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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
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LIFEPOINT HOSPITALS, INC.

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2015         
PROXY
STATEMENT
        
Notice of Annual
Meeting of Stockholders

LIFEPOINT HOSPITALS, INC.

 

to be held on June 2, 2015

GRAPHIC

LOGO


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LOGO


PHOTO
 

Last year our stock price increased by more than 36% for the second year in a row. We are confident successful execution of our strategic plan will continue to deliver long-term value for our stockholders.

April 22, 2015

Dear Fellow Stockholders:

It is my pleasure to invite you to attend the 2015 Annual Meeting of Stockholders, which is to be held on Tuesday, June 2, 2015 at 3:00 p.m. Central Daylight Time at the LifePoint Hospital Support Center, 330 Seven Springs Way, Brentwood, Tennessee 37027. The Annual Meeting is your opportunity to hear first-hand about the challenges and opportunities in healthcare and LifePoint's progress and performance in 2014. More importantly, it is your opportunity to have a say. I encourage you to sign and return your proxy card or vote by telephone or internet prior to the meeting to ensure that your voice is heard. You can find voting instructions on page 14.

Last year our stock price increased by more than 36% for the second year in a row. We believe this reflects our strengthened position as a leading company in the non-urban healthcare marketplace. We are situated to build on that advantage in each local community we serve today and in the future, creating long-term value for our stockholders.

During 2014, the business of non-urban healthcare continued to be characterized by ongoing challenges and emerging opportunities. Perhaps even more acutely than their urban counterparts, community hospitals face strong pressure to deliver excellent quality care, contain costs, recruit and retain outstanding physicians, enhance service lines and technology infrastructure, and offer comfortable, appealing, patient-friendly facilities — all of which are essential to building market share in the face of mounting competition from larger regional health systems.

In 2014's slow-growth economic environment, our LifePoint teams performed well in all of these areas. We successfully leveraged the benefits of healthcare reform, improved quality and patient safety performance, continued our strong record of disciplined growth through acquisitions, and optimized our organic growth initiatives to drive substantial profitability. This growth included a 21.9% increase in revenues, an 18.1% increase in adjusted EBITDA, and a 28.7% increase in adjusted diluted EPS. Historically, LifePoint's operating margins have ranked, and continue to rank, among the highest in our industry.

We achieved this success while continuing to deliver superior care to our patients; controlling costs; strengthening hospitals through investments in high quality services, exceptional talent and advanced technology; and effectively executing our acquisition and integration plans.

A significant factor in this success is our constant work to improve patient care, safety and satisfaction. This success is greatly enhanced by our innovative collaboration with Duke University Health System ("Duke"), both through Duke LifePoint Healthcare, our first-of-its-kind joint venture with Duke, which has become a national model for transforming the delivery of care to enhance quality and efficiency while reducing costs, and through our national quality program, which is improving the quality of care at every LifePoint hospital.

As a result of all of these efforts, we not only created significant value for our stockholders, but we also further differentiated LifePoint as the partner of choice for community hospitals.

We prepared extensively for healthcare reform — and benefited accordingly.

As a company, we believed that the impact of healthcare reform under the Affordable Care Act would be positive for hospitals that were prepared to make the most of opportunities that this new law presented. So, throughout 2013, we carefully laid the groundwork for such success, and we are pleased that these efforts paid off well for

LifePoint Hospitals, Inc. | 2015 Proxy Statement      1

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LifePoint and its stockholders in 2014. In fact, the impact of healthcare reform exceeded our expectations throughout the year.

We operate in nine states that availed themselves of federal incentives to expand their Medicaid programs. In each state, we saw increases in Medicaid coverage and corresponding decreases in self-pay volumes, which translated into faster account resolution, stronger cash flow and fewer bad-debt write-offs.

Also, we were diligent in our community outreach efforts to raise awareness, educate the public and encourage uninsured consumers to enroll in marketplace coverage. We participated in health insurance exchange products in each of our markets and negotiated near-commercial rates in almost every state exchange. We provided certified application counselors in all our hospitals, complemented by toll-free phone assistance, to help people understand their options and enroll effectively. As a result, many previously uninsured consumers purchased coverage in the exchanges. The resulting increase in newly insured consumers added to expanded Medicaid coverage contributed measurably to our results for the year.

A linchpin of our strategy remains the pioneering partnership that we established with Duke.

As mentioned above, Duke LifePoint Healthcare, the joint venture formed in 2011, has become a national model for transforming the delivery of care to enhance quality and efficiency. This expanding partnership — in which Duke provides clinical expertise and resources and LifePoint serves as the managing partner for a growing network of affiliated hospitals — has become a meaningful driver of our external growth over the past three years. This truly differentiating partnership has made us even more attractive to community hospitals faced with the urgent imperatives of improving quality and efficiency and reducing costs. By joining our network, these hospitals can share in the benefits of Duke's formidable clinical expertise and outstanding quality while accessing LifePoint's financial resources and operational know-how.

The opportunity to be part of a community hospital system with such impressive resources and expertise strengthens our ability to recruit new physicians, who represent the lifeblood of non-urban hospitals. In turn, our demonstrated ability to recruit excellent physicians to such communities reinforces the attractiveness of Duke LifePoint to hospitals we target for acquisition.

Finally, the partnership has notably advanced our continuing efforts to improve the quality of care we deliver. Our collaboration with Duke in our national quality program has helped us to build a culture of quality that permeates our clinical services at every LifePoint hospital. Along with improving the experience for our patients, improving quality is a bottom-line issue for our hospitals today in an era when reimbursements from government payors are increasingly tied to outcomes.

Our acquisition pipeline, both within and outside the Duke LifePoint network, remains filled with attractive prospects. As always, we intend to pursue future transactions in a measured and disciplined way by focusing on building regional hospital networks, whose scale will enable us to provide better care close to home for people in the communities we serve, attract additional physicians and enhance operating leverage. By building and integrating the continuum of care within these networks, we are also developing the infrastructure for a value-based reimbursement system. As a result, we are confident of achieving our goals for improving quality and patient safety, as well as continuing to increase our revenues, Adjusted EBITDA, operating efficiency and profitability.

After careful and extensive consideration, we concluded that a few of our hospitals would be better positioned in the hands of an operator with greater critical mass in their markets. We took action in 2014 to divest those operations, which include a single hospital in Louisiana and three hospitals in northern Alabama. We have been proud to be integral parts of these communities over the years. These decisions were not easy but were made in the best interest of these hospitals and their communities.

Excellence in operations is a bar we continually raise for ourselves.

Our efficient operations not only improve the performance of our hospitals, but are also a valuable selling point to potential candidates for acquisition as we grow.

Last year, we advanced our ongoing efforts to increase our operating efficiency in several notable ways. Among other accomplishments, we completed the implementation of the shared services initiative launched in 2012 in all our hospitals. As part of this innovative arrangement, a third party provides supply procurement, supply chain management, accounts payable, revenue cycle and payroll services to our hospitals. Previously, our revenue cycle management had been decentralized to the local business offices of our individual hospitals. By centralizing these

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functions, we leverage expertise and manpower to resolve claims faster and more effectively. As we anticipated, we have seen measureable improvements in payment recoveries, including reductions in denials and underpayments, as the shared services initiative became more fully implemented, and we have increased our efficiency in supply procurement, supply chain management and payroll services as well.

We also continued to take advantage of financial incentives to implement electronic health records (EHR). All LifePoint hospitals have met the federal government's "meaningful use" criteria and have qualified for all eligible incentive payments from the Centers for Medicare and Medicaid Services. Last year, these efforts contributed approximately $71.9 million in other income. This success has helped us to realize other, more vital benefits as well: by improving the flow of information within our hospitals and between hospitals and the physicians who practice there, EHRs improve efficiency over the longer term and result in better patient care.

Our industry remains buffeted by ongoing challenges. We're not only addressing them; we're turning them into opportunities.

Despite the overall positive impact of Medicaid expansion and insurance coverage via the Affordable Care Act, the challenges for non-urban hospitals remain formidable. The dynamics of health reform, including the movement from inpatient to outpatient services has adversely affected the financial performance of many community hospitals. That, in turn, makes the already imposing challenge of recruiting excellent physicians to non-urban areas even more difficult. Without an ongoing supply of excellent physicians, developing and sustaining a strong reputation for clinical quality is challenging. And, without a reputation for quality, it's difficult for community hospitals to stem the migration of patients to larger, more distant competitors.

Over the years, LifePoint has demonstrated the ability to address all of these challenges successfully, strengthening local hospitals and, in the process, the health (both physical and economic) of our communities. That track record creates a competitive advantage that goes far beyond our 65 hospital campuses. It has positioned us for growth and success across the country. With the strong balance sheet and ready access to capital that we have, we are able to improve our service offerings and facilities to meet the demands of today's marketplace, as well as tomorrow's. As non-urban hospitals and hospital systems look for the expertise and resources they need to thrive, LifePoint stands out as the partner of choice.

Now, more than ever, LifePoint offers a distinctive value proposition to hospitals, physicians and communities alike: an experienced group of healthcare operators executing a proven plan built around disciplined growth strategies, a strong balance sheet, continually improving operational excellence, investments in our people and, throughout our organization, an unsurpassed emphasis on quality. We are confident successful execution of this value proposition and effective deployment of our capital will continue to deliver long-term value for our stockholders.

We are excited about the opportunities ahead. As we work to seize them, we remain ever grateful for your support and your investment.

Sincerely yours,

SIGNATURE

WILLIAM F. CARPENTER III

Chairman and Chief Executive Officer

LifePoint Hospitals, Inc. | 2015 Proxy Statement      3

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LOGO

PHOTO

April 22, 2015

Dear Fellow Stockholders:

The Board of Directors is pleased to be stewards of LifePoint Hospitals and believes that accountability to our stockholders is a mark of good governance. The Board strives to govern the Company in a prudent and transparent manner to help the Company achieve sustainable operating and financial performance, and to deliver long-term value for our stockholders. We focus our attention on overseeing the Company's financial performance, business strategies, risk management, quality of care initiatives and patient outcomes, talent development and succession planning. We also believe that, as a Board, we are responsible for helping to establish the right leadership and tone from the top, one that permeates throughout the entire organization. We are committed to helping create a culture that is consistent with our High Five Guiding Principles of (i) delivering high quality patient care; (ii) supporting physicians; (iii) creating excellent workplaces for our employees; (iv) strengthening our hospitals' role in their communities; and (v) ensuring fiscal responsibility.

Over the last few years, based in large part on feedback from our stockholders, the Board has spent a significant amount of time modifying our executive compensation program to further reinforce the link between pay and performance and continue to align our executive compensation programs with stockholders' long-term interests. We were pleased by our stockholders' positive response to these very significant modifications at our 2014 annual meeting when they approved our "say-on-pay" proposal with a 96% vote. I encourage you to read the Compensation Discussion and Analysis section of the Proxy Statement beginning on page 31 for details of our executive compensation programs.

The Board also continually assesses and enhances its corporate governance processes. The Company has been committed to building long-term stockholder value since its formation in 1999 and believes that continuing to enhance our sound corporate governance practices contributes to our ability to deliver on this committment. As it does each year, the Corporate Governance and Nominating Committee spent considerable time in 2014 reviewing emerging governance issues and considering governance "best practices" within healthcare companies and other public companies with the advice of counsel.

During 2014, the Board unanimously approved an amendment to our Corporate Governance Standards which adopts a form of majority voting for the election of our Directors. Please read the "Corporate Governance" section of the Proxy Statement beginning on page 24 for more details about this new policy, as well as our other positive corporate governance practices.

The Board continues to evolve as well. We remain committed to ensuring that the Board is composed of a highly capable and diverse group of Directors who are well-equipped to oversee the success of the business and effectively represent the interests of our stockholders.

In late 2013 and continuing into 2014, the Corporate Governance and Nominating Committee began a director recruitment process in anticipation of the mandatory retirement over the next few years of certain of our Directors due to the age limitation requirement in our By-Laws. A significant amount of time was devoted to considering the Company's needs with respect to the qualifications and skills of potential Director nominees. The Committee interviewed a number of well-qualified candidates and, following careful deliberation of these candidates and the Company's requirements, nominated Reed V. Tuckson M.D. as a Director. Dr. Tuckson, who was elected to the Board in April 2014, has extensive experience both as a healthcare provider and as a senior executive with a large payor, in addition to his service as the Commissioner of Public Health for the District of Columbia.

More recently, on April 15, 2015, the Corporate Governance and Nominating Committee nominated, and the Board elected, Marilyn B. Tavenner as a Director. Ms. Tavenner has a wealth of healthcare knowledge, including executive, government and for-profit hospital leadership experience, in addition to clinical expertise. Ms. Tavenner

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served most recently as the Administrator of the Centers for Medicare and Medicaid Services, where she played a major role in the implementation of the Affordable Care Act while overseeing the country's largest health insurance programs, including the new health insurance exchanges created by the Affordable Care Act. Dr. Tuckson and Ms. Tavenner are tremendous additions to our Board and, I believe, are indicative of the Company's positive reputation and continued important role in the future of healthcare.

Finally, on a personal note, I have reached the mandatory retirement age for Directors as set forth in the Company's By-Laws and will not be standing for re-election at this Annual Meeting. It has truly been an honor to serve the Company and its stockholders for the past 13 years. I am confident that with the existing transparency and collaboration between the Company's highly functioning Board of Directors and its extremely talented executive leadership team, LifePoint will continue to be profitable and successful in the coming years.

Sincerely,

GRAPHIC

Owen G. Shell, Jr.
Lead Director

LifePoint Hospitals, Inc. | 2015 Proxy Statement      5

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TABLE OF CONTENTS


Table of Contents

NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS

  8

PROXY SUMMARY

 
9

PROXY STATEMENT

 
14

PROPOSAL 1: ELECTION OF DIRECTORS

 
15

Election of Directors

  15

Director Nomination Process

  15

Director Evaluations

  15

Director Qualifications

  16

Nominees for Election: Class I Directors — Term will expire in 2018

  16

Retiring Director

  18

Continuing Directors

  18

DIRECTOR COMPENSATION

 
22

CORPORATE GOVERNANCE

 
24

Board Leadership Structure

  24

Board's Role in Strategic Planning

  25

Board Meetings and Committees

  25

Sustainability

  27

Board Oversight of Risk

  28

Code of Conduct and Code of Ethics

  28

Policies Against Hedging and Pledging

  29

Independence and Related Person Transactions

  29

Compensation Committee Interlocks and Insider Participation

  30

COMPENSATION COMMITTEE REPORT

 
30

COMPENSATION DISCUSSION AND ANALYSIS

 
31

Executive Summary

  31

2014 Company Performance

  33

2014 Executive Compensation Highlights

  34

What We Pay and Why

  35

How We Make Compensation Decisions

  38

Other Compensation Policies and Information

  42

EXECUTIVE COMPENSATION

 
44

Executive Officers of the Company

  44

Summary Compensation Table

  46

Grants of Plan-Based Awards

  47

Outstanding Equity Awards at Fiscal Year-End

  48
6     2015 Proxy Statement | LifePoint Hospitals, Inc.

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Option Exercises and Stock Vested at Fiscal Year-End

  50

Potential Payments upon Termination or Change in Control

  50

OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY

 
54

Security Ownership of Certain Beneficial Owners

  54

Security Ownership of Management and Directors

  55

Section 16(a) Beneficial Ownership Reporting Compliance

  56

PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 
57

Fees and Services of the Independent Registered Public Accounting Firm

  57

Audit Committee Pre-Approval Policies and Procedures

  57

AUDIT AND COMPLIANCE COMMITTEE REPORT

 
58

PROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 
59

Most Recent Say-on-Pay Vote Results

  59

Performance and Pay Alignment

  59

Compensation Program

  59

PROPOSAL 4: AMENDMENT TO THE COMPANY'S 2013 LONG-TERM INCENTIVE PLAN

 
60

Required Vote

  60

Explanation of the Amendment

  60

General Description of the 2013 Plan

  60

ADDITIONAL INFORMATION

 
65

Stockholder Proposals for Inclusion in the 2016 Proxy Statement

  65

Other Stockholder Proposals for Presentation at the 2016 Annual Meeting

  65

Stockholder Communication with the Board of Directors

  65

Voting Securities

  65

Vote Required for Election, Ratification and Approval

  65

Manner for Voting Proxies

  66

Solicitation of Proxies

  67

Requesting Copies of the 2014 Annual Report on Form 10-K

  67

Delivery of Documents to Stockholders Sharing an Address

  67

Electronic Access to Proxy Statement and Annual Report to Stockholders

  67
LifePoint Hospitals, Inc. | 2015 Proxy Statement      7

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LOGO

April 22, 2015

NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS

Date and Time:   June 2, 2015 at 3:00 p.m. Central Daylight Time

Place:

 

LifePoint Hospital Support Center
330 Seven Springs Way
Brentwood, Tennessee 37027

Items of Business:

 

Item 1:

 

Elect three nominees as Class I directors of the Company;

 

 

Item 2:

 

Ratify the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for 2015;

 

 

Item 3:

 

Approve, on a non-binding advisory basis, compensation of the Company's named executive officers;

 

 

Item 4:

 

Approve an amendment to the Company's 2013 Long-Term Incentive Plan; and

 

 

Item 5:

 

Transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Record Date:

 

Friday, April 10, 2015. Only the Company's stockholders of record as of the close of business on that date are entitled to receive this notice and vote at the Annual Meeting and at any adjournments or postponements of the Annual Meeting.

Proxy Voting:

 

Your vote is very important, regardless of the number of shares you own. We urge you to promptly sign and return the enclosed proxy card or to use telephone or internet voting. Please see the section titled "Proxy Statement" on page 14 for information about voting by telephone or internet, how to revoke a proxy and how to vote shares in person.

    By Order of the Board of Directors,

 

 


GRAPHIC

 

 

CHRISTY S. GREEN
Vice President, Associate General Counsel
  and Corporate Secretary
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PROXY SUMMARY

Proxy Summary

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider and you should read the entire Proxy Statement before voting. For more information about the Company's business and details about the Company's 2014 performance highlights and the financial measures mentioned in this Proxy Statement, including an explanation and reconciliation of "Adjusted EBITDA" (a non-GAAP measure), which we define as earnings before depreciation and amortization; interest expense, net; impairment charges; debt transaction costs; gain on settlement of pre-acquisition contingent obligation; provision for income taxes; income from discontinued operations, net of income taxes; and net income attributable to noncontrolling interests and redeemable noncontrolling interests, please see the Annual Report on Form 10-K for the year ended December 31, 2014 (the "2014 Annual Report on Form 10-K"), particularly the sections entitled "Business," "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," available on the Company's website.

2014 Financial Highlights (page 33)

 
   
   
   
 

Key Financial Metrics


FY 2014 Results
FY 2013 Results

% Increase  

Revenues

  $4,483.1 million   $3,678.3 million     21.9%  

Adjusted EBITDA

  $634.2 million   $537.0 million     18.1%  

Adjusted Diluted EPS

  $3.45(1)   $2.68     28.7%  

Stock Price as of 12/31

  $71.91   $52.84     36.1%  
(1)
Including the impact of impairment charges totaling $57.7 million, $35.9 million net of income taxes, or $0.76 loss per diluted share related to the divestiture of four hospitals, our 2014 Diluted EPS was $2.69.

Consideration of 2014 Say-on-Pay Vote

At our Annual Meeting of Stockholders in June 2014 our stockholders expressed their strong support for our executive compensation program with 96% of the votes cast in favor of our "say-on-pay" proposal. We believe this was a direct result of the extensive stockholder outreach effort that the Company undertook following the 2013 vote and the subsequent changes made to the Company's executive compensation program. Consistent with the Company's pay-for-performance approach, the Compensation Committee has continued to examine our executive compensation program to ensure alignment between the interests of our executives and our stockholders.

2014 Changes to Executive Compensation Program

The key changes our Compensation Committee made to our 2014 executive compensation program include the following:

    Aligned long-term executive performance compensation with long-term stockholder value — Elected to utilize relative total shareholder return ("TSR") as the sole performance metric to determine what amount, if any, of the performance-based restricted stock units ("RSUs") will be earned by the Company's named executive officers ("Named Executive Officers" or "NEOs").
    Changed long-term incentive criteria — Tied a majority of the NEOs' target long-term compensation (performance-based RSUs) to the Company's three-year annualized TSR relative to the S&P GICS Sub-Industry: Healthcare Facilities with over $500 million in revenues ("TSR Peer Index").
    Increased performance period for RSUs — The performance-based RSUs are earned only after the three-year performance period and only if the Company meets or exceeds the established three-year annualized TSR thresholds relative to the TSR Peer Index.
    Eliminated overlap of performance targets for annual cash incentive versus long-term incentives — Payout of annual cash incentive awards will be based on achievement of annual financial and operational targets while vesting of performance-based RSUs will be tied solely to three-year annualized TSR relative to the TSR Peer Index.
LifePoint Hospitals, Inc. | 2015 Proxy Statement      9

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PROXY SUMMARY

2014 Executive Compensation Program Highlights (page 34)

The Company's executive compensation program is designed to ensure an appropriate linkage between executive pay, Company performance and stockholder results. 2014 total direct compensation included the following elements:

    Base Salary — NEO base salaries increased in 2014 based on each executive's individual achievements in 2013 and, with respect to Messrs. Murphy and Bumpus, also because their base salaries were below the market median for comparable executives in our peer group.
    Annual Cash Incentive Award — NEOs earned more than their target annual cash incentive award because the Company met or exceeded all of its 2014 performance targets.
    Performance-Based RSUs — 2014 performance-based RSUs remain unearned because the three-year performance period ends on December 31, 2016.
    Stock Options — One-third of options granted in 2014 vested in February 2015.

The charts below illustrate the percentage breakdown of 2014 total direct compensation for the CEO and the average total direct compensation of the other NEOs. Consistent with our pay-for-performance philosophy, approximately 91% of the CEO's total direct compensation, and approximately 87% of the average total direct compensation of the other NEOs, was performance-based.


GRAPHIC
 
GRAPHIC

2014 CEO Total Direct Compensation

 

2014 Average Other NEO Total Direct Compensation

*  The percentages shown are based on grant-date fair value; however, the performance-based RSUs remain unearned since the three-year performance period does not end until December 31, 2016. One-third of the options granted vested in February 2015, however, none have been exercised.

Executive Compensation Practices

What We Do

Pay for Performance — A high percentage of our NEO compensation is at-risk.
Stock Ownership Guidelines — We maintain stock ownership guidelines for our NEOs.
Peer Market Data — The Compensation Committee reviews peer group market data when making executive compensation decisions.
Tally Sheets — The Compensation Committee reviews tally sheets when making executive compensation decisions.
Double Trigger — Under our Change of Control Plan, cash severance payments are made only if double trigger provisions are met.
Compensation Limits — We use caps on potential incentive payments and multiple performance targets to limit our NEOs' aggregate compensation.
Recoupment — We have a clawback policy applicable to restatements of financial results as a result of fraud.
Review of Share Utilization — We annually evaluate share utilization.
Independent Compensation Consultant — The Compensation Committee utilizes an independent compensation consultant.
Risk Mitigation — We have robust board and management processes to identify and mitigate risks.
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PROXY SUMMARY

What We Don't Do

No Employment Contracts — We do not have employment agreements with our NEOs.
No Supplemental Executive Retirement Plans — We do not provide a separate supplemental executive retirement plan to our NEOs.
No Repricing of Stock Options — We do not grant stock option awards with reload features and we do not reprice stock options.
No Hedging — Hedging by our directors, officers and all employees located at the Hospital Support Center is prohibited.
Anti-Pledging — Pledge arrangements are generally prohibited. No pledge arrangements are currently in place.
No Perquisites — We do not provide any perquisites such as cars or car allowances, club membership, financial planning or tax preparation assistance.

2014 Governance Highlights (page 24)

We regularly review our corporate governance practices to ensure effective collaboration of management and our Board to yield the best possible value for stockholders. Highlights of our governance approach include:

Recent Updates

    >    Addition of independent directors in April 2014 and April 2015

    >    Changes to our executive compensation program (see page 35 for details)

    >    Amendment to our Corporate Governance Standards, adopting a form of majority voting (see page 26 for details)

Board of Directors

    >    Independent Lead Director

    >    Ten Directors; nine are independent

    >    Committee members are independent (except Quality Committee, which is chaired by our CEO)

    >    Executive sessions of independent Directors at each regularly-scheduled meeting

    >    All Directors, except Ms. Tavenner, who was recently elected to the Board, attended over 75% of all Board and committee meetings in 2014

    >    All Directors, except Ms. Tavenner, who was recently elected to the Board, own Company stock in accordance with our stock ownership guidelines

    >    Policy limiting membership on other public company boards

    >    Regular succession planning

    >    Regular Board and Committee self-assessments and individual Director evaluations

    >    No former employees serve as Directors

LifePoint Hospitals, Inc. | 2015 Proxy Statement      11

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PROXY SUMMARY

Director Nominees and Continuing Directors (page 16)

The following table provides summary information about each Director Nominee and continuing Director. Directors are divided into Classes, with each Class serving a three-year term. Stockholders are voting on the Class I Directors who, if elected, will serve until the annual meeting in 2018.

Name


Age
Director
Since


Primary Occupation
Other Public
Company Boards

DIRECTOR NOMINEES — CLASS I — TERM EXPIRES 2018

Marguerite W. Kondracke*

  69   2007   Former president and chief executive officer, America's Promise Alliance   2

John E. Maupin, Jr.*

  68   1999   Former president and chief executive officer, Morehouse School of Medicine   2

Marilyn B. Tavenner*1

  63   2015   Former Administrator, Centers for Medicare and Medicaid   0

RETIRING DIRECTOR — CLASS I — TERM EXPIRES 2015

Owen G. Shell, Jr.*2

  78   2002   Former president, Asset Management Group of Bank of America Corporation   0

CONTINUING DIRECTORS — CLASS II — TERM EXPIRES 2016

Gregory T. Bier*

  68   2008   Former managing partner — Deloitte & Touche LLP (Cincinnati office)   1

DeWitt Ezell, Jr.*

  76   1999   Former Tennessee state president — BellSouth Corporation   0

Reed V. Tuckson*3

  64   2014   Managing Director, Tuckson Health Communications, LLC   3

CONTINUING DIRECTORS — CLASS III — TERM EXPIRES 2017

William F Carpenter III

  60   2006   Chairman and Chief Executive Officer, LifePoint Hospitals, Inc.   0

Richard H. Evans*

  70   2000   Chairman, Evans Holdings, LLC   0

Michael P. Haley*

  64   2005   Advisor, Fenway Partners, LLC   3
*
Independent Director
1
Ms. Tavenner was elected to the Company's Board of Directors effective April 15, 2015.

2
Lead Director. Mr. Shell has reached the mandatory retirement age for Directors set forth in the Company's Fifth Amended and Restated By-Laws (the "By-Laws") and will not stand for re-election at the Annual Meeting.

3
Dr. Tuckson was elected to the Company's Board of Directors effective April 3, 2014.

2015 Annual Meeting of Stockholders

Date and Time:
June 2, 2015, 3:00 p.m. Central Daylight Time

 

Record Date:
April 10, 2015

Place:
LifePoint Hospital Support Center
330 Seven Springs Way
Brentwood, Tennessee 37027

 

Meeting Web- cast:
www.LifePointHospitals.com/investor-relations/

12     2015 Proxy Statement | LifePoint Hospitals, Inc.

Table of Contents

PROXY SUMMARY

Voting Matters and Board Recommendations

Agenda Item

Our Board's Recommendation

Page Reference
(for more detail)

1. Election of Directors
Each director nominee has an established record of accomplishment in areas relevant to overseeing the Company's current business. Each possesses qualifications and characteristics that are essential to a well-functioning and deliberative governing body.

 

FOR each Director Nominee

 

15

2. Ratification of Selection of Independent Registered Public Accounting Firm
As a matter of good corporate governance, the Board is asking stockholders to ratify the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for 2015.

 

FOR

 

57

3. Advisory Vote to Approve Executive Compensation
The Board is asking stockholders to approve, on a non-binding advisory basis, the compensation of the Company's named executive officers as disclosed in this proxy statement.

 

FOR

 

59

4. Approval of an Amendment to the Company's 2013 Long-Term Incentive Plan (the "2013 Plan")
The Board is asking stockholders to approve an amendment to the 2013 Plan to increase the number of shares that are available for the future grant of awards under the 2013 Plan.

 

FOR

 

60

Review Your Proxy Statement and Vote in One of Four Ways:

GRAPHIC   VIA THE INTERNET
Visit the website listed on your proxy card or notice of internet availability of proxy materials
  GRAPHIC   BY TELEPHONE
Call the telephone number on your proxy card or notice of internet availability of proxy materials

GRAPHIC

 

BY MAIL
Sign, date and return your proxy card in the enclosed envelope

 

GRAPHIC

 

IN PERSON
Attend the Annual Meeting and vote in person

Important Dates for 2016 Annual Meeting of Stockholders (page 65)

Stockholder proposals submitted for inclusion in our 2016 proxy statement pursuant to SEC Rule 14a-8 must be received by us by December 24, 2015.
Notice of stockholder proposals to be raised from the floor of the 2016 Annual Meeting of Stockholders outside of SEC Rule 14a-8 must be received by us by March 4, 2016.
LifePoint Hospitals, Inc. | 2015 Proxy Statement      13

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PROXY STATEMENT

Proxy Statement

As a holder of common stock ("Common Stock") of LifePoint Hospitals, Inc. (the "Company," "we," "us" or "our"), this Proxy Statement is available to you on the Internet or, upon your request, will be delivered to you by mail or email in connection with the solicitation of proxies by the Board of Directors of the Company to be voted at the 2015 Annual Meeting of Stockholders to be held on Tuesday, June 2, 2015 at 3:00 p.m. Central Daylight Time at the LifePoint Hospital Support Center, 330 Seven Springs Way, Brentwood, Tennessee 37027 (the "Annual Meeting"), and at any adjournments or postponements thereof. Distribution of the Notice of Internet Availability of Proxy Materials is scheduled to begin on or about April 22, 2015.

Only owners of record of shares of Common Stock as of the close of business on April 10, 2015, the record date, are entitled to notice of, and to vote at, the Annual Meeting or at any adjournments or postponements of the Annual Meeting. Each owner of record on the record date is entitled to one vote for each share of Common Stock held. On April 10, 2015, there were 44,305,383 shares of Common Stock issued and outstanding.

During normal business hours from May 22, 2015 to June 1, 2015, we will make available a list of stockholders of record as of the close of business on April 10, 2015 for inspection by stockholders for any purpose related to the meeting at the Company's principal place of business, 330 Seven Springs Way, Brentwood, Tennessee 37027. The list will also be available to stockholders for any such purpose at the Annual Meeting.

You can ensure that your shares are voted at the Annual Meeting by submitting your voting instructions by telephone or by Internet, or if you requested a hard copy of the proxy materials, by completing, signing, dating and returning the proxy card accompanying the materials in the envelope provided to you. Submitting your voting instructions or proxy by any of these methods will not affect your right to attend and vote at the Annual Meeting. We encourage stockholders to submit proxies in advance of the Annual Meeting. A stockholder who gives a proxy may revoke it at any time before it is exercised by voting in person at the Annual Meeting, by delivering a subsequent proxy or by notifying the inspectors of election in writing of such revocation. If your shares of Common Stock are held for you in a brokerage, bank or other institutional account, you must obtain a proxy from that entity and bring it with you to hand in with your ballot in order to be able to vote your shares at the Annual Meeting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 2, 2015

The Notice of Internet Availability of Proxy Materials and the Proxy Statement are available under the "Investor Relations — Proxy Statements and Annual Reports" section of the Company's website at www.LifePointHospitals.com.

14     2015 Proxy Statement | LifePoint Hospitals, Inc.

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ELECTION OF DIRECTORS (PROPOSAL 1)

PROPOSAL 1: ELECTION OF DIRECTORS

Upon the recommendation of the Corporate Governance and Nominating Committee of the Board of Directors, which consists entirely of independent directors, the Company's Board of Directors has nominated three directors for election at the Annual Meeting to hold office until the annual meeting of stockholders in 2018 or until their successors have been elected and qualified.

Election of Directors

The Company's Board of Directors currently consists of ten members, nine of whom are independent. The Company's Amended and Restated Certificate of Incorporation provides that the Board of Directors shall be divided into three classes of as nearly equal size as possible. One-third of the directors are elected each year. Our Corporate Governance Standards provide that, in an uncontested election, any Director nominee who receives a greater number of votes "withheld" from his or her election than votes "for" such election shall submit to the Board a letter of resignation for consideration by the Governance and Nominating Committee, which shall recommend to the Board the action to be taken with respect to such resignation.

Director Nomination Process

Board Nominations

The Corporate Governance and Nominating Committee is responsible for identifying and evaluating nominees for any director position and for recommending to the Board of Directors a slate of nominees for election at each annual meeting of stockholders. Nominees may be suggested by directors, members of management, stockholders or, in some cases, by a third-party firm. The Corporate Governance and Nominating Committee will evaluate all potential nominees in the same manner.

Stockholder Nominations

The information required to be provided by a stockholder nominating a candidate for the Board of Directors is set forth in the Company's By-Laws. The deadlines for timely submission by stockholders of persons for election as directors (other than persons nominated by or at the direction of the Board of Directors) at the 2016 annual meeting of stockholders is described in this Proxy Statement under the caption "Additional Information — Other Stockholder Proposals for Presentation at the 2016 Annual Meeting." The Corporate Governance and Nominating Committee will consider nominations by any Company stockholder of record who is entitled to vote at the applicable meeting and who has complied with the notice procedures set forth in the Company's By-Laws.

Nominations by stockholders of persons for election to the Board of Directors also may be made at a special meeting of stockholders if the stockholder's notice required by the Company's By-Laws is delivered not later than the close of business on the later of 90 days prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.

Director Evaluations

Prior to nominating any director for additional terms, the Corporate Governance and Nominating Committee conducts an annual performance evaluation of the Board of Directors, its committees and the directors, including the Lead Director and the Chairman and Chief Executive Officer. As part of this process, Paul D. Gilbert, the Company's Executive Vice President, Chief Legal Officer and Corporate Governance Officer, interviews each director privately in an effort to identify any concerns that have not otherwise been identified in the evaluations. Additionally, the Corporate Governance and Nominating Committee receives a verbal report from Mr. Gilbert regarding any matters of concern found through his review of detailed background checks conducted by a third party. The Corporate Governance and Nominating Committee also considers a number of subjective, objective, qualitative and quantitative factors before recommending any nominee to the Board of Directors.

LifePoint Hospitals, Inc. | 2015 Proxy Statement      15

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ELECTION OF DIRECTORS (PROPOSAL 1)

Director Qualifications

The general experience, qualifications, attributes and skills established by the Corporate Governance and Nominating Committee for directors are included in the Company's Corporate Governance Standards, which may be found under the "Investor Relations — Corporate Governance" section of our website at www.LifePointHospitals.com. The Company believes that directors should possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the stockholders. They must also have an inquisitive and objective perspective, practical wisdom and sound judgment. The Company endeavors to have a Board of Directors with diverse experience.

Information regarding each director's specific experience, qualifications, attributes and skills that led to the conclusion that the person should serve as a director of the Company is presented below.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" ALL OF THE NOMINEES.

Nominees for Election: Class I Directors — Term will expire in 2018

PHOTO

Director since: 2007

Independent

  Marguerite W. Kondracke         Age: 69            Director since 2007
 

Ms. Kondracke brings to the Board of Directors experience in dealing with the legislative and executive branches of government and executive experience in healthcare and other caregiving services, including experience as a chief executive officer.

Ms. Kondracke served as president and chief executive officer of America's Promise Alliance, a not-for-profit children's advocacy organization, from October 2004 until her retirement in May 2012. Prior to that time, Ms. Kondracke served as special assistant to U.S. Senator Lamar Alexander, as well as the staff director, Senate Subcommittee on Children and Families, between April 2003 and September 2004. From September 2001 to March 2003, Ms. Kondracke served as president and chief executive officer of The Brown Schools, a leading provider of behavioral services for adolescents. Ms. Kondracke is the co-founder, former chief executive officer and current board member of Bright Horizons Family Solutions, LLC (NYSE: BFAM), which provides childcare and other workplace services for employers and families. In addition, Ms. Kondracke is currently a member of the board of directors of Rosetta Stone, Inc. (NYSE: RST), a provider of technology-based language learning solutions. Her prior experience includes having served as Commissioner of Human Services for the State of Tennessee, where her responsibilities included making eligibility determinations for the state's Medicaid program. She earlier served in various leadership capacities for the Tennessee Department of Public Health. Her prior board experience includes service on the board of directors of Saks, Inc. from 1996 until its acquisition in November 2013, and with the board of trustees of Duke University and Duke University Medical Center.

16     2015 Proxy Statement | LifePoint Hospitals, Inc.

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CONTINUING DIRECTORS

PHOTO

Director since: 1999

Independent

  John E. Maupin, Jr.                    Age: 68            Director since 1999
 

Dr. Maupin brings to the Board of Directors diverse experience as an executive in academic medicine, public health and ambulatory healthcare, as well as experience in dealing with the legislative and executive branches of government and agencies within the U.S. Department of Health and Human Services.

Dr. Maupin served as president and chief executive officer of Morehouse School of Medicine from July 2006 until his retirement in June 2014. From July 1994 through June 2006, he was president and chief executive officer of Meharry Medical College. His other senior administrative positions have included executive vice president and chief operating officer of the Morehouse School of Medicine; chief executive officer of Southside Healthcare, Inc., Atlanta, Georgia; and Deputy Commissioner for Medical Services, Baltimore City Health Department, Baltimore, Maryland. Dr. Maupin has served on numerous health-related advisory councils and scientific panels. Most notably, in 2010, Dr. Maupin was appointed to the National Healthcare Workforce Commission, which was created by the Patient Protection and Affordable Care Act to serve as a national advisory resource to the U.S. Congress and President. Dr. Maupin is a director of HealthSouth Corporation (NYSE: HLS), a post-acute healthcare management company, and Regions Financial Corporation (NYSE: RF), a bank holding company. He also serves as a director/trustee for VALIC family of funds, a group retirement fund complex, and serves on the boards of America's Promise Alliance and the Development Authority of Fulton County.

     

PHOTO

Director since: 2015

Independent

  Marilyn B. Tavenner                    Age: 63            Director since 2015
 

Ms. Tavenner brings to the Board of Directors her extensive executive and financial experience in the healthcare industry, including expertise in Medicare, Medicaid, healthcare exchanges and the Affordable Care Act, as well as leadership and clinical experience managing investor-owned healthcare providers.

Marilyn Tavenner served as Administrator of the Centers for Medicare and Medicaid Services (CMS) from May 2013 to February 2015. She served as CMS Acting Administrator from the time of her nomination by President Obama in December 2011 until her confirmation by Congress in May 2013 and as Principal Deputy Administrator of CMS from February 2010 to December 2011. From January 2006 to February 2010, Ms. Tavenner served as Secretary of Health and Human Resources of the Commonwealth of Virginia. Prior to her government service, Ms. Tavenner was employed by Hospital Corporation of America (HCA) beginning in 1981 in a number of capacities, most recently as President of HCA's Outpatient Services Group from January 2004 to January 2006. Prior to that time, Ms. Tavenner had served as a Division President, Market President, hospital CEO and Director of Nursing for HCA. Ms. Tavenner has served on the Boards of several organizations, including the American Hospital Association and the Greater Richmond Partnership, which attracts business to the city and its surrounding counties.

     
LifePoint Hospitals, Inc. | 2015 Proxy Statement      17

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CONTINUING DIRECTORS

Retiring Director

Mr. Shell, who is a Class I Director, is not standing for re-election due to the age requirement in the Company's By-Laws and his term will expire immediately following the Annual Meeting.

PHOTO

Director since: 2002

Independent Lead Director

  Owen G. Shell, Jr.                      Age: 78            Director since 2002
 

Mr. Shell brings to the Board of Directors his perspective from several years as Lead Director and non-executive Chairman of the Company, as well as his decades of financial experience as an executive in a highly regulated industry.

Mr. Shell has served as the Company's Lead Director since December 2010 and served as non-executive Chairman of the Company's Board of Directors from 2006 to December 2010. Mr. Shell has over 40 years of financial experience as an executive in the banking industry. He served as president of the Asset Management Group of Bank of America Corporation from November 1996 until his retirement in June 2001. From 1986 through 1996, Mr. Shell served as the president of Bank of America for the Tennessee region. Prior to that, Mr. Shell held several positions, including chairman, president and chief executive officer of First American National Bank in Nashville, Tennessee. From 2004 to 2007, Mr. Shell served as a director of Central Parking Corporation, the nation's largest parking services provider at the time.

Continuing Directors

Stockholders are not voting at this Annual Meeting on the election of Class II or Class III directors, who will continue to serve as directors until the annual meeting of stockholders in the year indicated or until their successors are elected and qualified.

Class II Directors — Term will expire in 2016

PHOTO

Director since: 2008

Independent

  Gregory T. Bier                           Age: 68            Director since 2008
 

Having been a certified public accountant for over three decades, Mr. Bier brings to the Board of Directors financial expertise, public company accounting experience and experience with auditing of healthcare service providers.

Mr. Bier was the managing partner of the Cincinnati office of Deloitte & Touche LLP from 1998 until his retirement in 2002. In 1968, he joined Haskins & Sells, which later became a part of Deloitte & Touche, and he became a certified public accountant in 1970. Mr. Bier currently serves as a director of Cincinnati Financial Corporation (NASDAQ: CINF), a public company that markets commercial, personal and life insurance through independent insurance agencies, and previously served on the audit committee of Mercy Health (formerly, Catholic Health Partners), one of the largest not-for-profit health systems in the United States, from 2002 to 2007.

     
18     2015 Proxy Statement | LifePoint Hospitals, Inc.

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CONTINUING DIRECTORS

PHOTO

Director since: 1999

Independent

  DeWitt Ezell, Jr.                         Age: 76            Director since 1999
 

Mr. Ezell brings to the Board of Directors decades of executive experience with regulated industries and experience with a large healthcare payor.

Mr. Ezell served for over 37 years in various positions, including engineering, regulatory and public relations, with BellSouth Corporation, a communications services company, and served as the state president of Tennessee for BellSouth Corporation from January 1990 until his retirement in April 1999. Mr. Ezell served as the chairman of the board of BlueCross BlueShield of Tennessee, a non-profit health insurance company, from 2005 until April 2009.

 

PHOTO

Director since: 2014

Independent

  Reed V. Tuckson                        Age: 64            Director since 2014
 

Dr. Tuckson brings to the Board of Directors a vast amount of experience as a healthcare executive, with a history of creating new systems to improve quality and efficiency in the delivery of healthcare services.

Dr. Tuckson serves as the managing director of Tuckson Health Connections, LLC, a private health and medical care consulting business that brings people and ideas together to promote optimal health outcomes. From December 2006 to March 2014, Dr. Tuckson served as the executive vice president and chief of medical affairs of UnitedHealth Group. Dr. Tuckson's prior experience includes service as senior vice president, professional standards, for the American Medical Association, president of the Charles R. Drew University of Medicine and Science, senior vice president for programs of the March of Dimes Birth Defects Foundation and Commissioner of Public Health for the District of Columbia. Dr. Tuckson serves on the board of directors of CTI BioPharma Corp. (NASDAQ: CTIC), a biopharmaceutical company, and Neptune Technologies & Bioressources Inc. (NASDAQ: NEPT), a Canadian biotechnology company as well as its subsidiary, Acasti Pharma Inc. (NASDAQ: ACST), a Canadian biopharmaceutical company. In addition, Dr. Tuckson currently serves on the board of directors of the American Telemedicine Association, Howard University, the Alliance for Health Reform, the Arnold P. Gold Foundation for Humanism in Medicine and the Advisory Committee for the National Chair for Complimentary and Integrative Health at the National Institutes of Health.

LifePoint Hospitals, Inc. | 2015 Proxy Statement      19

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CONTINUING DIRECTORS

Class III Directors — Term will expire in 2017

PHOTO

Director since: 2006

Chairman and Chief
Executive Officer

  William F. Carpenter III             Age: 60            Director since 2006
 

Mr. Carpenter brings to the Board of Directors his perspective as the Company's Chief Executive Officer, decades of legal, development and corporate governance experience and the perspective gained from serving on the board of directors of the Federation of American Hospitals since 2006, including two terms as Chair.

Mr. Carpenter has served as Chief Executive Officer ("CEO") of the Company since June 2006 and as Chairman of the Company since December 2010. Prior to June 2006, Mr. Carpenter served as Executive Vice President of the Company from February 2004 until his appointment as CEO. In addition, Mr. Carpenter served as General Counsel and Secretary of the Company from May 1999 to June 2006 and Corporate Governance Officer from February 2003 to June 2006. From May 1999 to February 2004, Mr. Carpenter served as Senior Vice President of the Company.

 

PHOTO

Director since: 2000

Independent

  Richard H. Evans                        Age: 70            Director since 2000
 

Mr. Evans brings to the Board of Directors decades of expertise in managing employee-intensive businesses, consumer-facing organizations and entities with substantial real estate holdings.

Mr. Evans has been the chairman of Evans Holdings, LLC, a real estate investment and real estate services company, since April 1999. Prior to that time, Mr. Evans served as chief executive officer of Huizenga Sports and Entertainment Group, Madison Square Garden Corporation and Radio City Music Hall Productions, chief operating officer of Gaylord Entertainment Company and chief operating officer and corporate director of Florida Panthers Holdings, Inc. and began his career at The Walt Disney Company. Mr. Evans currently serves as a member of the board of directors of each of TharpeRobbins Company, Inc., an employee recognition company, and Tokyo Joe's, Inc., a restaurant chain, and as a member of the business advisory board of Gridiron Capital, LLC, a private equity firm. Mr. Evans is also a limited partner in Gridiron Strategic Partners Fund. Mr. Evans previously served as a member of the board of governors of the National Basketball Association, the National Hockey League, Major League Baseball and the National Football League, and as a director of Genesco, Inc. (NYSE: GCO), a specialty retailer, and Bass Pro Shops, an outdoor specialty retailer. Additionally, Mr. Evan's prior board experience includes service with the board of trustees of the University of Denver.

     
20     2015 Proxy Statement | LifePoint Hospitals, Inc.

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CONTINUING DIRECTORS

PHOTO

Director since: 2005

Independent

  Michael P. Haley                        Age: 64            Director since 2005
 

Mr. Haley brings to the Board of Directors substantial executive experience and community leadership in markets like those in which the Company operates.

Mr. Haley has served as an advisor to Fenway Partners, LLC, a private equity investment firm, since April 2006 and a managing director of its affiliate, Fenway Resources, since 2008. From 2007 to 2012, Mr. Haley served as executive chairman of Coach America, a transportation services operator. Mr. Haley is chairman of the board of directors of Stanley Furniture Company (NASDAQ: STLY), a furniture manufacturer, and is a member of the board of directors of American National Bankshares, Inc. (NASDAQ: AMNB), a bank holding company and Ply Gem Holdings, Inc. (NYSE: PGEM), a producer of window, door and siding products for the residential construction industry. Mr. Haley served as chairman from January 2005 to June 2005 and as president and chief executive officer from 2001 to 2005 of MW Manufacturers, Inc., a subsidiary of Ply Gem Industries, Inc. Mr. Haley previously served on the board of the Martinsville-Henry County United Way and as chairman of the board of trustees of Memorial Hospital of Martinsville and of the Martinsville-Henry County Economic Development Corporation.

LifePoint Hospitals, Inc. | 2015 Proxy Statement      21

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DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

The Compensation Committee of the Board of Directors is responsible for reviewing and making recommendations to the Board of Directors regarding all matters pertaining to compensation paid to directors for Board, committee and committee chair services. Mr. Carpenter, the Company's Chairman and CEO, does not receive compensation for serving as a member of the Board of Directors. Under the Compensation Committee's charter, the Committee is authorized to engage consultants or advisors in connection with its review and analysis of director compensation.

In 2014, the compensation consultant provided the Compensation Committee with information on peer comparisons for director compensation. The compensation consultant also reported on current trends in director compensation. In making non-employee director compensation recommendations, the Compensation Committee

takes various factors into consideration, including, but not limited to, the responsibilities of non-employee directors generally, as well as committee chairs, and the forms of compensation paid to non-employee directors by comparable companies. Following the annual meeting each year, the Board of Directors, upon recommendation of the Compensation Committee, determines the compensation payable to non-employee members of the Board of Directors through the date immediately preceding the next annual meeting of stockholders.

In 2013, our stockholders approved our 2013 Long-Term Incentive Plan (the "2013 Plan"), under which our non-employee directors receive equity-based compensation for their services. The 2013 Plan replaced the Amended and Restated Long-Term Incentive Plan ("LTIP") and the Amended and Restated Outside Directors Stock and Incentive Compensation Plan ("Directors Plan").

2014 Annual Compensation

The Board of Directors believes that our compensation program for non-employee directors:

ties a large portion of the non-employee directors' compensation to stockholder interests because the value of the equity awards made under the 2013 Plan fluctuates up or down depending on the stock price;

focuses on the long term, since the receipt of the shares of Common Stock pursuant to the award is deferred until the earlier of three years from the date of grant or the date the director ceases to be a member of the Board of Directors;

is simple to understand and communicate; and

is equitable based on the work required of non-employee directors serving an entity of the Company's size and scope in a highly regulated industry undergoing substantial change.

On June 3, 2014, the Board of Directors, upon recommendation of the Compensation Committee, approved the annual compensation for our non-employee directors, which includes an annual cash retainer of $140,000 payable to non-employee directors and an additional annual cash retainer of $125,000 payable to the Lead Director of the Board of Directors. An additional cash retainer of (i) $20,000 per year is payable to the Chair of the

Audit and Compliance Committee, (ii) $20,000 per year is payable to the Chair of the Compensation Committee and (iii) $10,000 per year is payable to the Chair of the Corporate Governance and Nominating Committee. No meeting fees are paid. Each of the foregoing annual fees is paid in four quarterly installments. Directors are also reimbursed for expenses incurred relating to attendance at Board and committee meetings.

Non-employee directors may elect to defer payment of all or any part of their directors' fees. For each term of the Board of Directors (beginning on the date of an annual meeting of stockholders and ending on the date immediately preceding the next annual meeting of stockholders), a non-employee director may elect to receive, in lieu of all or any portion (in multiples of 25%) of his or her annual retainer payable for such term, an RSU award pursuant to the 2013 Plan. Such an election applies to the number of RSUs determined by dividing (a) the additional annual retainer amount that would have been payable to the non-employee director in cash in the absence of his or her election, by (b) the fair market value of a share of Common Stock on the date of grant. No cash fees were deferred in 2014.

In addition to the cash compensation described above, on June 3, 2014 the Board of Directors,

22     2015 Proxy Statement | LifePoint Hospitals, Inc.

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DIRECTOR COMPENSATION

upon recommendation of the Compensation Committee, approved the grant of approximately $170,000 of RSUs to each of the non-employee directors. The terms of the grant provided that these RSUs would become fully vested and no longer subject to forfeiture upon the earliest of any of the following conditions to occur: (1) six months and one day following the date of grant; (2) the death or disability of the non-employee director; or

(3) a "change in control" of the Company (as defined in the 2013 Plan). The awards became fully vested on December 4, 2014. The non-employee director's receipt of shares of Common Stock pursuant to the award of RSUs is deferred until the first business day following the earliest to occur of (A) the third anniversary of the date of grant, or (B) the date the non-employee director ceases to be a member of the Board of Directors.

Certain information concerning the compensation of non-employee directors for 2014 is set forth in the table below. Mr. Carpenter, the Company's Chairman and CEO, does not receive compensation for serving as a member of the Board of Directors.

 
   
   
   

Name

 

Fees Earned or
Paid in Cash(1)


 

Stock
Awards(2)


 

Total

Gregory T. Bier

 

$152,500  

 

$170,028  

 

$322,528  

Richard H. Evans

 

150,000

 

170,028

 

320,028

DeWitt Ezell, Jr.

 

132,500

 

170,028

 

302,528

Michael P. Haley

 

132,500

 

170,028

 

302,528

Marguerite W. Kondracke

 

132,500

 

170,028

 

302,528

John E. Maupin, Jr.

 

142,500

 

170,028

 

312,528

Owen G. Shell, Jr.

 

257,500

 

170,028

 

427,528

Reed V. Tuckson

 

105,000

 

   340,011(3)

 

445,011


(1)
Reflects the cash fees paid to each non-employee director. In addition to the annual cash retainer, Mr. Shell received an additional $125,000 for service as the Lead Director, Mr. Bier received $20,000 for service as chair of the Audit Committee, Mr. Evans received $17,500 for service as chair of the Compensation Committee, and Dr. Maupin received $10,000 for service as chair of the Corporate Governance and Nominating Committee. No cash fees were deferred in 2014.

(2)
Reflects the grant date fair value for RSUs granted under the 2013 Plan, in accordance with Accounting Standards Codification ("ASC") 718-10, "Compensation — Stock Compensation" ("ASC 718-10"). The assumptions used in calculating the values are set forth in Note 9 to the Company's financial statements included in the 2014 Annual Report on Form 10-K.

(3)
Consistent with past Company practice, Dr. Tuckson received a grant of RSUs equal to the annual Director grant of RSUs for the previous year upon his election as a Director in April 2014.
LifePoint Hospitals, Inc. | 2015 Proxy Statement      23

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CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

The governance structure of the Company is designed to enable the Board of Directors to be an active, collegial body that is prepared to make prompt, principled decisions, provide sound advice and counsel and monitor the Company's compliance efforts, risk management and performance. The key practices and procedures of the Board of Directors are outlined in the Corporate Governance Standards available under the "Investor Relations — Corporate Governance" section of the Company's website at www.LifePointHospitals.com. This section of our website also includes all of the Company's corporate governance materials, including

    the Company's Amended and Restated Certificate of Incorporation and By-Laws;

    the charters for each Board committee;

    the Company's Code of Ethics and Code of Conduct;

    the Company's Related Person Transactions Policies and Procedures;

    the Company's Recoupment Policy;

    the Company's Insider Trading Policy; and

    the Company's Stock Ownership Guidelines.

Instructions for how to communicate with our Board of Directors are also included in this section of our website. The Board of Directors regularly reviews developments in corporate governance and updates our Corporate Governance Standards and other governance documents as it deems necessary and appropriate.

Board Leadership Structure

The fundamental duties of the Board of Directors are to:

    oversee the CEO and senior management in the appropriate operation of the Company;

    advise the CEO and senior management with respect to the conduct of the Company's business and its strategic direction; and

    protect the long-term interests of the stockholders.

To satisfy these duties, the non-employee directors take a proactive approach through active and frequent communication with the CEO and other members of senior management, by setting the correct "tone at the top" and ensuring that it permeates the Company's relationships, and by defining what information the Board of Directors should receive and how. The Board of Directors sets its own meeting agendas through its Lead Director and committee chairs. The By-Laws and the Corporate Governance Standards of the Company allow the Chairman and CEO roles to be held by the same person, and in such case, the Board of Directors is required to have an independent Lead Director.

Currently, the offices of Chairman of the Board and CEO of the Company are held by the same person.

Board Leadership Structure

Chairman of the Board and CEO: William F. Carpenter III

Lead Director: Owen G. Shell, Jr.

Active engagement by all directors, including nine independent directors

The Board believes that this is the optimal structure to guide the Company and maintain the focus required to achieve our business goals.

From 2006 to December 2010, the Company had a non-executive Chairman. In December 2010, the Board of Directors determined that the Company's stockholders would be best served by electing Mr. Carpenter to be Chairman of the Board. The Board of Directors reached this decision after considering the following:

    the Company's governance structure and how it functioned;

    the number of companies in the healthcare services industry that combined the Chairman and CEO roles;

    Mr. Carpenter's contributions to the Company, including a recognition of his role
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CORPORATE GOVERNANCE

      in setting the Company's strategic direction and in attracting new executive management to the Company; and

    the importance of the Lead Director position, as defined by the Company and set out in the written job description of the Lead Director in the Company's Corporate Governance Standards.

As required by the Company's By-Laws and Corporate Governance Standards when the Chairman and CEO roles are held by the same person, the independent members of the Board of Directors must select a Lead Director. Mr. Shell, who previously served as the non-executive Chairman of the Board, currently serves as the Lead Director. The Lead Director:

    advises and counsels the Chairman;

    coordinates with the Chairman on the agenda and format for meetings of the Board of Directors;
    chairs executive sessions of the Board of Directors; and

    serves as a primary liaison between the independent directors and the CEO.

Importantly, all Board members play an active role in overseeing the Company's business, both at the Board and the committee level.

The Board of Directors has determined that all Board members except the Company's Chairman and CEO, Mr. Carpenter, are independent in accordance with the applicable rules of The NASDAQ Stock Market LLC ("NASDAQ"). All committee members, except Mr. Carpenter, who serves as chair of the Quality Committee, are independent in accordance with NASDAQ's listing standards. The non-employee directors are skilled and experienced leaders in business, healthcare, government and public policy.

Board's Role in Strategic Planning

In connection with its responsibility for overseeing the affairs of the Company, the Board of Directors is consistently updated about, and provides significant input regarding, the Company's business and strategies. This involvement enables the Board to provide guidance to management in formulating and developing plans and to exercise independently its decision-making authority on matters of importance to the Company. Acting as a full Board and through the Board's four standing committees, the Board is fully involved in the Company's strategic planning process.

Board Meetings and Committees

Directors are expected to attend all meetings of the Board of Directors, the annual meeting of stockholders and all meetings of the committees on which they serve, with the understanding that on occasion a director may be unable to attend a meeting. The Board of Directors held nine meetings (including regularly scheduled and special meetings) during 2014. All directors attended the 2014 annual meeting of stockholders. Additionally, no director attended fewer than 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings of the committees on which the director served. At each of its regularly scheduled meetings, the Board of Directors meets in executive sessions in which Mr. Carpenter and other members of management do not participate. The Lead Director presides over these sessions.

Director Education

Every new director participates in an orientation program and receives materials and presentations by senior management to acquaint him or her with the Company's strategic plans, business, industry, significant financial accounting and risk management issues, compliance programs, internal and independent auditors, management and corporate governance policies and practices. Continuing education is provided for all directors through board materials and presentations, discussions with management and other sources, including customized governance presentations by nationally recognized corporate governance leaders. Additionally, the Company, its executives and its directors are all members of the National Association of Corporate Directors.

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Committees of the Board of Directors

The Board of Directors has adopted written charters for each of its four standing committees: the Audit and Compliance Committee; the Compensation Committee; the Corporate Governance and Nominating Committee; and the Quality Committee. The committee charters are available on the Company's website under the "Investor Relations — Corporate Governance" section at www.LifePointHospitals.com. Except for the Quality Committee, the committees of the Board of Directors are composed exclusively of independent directors.

Audit and Compliance Committee

The Audit and Compliance Committee is primarily responsible for:

    selecting and overseeing the services performed by the Company's independent registered public accounting firm;

    evaluating the Company's accounting policies and its system of internal controls;

    monitoring compliance with the Code of Conduct and the Code of Ethics; and

    monitoring and overseeing the internal audit and compliance departments of the Company and their respective work plans and programs.

The Board of Directors has determined that Gregory T. Bier, Chair of the Audit and Compliance Committee, is qualified as an "audit committee financial expert," as defined by the U.S. Securities and Exchange Commission ("SEC") rules, and that each member is independent in accordance with the applicable rules of NASDAQ. The report of the Audit and Compliance Committee is on page 58.

Compensation Committee

The Compensation Committee is primarily responsible for:

    reviewing the compensation policies and practices of the Company and its subsidiaries;

    approving compensation arrangements for the CEO and other senior management of the Company;

    administering the Company's compensation plans; and

    annually reviewing the Company's Compensation Discussion and Analysis

      prepared according to SEC requirements and discussing the same with the Company's management.

The Compensation Committee has authority to delegate any of its responsibilities to subcommittees as the Compensation Committee may deem appropriate. The report of the Compensation Committee is on page 30.

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee is primarily responsible for:

    identifying persons qualified to become members of the Board of Directors and, when appropriate, recommending such persons to the Board of Directors as proposed nominees for Board membership;

    ensuring that a succession plan is in place for the position of CEO and other senior management positions;

    leading the Board of Directors in its annual review of the performance of the Board of Directors, its committees and individual directors; and

    regularly reviewing and considering evolving governance practices.

During 2014, there were no material changes to the procedures by which a stockholder may recommend nominees to the Board of Directors. In 2014, the Corporate Governance and Nominating Committee also recommended, and the Board unanimously approved, an amendment to our Corporate Governance Standards which adopts majority voting for our Directors. The amendment requires any Director nominee in an uncontested election who receives a greater number of votes "withheld" from his or her election than votes "for" such election to submit a letter of resignation to the Board for consideration by the Corporate Governance and Nominating Committee. The Committee will then recommend to the Board a course of action to be taken with respect to the resignation. The Committee believes that this form of majority voting is in the best interest the Company and its stockholders.

Quality Committee

The Board of Directors of the Company has established the Quality Committee to monitor and provide leadership with respect to the quality of care provided at hospitals owned by the Company.

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The Quality Committee has the authority and responsibility to:

    monitor and evaluate the Company's quality of care and patient safety programs and initiatives;

    review and discuss with senior management the adequacy and effectiveness of the Company's quality of care and patient safety programs and initiatives and consider recommendations for improvement thereof;

    receive reports from senior management as frequently as appropriate summarizing significant (a) deviations from the Company's quality of care and patient safety standards;

      (b) corrective and preventative actions and (c) other matters deemed relevant by the Committee;

    receive reports from senior management as frequently as appropriate summarizing significant quality assurance related activities undertaken by the Company and the results of internal quality compliance audits conducted; and

    receive summaries of reports prepared by third party consultants or auditors retained to evaluate the Company's quality of care and patient safety programs and initiatives.

The following table describes the current members of each of the committees and the number of meetings held during 2014.

TABLE

*
Independent Director
1
Mr. Shell has reached the mandatory retirement age for Directors set forth in the Company's By-Laws and will retire from the Board and any Board committees of which he is a member immediately following the Annual Meeting.
2
Ms. Tavenner was elected to the Company's Board of Directors effective April 15, 2015.
3
Dr. Tuckson was elected to the Company's Board of Directors effective April 3, 2014.

Sustainability

The Company is committed to providing stakeholder value at all levels of our organization. To give insight into our operations and performance from a sustainability perspective, we published our first Corporate Sustainability Report in 2013. This Sustainability Report is available on the Company's website under the "Investor Relations — Corporate Governance" section at www.LifePointHospitals.com.

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Board Oversight of Risk

The Board of Directors considers risk oversight a high priority. Throughout the year, the Board of Directors and the committees to which it has delegated responsibility dedicate a portion of their meetings to review and discuss specific risk topics. The Board of Directors has delegated responsibility for the oversight of specific risks to the following committees:

The Enterprise Risk Management Committee of the Company, which is comprised of individuals from all major areas of the Company including operational, financial, human resources, legal and risk functions of the Company, is responsible for, among other things, establishing a comprehensive process for the management of risk across the Company and measurement methodologies for quantifying, comparing, benchmarking and prioritizing risks facing the Company;

The Audit and Compliance Committee oversees the Company's guidelines, policies and processes for monitoring and mitigating risk relating to the financial statements and financial reporting processes, as well as key credit risks, liquidity risks, market risks and compliance efforts. The Audit and Compliance Committee oversees the internal audit function and the Company's ethics programs, including the Code of Conduct and Code of Ethics, and receives reports from the Company's compliance and audit services departments at each of its regular meetings;
The Compensation Committee monitors any risks related to the Company's executive compensation policies and practices and the Company's compensation practices in general. As discussed in more detail in the Compensation Discussion and Analysis beginning on page 31, the Compensation Committee reviews and approves compensation programs with features that mitigate risk without diminishing the incentive aspect of the compensation. Management discusses with the Compensation Committee the procedures that have been put in place to identify and mitigate potential risks in compensation;

The Corporate Governance and Nominating Committee oversees risks related to the Company's governance structure and processes;

The Quality Committee plays a significant role in evaluating risks with respect to clinical performance and industry practices; and

The Disclosure Committee of the Company, which is comprised of our executive leadership team as well as individuals from all major areas of the Company, including operational, financial, human resources, legal and risk functions of the Company, plays an integral role in reviewing the accuracy, completeness, timeliness and fairness of the Company's financial reporting.

Oversight of Risk

The Board of Directors oversees risk management.

Board committees, which meet regularly and report back to the full Board, play significant roles in carrying out the risk oversight function.

Company management is charged with mitigating risk, through robust internal processes and strong internal controls.

Code of Conduct and Code of Ethics

The Company has a Code of Conduct that provides guidance to the Board of Directors and all employees, including the Company's senior management. The Board of Directors has also adopted a Code of Ethics for the Company's CEO, principal financial officer, principal accounting officer, controller and persons performing similar functions, which specifically addresses the unique roles of these officers in corporate governance. Many of the topics covered in the Code of Ethics

are also addressed in the Code of Conduct, and each of the officers subject to the Code of Ethics is subject to, and has agreed to comply with, the Code of Conduct.

The Code of Conduct and the Code of Ethics are available under the "Investor Relations — Corporate Governance" section of the Company's website at www.LifePointHospitals.com.

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Compliance Hotline

The Audit and Compliance Committee has adopted a policy on the reporting of concerns regarding accounting, internal controls or auditing matters. Any person, whether or not an employee, who has a concern about the conduct of the Company or any of the Company's personnel, including with respect to the Company's accounting, internal controls or auditing matters, may, in a confidential

and anonymous manner, communicate that concern through an external compliance hotline by calling 877-508-5433. The hotline services are available 24 hours a day, seven days a week. All calls to the compliance hotline will be handled on an expedited basis and, under certain circumstances, will be communicated directly to the Chair of the Audit and Compliance Committee.

Policies Against Hedging and Pledging

Our Insider Trading Policy prohibits hedging by the Company's directors, officers and all employees located at our Hospital Support Center (each, a "Covered Person"). Pledge arrangements are also prohibited; provided, however, that the Company's securities may be pledged as collateral for a loan (not including margin debt) upon prior approval of the Company's Chief Legal Officer when the Covered Person clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. No NEO or director of the Company currently has any such arrangement in place.

Independence and Related Person Transactions

Independence Determinations

Under the listing standards of NASDAQ and the Company's Corporate Governance Standards, the Board of Directors must consist of a majority of independent directors. In making independence determinations, the Board of Directors observes NASDAQ and SEC criteria and considers all relevant facts and circumstances. Under NASDAQ listing standards and the Company's Corporate Governance Standards, to be considered independent:

    The director must not have a disqualifying relationship, as defined in NASDAQ listing standards; and

    The Board of Directors must affirmatively determine that the director has no material relationship with the Company, directly or as an officer, stockholder or partner of an organization which has a material relationship with the Company, and meets the independence standards established by NASDAQ, and all other applicable laws, rules and regulations regarding director independence in effect from time to time.

The Board of Directors, through its Corporate Governance and Nominating Committee, regularly reviews all relevant business relationships any director or nominee for director may have with the Company. As a result of its review, the Board of Directors has determined that none of the directors, other than Mr. Carpenter, the Company's Chairman

and CEO, has a material relationship with the Company and, as a result, all of the directors other than Mr. Carpenter are independent.

The Board of Directors has determined that all of the Directors who serve as members of the Audit and Compliance Committee, the Compensation Committee and the Corporate Governance and Nominating Committee are independent as required by NASDAQ listing standards. Under these rules, Audit and Compliance Committee members also satisfy the separate SEC independence requirement that provides that no member may accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries other than compensation for services as a director.

Additionally, in determining the independence of Compensation Committee members, the Board of Directors must consider all factors specifically relevant to determining whether a director has a relationship to the Company that is material to that director's ability to be independent from management in connection with the duties of a Compensation Committee member, including, but not limited to, the source of such directors' compensation, including any consulting, advisory or other compensatory fee paid by the Company, and whether the director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company.

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Related Person Transaction Policy and Process

In addition to the Company's Corporate Governance Standards, Code of Conduct and Code of Ethics, the Board of Directors has approved written policies and procedures that govern the review, approval and/or ratification of transactions between the Company and its directors, director nominees, executive officers, greater than five percent beneficial owners and each of their respective family members, where the amount involved in the transaction exceeds or is expected to exceed $100,000 in any single calendar year. A copy of the Related Person Transactions Policies and Procedures is available under the "Investor Relations — Corporate Governance" section of the Company's website at www.LifePointHospitals.com.

This policy is administered under the oversight of the Audit and Compliance Committee. To assist this committee in identifying potential related person transactions, each director and executive officer is annually required to identify his or her family members and provide certain information about them. The Company's Corporate Governance Officer disseminates a list of the related persons to various officers and departments of the Company so that such transactions can readily be identified. If a related person transaction is identified in advance and the Corporate Governance Officer determines that the transaction is subject to this policy, he must submit the transaction to the Audit and Compliance Committee (or its Chair, if time is of the essence) for consideration. The Audit and

Compliance Committee may generally approve such transactions that are in, or not inconsistent with, the best interests of the Company and its stockholders. The policy also enumerates certain related person transactions that are deemed automatically pre-approved by the Audit and Compliance Committee because the SEC has determined that such transactions are not required to be disclosed or they are unlikely to raise the concerns underlying the SEC's disclosure requirements.

During 2014, there were no reportable related person transactions for the Company, and no related person had any reportable indebtedness to the Company or any of its subsidiaries.

Compensation Committee Interlocks and Insider Participation

During 2014, the Compensation Committee of the Board of Directors consisted of Dr. Maupin, Messrs. Evans, Bier, Ezell, Haley and Shell, Ms. Kondracke and, beginning on April 3, 2014, Dr. Tuckson. None of the members of the Compensation Committee has at any time been an officer or employee of the Company, nor has any of the members had any relationship requiring disclosure by the Company. None of the Company's executive officers serves, or in the past year served, as a member of the board of directors or compensation committee of any entity that has or had one or more of its executive officers serving on the Company's Board of Directors or Compensation Committee.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the disclosures contained in the section entitled "Compensation Discussion and Analysis" required by SEC Regulation S-K, Item 402(b) beginning on the following page. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the section entitled "Compensation Discussion and Analysis" be included in this Proxy Statement for the Annual Meeting and incorporated by reference in the Company's 2014 Annual Report on Form 10-K.

COMPENSATION COMMITTEE

Richard H. Evans, Chair
Gregory T. Bier
DeWitt Ezell, Jr.
Michael P. Haley
Marguerite W. Kondracke
John E. Maupin, Jr.
Owen G. Shell, Jr.
Reed V. Tuckson

Dated: April 15, 2015

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COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

This Compensation Discussion and Analysis provides a detailed description of our executive compensation philosophy and programs, the decisions of the Compensation Committee made under those programs and the factors considered in making those decisions. Specifically, this section focuses on the compensation paid to the Company's Named Executive Officers.

2014 Named Executive Officers

William F. Carpenter III, Chairman and Chief Executive Officer
David M. Dill, President and Chief Operating Officer
Leif M. Murphy, Executive Vice President, Chief Financial Officer and Chief Development Officer
Paul D. Gilbert, Executive Vice President, Chief Legal Officer and Corporate Governance Officer
John P. Bumpus, Executive Vice President and Chief Administrative Officer

Pay for Performance

Similar to prior years, the key principles underlying the Company's compensation programs continue to be aligning pay and performance, driving strong business results, focusing on stockholder return, delivering high quality patient care, and attracting, motivating and retaining strong talent. In 2014, the Company executed well on multiple fronts and we experienced one of the strongest years of growth in the Company's history. The Company's strong performance in 2014 is highlighted below:

             

2014 Company Performance

Key Financial Metrics

 

FY 2014 Results

 

FY 2013 Results

 

% Increase

             

Revenues

  $4,483.1 million   $3,678.3 million   21.9%
             

Adjusted EBITDA

  $634.2 million   $537.0 million   18.1%
             

Adjusted Diluted EPS

  $3.451   $2.68   28.7%
             

Stock Price as of 12/31

  $71.91   $52.84   36.1%
             

1  Including the impact of impairment charges totaling $57.7 million, $35.9 million net of income taxes, or $0.76 loss per diluted share related to the divestiture of four hospitals, our 2014 Diluted EPS was $2.69.

Consideration of 2014 Say-on-Pay Vote and Stockholder Outreach

At our Annual Meeting of Stockholders in June 2014 our stockholders expressed their strong support for our executive compensation program with 96% of the votes cast in favor of our "say-on-pay" proposal. We believe this was a direct result of the extensive stockholder outreach effort that the Company undertook following the 2013 vote and the subsequent changes made to the Company's executive compensation program. Consistent with the Company's pay-for-performance approach, the Compensation Committee has continued to examine our executive compensation program to ensure alignment between the interests of our executives and our stockholders.

Highlights of 2014 Executive Compensation Program

Aligned long-term executive performance compensation with long-term stockholder value — Elected to utilize relative TSR as the sole performance metric to determine what amount, if any, of the performance-based RSUs will be earned by the NEOs.

Changed long-term incentive criteria — Tied a majority of the NEOs' target long-term compensation (performance-based RSUs) to the Company's three-year annualized TSR compared to the TSR Peer Index.

Increased performance period for RSUs — The performance-based RSUs will be earned only after the three-year performance period and only if the Company meets or exceeds the established three-year annualized TSR thresholds relative to the TSR Peer Index.

Eliminated overlap of performance targets for annual cash incentive versus long-term incentives — Payout of annual cash incentive awards will be based on achievement of annual financial and operational targets while vesting of performance-based RSUs will be tied solely to three-year annualized TSR relative to the TSR Peer Index.
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COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY

Executive Compensation Practices

Our compensation philosophy is complimented by several specific policies and practices that are designed to align our executive compensation with long-term stockholder interests, including the practices highlighted below.

         

  

 

What We Do
    

 

 

 

 

Pay for Performance — A high percentage of our NEO compensation is at-risk.

   

 

 

Stock Ownership Guidelines — We maintain stock ownership guidelines for our NEOs.

   

 

 

Peer Market Data — The Compensation Committee reviews peer group market data when making executive compensation decisions.

   

 

 

Tally Sheets — The Compensation Committee reviews tally sheets when making executive compensation decisions.

   

 

 

Double Trigger — Under our Change of Control Plan, cash severance payments are made only if double trigger provisions are met.

   

 

 

Compensation Limits — We use caps on potential incentive payments and multiple performance targets to limit our NEOs' aggregate compensation.

   

 

 

Recoupment — We have a clawback policy applicable to restatements of financial results as a result of fraud.

   

 

 

Review of Share Utilization — We annually evaluate share utilization.

   

 

 

Independent Compensation Consultant — The Compensation Committee utilizes an independent compensation consultant.

   

 

 

Risk Mitigation — We have robust Board and management processes to identify and mitigate risks.

   

 

 

 

 

 

  

 

What We Don't Do
    

 

 

 

 

No Employment Contracts — We do not have employment agreements with our NEOs.

   

 

 

No Supplemental Executive Retirement Plans — We do not provide a separate supplemental executive retirement plan to our NEOs.

   

 

 

No Repricing of Stock Options — We do not grant stock option awards with reload features and we do not reprice stock options.

   

 

 

No Hedging — Our Insider Trading Policy prohibits hedging by our directors, officers and all employees located at the Hospital Support Center.

   

 

 

Anti-Pledging — Pledge arrangements are generally prohibited. No pledge arrangements are currently in place.

   

 

 

No Perquisites — We do not provide any perquisites such as cars or car allowances, club membership, financial planning or tax preparation assistance.

   
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COMPENSATION DISCUSSION AND ANALYSIS

2014 Company Performance

The Company, through its subsidiaries, operates general acute care hospitals primarily in non-urban communities in the United States. At December 31, 2014, we operated 67 hospital campuses in 21 states. In 2014, the Company was able to drive substantial profitable growth by leveraging the benefits of healthcare reform, strategic acquisitions and our organic growth initiatives. The discussion below highlights the impact of some of these factors on our operating results.

Total Shareholder Return was 36.1% for 2014. Our Company ended 2014 with a market value of $71.91 per share, up from $52.84 per share at the end of 2013.

GRAPHIC

In 2012, we received a one-time "rural floor" settlement from Medicare related to historic underpayments (the "2012 rural floor settlement"). The following charts reflect the results for 2012 that have been adjusted to exclude the impact of the 2012 rural floor settlement.

Revenues increased by 21.9%, from $3,678.3 million to $4,483.1 million.

GRAPHIC

Adjusted EBITDA increased $97.2 million, or 18.1%, from $537.0 million to $634.2 million.

GRAPHIC

Diluted EPS was $3.45, an increase of 28.7% over 2013, when adjusted to exclude the impact of impairment charges totaling $57.7 million, $35.9 million net of income taxes, or $0.76 loss per diluted share related to the divestiture of four hospitals. Including the impact of these impairment charges, our Diluted EPS was $2.69.

GRAPHIC

Growth

In 2014 we continued to expand our Duke LifePoint partnership through the acquisition of eight hospitals:

Effective March 1, 2014, Duke LifePoint acquired an 80% ownership in Wilson Medical Center in Wilson, North Carolina.

Effective June 1, 2014, Duke LifePoint acquired an 80% ownership interest in Rutherford Regional Medical Center, located in Rutherfordton, North Carolina.

Effective August 1, 2014, Duke LifePoint acquired Harris Regional Hospital in Sylva, Haywood Regional Medical Center in Clyde, and Swain County Hospital in Bryson City, North Carolina.

Effective September 1, 2014, Duke LifePoint acquired Conemaugh Health System in Pennsylvania, which is comprised of three hospitals: Memorial Medical Center in Johnstown, Meyersdale Medical Center in Meyersdale and Miners Medical Center in Hastings.

The acquisition of these facilities expands Duke LifePoint's footprint into Pennsylvania and strengthens its presence in North Carolina, furthering the Company's strategic initiative to form regional networks throughout the areas in which it operates.

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COMPENSATION DISCUSSION AND ANALYSIS

2014 Executive Compensation Highlights

 
   
   
   
   

Component


Performance-
Based


Primary Metric(s)
Terms
2014 Results

Base Salary

         

Determined annually, upon promotion, or following a change in job responsibilities.

Based on market data, internal pay equity and level of responsibility, experience, expertise and performance.

  NEO base salaries were increased based on each executive's individual achievements in 2013 and, with respect to Messrs. Murphy and Bumpus, also because their base salaries were below the market median for comparable executives in the Peer Group.

Annual Cash Incentive Award

  ü  

Revenues

Acquisition Revenue

Adjusted EBITDA

Integration EBITDA

Adjusted Diluted EPS

Quality

 

Annually determined as a percentage of the NEO's base salary.

Earned only if the Company meets or exceeds annual performance thresholds set at the beginning of each year.

  Because the Company met or exceeded all of its 2014 Performance Criteria targets, the annual cash incentive award paid out above target levels.

Performance-Based Restricted Stock Units (RSUs)

  ü  

Three-year annualized TSR as of December 31, 2016 relative to TSR Peer Index

 

Cliff vest at end of three-year service period.

Vesting subject to the Company's three-year annualized TSR relative to the TSR Peer Index; no payouts made if relative TSR is below the 25th percentile of the TSR Peer Index.

  2014 performance-based RSUs remain subject to vesting because the performance period ends on December 31, 2016.

Stock Options

  ü  

Stock Price

 

Vest 33% per year.

Ten-year term.

  One-third of options granted in 2014 vested in February 2015.

2014 NEO Compensation Summary

The charts below illustrate the percentage breakdown of 2014 total direct compensation (consisting of base salary, annual cash incentive award, stock options and performance-based RSUs) for each of our NEOs. Consistent with our pay-for-performance philosophy, approximately 91% of the CEO's total direct compensation (and an average of approximately 87% of the total average direct compensation of the other NEOs) was performance-based.


GRAPHIC
 
GRAPHIC
2014 CEO Total Direct Compensation   2014 Average Other NEO Total Direct Compensation

*  The percentages shown are based on grant-date fair value; however, the performance-based RSUs remain unearned because the three-year performance period does not end until December 31, 2016. One-third of the options granted in 2014 vested in February 2015, however, none have been exercised.

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COMPENSATION DISCUSSION AND ANALYSIS

What We Pay and Why

The Company's total direct compensation to its NEOs consists of base salary, annual cash incentive awards and long-term equity incentive awards. The Compensation Committee implemented significant changes to the Company's executive compensation program for 2014, which are highlighted in the chart below and are more fully described in the discussion following the chart.

2014 Executive Compensation Program

GRAPHIC

(1)
Revenues goal includes net revenue for all facilities owned and operated prior to 12/31/2013, but not net revenue from acquisitions effective in 2014.

(2)
Adjusted EBITDA goal includes all facilities owned and operated prior to 12/31/2013; Integration EBITDA goal includes 2014 actual EBITDA for assets acquired in 2012, 2013 and 2014, as compared to pro forma EBITDA developed by the Company for those assets at the time of their acquisition.

(3)
Quality goal aligns with the 2014 Hospital Engagement Network ("HEN") goal of a 35% absolute reduction in non-OB patient harm for a 60-day consecutive period in 2014 compared with 2010 YTD baseline. If the HEN goal is met, an additional 10% could be earned upon achievement of patient and physician satisfaction goals.
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COMPENSATION DISCUSSION AND ANALYSIS

2014 Base Salary

In making its compensation decisions at its February 2014 meeting, the Compensation Committee analyzed the compensation of each NEO in detail, including how each NEO's base salary, annual cash incentive, long-term incentive and total direct compensation compared to the compensation paid to similar positions by companies within the Company's Peer Group described below on page 39. In addition, the Compensation Committee discussed unique factors applicable to each NEO, such as perceived importance to the Company, internal equity, the ability to replace such individual if they departed the Company, and whether the Committee believed that an individual was likely to be a target recruit for other companies. As a result of these comparisons, discussions and analysis, the Compensation Committee increased NEO base salaries as follows: Mr. Carpenter, 5%; Mr. Dill, 4%; Mr. Murphy, 14%; Mr. Gilbert, 3%; and Mr. Bumpus, 13%. The Compensation Committee believed these increases were appropriate based on each executive's individual achievements in 2013 and, with respect to Messrs. Murphy and Bumpus, also because their base salaries were below the market median for comparable executives in the Peer Group.

2014 Annual Cash Incentive Award

At its February 2014 meeting, the Compensation Committee determined to make certain changes to the Performance Criteria targets for the annual cash incentive award to more closely align NEO target compensation with the Company's financial and strategic goals and to eliminate overlap in the measurement of the performance targets with the long-term incentive targets. The Compensation Committee believes these metrics align stockholder value with the Company's future performance by measuring Revenues, Adjusted EBITDA and Adjusted Diluted EPS while also encouraging the efficient growth of the Company through strategic, well-transitioned acquisitions, as well as quality of care. The Company's performance against each of the metrics within the Performance Criteria is analyzed separately, and the NEOs may earn more than or less than the Target Cash Incentive Award depending on performance relative to each of the metrics' targets, subject to minimum threshold achievements and maximum payouts for each Performance Criteria (the "Actual Cash Incentive Award"). With respect to specific Performance Criteria for 2014, 90% of the Target Cash Incentive Award of each NEO was based on the Company's actual financial performance against the metrics described in the table below. Additionally, the target for the Quality metric, which constitutes 10% of the Target Cash Incentive Award, was a 35% absolute reduction in non-OB patient harm for a 60-day consecutive period in 2014 compared with 2010 YTD baseline. Once the Quality metric was achieved, an additional 10% could be earned upon achievement of patient and physician satisfaction goals.

Metric1



Weight


Performance
Threshold




Performance
Target2



2014 Results2


Weighted
Payout
 

All dollar amounts, except diluted EPS, in millions.

 

Revenues

    12.5 %   $3,767.1     $3,965.4     $3,983.6     12.5%  

Acquisition Revenue (not derived from the Company's audited financial statements)3

    12.5 %   $215.0     $255.0     $856.5     55.0%  

Adjusted EBITDA

    25.0 %   $525.0     $583.3     $602.5     55.0%  

Integration EBITDA4

    15.0 %   $89.0     $98.9     $115.1     30.0%  

Adjusted Diluted EPS

    25.0 %   $2.35     $2.61     $3.51     55.0%  

Quality

    10.0 %               10.0%  

Total (as a percentage of the Target Cash Incentive Award)

    100.0 %               217.5%  

1  For more information about the Company's business and details about the Company's 2014 performance highlights and the financial measures mentioned in this Proxy Statement, please see the 2014 Annual Report on Form 10-K, particularly the sections entitled "Business," "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

2  Performance Targets and 2014 Results have been adjusted for purposes of measuring performance in accordance with the 2014 annual cash incentive award program, when applicable, to exclude the financial performance of 2014 acquisitions and divestitures, and the impact of certain non-cash impairment charges related to divestitures.

3  Measures 12 months trailing revenues from 2014 acquisitions (not derived from the Company's audited financial statements).

4  Measures how efficiently hospital acquisitions are transitioned into our operations and includes 2014 actual EBITDA for assets acquired in 2012, 2013 and 2014 as compared to pro forma EBITDA developed by the Company for the acquired assets at the time of their acquisition.

36     2015 Proxy Statement | LifePoint Hospitals, Inc.

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COMPENSATION DISCUSSION AND ANALYSIS

The table below sets forth each NEO's Target Cash Incentive Award and Actual Cash Incentive Award, which are percentages of the NEO's Base Salary. The Actual Cash Incentive Award is determined by multiplying the Target Cash Incentive Award by the total weighted payout shown in the previous table (217.5%).

Name


Target Cash
Incentive Award
(as a percentage
of Base Salary)




Actual Cash
Incentive Award
(as a percentage
of Base Salary)

William F. Carpenter III

  100%   217.5%

David M. Dill

  90%   195.8%

Leif M. Murphy

  75%   163.1%

Paul D. Gilbert

  75%   163.1%

John P. Bumpus

  65%   141.4%

2014 Long-Term Incentive Awards

Stock Option Awards.    In 2014, the Compensation Committee made its annual grant of stock option awards to the NEOs at its first regularly scheduled meeting in February. All stock option awards granted in 2014 to NEOs vest in three equal annual installments beginning on the first anniversary following the date of the grant and expire after 10 years. The regularly scheduled meetings of the Compensation Committee at which stock option awards are granted do not coincide with earnings releases or other periodic filings of the Company that may have a material effect on the stock price of the Company and are scheduled in advance without regard to those events. The Compensation Committee considers stock options to be performance-based because employees recognize value only if the market value of our Common Stock appreciates over time.

Performance-Based RSUs.    Also at its February 2014 meeting, the Compensation Committee granted performance-based RSUs that are conditioned upon the Company's three-year annualized TSR as of December 31, 2016 relative to the TSR Peer Index. The stock price average for the last 30 trading days in 2013 and for the last 30 trading days of 2016 will be used for determining the three-year annualized TSR during the performance period. The actual amount earned will be paid out as described in the table to the right, with any amounts over 100% up to 200% being paid out in cash in an amount equivalent to the number of units earned times the stock price on the date the Compensation Committee certifies the level of performance achieved.

Relative TSR Achieved
% of Target Awarded*
75th percentile   200%
62.5 percentile   150%
50th percentile   100%
37.5 percentile     75%
25th percentile     50%
Below 25th percentile       0%
* The award percentage will be interpolated if the level of performance achieved falls between two of the levels specified above.

Recent Compensation Decisions

At its February 2015 meeting, the Compensation Committee certified the achievement of the performance targets related to the 2013 grant of performance-based RSUs. In addition, the base salary for Mr. Carpenter was increased by 10% and the base salaries of each of the other NEOs were increased by 3.0%. The target annual cash incentive award, as a percentage of base salary, was set at the following percentages: Carpenter, 150%; Dill and Murphy, 100%; Gilbert and Bumpus, 75%. In addition, the Compensation Committee made its annual grant of stock option awards and performance-based RSUs. All stock option awards granted to the NEOs vest in three equal installments beginning on the first anniversary following the date of grant. Vesting of the performance-based RSUs is conditioned on the Company's three-year annualized TSR as of December 31, 2017 relative to the TSR Peer Index and continued employment with the Company through February 25, 2018.

LifePoint Hospitals, Inc. | 2015 Proxy Statement      37

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

How We Make Compensation Decisions

Philosophy and Principles of Executive Compensation

The foundation of the compensation philosophy for all of the Company's employees generally is the vision of making it a place where employees want to work, guided by the Company's High Five Guiding Principles. The executive compensation program aligns with the High Five Guiding Principles and is designed to balance stockholder interests with the Company's need to retain and motivate executive talent. The goal of the Company's executive compensation program is to provide compensation to its executive management team that will allow the Company to recruit, retain and motivate the exceptional caliber of leaders necessary to deliver sustained high performance to stockholders, patients and the communities where the Company's hospitals are located. When setting executive compensation, the Compensation Committee seeks to incorporate the following objectives:

High Five Guiding Principles

Delivering high quality patient care
Supporting physicians
Creating excellent workplaces for our employees
Strengthening the hospitals' role in the community
Ensuring fiscal responsibility

Compensation Program Objective


How Objective is Achieved

Support the achievement of the Company's vision and strategy

 

Incentive program metrics are tied to both annual and long-term strategic objectives of the Company.

Compensation program provides incentives for NEOs to meet and exceed Company goals.

Long-term equity-based incentive awards minimize any reason to seek short-term gains at the expense of long-term growth and value creation.

Attract and retain the most talented executives to succeed in today's competitive marketplace

 

Compensation elements and pay opportunities are targeted in the range of the Peer Group with which we compete for talent.

NEOs are held accountable for results and rewarded above target levels when Company goals are exceeded. When goals are not met, compensation awards will be below target levels.

Long-term equity-based incentive awards incentivize NEOs to remain employed with the Company in the face of a competitive business and geographic market for their services.

Create an ownership alignment with stockholders

 

Long-term incentive awards are equity-based to incentivize our NEOs to manage the Company in a manner that emphasizes continuing value creation for the Company's stockholders.

Stock ownership requirements in place for NEOs.

Approximately 77% of target NEO compensation is equity-based where the value is directly linked to share price appreciation and relative TSR.

Motivate and reward NEOs when they deliver desired business results and stockholder value

 

Annual cash incentive awards are based on performance against Company financial and operational goals. Financial metrics are Revenues, Acquisition Revenue, Adjusted EBITDA, integration EBITDA, and Adjusted diluted EPS. Operational metrics include measures relating to the provision of quality care to our patients.

Relative TSR versus a peer group drives the payout of a majority of our long-term incentive awards in the form of performance-based RSUs.

Long-term equity-based incentive awards incentivize NEOs to emphasize ethical and legal compliance throughout the Company and its facilities.

38     2015 Proxy Statement | LifePoint Hospitals, Inc.

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COMPENSATION DISCUSSION AND ANALYSIS

Use of Competitive Data

The Compensation Committee relies on various sources of compensation information provided by its independent compensation consultant, Mercer LLC ("Mercer"), to understand the competitive market for the Company's executive officers, including the NEOs. The Compensation Committee uses compensation data compiled from proprietary surveys and proxy data provided by Mercer, paying particular attention to a group of three publicly traded hospital management companies and seven other publicly traded health services companies that are the general size of the Company, considering revenue, market capitalization and other appropriate indicators (the "Peer Group").

The Peer Group includes companies with which we compete for talent as well as the companies that we use for measuring relative financial performance for compensation purposes. For 2014, the Company was positioned near the median of the Peer Group in terms of 2014 revenue and at approximately the 25th percentile of the Peer Group in terms of market capitalization (as of December 31, 2014).

 
   
   

Company


2014 Fiscal Year
Net Revenue
(in Millions)



December 31, 2014
Market Capitalization
(in Millions)(1)

Hospital Management Companies

Community Health Systems, Inc.

  $18,639     $6,294

Tenet Healthcare Corporation

  $16,615     $4,985

Universal Health Services, Inc.

    $8,065   $10,983

Other Health Services Companies

Brookdale Senior Living, Inc.

    $3,832     $6,859

DaVita HealthCare Partners, Inc.

  $12,795   $16,333

Gentiva Health Services, Inc.2

        N/A         N/A

HealthSouth Corporation

    $2,374     $3,376

Kindred Healthcare, Inc.

    $5,028     $1,272

Select Medical Holdings Corporation

    $3,065     $1,890

Varian Medical Systems, Inc.

    $3,050     $8,679

LifePoint Hospitals, Inc.

 

  $4,483

 

  $3,205

(1)
Market capitalization is calculated using the closing stock price on December 31, 2014 multiplied by the total number of shares outstanding on December 31, 2014, except that due to its September 26, 2014 fiscal year end, market capitalization for Varian Medical Systems, Inc. was calculated using the closing share price on December 31, 2014 and the total number of shares outstanding reported as of January 2, 2015.

(2)
On February 2, 2015, Gentiva Health Services, Inc. merged into Kindred Healthcare, Inc. Gentiva did not report 2014 financial results.

Competitive Local Market for Talent

In addition to the Peer Group, the Compensation Committee also considers the compensation practices of HCA Holdings, Inc. which, although significantly larger than the Company in revenue and market capitalization, is also located in the Nashville metropolitan area, includes the Company as one of its peers and competes with the Company for executive talent.

In addition to the Company, HCA Holdings, Inc. and Community Health Systems, Inc., the Nashville metropolitan area is home to companies that collectively own or manage over half of the investor-owned hospitals in the United States. Specifically, the Company competes for executive talent with numerous smaller private equity-backed hospital management companies located in the Nashville area, including Iasis Healthcare Corporation, Ardent Health Services, Capella Healthcare, Inc. and RegionalCare Hospital Partners, Inc., as well as dozens of other investor-owned healthcare service providers. The Compensation Committee recognizes that the Company's location in the Nashville metropolitan area has allowed it to recruit leadership with talent and deep industry experience, but also considers that its executives have been and will continue to be targeted by other industry competitors.

LifePoint Hospitals, Inc. | 2015 Proxy Statement      39

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COMPENSATION DISCUSSION AND ANALYSIS

Role of the Compensation Committee

The Compensation Committee is responsible for overseeing the development and administration of the Company's compensation programs and practices.

The Chair of the Compensation Committee, currently Mr. Evans, has a significant role in determining the compensation recommendations made to the Compensation Committee for its consideration, and works closely with the Company's Executive Vice President and Chief Administrative Officer, Mr. Bumpus, and the independent compensation consultant in formulating such recommendations.

Factors and Steps in Setting Compensation

The compensation of individual NEOs is evaluated and set annually by the Compensation Committee. The Compensation Committee uses the compensation practices of the companies in the Peer Group to benchmark the compensation paid to the NEOs. In addition, the Compensation Committee also takes into account various factors, such as the Company's performance within the Peer Group, the unique characteristics of an individual's position, and any succession and retention considerations. When exercising its judgment in this regard, the Compensation Committee considers other factors including the following:

Range of compensation for similar jobs and job levels in the market;

Company financial performance;

Company performance relative to non-financial goals approved by the Committee;

Each NEO's experience, knowledge, skills and personal contributions; and

Business climate, economic conditions and other factors.

The Compensation Committee recognizes that the NEOs have substantial operating history with the Company and other experience relevant to the execution of the Company's strategic initiatives and goals. As a result, when considering the retention risk posed by the compensation decisions made with respect to each NEO, the Compensation Committee takes into account the disruption that could be caused by the unplanned departure of one or more NEOs, including the time required for any successor to fully transition into his or her duties, and the costs required to replace an NEO (or fill the

position vacated by his or her internal successor) with an external candidate. The Compensation Committee also takes into account whether each NEO is, in its judgment, fairly compensated and sufficiently incentivized to remain with the Company. In addition, the Compensation Committee takes into consideration that approximately one-third of the Peer Group, including all of the other major hospital operators, provide meaningful "employer paid" supplemental retirement plans.

Allocation of Compensation Elements and Tally Sheets

The Compensation Committee considers the forms in which total compensation will be paid to executive officers and seeks to achieve an appropriate balance between base salary, annual cash incentive awards and long-term incentive awards. The Compensation Committee determines the size of each element based primarily on Peer Group data and individual and Company performance. The percentage of compensation that is contingent on achievement of performance criteria typically increases in correlation to an NEO's responsibilities within the Company, with at-risk performance-based incentive compensation making up a greater percentage of total compensation for the most senior executive officers. The Compensation Committee believes that total compensation should be targeted within the range of compensation for comparable executives at companies in the Peer Group, and that it should also take into account other relevant factors such as the NEO's unique roles and responsibilities, his or her performance over a period of years, experience, results and internal equity. Accordingly, the compensation of an NEO may be above or below the median of the applicable range of compensation paid by our Peer Group.

The Compensation Committee uses tally sheets to review the compensation of the NEOs, which show the cumulative impact of all elements of compensation. These tally sheets include detailed information and dollar amounts for the last three years for each component of compensation, the value of all equity granted to each NEO, and the value of welfare and retirement benefits and severance payments. Tally sheets provide the Compensation Committee with the relevant information necessary to determine whether the balance between long-term and short-term compensation, as well as fixed and variable compensation, is consistent with the overall compensation philosophy of the Company.

40     2015 Proxy Statement | LifePoint Hospitals, Inc.

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COMPENSATION DISCUSSION AND ANALYSIS


Currently, the Compensation Committee awards stock options in combination with performance-based RSUs. In administering the Company's equity-based incentive programs, the Compensation Committee regularly evaluates the total cost of such programs and considers the impact of stockholder dilution in making its award determinations.

Assessment of Compensation Consultant Independence

The Compensation Committee has retained, without recommendation from management, Mercer as its independent compensation consultant pursuant to a written consulting agreement. Mercer is a subsidiary of Marsh & McLennan Companies, Inc., and, as a result, has over 500 affiliates that operate in numerous distinct areas of business unrelated to Mercer's compensation consulting practice. The Company paid Mercer and its affiliates an aggregate of $436,347 during 2014, of which $302,483 was for Mercer's services as compensation consultant. Neither the Compensation Committee nor the Board of Directors approved in advance the services of Mercer or its affiliates that were not related to executive compensation. Pursuant to NASDAQ's listing standards, if the Compensation Committee chooses to use a compensation consultant, the Committee must assess the consultant's independence. The Compensation Committee assessed Mercer's independence, taking into account the following factors:

provision of other services to the Company by Mercer and its affiliates other than its services to the Compensation Committee;

the amount of fees paid by the Company to the consultant and its affiliates as a percent of the consultant's total revenue;

the policies and procedures the consultant has in place to prevent conflicts of interest;

any business or personal relationships between the consultant and the members of the Compensation Committee;

any ownership of Company stock by the individuals performing consulting services for the Compensation Committee; and

any business or personal relationship of Mercer with an executive officer of the Company.

After consideration of the factors above, the Compensation Committee determined that Mercer is independent and that no conflicts of interest exist.

The Compensation Committee's Charter, which sets out its duties and responsibilities, can be found on the Company's website under the "Investor Relations — Corporate Governance" section at www.LifePointHospitals.com.

Role of the Chief Executive Officer

Mr. Carpenter, our Chief Executive Officer, provides input regarding compensation recommendations relating to the other NEOs to Mr. Bumpus or directly to Mr. Evans, but does not play any role with respect to any matter affecting his own compensation.

The Company's Lead Director directly and significantly influences compensation decisions made with respect to Mr. Carpenter. Mr. Shell, the Company's current Lead Director, reviews Mr. Carpenter's performance based on his observations and with input from all other independent directors. Mr. Shell then discusses these performance results with Mr. Evans, the Compensation Committee Chair, and they jointly provide recommendations regarding Mr. Carpenter's compensation to the Compensation Committee. Mr. Shell also discusses the results of this performance review with Mr. Carpenter.

Role of the Compensation Consultant

The compensation consultant reports directly to the Compensation Committee, and the Committee may replace Mercer or hire additional consultants at any time. A representative of the compensation consultant attends meetings of the Compensation Committee and meets alone in executive session without management present, as requested, and communicates with the Compensation Committee Chair between meetings.

During 2014, Mercer performed the following specific services:

provided updates on executive compensation trends and external developments;

provided an analysis of board of director compensation levels;

provided an annual competitive evaluation of each compensation element and total compensation for the NEOs;

provided information on CEO total compensation to the Compensation Committee, without prior review by the CEO;
LifePoint Hospitals, Inc. | 2015 Proxy Statement      41

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


reviewed Compensation Committee agendas and supporting materials in advance of each meeting, and raised questions/issues with management and/or the Compensation Committee Chair, as appropriate; and
reviewed drafts and commented on this Compensation Discussion and Analysis and the related compensation tables for this Proxy Statement.

Other Compensation Policies and Information

Additional Compensation Elements

Benefits

The NEOs are eligible to participate in the Company's health and welfare programs, 401(k) plan (including discretionary matches), and other employee recognition programs on the same basis as other employees. The Company offers all employees group life, disability, medical, dental and vision insurance and other comparable benefits.

Deferred Compensation Plan

The NEOs and certain other senior executives and employed physicians of the Company are eligible to participate in the Company's deferred compensation plan (the "Deferred Compensation Plan"). Pursuant to the Deferred Compensation Plan, a participant may defer up to 50% of their annual base compensation and up to 100% of any annual cash incentive award. The Deferred Compensation Plan was amended at the end of 2014 to allow participants to defer up to 100% of any performance-based restricted stock units if allowed under the applicable restricted stock unit agreement. In addition, the Company may provide a matching contribution on behalf of our NEOs based on the amount of compensation deferred by the NEO. The matching contribution is subject to certain requirements, including a limit on the amount of deferred compensation that may be matched per year and a minimum period of time the NEOs must

elect to defer payment. As of April 10, 2015, none of the NEOs have made deferrals that are eligible for this matching contribution.

Management Stock Purchase Plan

The Company also has a Management Stock Purchase Plan (the "MSPP"), which historically has been available to approximately 330 management level employees of the Company, including the NEOs. In 2012, the Board of Directors decided to suspend the right of employees to acquire shares under the MSPP. The MSPP will remain suspended until the Board of Directors reinstates the plan or takes other appropriate action.

Supplemental Long-Term Disability Plan

The Company has a supplemental long-term disability plan to accommodate certain employees, including the NEOs, who cannot receive a maximum payout under the existing long-term disability plan because of limitations within the plan.

No Supplemental Retirement Plan

The Company does not provide a separate supplemental executive retirement plan to our NEOs.

No Perquisites

The Company does not provide perquisites such as cars or car allowances, club memberships, financial planning or tax preparation assistance.

Stock Ownership Guidelines

The Compensation Committee has established stock ownership guidelines applicable to senior executives (including the NEOs) and non-employee directors. These ownership guidelines provide that the subject persons should own Common Stock equal in value to three times their annual salary (or, in the case of directors, their annual retainer).

The table to the right reflects the minimum stock ownership requirement applicable to each NEO and the value of actual stock owned by each NEO based on the closing price of the Company's Common Stock on December 31, 2014. The Compensation Committee monitors compliance with these guidelines on an annual basis.

 
   
   
 

Name





Minimum Stock
Ownership
Requirement






Value of Shares
Owned as of
12/31/14
 

William F. Carpenter III

    $3,150,000     $40,275,569      

David M. Dill

    $1,950,000     $20,001,695      

Leif M. Murphy

    $1,800,000     $6,157,222      

Paul D. Gilbert

    $1,545,000     $4,119,580      

John P. Bumpus

    $1,275,000     $9,426,035      
42     2015 Proxy Statement | LifePoint Hospitals, Inc.

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COMPENSATION DISCUSSION AND ANALYSIS

Recoupment Policy

Senior executives, including the NEOs, are subject to a Recoupment Policy Relating to Unearned Incentive Compensation of Executive Officers (the "Recoupment Policy"). Generally, the Recoupment Policy provides that if the Board of Directors determines that a senior executive has committed fraud that requires the Company to restate its financial statements, the Board of Directors may take, in its discretion, such action as it deems appropriate with respect to the fraud.

The Board of Directors will, in all cases it determines appropriate, require reimbursement of any incentive compensation paid to an executive subject to the Recoupment Policy. The Board of Directors may also require reimbursement from executives subject to the Recoupment Policy of gains realized upon the exercise of any equity-based awards previously made to such person that vested after the date of adoption of the Recoupment Policy. The Recoupment Policy allows for reimbursement from an executive subject to the Recoupment Policy only if and to the extent that (a) the amount paid to or realized by the executive was calculated based on the achievement of certain financial results that were subsequently reduced due to the restatement, (b) the Board of Directors determines that the executive actually committed a fraud obligating the Company to restate its financial statements, and (c) the amount of the incentive compensation paid to, or the amount of the gains realized by, an executive subject to the Recoupment Policy, had the financial results not been restated, would have been lower than the amount actually paid or realized. The Board of Directors will not seek to recover compensation paid or amounts realized more than three years prior to the date that the applicable restatement is first publicly disclosed.

Change in Control Protections

The NEOs are covered by the Company's Change in Control Plan, which has a "double trigger," providing cash payments and certain benefits to the NEOs on a change in control, only if the employment of the NEOs is subsequently terminated or materially diminished. For more information about the Change in Control Plan, please see the "Potential Payments upon Termination or Change in Control" section on page 50.

Derivatives Trading and Anti-Hedging and Anti-Pledging Policies

Under our Insider Trading Policy, all directors and employees located at our Hospital Support Center, including the NEOs, are required to receive the permission of the Company's Chief Legal Officer or Corporate Secretary prior to entering into any transactions in Company securities, including gifts, grants and transactions involving derivatives. Generally, trading is permitted only during announced trading periods. Employees who are subject to trading restrictions, including the NEOs, may enter into a trading plan under Rule 10b5-1 of the 1934 Act. These trading plans may be entered into only during an open trading period and must be approved by the Company. The NEO bears full responsibility if he or she violates Company policy by permitting shares to be bought or sold without pre-approval or when trading is restricted. NEOs are prohibited from entering into hedging transactions. Pledge arrangements must be pre-approved by the Company's Chief Legal Officer on a case-by-case basis, after consideration of the particular facts and circumstances of the request, as described on page 29. There are no pledging arrangements currently in place.

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EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

Executive Officers of the Company

The following list identifies the name, age and position(s) of the executive officers and other significant employees of the Company:

Name  
Age
Position

William F. Carpenter III

    60   Chairman and Chief Executive Officer

David M. Dill

    46   President and Chief Operating Officer

Leif M. Murphy

    47   Executive Vice President, Chief Financial Officer and Chief Development Officer

Paul D. Gilbert

    48   Executive Vice President, Chief Legal Officer and Corporate Governance Officer

John P. Bumpus

    54   Executive Vice President and Chief Administrative Officer

Michael S. Coggin

    45   Senior Vice President and Chief Accounting Officer

Russell L. Holman, M.D.

    47   Chief Medical Officer

Donald J. Bivacca

    53   President — Western Group

R. Scott Raplee

    49   President — Central Group

Jeffrey G. Seraphine

    45   President — Eastern Group

The term of each executive officer runs until his successor is appointed by the Board, or until his earlier death, resignation or removal. Below is a biographical summary of the experience of the executive and senior officers of the Company. Information pertaining to Mr. Carpenter, who is both a director and an executive officer of the Company, may be found in the section entitled "Continuing Directors: Class III Directors" on page 20.

David M. Dill has served as President of the Company since January 2011 and as Chief Operating Officer of the Company since April 2009. Mr. Dill served as Executive Vice President from February 2008 to January 2011. Mr. Dill joined the Company in July 2007 as Chief Financial Officer and continued to serve in that role until April 2009. From March 2006 until Mr. Dill joined the Company, he served as executive vice president of Fresenius Medical Care North America and as chief executive officer of one of two United States divisions of Fresenius Medical Care Services, a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA. Mr. Dill previously served as executive vice president, chief financial officer and treasurer of Renal Care Group, Inc., a publicly traded dialysis services company, from November 2003 until Renal Care Group was acquired by Fresenius Medical Care in March 2006. From 1996 to November 2003, Mr. Dill served in various finance and accounting roles with Renal Care Group, Inc. Mr. Dill served as a member of the board of directors of Psychiatric Solutions, Inc., a behavioral health services company, from 2005 until 2010.

Leif M. Murphy has served as Executive Vice President and Chief Development Officer since joining the Company in October 2011. In addition, Mr. Murphy has served as the Company's Chief Financial Officer since September 14, 2013. From October 2008 to October 2011, Mr. Murphy served as president and chief executive officer of DSI Renal, Inc., a dialysis services company. Mr. Murphy was senior vice president and treasurer at Caremark, Inc., the largest pharmacy healthcare provider in the United States, from April 2006 to October 2008. From 1999 to 2006, Mr. Murphy served in various senior leadership roles with Renal Care Group, Inc. and its predecessors.

Paul D. Gilbert has served as Executive Vice President, Chief Legal Officer and Corporate Governance Officer of the Company since February 2008 and also served as Corporate Secretary from December 15, 2010 until June 6, 2012. From February 2009 until October 2011, Mr. Gilbert also served as the Company's Chief Development Officer. From August 2006 until February 2008, Mr. Gilbert served as Senior Vice President, General Counsel, Secretary and Corporate Governance Officer of the Company. Prior to such time, Mr. Gilbert was a partner in the law firm of Waller Lansden Dortch & Davis, LLP from January 1999 to August 2006. While in private practice, Mr. Gilbert advised hospitals and healthcare systems in the acquisition, affiliation, joint venture, sale or merger of acute care hospitals and behavioral or psychiatric hospitals throughout the United States and the Caribbean.

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EXECUTIVE COMPENSATION

John P. Bumpus has served as Executive Vice President and Chief Administrative Officer of the Company since February 2008. From April 2005 until February 2008, Mr. Bumpus served as Senior Vice President, Human Resources and Administration of the Company. Prior to joining the Company in April 2005, Mr. Bumpus served as vice president — human resources with Province Healthcare Company.

Michael S. Coggin has served as Senior Vice President and Chief Accounting Officer of the Company since December 2008. From September 2007 until December 2008, Mr. Coggin served as chief financial officer of Specialty Care Services Group, a multi-service line healthcare provider primarily focused on providing perfusion and auto-transfusion services to hospitals. Mr. Coggin was a senior vice president in the finance, accounting and internal audit groups of Renal Care Group, Inc. from April 2004 until its acquisition by Fresenius Medical Care AG & Co. KGaA in March 2006. Following the acquisition, Mr. Coggin provided finance and accounting oversight for business units within the East Division of Fresenius. Prior to that time, Mr. Coggin was an audit manager at KPMG Peat Marwick in Nashville, Tennessee.

Russell L. Holman, M.D. became the Company's Chief Medical Officer in February 2013. Dr. Holman oversees the Company's quality and clinical effectiveness, care management, disease management, patient safety and satisfaction, physician engagement, appropriateness of care and ancillary resource utilization. Prior to joining the Company, Dr. Holman served as chief clinical officer of Cogent HMG, where he served in executive leadership roles for eight years. Previously, he served as medical director of hospital services for HealthPartners Medical Group & Clinics in Bloomington, Minnesota, and assistant director of the Internal Medicine Residency Program at the University of Minnesota. Among Dr. Holman's professional accomplishments, in 1996 he founded one of the earliest hospitalist programs for Regions Hospital in St. Paul, Minnesota. In 2000, he created one of the nation's first postgraduate Fellowship Programs in Hospital Medicine for HPMG&C. In 2007, he co-authored and edited the textbook, Comprehensive Hospital Medicine. Dr. Holman is one of only 16 Masters in Hospital Medicine in the United States.

Donald J. Bivacca has served as President of the Company's Western Group since February 2013, and has responsibility for 17 hospitals in Alabama, Arizona, Colorado, Florida, Kansas, Louisiana, Nevada, New Mexico, Texas, Utah and Wyoming. Prior to assuming his current position, Mr. Bivacca served as President of the Company's National Division. He has also served as National Division Chief Operating Officer and National Division Chief Financial Officer since joining the Company in April 2004. From 1999 to 2004, Mr. Bivacca served as chief operating officer/owner of ARx, a privately held accounts receivable company specializing in healthcare collections. Mr. Bivacca also served as mid-Atlantic division chief financial officer of Columbia/HCA from 1997 to 1999, and as controller and chief financial officer of various healthcare facilities owned by HCA from 1986 to 1997.

R. Scott Raplee began serving as President of the Company's Central Group in February 2013 and has direct financial and operations responsibility for 21 hospitals in the Georgia, Indiana, Kentucky, Mississippi, Tennessee and West Virginia markets. Mr. Raplee is a founding employee of LifePoint and began his tenure as the Company's National Division Chief Financial Officer in 1999. Since then, he has served in various roles, including as Operations Chief Financial Officer, Senior Vice President and Operations President, and Senior Vice President and President of Operations Planning and Support, until his appointment as Central Group President.

Jeffrey G. Seraphine has served as President of the Company's Eastern Group since February 2013 and has responsibility for 20 hospitals, including all of the Duke LifePoint hospitals, located in Michigan, Virginia, North Carolina and Pennsylvania. Mr. Seraphine is a founding employee of the Company and, since 1999, has served in various roles, including as President of the Company's Delta Division and as CEO of several of the Company's hospitals. Prior to joining LifePoint, Mr. Seraphine served in hospital administration roles with Hospital Corporation of America (HCA) in Florida.

LifePoint Hospitals, Inc. | 2015 Proxy Statement      45

Table of Contents

EXECUTIVE COMPENSATION

Summary Compensation Table

The table below sets forth the compensation of the Company's Named Executive Officers, which consist of the CEO, the CFO, and the three other most highly compensated executive officers who were serving as executive officers on December 31, 2014.

Name and Principal
Position




Year
Salary
Bonus(1)
Stock
Awards(2)


Option
Awards(3)


Non-Equity
Incentive
Plan
Compen-
sation(4)





All Other
Compen-
sation



Total

William F. Carpenter III

    2014   $1,050,000     $6,287,450   $2,720,250   $2,283,750     $12,341,450

Chairman and

    2013     1,000,000       4,434,000     2,394,000        520,000         8,348,000

Chief Executive Officer

    2012        978,192       4,053,792     2,435,320     1,495,000         8,962,304

David M. Dill

    2014      $650,000     $3,106,740   $1,395,000   $1,272,375       $6,424,115

President and

    2013        625,000       2,217,000     1,197,000        292,500         4,331,500

Chief Operating Officer

    2012        607,692       2,033,682     1,217,660        840,938         4,699,972

Leif M. Murphy

    2014      $600,000     $2,219,100      $906,750      $978,750       $4,704,600

Executive Vice President,

    2013        481,154       1,567,950        894,600        189,150         3,132,854

Chief Financial Officer and

    2012        454,616          806,982        487,064        521,381         2,270,043

Chief Development Officer

                                 

Paul D. Gilbert

    2014      $515,000     $1,257,490      $530,100      $840,094       $3,142,684

Executive Vice President,

    2013        500,000          886,800        478,800        195,000         2,060,600

Chief Legal Officer and

    2012        485,462          799,400        487,064        560,625         2,332,551

Corporate Governance

                                 

Officer

                                 

John P. Bumpus

    2014      $425,000     $1,035,580      $404,550      $600,844       $2,465,974

Executive Vice President,

    2013        375,000          753,780        418,950        126,750         1,674,480

Chief Administrative

    2012        370,962          686,601        426,181        364,406         1,848,150

Officer

                                 

(1)
Reflects discretionary cash bonuses. No such bonuses were paid in 2012, 2013 or 2014.

(2)
Reflects the grant date fair value for restricted stock awards and RSUs granted under the LTIP and RSUs granted under the 2013 Plan, as applicable, in accordance with ASC 718-10. Excludes the impact of changes in the fair value of performance-based awards that will be settled in cash and that have been classified as a liability, when applicable. The assumptions used in calculating the values are set forth in Note 9 to the Company's financial statements included in the 2014 Annual Report on Form 10-K.

(3)
Reflects the grant date fair value for stock option awards granted under the LTIP and the 2013 Plan, as applicable, in accordance with ASC 718-10. The assumptions used in calculating the values are set forth in Note 9 to the Company's financial statements included in the 2014 Annual Report on Form 10-K.

(4)
Reflects annual cash incentive awards earned under the Executive Performance Incentive Plan ("EPIP").
46     2015 Proxy Statement | LifePoint Hospitals, Inc.

Table of Contents

EXECUTIVE COMPENSATION

Grants of Plan-Based Awards

The following table provides information about equity and non-equity incentive plan awards granted to the NEOs in 2014, including: (1) the grant date; (2) possible future payouts under non-equity incentive plan awards and estimated future payouts under equity incentive plan awards; (3) the number of shares underlying all other stock awards; (4) the number of shares underlying all other stock option awards; (5) the exercise price of the stock option awards, which reflects the closing price of the Common Stock on the most recent trading date before the date of grant; and (6) the grant date fair value of each equity award computed under ASC 718-10.

                                All Other

All Other
     
                    Estimated Future Payouts
Stock

Option
     
           Estimated Future Payouts Under
Under Equity Incentive Plan
Awards:  
Awards:
    Grant Date
      Non-Equity Incentive Plan Awards(1)
Awards(2)
Number of

Number of
Exercise or
Fair Value of
                                Shares of

Securities
Base Price
Stock and
   
Grant
                        Stock or

Underlying
of Option
Option
Name

Date
Threshold
Target
Maximum
Threshold

Target
Maximum
Units

Options
Awards(3)
Awards(4)
Carpenter     N/A   $52,500   $1,050,000   $2,625,000                       $—               $—
      02/25/14           —                —               —       85,000               —           —     6,287,450
      02/25/14           —                —               —               195,000     52.90     2,720,250
Dill     N/A   $29,250      $585,000   $1,462,500                       $—               $—
      02/25/14             —                —               —       42,000                   —     3,106,740
      02/25/14             —                —               —               100,000     52.90     1,395,000
Murphy     N/A   $22,500      $450,000   $1,125,000                       $—               $—
      02/25/14           —                —               —       30,000                   —     2,219,100
      02/25/14           —                —               —                 65,000     52.90       906,750
Gilbert     N/A   $19,313      $386,250   $965,625                       $—               $—
      02/25/14           —                —               —       17,000                   —     1,257,490
      02/25/14           —                —               —                 38,000     52.90       530,100
Bumpus     N/A   $13,813      $276,250   $690,625                       $—               $—
      02/25/14           —                —               —       14,000                   —     1,035,580
      02/25/14           —                —               —                 29,000     52.90       404,550

(1)
Reflects annual cash incentive awards granted under the EPIP where receipt is contingent upon the achievement of certain performance goals. Threshold amount is equal to 5% of target amount. Maximum amount is equal to 250% of base salary for Mr. Carpenter, 225% of base salary for Mr. Dill, 187.5% of base salary for Messrs. Gilbert and Murphy, and 162.5% of base salary for Mr. Bumpus. For more information about the cash bonus awards and performance goals for the NEOs, please refer to the section above entitled "Compensation Discussion and Analysis."

(2)
Reflects RSUs where vesting is contingent upon the achievement of certain performance goals defined by the Compensation Committee and continued employment with the Company through the third anniversary of the date of grant. For more information about the performance criteria for the NEOs, please refer to the section above entitled "Compensation Discussion and Analysis."

(3)
Reflects the fair market value of a share of Common Stock on the date of grant, defined in the 2013 Plan as the closing sales price of the Common Stock on the trading day immediately preceding the date of grant.

(4)
Reflects the grant date fair value of stock and option awards granted under the 2013 Plan in accordance with ASC 718-10. Excludes the impact of changes in the fair value of performance-based awards that will be settled in cash and that have been classified as a liability, when applicable. The assumptions used in calculating the grant date fair values of option awards are set forth in Note 9 to the Company's financial statements included in the 2014 Annual Report on Form 10-K.
LifePoint Hospitals, Inc. | 2015 Proxy Statement      47

Table of Contents

EXECUTIVE COMPENSATION

Outstanding Equity Awards at Fiscal Year-End

The following tables provide information on the current holdings of option and stock awards for each NEO outstanding as of the end of the 2014 fiscal year. These tables include unexercised and unvested option awards and unvested restricted stock and RSU awards with vesting conditions that were not satisfied as of December 31, 2014. Each equity grant is shown separately for each NEO. The vesting schedule for each outstanding award is shown following these tables, based on the option or stock award grant date. For additional information about the option and other equity awards, see the description of equity-based incentive compensation in the section above entitled "Compensation Discussion and Analysis."


Option Awards

 

 

 

 

 

 

 

 

Equity Incentive



 

 

 
                Plan Awards:
     
                Number of
     
        Number of
Securities
     
        Securities Underlying Unexercised
Underlying
     
        Options
Unexercised
Option
Option
    Option Award
        Unearned
Exercise
Expiration
Name
Grant Date
Exercisable
Unexercisable
Options
Price
Date
Carpenter   02/28/08   100,000           —     $25.79   02/28/2018
    02/24/09   200,000           —       21.41   02/24/2019
    02/23/10   235,000           —       31.51   02/23/2020
    02/23/11   165,000           —       35.88   02/23/2021
    02/21/12   133,334     66,666(1)       39.97   02/21/2022
    02/19/13     66,666   133,334(2)       44.34   02/19/2023
    02/25/14           —   195,000(3)       52.90   02/25/2024
Dill   05/08/07     90,000           —     $38.22   05/08/2017
    02/28/08     45,000           —       25.79   02/28/2018
    02/24/09     60,000           —       21.41   02/24/2019
    02/23/10     60,000           —       31.51   02/23/2020
    02/23/11     70,000           —       35.88   02/23/2021
    02/21/12     66,667     33,333(1)       39.97   02/21/2022
    02/19/13     33,333     66,667(2)       44.34   02/19/2023
    02/25/14           —   100,000(3)       52.90   02/25/2024
Murphy   12/13/11     50,000           —     $36.29   12/13/2021
    02/21/12     26,667     13,333(1)       39.97   02/21/2022
    02/19/13     13,333     26,667(2)       44.34   02/19/2023
    09/10/13     11,666     23,334(4)       45.41   09/10/2023
    02/25/14           —     65,000(3)       52.90   02/25/2024
Gilbert   02/21/12           —     13,334(1)     $39.97   02/21/2022
    02/19/13     13,333     26,667(2)       44.34   02/19/2023
    02/25/14           —     38,000(3)       52.90   02/25/2024
Bumpus   02/24/09     15,000           —     $21.41   02/24/2019
    02/23/10     45,000           —       31.51   02/23/2020
    02/23/11     35,000           —       35.88   02/23/2021
    02/21/12     23,334     11,666(1)       39.97   02/21/2022
    02/19/13     11,666     23,334(2)       44.34   02/19/2023
    02/25/14           —     29,000(3)       52.90   02/25/2024

(1)
These options became exercisable on February 21, 2015.

(2)
One-half of these options became exercisable on February 19, 2015 and the remainder will become exercisable on February 19, 2016.

(3)
One-third of these options became exercisable on February 25, 2015, and the remaining two-thirds will become exercisable one-half on February 25, 2016 and the remainder on February 25, 2017.

(4)
One-half of this one-time, special grant of options becomes exercisable on each of September 10, 2015 and September 10, 2016.
48     2015 Proxy Statement | LifePoint Hospitals, Inc.

Table of Contents

EXECUTIVE COMPENSATION


 

 


 

Stock Awards



 
            Equity Incentive Plan
          Equity Incentive Plan   Awards: Market or