Agreement and if within fifteen (15) days after receipt by the Company of the request for
such determination the Board or the Disinterested Directors, if appropriate, resolve to submit such
determination to the stockholders for their consideration (i) at the next annual meeting thereof
and such determination is made thereat or (ii) if an annual meeting is not to be held within
seventy-five (75) days after such receipt, at a special meeting of stockholders held for such
purpose within seventy-five (75) days after such receipt.
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(h) Indemnitee shall reasonably cooperate with the person, persons or entity making such
determination with respect to Indemnitee’s entitlement to indemnification, and provide to such
person, persons or entity upon reasonable advance request any documentation or information which is
under the control of or in the possession of Indemnitee and reasonably necessary to such
determination. Nothing in this Agreement shall require Indemnitee to waive any of Indemnitee’s
rights under the United States Constitution or to provide information which is privileged or
otherwise protected from disclosure. Any Independent Legal Counsel, member of the Board, or
stockholder of the Company shall act reasonably and in good faith in making a determination under
the Agreement of Indemnitee’s entitlement to indemnification. Any costs or expenses (including
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
(i) Neither the failure of the Company (including by the Board or Independent Legal Counsel)
to have made a determination prior to the commencement of any action pursuant to this Agreement
that indemnification is proper in the circumstances because Indemnitee has met the applicable
standard of conduct nor an actual determination by the Company (including by the Board or
Independent Legal Counsel) that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct. The termination of a Proceeding by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself, (i) establish that
Indemnitee does not meet the criteria for entitlement to indemnification set forth in Section
3 or (ii) otherwise adversely affect the rights of Indemnitee to indemnification except as may
be provided herein.
(j) Promptly after a determination has been made or is deemed to have been made that
Indemnitee is entitled to indemnification in respect of any Proceeding, or, if no such
determination is then required by law, within 30 days after receipt by the Company of a request for
indemnification pursuant to Section 8(a) the Company shall pay to Indemnitee all amounts
for which Indemnitee has sought indemnification. The Company shall not deny or delay payment of
any amount for which Indemnitee has sought indemnification for any reason unless a determination is
required by law to be made and has been made in the specific case that Indemnitee is not entitled
to Indemnification.
9. REMEDIES.
(a) In the event that (i) a determination is made pursuant to Section 8 of this
Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 8(b) of this Agreement within 60
days after receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to this
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Agreement within fifteen (15) days after receipt by the Company of a written request therefor,
or (v) payment of indemnification is not made within fifteen (15) days after a determination has
been made that Indemnitee is entitled to indemnification or such determination is deemed to have
been made pursuant to Section 8 of this Agreement, Indemnitee shall be entitled to an
adjudication of Indemnitee’s entitlement to such indemnification. The Company shall not oppose
Indemnitee’s right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant to Section 8(b) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding
commenced pursuant to this Section 9 shall be conducted in all respects as a de novo trial,
on the merits and Indemnitee shall not be prejudiced in any way by reason of that adverse
determination.
(c) If a determination shall have been made pursuant to Section 8(b) of this Agreement
that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding commenced pursuant to this Section 9, absent a prohibition of such
indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 9, seeks a judicial
adjudication of Indemnitee’s rights under, or to recover damages for breach of, this Agreement, or
to recover under any directors’ and officers’ liability insurance policies maintained by the
Company, the Company shall pay on Indemnitee’s behalf, in advance (within 10 days of receipt by the
Company of any request therefore), any and all expenses (including for these purposes all items
contemplated to be within the meaning of the term “Expenses” as if such adjudication were a
Proceeding) actually and reasonably incurred by Indemnitee in connection with such judicial
adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 9 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement and, in the event the Company shall hereafter fail to comply
with this covenant, to the fullest extent permitted by law, the Company hereby irrevocably and
unconditionally stipulates for the purpose of any such proceeding that such procedures and
presumptions are valid, binding and enforceable against it and that it is bound by all the
provisions of this Agreement.
(f) In the event that Indemnitee commences a judicial proceeding or arbitration pursuant to
this Section 9, Indemnitee shall not be required to reimburse the Company for any advances
of expenses, pursuant to Section 7 or otherwise, until a final determination is made by a
court of competent jurisdiction with respect to Indemnitee’s entitlement to Indemnification (as to
which all rights of appeal have been exhausted or lapsed). Interest shall be paid by the Company
to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies or is
obliged to indemnify for the period commencing with the date on which Indemnitee requests
indemnification (or
11
reimbursement or advancement of any expenses) and ending with the date on which such payment
is made to the Indemnitee by the Company.
10. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The rights of indemnification and advancement of Expenses provided by this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under
applicable law, the Certificate, the By-laws, any agreement, a vote of stockholders or a resolution
of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof or of the Certificate or the By-laws or of any provision thereof shall limit or
restrict any right of Indemnitee under this Agreement, the Certificate or the By-laws in respect of
any action taken or omitted by Indemnitee in Indemnitee’s Corporate Status prior to such amendment,
alteration or repeal. To the extent that a change in the law, whether by statute or judicial
decision, permits greater indemnification than would be afforded currently under this Agreement,
the Certificate or the By-laws it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by such change. No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every other right and
remedy shall be cumulative and in addition to every other right and remedy given hereunder or now
or hereafter existing at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent or later assertion or
employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, agents or fiduciaries of the Company or of
any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise
which such person serves at the request of the Company, Indemnitee shall be covered by such policy
or policies in accordance with its or their terms to the maximum extent of the coverage available
for any such director, officer, employee, agent or fiduciary under such policy or policies.
(c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of an Indemnitee, who shall execute all
papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received an indemnification, insurance or similar payment therefore under any insurance policy,
contract or agreement or otherwise pursuant to the exercise of statutory rights or as a result of
any Proceeding.
12
11. EXCEPTION TO RIGHT OF INDEMNIFICATION. Notwithstanding any other provision of
this Agreement, Indemnitee shall not be entitled under this Agreement:
(a) to indemnification or advancement of expenses with respect to any Proceeding brought by
Indemnitee, or any claim therein (except proceedings and claims brought to enforce rights to
indemnification under this Agreement or Article Thirteenth and claims by way of defense,
counterclaim or crossclaim), unless (i) the bringing of such Proceeding or making of such claim
shall have been approved by the Board, or (ii) as otherwise required under Section 145 of the
General Corporation Law of the State of Delaware, regardless of whether Indemnitee is determined to
be entitled to such indemnification or insurance recovery as the case may be; or
(b) to indemnification or advancement of expenses with respect to any Proceeding for an
accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of
securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of
1934, as amended, or similar provisions of state statutory law or common law; or
(c) to indemnification in respect of conduct which has been finally determined by a court of
competent jurisdiction (as to which all rights of appeal have been exhausted or lapsed) to have
been knowingly fraudulent or to constitute intentional misconduct or knowing violation of the law.
12. DURATION OF AGREEMENT. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is serving as a director, officer, employee,
agent or fiduciary of the Company or is serving at the request of the Company as a director,
officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise and shall continue thereafter so long as Indemnitee may
be subject to any possible Proceeding (or any proceeding commenced under Section 9 hereof)
by reason of (or arising out of or relating to) Indemnitee’s Corporate Status, whether or not
Indemnitee is acting or serving in any such capacity at the time such Proceeding is commenced or at
the time any liability or expense is incurred for which indemnification can be provided under this
Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by
the parties hereto and their respective successors (including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the business or assets
of the Company), assigns, spouses, heirs, executors, administrators, and personal and legal
representatives. The Company shall not effect any sale, lease, exchange or other disposition of
all or substantially all of its assets determined on either an unconsolidated or consolidated basis
(in one or a series of related transactions) or be party to any merger, consolidation or similar
transaction in which it is not the surviving entity unless the acquiring or surviving entity agrees
in writing to (and does) assume all obligations of the Company under this Agreement, it being
understood and agreed that this Agreement shall continue in full force and effect after any such
transaction, and such surviving entity shall be bound by the terms hereof, whether or not this
sentence has been complied with. This Agreement shall continue in effect regardless
13
of whether Indemnitee continues to serve as an officer or director of the Company or any other
enterprise at the Company’s request.
13. ENFORCEMENT.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve or continue to
serve in Indemnitee’s Corporate Status (and to eliminate any uncertainty regarding Indemnitee’s
continuing enforceable rights to indemnification, advancement of expenses and contribution for acts
or omissions occurring before, on or after the date hereof), and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving or continuing to serve in any Corporate
Status, now or hereafter. The Company and Indemnitee concur that such service of Indemnitee, and
the warranties, covenants and agreements of the Company and Indemnitee contained herein comprise
good and valuable consideration the receipt and sufficiency of which are hereby acknowledged.
(b) This Agreement, including Exhibit A hereto which is an integral part of this
Agreement and, to the extent enforcement may be sought hereunder, Article Thirteenth, constitute
the entire agreement between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral, written and implied, between the parties
hereto with respect to the subject matter hereof. It is understood and agreed that Article
Thirteenth which, at the election of Indemnitee may be enforced hereunder, is also an independent
right which may be enforced by Indemnitee independently of or concurrently with Indemnitee’s rights
under this Agreement.
(c) The obligations of the Company and the rights of the Indemnitee pursuant to this
Agreement, including those that may arise under Article Thirteenth, are fully effective and vested
on the date of this Agreement, are for indemnification, advancement of Expenses and contribution in
respect of any action actually or alleged to have been taken or omitted by Indemnitee in any
Corporate Status regardless of whether such action or omission occurred prior to the date hereof or
hereafter, are not contingent or dependent upon the occurrence or existence of any other fact,
circumstance or event, and may not be limited or narrowed in any way after the date of this
Agreement, whether before or after any Proceeding with respect to any such actual or alleged action
or omission is commenced, except by an amendment hereto expressly agreed to in a writing manually
executed by the Indemnitee and delivered to the Company.
(d) The Company and the Indemnitee agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that they each will be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement, this being in addition to any other remedy to which they
are entitled at law or in equity.
14
14. SEVERABILITY. If any provision or provisions of this Agreement shall be held by a
court of competent jurisdiction to be invalid, void, illegal or otherwise unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, void, illegal or unenforceable, that is not
itself invalid, illegal, void or otherwise unenforceable) shall not in any way be affected or
impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) to the
fullest extent possible, this Agreement and the provisions hereof (including, without limitation,
each portion of any section of this Agreement containing any such provision held to be invalid,
illegal, void or otherwise unenforceable, that is not itself invalid, illegal, void or otherwise
unenforceable) shall be construed so as to give effect to the intent manifested thereby and the
intended interpretation of this Agreement as expressed herein; and (c) a court shall have the power
to fashion and enforce another provision (or portion thereof), instead of any invalid, void,
illegal or otherwise unenforceable provision hereof (or portion thereof), that is enforceable to
carry out the intent of such provision and this Agreement as expressed herein.
15. MODIFICATION AND WAIVER. No supplement, modification, termination or amendment of
this Agreement shall be binding or enforceable against the parties hereto unless the same is (i)
made by a court of competent jurisdiction pursuant to Section 14 hereof, (ii) if
enforcement is sought against Indemnitee, set forth in a writing manually executed by Indemnitee
and delivered to the Company; or (iii) if enforcement is sought against the Company, set forth in a
writing manually executed by the Company and delivered to the Indemnitee. The Company shall not
supplement, modify, terminate or amend the Certificate or By-laws, or any provision thereof, if the
effect thereof would directly or indirectly limit, narrow or diminish in any way any rights
thereunder in respect of indemnification, advancement of expenses or contribution (including
procedural rights and presumptions) from those in existence immediately prior to such supplement,
amendment, termination or modification. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.
16. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Company in writing
upon being served with any summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to indemnification covered
hereunder. The failure to so notify the Company shall not relieve the Company of any obligation
which it has to Indemnitee under this Agreement or otherwise.
17. NOTICES. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by and receipted for by
the party to whom said notice or other communication shall have been directed or if (ii) mailed by
certified or registered mail with postage prepaid, on the third business day after the date on
which it is so mailed or (iii) on the first business day
15
following the date on which it is mailed if delivered by a nationally recognized next-day
courier service:
| (a) | If to Indemnitee, to: | ||
| (b) | If to the Company, to: | ||
| LifePoint Hospitals, Inc. 000 Xxxxxx Xxxxx, Xxxxx 000 Xxxxxxxxx, Xxxxxxxxx 00000 Attn: Corporate Secretary |
|||
| With copies to: | |||
| Xxxxx & XxXxxxx LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000 Attention: Xxxxx X. Xxxxx, Esq. |
18. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. The signatures of both parties need not
appear on the same counterpart, and delivery of an executed counterpart signature page by facsimile
is as effective as executing and delivering this Agreement manually in the presence of the other
party thereto. Only one such counterpart signed by the party against whom enforceability is sought
needs to be produced to evidence the existence of this Agreement.
19. HEADINGS. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
20. GOVERNING LAW. The parties agree that this Agreement, and all matters arising out
of or related to this Agreement, shall be governed by, and interpreted, construed and enforced in
accordance with, the laws of the State of Delaware but without giving effect to the applicable
conflict of laws principles thereof to the extent that the application of the laws of another
jurisdiction would be required thereby. The Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in connection with this
Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware
Court”), and not in any other
16
state or federal court in the United States of America or any court in any other country, (ii)
consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or
proceeding arising out of or in connection with this Agreement, (iii) irrevocably appoint and name,
to the extent such party is not otherwise subject to service of process in the State of Delaware,
Corporation Service Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 as its
agent in the State of Delaware, including as such party’s agent for acceptance of legal process in
connection with any such action or proceeding against such party with the same legal force and
validity as if served upon such party personally within the State of Delaware, (iv) waive any
objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v)
waive, and agree not to plead or to make, any claim that any such action or proceeding brought in
the Delaware Court has been brought in an improper or inconvenient forum.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| LIFEPOINT HOSPITALS, INC. |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
17
Exhibit A
UNDERTAKING
1. I, [insert name], am the Indemnitee defined as such under that certain Indemnification
Agreement (the “Indemnification Agreement”) made and entered into as of the [l] day
of [l] 20__, by and between me and LifePoint Hospitals, Inc. (“LifePoint”), and I may
also be entitled to certain rights to advancement under the Amended and Restated Articles of
Incorporation of LifePoint Hospitals, Inc. (“LifePoint”), in particular Article Thirteenth
thereof (“Article Thirteenth”).1 I have read and understand the Indemnification
Agreement and the Amended and Restated Articles of Incorporation of LifePoint, in particular
Article Thirteenth. Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Indemnification Agreement.
2. I am involved in a [insert brief description of the proceeding] (the “Proceeding”).
3. I understand that:
(i) pursuant to the Indemnification Agreement certain Expenses shall be advanced to
me in accordance with the terms of the Indemnification Agreement upon receipt of
this undertaking, and
(ii) pursuant to Article Thirteenth, costs, charges, and expenses (including
attorneys’ fees) incurred by me in defending the Proceeding shall be paid by
LifePoint in advance of the final disposition of the Proceeding, in accordance with
the procedures set forth in such Article, upon receipt of an undertaking by me to
repay all amounts so advanced in the event that it shall ultimately be determined
that I am not entitled to be indemnified by LifePoint.
4. I hereby request that LifePoint advance (i) in accordance with the terms of the
Indemnification Agreement, all Expenses incurred by me or on my behalf in connection with such
Proceeding, and (ii) to the extent applicable, in accordance with the terms of Article Thirteenth,
all costs, charges and expenses (including attorneys’ fees) incurred by me in defending the
Proceeding (it being understood and agreed that in the event of any conflict between the preceding
clauses (i) and (ii), the provisions providing for advancement of Expenses that are most favorable
to Indemnitee, including as to the amount and promptness of advance payments, shall be honored).
5. (a) I undertake to repay all amounts advanced in the event that it shall ultimately be
determined that I am not entitled to indemnification by LifePoint, it being understood and agreed
that, in respect of any amount which is permitted to be advanced under both the Indemnification
Agreement and Article Thirteenth, I am not obligated to repay such amount unless and until it has
been determined that I am not entitled to indemnification in respect thereof under both of the
Indemnification Agreement and Article Thirteenth (with respect to the latter, whether or not I have
specifically sought advancement of Expenses thereunder).
| 1 | At the option and sole discretion of Indemnitee, Clauses 3(ii) and 4(ii) of this undertaking may be omitted at the time this undertaking is provided. It is understood and agreed that no such omission shall be deemed an admission by Indemnitee that advancement of expenses or indemnification pursuant to Article Thirteenth is not available to Indemnitee or an election of remedies by Indemnitee. |
Exhibit A
(b) If, when and to the extent that the Company determines (in accordance with the
presumptions, burdens and procedures set forth in, and terms and conditions of, the Indemnification
Agreement, including for the avoidance of doubt those set forth in Section 7 and
Section 8 of the Indemnification Agreement) that I am not permitted to be indemnified under
applicable law, the Company shall be entitled to be reimbursed by me for all such amounts
theretofore paid to me as advancement of Expenses within thirty (30) days of the later of the date
of such determination and the date on which the judicial determination contemplated by clause (iii)
of Section 7(c) of the Indemnification Agreement ceases to be subject to appeal.
* * *
I have made this undertaking required by the Indemnification Agreement as of the date written
under my signature below.
| [Insert Name] | ||||||
| Dated: | ||||||
