EXHIBIT 10.30
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") between LifePoint CSGP, LLC,
a Delaware limited liability company ("LifePoint" or the "Company") and Xxxxxxx
X. Xxxxxxx (the "Executive"), effective June 25, 2001 (the "Effective Date"), is
hereby amended and restated effective as of December 31, 2004.
WITNESSETH:
WHEREAS, LifePoint Executive has served as the Chairman of the Board of
Directors and Chief Executive Officer of the Company and as a member of Board of
Directors and Chief Executive Officer of LifePoint Hospitals, Inc. since the
Effective Date hereof; and
WHEREAS, the Company desires to amend the terms of the Agreement to
reflect the adoption of certain incentive and benefit programs in which the
Executive participates, including the LifePoint Hospitals, Inc. Executive
Performance and Incentive Plan and the LifePoint Hospitals, Inc. Change in
Control Severance Plan, and to incorporate certain administrative modifications;
and
WHEREAS, the Executive is willing to continue to serve the Company as the
Chairman of the Board of Directors, and as a member of such Board and Chief
Executive Officer of LifePoint Hospitals, Inc. on the terms and conditions set
forth herein, and to participate in the incentive and benefit programs that have
heretofore been adopted in lieu of the benefits that are or have been the
subject of this Agreement;
NOW, THEREFORE, in consideration of the premises recited herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby covenant and agree as follows:
1. TERMS AND CONDITIONS OF EMPLOYMENT
(a) Employment. LifePoint hereby agrees to employ the Executive and
the Executive hereby agrees to remain in the employ of LifePoint on and subject
to the terms and conditions of this Agreement.
(b) Positions, Duties and Responsibilities. The Executive at all
times shall serve as, and with the title, office, and authority of, the Chief
Executive Officer of LifePoint, reporting directly to the Board of Directors of
LifePoint Hospitals, Inc. (the "Board of Directors" or "Board") as well as
serving as a member of the Board and as the Chairman of the Board. LifePoint
shall use its best efforts to take such action as may be required to maintain
the Executive's status as such.
(c) Full-Time Employment. The Executive agrees to devote
substantially all of his professional working time and attention to the benefit
of LifePoint under the terms of this Agreement; provided, however, that nothing
in this Agreement is intended nor shall be construed
as limiting or restricting the Executive's right to engage in any activity that
is unrelated to his position specified in paragraph (b) above, including,
without limitation, managing private, passive investments, engaging in church,
community, and civic activities and other activities approved by the Board, and
serving as a director or a member of an advisory committee of any corporation or
other entity on which the Executive is serving as of the Effective Date or any
other corporation or entity that is not in competition with LifePoint, provided
that such activities do not impinge in any material way upon the requirement
that the Executive devote substantially all of his professional working time and
attention to the Company and perform the duties of his position specified in
paragraph (b) above.
2. COMPENSATION
In consideration of the services rendered by the Executive during
the Agreement Term (as defined below), LifePoint shall (except as otherwise
provided in item (iii) of paragraph (b) below), pay or provide the Executive
with the compensation and benefits set forth below.
(a) Salary. The Executive shall be paid a base salary (the "Base
Salary") equal to $520,000 per annum, payable in bi-weekly installments. The
Executive's Base Salary shall be reviewed not less than once each calendar year
by the Compensation Committee of the Board of Directors of LifePoint and may be
increased, but not decreased, in such Compensation Committee's sole and absolute
discretion.
(b) Annual Bonus. Notwithstanding anything contained herein,
effective January 1, 2004, and continuing for the duration of this Agreement,
including renewals and extensions hereof, the Executive shall be entitled to
receive an annual bonus payment only to the extent that the Executive becomes
entitled to such pursuant to an award made under the LifePoint Hospitals, Inc.
Executive Performance and Incentive Plan, or pursuant to any other program or
arrangement that is hereafter adopted by the Company as the successor thereto.
(c) Benefits. The Executive, as of any date, shall be entitled to
participate in the benefit plans offered at such time at a level which is no
less than commensurate with the benefit level offered generally to other senior
executives at such time.
3. TERM AND TERMINATION OF EMPLOYMENT
(a) Term. The term of this Agreement shall commence on the Effective
Date and shall end on the third anniversary of the Effective Date (the
"Agreement Term"); provided, however, that the Agreement Term shall be
automatically extended for an additional year on the second anniversary of the
Effective Date and on each succeeding anniversary of the Effective Date, unless
written notice of non-extension is provided by LifePoint or the Executive to the
other party at least 90 days prior to the applicable anniversary.
(b) Termination of Employment. Nothing in this Agreement shall be
construed to prevent the Executive from voluntarily terminating his employment
with LifePoint at any time or to prevent LifePoint from terminating the
Executive's employment at any time. Upon such termination, the provisions of
Section 4 shall apply.
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4. COMPENSATION UPON TERMINATION OF EMPLOYMENT.
If the Executive's employment with LifePoint is terminated during
the Agreement Term, the Executive shall be entitled to the following in full
satisfaction of his rights under this Agreement, notwithstanding anything
elsewhere in this Agreement; provided, however, upon the occurrence of a
termination event described in this Section 4 that would also entitle Executive
to benefits under the LifePoint Hospitals, Inc. Change in Control Severance Plan
(or any other arrangement established by the Company or an affiliate for the
purpose of providing severance or change in control benefits), the Executive
shall receive the greater (but not both) of: (i) the benefits described in this
Section 4 or, (ii) the benefits under such plan.
(a) Involuntary Termination Without Cause or Termination for Good
Reason. In the event the Executive's employment is terminated by the Company
other than for Cause, death, or Disability, or is terminated by the Executive
for Good Reason, the Company shall pay the Executive, and provide him with, the
following:
(i) His earned but unpaid Base Salary through the date of
termination, any earned but unpaid bonus under Section 2(b) for the
calendar year that ended prior to the date of termination and amounts due
to the Executive from the Company as of the date of termination, all of
which amounts shall be paid in a lump sum no later than fifteen (15) days
after the date the Executive's employment terminates, and any payments,
rights and benefits due as of the date of termination under the terms of
all employee benefit plans and programs (in which he was a participant) in
accordance with the terms of such plans and programs (collectively the
"Accrued Rights").
(ii) Continued payments pursuant to the Company's normal payroll
practices at an annual rate of 100% of the Base Salary from the date of
such termination until the second anniversary of such termination (the
"Cut-Off Date").
(iii) 75% of Base Salary (based on his Base Salary at the time of
his termination) for each calendar year or fraction of a calendar year in
the period from the first day of the calendar year in which such
termination occurs through the Cut-Off Date, with the amount payable
hereunder for the calendar year in which the Cut-Off Date occurs to be
prorated (based on calendar days), all of which amounts shall be paid in a
lump sum no later than fifteen (15) days after the date the Executive's
employment terminates.
(iv) His Insurance Coverage.
(b) Voluntary Termination; Termination for Cause. In the event the
Executive voluntarily terminates his employment hereunder or is terminated by
the Company for Cause, the Company shall pay the Executive, and provide him
with, any Accrued Rights.
(c) Disability; Death. In the event the Executive's employment is
terminated by reason of the Executive's death, or the Board of Directors
determines in good faith that the Executive is Disabled, the Company shall pay,
and provide the Executive (or his legal representative) with, the following:
(i) His Accrued Rights.
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(ii) Continued monthly payments at an annual rate of 100% of his
then Base Salary from the date of such termination until the Cut-Off Date.
(iii) 75% of his Base Salary (based in each case on the Base Salary
at the time of his termination) for each calendar year or fraction of a
calendar year in the period from the first day of the calendar year in
which such termination occurs through the Cut-Off Date, with the amount
payable hereunder for the calendar year in which the Cut-Off Date occurs
to be prorated (based on calendar days) and with the amount payable
hereunder for any calendar year to be payable as promptly as practicable
after the close of such calendar year.
(iv) His Insurance Coverage (if he is Disabled).
For purposes of this Agreement, "Disability" shall mean the
inability of the Executive, after reasonable accommodation, to perform the
duties required hereunder for a period equal to or in excess of the waiting
period under the Company's long term disability insurance policy, as determined
in good faith by the Board of Directors.
(d) Termination after Agreement Term. If the Executive's employment
with the Company is terminated upon or following the close of the Agreement
Term, and the Executive is not subject to a written agreement with the Company
that replaces or supersedes this Agreement, he shall be entitled to the
following in full satisfaction of his rights under this Agreement,
notwithstanding anything elsewhere in this Agreement:
(i) His Accrued Rights.
(ii) If his employment terminates in the calendar year in which the
Agreement Term ends and is not for Cause, 75% of his Base Salary prorated
(based on calendar days) for the portion of such calendar year prior to
the close of the Agreement Term (based on the Base Salary on the last day
of the Agreement Term), all of which amounts shall be paid in a lump sum
no later than fifteen (15) days after the date his employment terminates.
(e) Stock Options. Any options covering shares of Common Stock held
by the Executive at the time of the Executive's termination of employment shall
be exercisable on or after the date of such termination in accordance with their
terms.
(f) Taxes. If there is a determination that the payments and other
benefits called for under this Agreement, in combination with any other payments
or benefits to or for the benefit of the Executive from LifePoint or any
predecessor or successor organization, will result in the Executive's being
subject to an excise tax under Section 4999 of the Code and/or if such an excise
tax is assessed against the Executive as a result of such payments or other
benefits, LifePoint shall make a Gross Up Payment (as defined in this Section
4(f)) to or on behalf of the Executive as and when such determination(s) and
assessment(s), as appropriate, are made, provided the Executive takes such
action as LifePoint reasonably requests under the
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circumstances to mitigate or challenge, or to mitigate and challenge, such tax
and LifePoint complies with its obligations described below in this Section
4(f).
A "Gross Up Payment" means a payment to or on behalf of the Executive
which shall be sufficient to pay (i) any such excise tax in full, (ii) any
federal, state and local income tax and social security and other employment tax
on the payment made to pay the Executive's excise tax as well as any additional
excise tax on such payment and (iii) any interest or penalties assessed by the
Internal Revenue Service on the Executive if such interest or penalties are
attributable to LifePoint's failure to comply with its obligations under this
Section 4(f) or applicable law. Any determination under this Section 4(f) by
LifePoint or LifePoint's accountants shall be made in accordance with Section
280G of the Code and any applicable related regulations (whether proposed,
temporary or final) and any related Internal Revenue Service rulings and any
related case law and, if LifePoint reasonably requests that the Executive take
action to mitigate or challenge, or to mitigate and challenge, any such tax or
assessment and the Executive complies with such request, LifePoint shall provide
Executive with such information and such expert advice and assistance from
LifePoint's accountants, lawyers and other advisors as he may reasonably request
and shall pay for all expenses incurred in effecting such compliance and any
related fines, penalties, interest and other assessments.
5. TAX WITHHOLDING
All compensation payable pursuant to this Agreement shall be subject
to reduction by all applicable withholding, social security and other federal,
state and local taxes and deductions.
6. RESTRICTIVE COVENANTS
(a) Confidentiality/Trade Secrets. The Executive acknowledges that
his position with the Company will be one of the highest trust and confidence,
both by reason of his position and by reason of his access to and contact with
the trade secrets and confidential and proprietary business information of the
Company and all of its Affiliates (which term as used in this Agreement shall
include, any person, corporation, partnership, general partner or other entity
that directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Company), both during the term
of this Agreement and thereafter. The Executive covenants and agrees as follows:
(i) Protection. That he shall at all times use his best efforts and
exercise diligence to protect and safeguard the trade secrets and
confidential and proprietary information of the Company and its
Affiliates, including, without limitation, the identity of their patients
or customers (including third-party payers of any kind or nature) and
suppliers, their arrangements with their patients or customers and
suppliers, and their technical data, records, compilations of information,
processes, computer software, and specifications relating to their
patients or customers, suppliers, products and services.
(ii) Nondisclosure. That he shall not at any time disclose any of
such trade secrets and confidential and proprietary information, except as
Executive reasonably
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decides may be required in the course of his employment with the Company
under Section 1 hereof or as may be required by law.
(iii) Nonusage. That he shall not at any time use, directly or
indirectly, for his own benefit or for the benefit of another, any of such
trade secrets and confidential and proprietary information.
The covenants contained in this Section 6(a) shall not be applicable
to any information which is in the public domain, other than as a result of
action by the Executive in violation of this Section 6(a), or which was obtained
from sources other than the Company or its Affiliates who are not under a duty
of nondisclosure. All files, records, documents, drawings, specifications,
computer software, memoranda, notes, or other documents relating to the business
of the Company and its Affiliates, whether prepared by the Executive or
otherwise coming into his possession, shall be the exclusive property of the
Company and its Affiliates and shall be delivered to the Company or its
Affiliates as appropriate, and not retained by the Executive, upon termination
of his employment for any reason whatsoever.
(b) Non-Competition. The Executive covenants and agrees that, so
long as he is employed by the Company, and for a period of two years following
his termination of employment for Cause or his voluntary termination under
Section 4(b), the Executive shall not, without the prior written consent of the
Company, directly or indirectly, as an employee, company, agent, principal,
proprietor, partner, ten percent (10% or more) stockholder, consultant,
director, or corporate officer, engage in any business that is in competition
with the hospitals owned by the Company at the time of termination.
(c) Modification. If the scope of any of the restrictions contained
in this Section 6 is too broad to permit enforcement of such restrictions to
their full extent, then such restrictions shall be enforced to the maximum
extent permitted by law, and the Executive hereby consents and agrees that such
scope may be modified accordingly in any proceeding brought to enforce such
restrictions.
(d) Remedies for Breach of Restrictive Covenants. The covenants set
forth in this Section 6 shall continue to be binding upon the Executive
notwithstanding the termination of his employment with the Company for any
reason whatsoever. Such covenants shall be deemed and construed as separate
agreements independent of any other provision of this Agreement. The existence
of any claim or cause of action by the Executive against the Company or any of
its Affiliates, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company or any of its Affiliates
of any or all of such covenants. It is expressly agreed that the remedy at law
for the breach of any such covenant is inadequate and that temporary and
permanent injunctive relief shall be available to prevent the breach or any
threatened breach thereof, without the necessity of proof of actual damages and
without the necessity of posting a bond, cash or otherwise.
7. SUCCESSORS
(a) This Agreement shall be binding upon and shall inure to the
benefit of LifePoint, its successors and assigns and any person, firm,
corporation or other entity which
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succeeds to all or substantially all of the business, assets or property of
LifePoint in accordance with Section 7. Any successor to LifePoint shall be
treated the same as LifePoint under this Agreement. LifePoint will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business, assets or property of
such company, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that such company would be required to
perform it if no such succession had taken place.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts are due and
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid to the legal representatives of the Executive's estate.
8. NOTICES
Any notice, demand, or communication required, permitted or desired
to be given hereunder must be in writing to be effective, and shall be deemed
effectively given when personally delivered or mailed by prepaid certified mail,
return receipt requested, addressed as follows:
If to the Executive: Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
If to LifePoint: LifePoint Hospitals, Inc.
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Executive Vice President
9. GOVERNING LAW
This Agreement has been executed and delivered and shall be
interpreted, construed, and enforced in accordance with the laws of the State of
Tennessee.
10. ENTIRE AGREEMENT
This Agreement shall constitute the entire agreement of the parties
hereto and may not be amended except in writing signed by all of the parties
hereto. No oral statements or prior written materials not specifically
incorporated herein shall be of any force or effect.
11. SEVERABILITY
In the event any provision of this Agreement is held to be
unenforceable or void for any reason, the remainder of this Agreement shall be
unaffected and shall remain in full force and effect in accordance with its
terms.
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12. NO ASSIGNMENT BY EXECUTIVE; BINDING EFFECT
The Executive shall not assign this Agreement to any other party or
parties without the prior written consent of LifePoint. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
13. HEADINGS
The headings used herein are for convenience only and do not limit
the contents of this Agreement.
14. DEFINITIONS
(a) For purposes of this Agreement, "Cause" shall mean:
(i) The conviction of the Executive of a felony under the laws of
the United States or any state thereof, whether or not appeal is taken, as
determined by the Board of Directors in good faith.
(ii) The conviction of the Executive for a violation of criminal law
involving the Company and its business that materially damages the Company
as determined by the Board of Directors in good faith.
(iii) The willful misconduct of the Executive, or the willful or
continued failure by the Executive (except in the case of a Disability as
provided in Section 4(c) hereof) to substantially perform his duties
hereunder, in either case which has a material adverse effect on the
Company as determined by the Board of Directors in good faith.
(iv) The willful fraud or material dishonesty of the Executive in
connection with his performance of his duties to the Company and involving
the finances of the Company as determined by the Board of Directors in
good faith.
(v) Executive's repeated use of alcohol in a manner which in the
opinion of the Board of Directors materially impairs the ability of the
Executive to effectively perform the Executive's duties and obligations
under this Agreement, or the illegal use, possession, or sale of, or
impaired performance due to the illegal use of, controlled substances.
(vi) a violation of the Company's policies on sexual or other
illegal harassment of a Company employee by the Executive as determined by
the Board of Directors in good faith.
In no event, however, shall the Executive's employment be considered to have
been terminated for "Cause" under this Agreement unless and until the Executive
receives written notice from the Board of Directors stating in detail the acts
or omissions constituting Cause and the Executive has the opportunity to cure to
the Board of Directors' satisfaction any such acts or omissions, in the case of
(iii), (v) or (vi) above, within 30 days of the Executive's receipt of such
notice. The foregoing shall not limit the right of the Board of Directors to
suspend the Executive from his
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day-to-day responsibilities with the Board of Directors pending the completion
of such notice and cure procedures.
(b) For purposes of this Agreement, "Good Reason" shall mean: (i) the
assignment to the Executive of any duties inconsistent with the Executive's
position (including the loss of any of his titles or position as Chairman of the
Board, a member of the Board and Chief Executive Officer, and any other status,
offices, titles or reporting relationships), authority, duties or
responsibilities as contemplated by Section 1 hereof, any adverse change in the
Executive's reporting responsibilities, or any action by LifePoint that results
in a diminution in such position, authority, duties or responsibilities, but
excluding for these purposes an isolated and insubstantial action not taken in
bad faith and which is remedied by LifePoint promptly after receipt of notice
thereof given by the Executive; (ii) any diminution in Executive's total
compensation in violation of Section 2; (iii) the relocation, without the
consent of the Executive, of LifePoint's principal executive offices or the
offices of the Executive to a location more than 40 miles from Nashville,
Tennessee, (iv) a termination of Executive's employment for any reason (other
than his death) within twelve months after a Change in Control, or (v) any
breach under Section 7 of this Agreement.
(c) For purposes of this Agreement, "Change in Control" shall mean:
(i) An acquisition (other than directly from LifePoint) of any
voting securities of LifePoint (the "Voting Securities") by any "Person"
(as the term Person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act")) immediately
after which such Person has "Beneficial Ownership" (within the meaning of
Rule 13d-3 promulgated under the 0000 Xxx) of twenty percent (20%) or more
of the combined voting power of the then outstanding Voting Securities;
provided, however, that in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an acquisition
which would cause a Change in Control. A "Non-Control Acquisition" shall
mean an acquisition by (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (A) LifePoint or (B) any corporation or other
Person of which a majority of its voting power or its equity securities or
equity interest is owned directly or indirectly by LifePoint (a
"Subsidiary") or (ii) LifePoint or any Subsidiary.
(ii) The individuals who are members of the Board (the "Incumbent
Board"), cease for any reason to constitute at least two-thirds of the
Board; provided, however, that if the election or nomination for election
by LifePoint's stockholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be considered a
member of the Incumbent Board if (1) such individual initially assumed
office as a result of either an actual or threatened "Election Contest"
(as described in Rule 14a-11 promulgated under the 0000 Xxx) or other
actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board (a "Proxy Contest") including by reason
of any agreement intended to avoid or settle any Election Contest or Proxy
Contest or (2) such
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individual was designated by a Person who has entered into an agreement
with LifePoint to effect a transaction described in clause (i) or (iii) of
this Section 14(c); or
(iii) The consummation, after approval by stockholders of LifePoint,
of:
(A) merger, consolidation or reorganization involving LifePoint
unless
(1) The stockholders of LifePoint, immediately before such
merger, consolidation or reorganization, own, directly or
indirectly immediately following such merger, consolidation or
reorganization, at least seventy-five percent (75%) of the
combined voting power of the outstanding Voting Securities of
the corporation resulting from such merger or consolidation or
reorganization or its parent corporation (the "Surviving
Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such
merger, consolidation or reorganization;
(2) The individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing
for such merger, consolidation or reorganization constitute at
least two-thirds of the members of the board of directors of
the Surviving Corporation; and
(3) No Person (other than LifePoint, any Subsidiary, any
employee benefit plan (or any trust forming a part thereof)
maintained by LifePoint, the Surviving Corporation or any
Subsidiary, or any Person who, immediately prior to such
merger, consolidation or reorganization, had Beneficial
Ownership of twenty percent (20%) or more of the then
outstanding Voting Securities) has Beneficial Ownership of
twenty percent (20%) or more of the combined voting power of
the Surviving Corporation's then outstanding Voting
Securities.
(B) A complete liquidation or dissolution of LifePoint; or
(C) An agreement for the sale or other disposition of all or
substantially all of the assets of LifePoint to any Person (other than a
transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by LifePoint
which, by reducing the number of Voting Securities outstanding, increased the
proportional number of shares Beneficially Owned by the Subject Person;
provided, however, if a Change in Control would occur (but for the operation of
this sentence) as a result of the acquisition of Voting Securities by LifePoint,
and after such share acquisition by LifePoint, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
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15. COUNTERPARTS
This Agreement may be executed in counterparts, each of which will
deem to be an original, but all of which together will constitute one in the
same Agreement.
IN WITNESS WHEREOF, LifePoint has caused this Agreement to be executed and
the Executive has set his hand hereto on the day and year first written above.
LIFEPOINT CSGP, LLC
By: _________________________________
Its: _________________________________
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
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