AGREEMENT TO COOPERATE AND GENERAL RELEASE
Exhibit
10.1
This Agreement to Cooperate and General Release (the “Agreement”) is made and entered into on
May 4, 2007 by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual resident of the State of Tennessee (“▇▇.
▇▇▇▇▇▇▇”), and LifePoint Hospitals, CSGP, LLC, a Delaware limited liability company (together with
LifePoint Hospitals, Inc., a Delaware corporation, the “Company”).
WITNESSETH:
WHEREAS, ▇▇. ▇▇▇▇▇▇▇ was employed at-will by the Company as its Chief Financial Officer from
November 2001 until his voluntary resignation on Thursday, April 26, 2007 (the “Resignation Date”);
WHEREAS, ▇▇. ▇▇▇▇▇▇▇ submitted voluntarily his resignation to the Company to pursue other
interests effective upon the close of business on the Resignation Date and has decided to refrain
from seeking employment with the Company or any of its subsidiaries or affiliates after the
Resignation Date; and,
WHEREAS, ▇▇. ▇▇▇▇▇▇▇ and the Company recognize, in light of ▇▇. ▇▇▇▇▇▇▇’▇ resignation, the
desirability of clarifying the benefits that ▇▇. ▇▇▇▇▇▇▇ will receive from the Company and each
desire to make various, additional mutual covenants.
THEREFORE, in consideration of the premises and mutual promises herein contained, it is agreed
as follows:
1. Resignation; Cooperation.
(a) The parties confirm and acknowledge that ▇▇. ▇▇▇▇▇▇▇ voluntarily resigned as an employee
and officer of the Company and all of its subsidiaries and affiliates, effective at 8:00 AM Central
Time on the Resignation Date. ▇▇. ▇▇▇▇▇▇▇ promises and agrees to execute any additional document
or documents necessary, if any, to effect his resignation from the Company and/or any of its
subsidiaries or affiliates within two business days of any written request by the Company to do so.
▇▇. ▇▇▇▇▇▇▇ acknowledges and agrees that he holds no claim, right or interest in reinstatement or
future employment with the Company and/or any of its subsidiaries or affiliates.
(b) As a material inducement to the Company to make the payments described herein, ▇▇. ▇▇▇▇▇▇▇
agrees to be available, either in person or telephonically at the Company’s option, to assist and
cooperate fully with the Company so as to ensure a smooth and seamless transition of the
responsibilities held, and information learned, by ▇▇. ▇▇▇▇▇▇▇ while employed by the Company to one
or more persons designated by the Company. ▇▇. ▇▇▇▇▇▇▇ also agrees to answer any question(s) asked
of him by any officer of the Company that relates to any function of the Company for which ▇▇.
▇▇▇▇▇▇▇ was responsible while employed by the Company. Further, ▇▇. ▇▇▇▇▇▇▇ recognizes that the
Company is or may be involved in litigation and other business matters unrelated to litigation from
time to time, and agrees to provide his full cooperation with any of the Released Parties in the
defense or prosecution of one or more existing or future court
actions, governmental investigations, arbitrations, mediations or other legal or equitable
matters or proceedings, and all business matters, which involve any of them or any of their
employees, officers or directors. ▇▇. ▇▇▇▇▇▇▇ acknowledges and understands that his obligations of
cooperation under this Section 1(b) are not limited in time and may include, but shall not be
limited to, the need for or availability for testimony in deposition, affidavit, trial, mediation
or arbitration, as well as preparation for that testimony, and consultation for other business
matters unrelated to litigation. ▇▇. ▇▇▇▇▇▇▇ agrees that he will be available at the Company’s
reasonable request for any meetings or conferences deemed necessary in connection with any matters
within this Section 1(b), and in preparation for the defense or prosecution of any such other
matters or proceedings, and the Company agrees to endeavor to schedule ▇▇. ▇▇▇▇▇▇▇’▇ availability
at mutually agreeable times, dates and locations. Other than the consideration identified in
Section 2, ▇▇. ▇▇▇▇▇▇▇ shall receive no additional compensation for time spent assisting the
Company pursuant to this Section 1(b), provided, however, that if ▇▇. ▇▇▇▇▇▇▇ shall be required to
travel in excess of fifty (50) miles from his principal residence pursuant to this Section 1(b),
the Company shall reimburse ▇▇. ▇▇▇▇▇▇▇ for his reasonable travel, meal and lodging expenses
pursuant to its existing policies and procedures for same.
2. Consideration and Payment; Release of Claims.
(a) In consideration of, and in exchange for, ▇▇. ▇▇▇▇▇▇▇’▇ promises and covenants made in
this Agreement and beginning on the next regularly scheduled pay day after ▇▇. ▇▇▇▇▇▇▇ executes
this Agreement, the Company agrees to pay ▇▇. ▇▇▇▇▇▇▇ the total gross amount of $802,500 (“the
“Payment”), which represents eighteen months of ▇▇. ▇▇▇▇▇▇▇’▇ annual salary as of the Resignation
Date, subject to ▇▇. ▇▇▇▇▇▇▇’▇ full compliance with this Agreement. The Payment will be made, pro
rata and subject to all applicable withholding taxes, on each of the Company’s regularly scheduled
paydays beginning on the next payday after ▇▇. ▇▇▇▇▇▇▇ executes the Agreement, and shall continue
thereafter for thirty-nine pay periods. Having voluntarily resigned his position, ▇▇. ▇▇▇▇▇▇▇
acknowledges and agrees that the Company is not otherwise obligated to provide him with any of the
benefits set forth in Section 2(a).
(b) Except to the extent provided otherwise herein, ▇▇. ▇▇▇▇▇▇▇ shall not, from the
Resignation Date forward, participate in the Company’s 401(k); retirement and/or thrift plan;
cafeteria plan; or, any other benefit or stock grant, award or option plan sponsored by the
Company. ▇▇. ▇▇▇▇▇▇▇ shall, however, be entitled to any funds accrued in such plans prior to the
Resignation Date (less any outstanding principal loan balance, where applicable), to the extent and
in accordance with the terms of the plans. ▇▇. ▇▇▇▇▇▇▇’▇ health and welfare plan participation
will cease as of the Resignation Date, except that ▇▇. ▇▇▇▇▇▇▇ may elect to exercise his rights
under COBRA to continue applicable medical and dental coverage in accordance with the applicable
plan and ▇▇. ▇▇▇▇▇▇▇ shall be solely responsible for the premiums therefore. Except as herein
expressly stated, ▇▇. ▇▇▇▇▇▇▇ shall not be entitled to any other benefits or compensation from the
Company at any time after the Resignation Date, including but not limited to any accrued but unused
vacation or PTO time.
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(c) The parties acknowledge and agree that all of ▇▇. ▇▇▇▇▇▇▇’▇ Options (as such term is
defined by the 1998 Long Term Incentive Plan) that are vested as of the Resignation Date remain
vested and are exercisable no later than three months after the Resignation Date, and that all of
▇▇. ▇▇▇▇▇▇▇’▇ Options that were not vested on the Resignation Date are forfeited effective as of
the Resignation Date. The parties acknowledge and agree that all rights and options to purchase the
Company’s stock under the Management Stock Purchase Plan cease and all unvested shares are
forfeited as of the Resignation Date and that ▇▇. ▇▇▇▇▇▇▇ shall receive, within thirty days of the
date he executes this Agreement, the lesser of the market value of the stock or the amount of
salary used to purchase stock. The parties also acknowledge and agree that all shares of restricted
stock held by ▇▇. ▇▇▇▇▇▇▇ on the date of this Agreement are unvested and are, therefore, forfeited.
(d) ▇▇. ▇▇▇▇▇▇▇ hereby forever settles, releases, compromises, reaches accord and
satisfaction, waives, remises, discharges, and acquits the Company and its predecessors,
successors, purchasers, subsidiaries, assigns or affiliates and the officers, agents, directors, or
employees of any of them, or any successors, purchasers, or predecessors of any of them
(collectively, the “Released Parties”) from each and every claim which exists as of the date of
this Agreement, whether known or unknown, or which ▇▇. ▇▇▇▇▇▇▇ at any time hereafter may have
relating to his employment by the Company including, but not limited to the separation of said
employment and any right or claim under federal or state law or any political subdivision thereof,
including but not limited to Title VII of the Civil Rights Act of 1964 which prohibits
discrimination in employment based on race, color, national origin, religion or sex; the Americans
with Disabilities Act which prohibits discrimination in employment based upon physical or mental
disabilities; the Family and Medical Leave Act; and any other federal, state or local laws or
regulations prohibiting employment discrimination or protecting employee rights, as well as claims
for any other tortious or unlawful conduct, including but not limited to slander, defamation and
intentional or tortious interference with contract or a prospective business relationship, up to
the date of the execution of this Agreement (“the Claims”). The foregoing release of Claims shall
not include Company’s obligations, responsibilities or undertakings pursuant to this Agreement.
(e) ▇▇. ▇▇▇▇▇▇▇ fully understands and agrees that this Agreement may be pled by the Released
Parties as a complete defense to any of the Claims which may be hereafter asserted by him or on his
behalf in any suit, claim, or grievance proceeding against the Released Parties, for or on account
of any of the Claims up to and including the present time of execution hereof.
3. Restrictive Covenants of ▇▇. ▇▇▇▇▇▇▇.
(a) For a period of eighteen months following the Resignation Date (“the Identified Period”),
▇▇. ▇▇▇▇▇▇▇ agrees that he will not, in any capacity (including, but not limited to, as an owner,
member, partner, shareholder, consultant, advisor, financier, agent, employee, officer, director,
manager or otherwise), whether directly or indirectly, engage in a Competitive Activity (as such
term is hereinafter defined). As used in this Agreement, the term “Competitive Activity” shall
mean and refer to: (i) any person or entity (including their successors (including any successor(s)
that results from any business combination, sale or merger), assigns and transferees, whether by
operation of law or otherwise) that, whether on the Resignation Date or
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at any time within the Identified Period, derives more than fifty percent of its revenues from
one or more non-urban acute care hospitals (and associated outpatient healthcare facilities)
(together, a “Non-Urban Hospital”) anywhere in the United States; (ii) any person or entity
(including their successors (including any successor(s) that results from any business combination,
sale or merger), assigns and transferees, whether by operation of law or otherwise) that, whether
on the Resignation Date or at any time within the Identified Period, offers or provides, within a
twenty-five (25) mile radius of a Non-Urban Hospital operated or managed by a subsidiary of the
Company, a healthcare service offered at such Non-Urban Hospital; (iii) any person or entity that
derives more than fifty percent of its revenues from physician recruitment services and that may,
as a part of its operation, be engaged in the recruitment of physicians from facilities owned or
operated by any of the Released Parties (excluding recruitment activities that are conducted by
means of general solicitation, such as by way of newspapers or the Internet, and that are not
targeted to recruit physicians from a facility that is owned or operated by any of the Released
Parties); or (iv) any person or entity (including their successors (including any successor(s) that
results from any business combination, sale or merger), assigns and transferees, whether by
operation of law or otherwise) who, whether on the Resignation Date or at any time within the
Identified Period, owns or seeks to own, directly or indirectly, whether beneficially, of record or
otherwise, any security issued by the Company. Nothing in this Section 3(a) shall prohibit ▇▇.
▇▇▇▇▇▇▇’▇ ownership of stock in any publicly held company (other than the Company) listed on a
national securities exchange or whose shares of stock are regularly traded in the over the counter
market as long as such holding at no time exceeds two percent (2%) of the total outstanding stock
of such company.
▇▇. ▇▇▇▇▇▇▇ has carefully read and considered the provisions of this Section 3(a) and, having
done so, agrees and acknowledges that the terms, conditions, agreements and restrictions set forth
herein are fair and reasonable and are reasonably required for the protection of the interests of
the Company and its subsidiaries or affiliates and their respective officers, directors,
shareholders, agents, representatives and other employees, and will not impose any hardship on ▇▇.
▇▇▇▇▇▇▇ or affect his ability to earn a living. ▇▇. ▇▇▇▇▇▇▇ further acknowledges that the
Company’s business is nationwide in character and is not limited to any narrower scope or area
except as provided herein.
(b) For a period of eighteen months following the Resignation Date, ▇▇. ▇▇▇▇▇▇▇ covenants and
agrees that he will not directly or indirectly solicit the services of any the Released Parties’
employees, independent contractors who derive more than twenty-five percent of their income from
any of the Released Parties, customers, referral sources, or otherwise induce or attempt to induce
any of the Released Parties’ current employees to sever their employment relationship with any of
the Released Parties. ▇▇. ▇▇▇▇▇▇▇ has carefully read and considered the provisions of this Section
3(b) and, having done so, agrees and acknowledges that the terms, conditions, agreements and
restrictions set forth herein are fair and reasonable and are reasonably required for the
protection of the interests of the Company and its subsidiaries or affiliates and their respective
officers, directors, shareholders, agents, representatives and other employees, and will not impose
any hardship on ▇▇. ▇▇▇▇▇▇▇ or affect his ability to earn a living. ▇▇. ▇▇▇▇▇▇▇ further
acknowledges that the Company’s business is nationwide in character and is not limited to any
narrower scope or area except as provided herein.
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(c) ▇▇. ▇▇▇▇▇▇▇ covenants and agrees that he will not use or disclose to any person or entity
any confidential, competitive or proprietary information on or about any of the Released Parties
(collectively, “Confidential Information”). By way of illustration, but not limitation, such
Confidential Information shall include, whether oral or written, (i) trade secrets concerning the
business and affairs of any of the Released Parties, Released Companies’ business drivers, product
specifications, data, profitability information, know how, formulae, compositions, processes,
designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current, and
planned research and development, current and planned service delivery methods and processes,
patient, provider or supplier lists, current and anticipated patient and provider requirements,
price or cost lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies, systems, structures and
architectures (and related processes, formulae, composition, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and information); and, (ii) information
concerning the business and affairs of any of the Released Parties (which includes historical
financial statements, financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key personnel, and personnel training
techniques and materials), however documented, that has been or may hereafter be provided or shown
to ▇▇. ▇▇▇▇▇▇▇ by any of the Released Parties or is otherwise obtained from review of any of the
Released Parties’ documents or property or discussions with agents of any of the Released Parties
by ▇▇. ▇▇▇▇▇▇▇, irrespective of the form of the communication, and all notes, analyses,
compilations, studies, summaries, and other material prepared by ▇▇. ▇▇▇▇▇▇▇ containing or based,
in whole or in part, on any information included in the foregoing. ▇▇. ▇▇▇▇▇▇▇ further
acknowledges that any unauthorized use of the Confidential Information by him, or any disclosure of
the same to any third parties, would be wrongful and would cause irreparable injury to the Company.
Provided, however, that the provisions of this Section 3(c) shall not apply to any information
that is (i) first ascertained from public or published information, (ii) received from a third
party not under an obligation to the Company to keep such information confidential, (iii) becomes
known to the public other than through a breach of this Agreement, or (iv) required to be disclosed
by an Order issued by any court or governmental authority having competent jurisdiction. If ▇▇.
▇▇▇▇▇▇▇ is required to disclose any of the Confidential Information pursuant to Section 3(c)(iv),
he shall notify the Company’s General Counsel in writing via facsimile or overnight mail, within 24
hours of his receipt of such court order or subpoena, and simultaneously provide the Company’s
General Counsel with a copy of such court order or subpoena, all of which shall occur prior to such
disclosure. ▇▇. ▇▇▇▇▇▇▇ agrees to waive any objection to any request by any of the Released
Parties that the document production or testimony be made in camera and under seal. ▇▇. ▇▇▇▇▇▇▇
shall also, upon execution of this Agreement, return to the Company all records or property of any
nature in his possession or control in any way relating to or owned by the Company or the
Confidential Information.
(d) ▇▇. ▇▇▇▇▇▇▇ covenants and agrees not to discuss with any other person or entity in any
manner, or make statements about or relating to, the Company, the Released Parties, or the business
or business matters of or relating to the Company and/or its affiliates. ▇▇. ▇▇▇▇▇▇▇ covenants and
agrees that he will not make any comment, innuendo, gesture, remark or statement that, or omit to
make any remark or statement the absence of which, reasonably may be construed as disparaging or
critical of or to any of Released Parties. Further, ▇▇. ▇▇▇▇▇▇▇
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represents to the Company that he has not, since the Resignation Date, made any comment,
innuendo, gesture, remark or statement that, or omit to make any remark or statement the absence of
which, reasonably may be construed as disparaging or critical of or to any of Released Parties.
Nothing in this Agreement restricts ▇▇. ▇▇▇▇▇▇▇ from making any true statements in connection with
any legal proceeding or as required by applicable law.
(e) If ▇▇. ▇▇▇▇▇▇▇ has any question as to whether any activity or conduct by him will violate
any provision of this Section 3, he may request in writing that the Company provide its opinion
regarding same. All such requests should be sent via facsimile, First Class mail or overnight
delivery to the Company’s General Counsel.
4. Remedies for Breach of the Agreement.
(a) In the event of a breach or default by ▇▇. ▇▇▇▇▇▇▇ of any of his obligations contained in
this Agreement, the Company shall have the right to pursue (i) such legal remedies as may be
available to it to recover from ▇▇. ▇▇▇▇▇▇▇ any damages suffered by any of the Released Parties as
a result of such breach or default, and/or (ii) an appropriate action in equity, including an
action for injunctive relief, as may be appropriate under the circumstances to protect itself or
any of the Released Parties against such breach or default. ▇▇. ▇▇▇▇▇▇▇ agrees and acknowledges
that the Company has the right to seek such relief and that the Company may do so without the
necessity of proof of actual damages. Additionally, in the event ▇▇. ▇▇▇▇▇▇▇ breaches the
Agreement, he agrees to repay immediately all sums paid to him, and to forfeit any future payments
to be paid to him, pursuant to the Agreement.
(b) If a Court determines that ▇▇. ▇▇▇▇▇▇▇ has violated any of the covenants contained in this
Agreement, the parties agree and acknowledge that the period applicable to each obligation that has
been violated will be extended automatically by a period of time equal in length to the period
during which such violation(s) occurred.
(c) If the Company breaches its obligations to ▇▇. ▇▇▇▇▇▇▇ under this Agreement, ▇▇. ▇▇▇▇▇▇▇
may seek any remedies available at law or in equity in connection with such breach.
5. Compliance Program. ▇▇. ▇▇▇▇▇▇▇ represents that, during the course of his
employment with the Company, he read, and signed as having read, a copy of the Common Ground
Compliance Program of LifePoint Hospitals, Inc. and the Code of Ethics for Senior Financial
Officers and Chief Executive Officer (together, the “Codes”). ▇▇. ▇▇▇▇▇▇▇ represents that during
the course of his employment he complied with the provisions of the Codes. ▇▇. ▇▇▇▇▇▇▇ represents
that he is not aware of any possible violations by any director, officer, employee, agent of or
consultant to the Company or any of its affiliates of any federal, state or local law, rule,
regulation, ordinance, order or other legal authority including without limitation those related to
governmental reimbursement programs or the “fraud and abuse” statutes and regulations, other than
as disclosed by him in any publicly filed report.
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6. Voluntary Agreement. ▇▇. ▇▇▇▇▇▇▇ has read all of the terms of this Agreement and
understands that this Agreement releases the Released Parties forever from any legal action arising
from his employment relationship with any of them and the termination of that relationship. ▇▇.
▇▇▇▇▇▇▇ acknowledges that he signs this Agreement of his own free will and in exchange for the
consideration to be given, which is acknowledged to be adequate and satisfactory. ▇▇. ▇▇▇▇▇▇▇
declares that he is competent to execute this Agreement.
7. No Charges or Claims. ▇▇. ▇▇▇▇▇▇▇ represents that he has not filed any complaints,
claims or charges against any of the Released Parties with any local, state or federal agency or
court related to his employment by any of Released Parties, that he will not file any such
complaints, claims or charges arising out of or relating to events prior to the execution of this
Agreement and that if any such agency or court assumes jurisdiction of any such complaint, claim or
charge against any of the Released Parties on behalf of ▇▇. ▇▇▇▇▇▇▇, he will request such agency or
court to withdraw from the matter and that the complaint, claim or charge be dismissed.
8. Miscellaneous.
(a) This is the entire agreement between the parties and takes the place of any prior
agreement, representation or promise, except as identified in this Agreement. The Agreement cannot
be modified except in writing signed by both ▇▇. ▇▇▇▇▇▇▇ and the Company’s Chief Executive Officer.
If any provision of this Agreement is found to be unenforceable, all other provisions will remain
fully enforceable.
(b) This Agreement binds and inures to the benefit of ▇▇. ▇▇▇▇▇▇▇’▇ heirs, administrators,
representatives, executors, successors and assigns and binds and inures to the benefit of all
Released Parties and their respective heirs, administrators, representatives, executors, successors
and assigns.
(c) This Agreement shall be construed as whole according to its fair meaning. It shall not be
construed strictly for or against any Released Party or ▇▇. ▇▇▇▇▇▇▇. Captions are intended solely
for the convenience of reference and shall not be used in the interpretation of this Agreement.
(d) This Agreement is assignable by the Company and is binding upon its successors and assigns
but such assignment shall not relieve the Company of its obligations hereunder. Except in the
event of ▇▇. ▇▇▇▇▇▇▇’▇ death, this Agreement is personal to and nonassignable by ▇▇. ▇▇▇▇▇▇▇ but is
binding upon his heirs and estate.
(e) This Agreement shall be governed by the laws of the State of Tennessee. Any and all claims
relating hereto may be brought only in the federal and/or state courts with jurisdiction over
claims arising in ▇▇▇▇▇▇▇▇▇▇ County, Tennessee and the parties expressly agree to personal
jurisdiction in those courts.
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(f) Should any provision of this Agreement be declared or be determined by any Court to be
illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected
thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of
this Agreement. The term, condition or aspect deemed reasonable and enforceable by the court shall
be incorporated into the applicable section of this Agreement, shall replace the term, condition or
aspect deemed by the court to be unreasonable and unenforceable, and shall remain enforceable to
the fullest extent permitted by law.
(g) ▇▇. ▇▇▇▇▇▇▇ further agrees that to the extent that any federal or state taxes of any kind
may be due or payable as a result of any payments referred to in this Agreement, he will be
responsible for the payment of such taxes and will hold the Released Parties harmless in the event
of any claim against any of them for payment of such taxes. Said agreement to hold the Released
Parties harmless shall include ▇▇. ▇▇▇▇▇▇▇’▇ agreement to indemnify the Released Parties for any
and all loss, cost, damage, or expense, including, but without limitation, attorneys’ fees
associated with defending against such claim for taxes.
(h) If legal action is commenced to enforce any provision of this Agreement, the prevailing
party in such action shall be entitled to recover its attorney’s fees and expenses in addition to
any other relief that may be granted.
(i) This Agreement may be executed in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.
THE UNDERSIGNED FURTHER STATES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND
UNDERSTANDS THE CONTENTS THEREOF, AND THAT HE EXECUTES THE SAME OF HIS OWN FREE ACT
AND DEED.
Signature page follows.
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WHEREFORE, ▇▇. ▇▇▇▇▇▇▇ and the Company voluntarily enter into this Agreement to Cooperate and
General Release by affixing his and its respective signatures hereunto on the dates set forth
below.
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||
| Date: May 4, 2007 | ||||
| LIFEPOINT HOSPITALS, CSGP, LLC |
||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| Its: | Senior Vice President | |||
| Date: May 4, 2007 | ||||
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