COMMUNITY HEALTH SYSTEMS, INC.
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FORM 11-K – For Annual Reports of Employee Stock Purchase, Savings and Similar Plans Pursuant
to Section 15(d) of the Securities Exchange Act of 1934

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

     
þ   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the year ended December 31, 2004

OR

     
o   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___to ___

Commission file number 001-15925

COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN

COMMUNITY HEALTH SYSTEMS, INC.

(Exact name of registrant as specified in its charter)
     
Delaware   13-3893191
(State or other jurisdiction of incorporation or
organization)
  I.R.S. Employer
Identification Number)
     
155 Franklin Road, Suite 400
Brentwood, Tennessee

(Address of principal executive offices)
  37027
(Zip Code)
Registrant’s telephone number, including area code:   (615) 373-9600
 
 

 


COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN

TABLE OF CONTENTS

     

 
         
    Page
    1  
 
       
FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003:
       
 
       
    2  
 
       
    3  
 
       
    4-11  
 
       
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2004
       
 
       
    12  
 
       
    13  
 
       
    14  
 
       
 EX-10.1 FIRST AMENDMENT TO THE COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN DATED DECEMBER 1, 2003
 EX-10.2 SECOND AMENDMENT TO THE COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN DATED JANUARY 1, 2004.
 EX-10.3 CHS/COMMUNITY HEALTH SYSTEMS, INC. OFFICER'S CERTIFICATE DATED MAY 14, 2004.
 EX-10.4 THIRD AMENDMENT TO THE COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN DATED MAY 18, 2004.
 EX-10.5 MERGER AND TRANSFER AGREEMENT BETWEEN GALESBURG COTTAGE HOSPITAL RETIREMENT PLAN
 EX-10.6 PLAN-TO-PLAN TRANSFER AGREEMENT
 EX-23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Schedules other than that listed above have been omitted due to the absence of the conditions under which they are required.

 


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Participants and the Retirement Committee of Community Health Systems, Inc. 401(k) Plan
Brentwood, Tennessee

We have audited the accompanying statements of net assets available for benefits of Community Health Systems, Inc. 401(k) Plan (“the Plan”) as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held as of December 31, 2004 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. Such supplemental schedule has been subjected to the auditing procedures applied in our audit of the 2004 basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

/s/ Deloitte & Touche LLP
Nashville, Tennessee
June 28, 2005

 


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COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003

                 
    2004     2003  
ASSETS
               
Investments:
               
Investments
  $ 192,779,365     $ 132,043,315  
Participant notes receivable
    4,002,822       2,728,993  
 
           
Total investments
    196,782,187       134,772,308  
 
           
 
               
Receivables:
               
Participant contributions
    1,209,781       1,101,851  
Employer matching contribution
    8,079,140       6,498,968  
 
           
Total receivables
    9,288,921       7,600,819  
 
           
 
               
TOTAL ASSETS
    206,071,108       142,373,127  
 
           
 
               
LIABILITIES
               
Forfeitures in suspense
    394,864       141,610  
Administrative fees
    120,787       103,460  
Excess participant contributions
    23,450       78,095  
 
           
 
               
TOTAL LIABILITIES
    539,101       323,165  
 
           
NET ASSETS AVAILABLE FOR BENEFITS
  $ 205,532,007     $ 142,049,962  
 
           

See notes to financial statements.

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COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003

                 
    2004     2003  
Additions (deductions) to net assets attributed to:
               
Investment income:
               
Net appreciation (depreciation) in fair value of investments
  $ 11,833,354     $ 22,846,488  
Interest
    139,152       117,171  
Dividends
    2,759,067       1,778,519  
 
           
Total investment income (loss)
    14,731,573       24,742,178  
 
           
 
               
Contributions:
               
Participant
    34,147,115       26,662,315  
Conversions
    18,138,726       1,770,857  
Rollovers
    2,687,399       2,789,437  
Employer matching
    8,094,202       6,498,968  
 
           
Total contributions
    63,067,442       37,721,577  
 
           
Total additions
    77,799,015       62,463,755  
 
           
 
               
Deductions from net assets attributed to:
               
Benefits paid to participants
    13,450,119       8,737,365  
Forfeitures in suspense
    394,864       141,610  
Participant paid administrative fees
    448,537       390,007  
Excess participant contributions
    23,450       78,095  
 
           
Total deductions
    14,316,970       9,347,077  
 
           
 
               
Net increase
    63,482,045       53,116,678  
 
               
Net assets available for benefits:
               
Beginning of year
    142,049,962       88,933,284  
 
           
End of year
  $ 205,532,007     $ 142,049,962  
 
           

See notes to financial statements

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COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004 AND 2003

 

1. DESCRIPTION OF THE PLAN

General. Effective February 1, 1987, Community Health Investment Corporation, a wholly-owned subsidiary of Community Health Systems, Inc. (the “Company”, the “Plan Administrator”, or “CHS”), adopted and approved the creation of the Community Health Systems, Inc. 401(k) Plan, (the “Plan”). Subsequently, the Plan was adopted by the Company and its wholly-owned and majority-owned subsidiaries. The Plan and related trust are maintained for the exclusive benefit of the Plan participants, and no part of the trust may ever revert to the Company, except forfeitures of any unvested portion of a participant’s “Matching Account”, which may offset future Company contributions. Participants should refer to the Plan agreement for a complete description of the Plan’s provisions.

For those participating facilities of the Company, including the corporate offices, participation in the Plan is available to primarily all full-time employees after completion of six months of eligible service, as defined in the Plan document, or upon reaching his/her 21st birthday, whichever is later. Company employment includes all previous service with an acquired employer. All employees of the Company are entitled to participate except individuals covered by a collective bargaining contract and those employees covered by other retirement plans to which the Company is required to contribute.

The Plan has been amended and/or restated from time to time. The Plan’s most recent determination letter was received in 2004. The Company believes that the Plan is currently designed and is being operated in compliance with applicable requirement of the Internal Revenue Code.

Lake Wales Medical Center was acquired on December 1, 2002 and commenced participation into the Plan on January 1, 2003.

Seven hospitals located in West Tennessee, which includes, Jackson Hospital, Dyersburg Hospital, Lexington Hospital, McKenzie Hospital, McNairy Hospital, Volunteer Hospital and Brownsville Hospital were acquired January 1, 2003 and commenced participation into the Plan on February 1, 2003. Pottstown Memorial Medical Center was acquired on July 1, 2003 and commenced participation into the Plan on August 1, 2003. Southside Regional Medical Center was acquired on August 1, 2003 and commenced participation into the Plan on that date. Laredo Medical Center was acquired on October 1, 2003 and commenced participation into the Plan on November 1, 2003.

Galesburg Cottage Hospital was acquired and commenced participation into the Plan on July 1, 2004. Phoenixville Hospital was acquired and commenced participation into the Plan on August 1, 2004.

Randolph County Medical Center and Sabine Medical Center was disposed of on August 1, 2004 and ceased participation in the Plan on that date.

Berrien County Hospital was disposed of on November 1, 2003 and ceased participation in the Plan on that date.

Administration. The Plan is administered by the Company’s Retirement Committee of not less than three persons, all appointed by the Company’s Board of Directors. The Retirement Committee is responsible for carrying out the provisions of the Plan, including the selection of the trustee. Scudder Trust Company

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(“Trustee”) serves as trustee for the Plan. The Trustee holds, invests and administers the trust assets and contributions of the Plan.

Contributions. Eligible employees electing to participate in the Plan may make contributions by payroll deductions of 1% to 25% of basic compensation as defined in the Plan document, to the extent not exceeding Internal Revenue Service (“IRS”) imposed limitations on contributions ($13,000 for 2004 and $12,000 for 2003 Plan years). Participants who have attained age 50 before the close of the calendar year shall be eligible to make catch-up contributions up to $3,000 for 2004. Employee contributions beyond specific Plan thresholds are reimbursed to the participants and classified as excess participant contributions in the financial statements. Prior to each Plan year, employer contribution percentages are determined by the Plan Administrator. Employer matching contributions for 2004 and 2003 were 33.34% to 66.67% of the first 6% of eligible compensation the employee contributes to the Plan. The employer matching contribution may be made in the form of cash or shares of Company common stock. Matching contributions in the form of cash are initially used to purchase Company stock on the open market. The employer matching contributions deposited into the participant’s accounts in the subsequent plan year consisted of $8,079,140 in cash for 2004 and $6,151,215 in CHS company stock and $347,753 in cash for 2003. Any matching contribution made to the participant’s account is initially held by the participant in the form of stock. Participants are permitted to instruct the Trustee to sell the stock and transfer the funds to another permitted investment at any time.

Participant Accounts. The Retirement Committee utilizes the services of an outside firm to maintain individual accounts of each participant and record separately all activity as follows:

     
        “The Deferred Account”
  The value of participants’ employee contributions and earnings on those contributions are maintained in this account.
 
   
       “The Rollover Account”
  The value of any rollover contributions from another qualified plan and associated earnings are maintained in this account.
 
   
       “The Matching Account”
  The value of matching contributions made by the Company on behalf of participants and associated earnings is maintained in this account.

The Plan was amended on January 1, 2003 so that effective May 12, 2003, a reporting person, defined as (a) a director, (b) the direct or indirect beneficial owner of more than 10% of any class of any equity security of the Employer which is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (c) certain officers who have been so designated registrant affiliate of the Employer, who are required to file a statement with the SEC pursuant to Section 16 of the Exchange Act, must have (i) any portion of their account invested in the CHS Company Stock Fund liquidated, and the proceeds invested in the investment options available to the Plan in accordance with their investment elections, and (ii) no portion of their account invested in the CHS Company Stock Fund.

The First Amendment to the Plan was effective on January 1, 2004 to redefine the “Formula for Determining Employer Contributions”, to increase the maximum elective deferral percentage available under the Plan and to allow catch-up contributions. The Employer may allocate in its sole discretion and in a non-discriminatory manner a different matching contribution for the Plan Year to participants at each of its different facilities, as amended time to time by the Plan Administrator. The amendment also increased the maximum elective deferral percentage from 15% to 25%. Also, employees who are eligible to make elective deferrals under the Plan and who have attained age 50 before the close of the calendar year shall be eligible to make catch-up contributions. To make catch-up contributions, the employee must contribute the maximum available to the employee through regular 401 (k) deductions. The limit for

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2004 is $3,000. This limit increases by $1,000 each year until it reaches $5,000 in 2006. After 2006, the limit will be indexed for inflation.

The Second Amendment to the Plan was effective on January 1,2004 to allow for installment and other forms of distribution of benefits. The Plan Administrator, pursuant to the election of the participant, shall direct the Trustee to distribute to a participant or such participant’s beneficiary any amount to which the participant is entitled under the Plan in one or more of the following methods: a) one lump sum cash payment; b) partial cash payments; or c) partial cash payments over a period certain in monthly, quarterly, semi-annual or annual installments. The period over which such payment is to be made shall not extend beyond the participant’s life expectancy (or the life expectancy of the participant and the participant’s designated beneficiary). The Plan was also amended to redefine that only Participants who are actively employed at the beginning of the last day of the Plan Year by the Employer or an Affiliated Employer whose Employees are eligible for a matching contribution under Section 4.1(b) shall be eligible to share in the Employer Matching Contributions for the year.

The following amendments were made to plans at specific hospitals:

Effective January 1, 2003, a revision was made to the Plan regarding Watsonville Hospital Corporation. Only highly compensated employees that are not governed by a collective bargaining agreement will be eligible to participate in the Plan.

Effective for the period beginning August 1, 2003 and ending December 31, 2003, bargaining unit employees of Pottstown Hospital Company, LLC (Pottstown Memorial Medical Center and Pottstown Coventry Medical Group) and employees who are hospital-based physicians are not eligible to participate in the Plan. Effective August 1, 2003, each employee of Pottstown Hospital Company, LLC who is a participant in the Plan is not eligible for any employer contributions. Effective January 1, 2004, each employee of Pottstown Hospital Company, LLC who is a participant in the Plan, is a highly compensated employee and is eligible to share in employer matching contributions, will be eligible to receive an employer match of 33.34% of the first 6% of eligible compensation the employee contributes to the Plan. Also, each Pottstown physician employee who is not hospital-based and non-highly compensated shall receive an employer match of 50% of the first 6% of eligible compensation the employee contributes to the Plan.

For the period beginning August 1, 2003 and ending December 31, 2003, employees of Pottstown Imaging Center, LLC shall only be eligible to participate in the Plan as to the allocation of a discretionary contribution. The employees shall receive an allocation in an amount of 3% of the participant’s compensation for the same period. The vesting of this contribution is based upon years of service: less than 5 years = 0% and 5 or more years = 100%. For the period beginning January 1, 2004 and ending December 31, 2004, each employee of Pottstown Imaging Center, LLC who is a participant in the Plan, has at least 1,000 hours of service, is a non-highly compensated employee and is eligible to share in employer matching contributions will be eligible to receive an employer match of 33.34% of the first 6% of eligible compensation the employee contributes to the Plan.

For the period beginning August 1, 2003 and ending December 31, 2004, each employee of Pottstown Clinic Company, LLC who is a participant in the Plan, has at least 1,000 hours of service, is a non-highly compensated employee and is eligible to participate in the Plan is eligible for an employer match of 50% of the first 6% of eligible compensation the employee contributes to the plan.

For the period beginning January 1, 2003 and ending December 31, 2004 each employee of Southside Regional Medical Center, Southside School of Nursing and Southside Industrial Medicine, who is a

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participant in the Plan, has at least 1,000 hours of service and is eligible to share in employer matching contributions will be eligible to receive an employer match in an amount equal to:

  a)   33.34% of the first 6% of eligible compensation the employee contributes to the Plan if the participant has at least one (1) but no more than nine (9) years of service;

  b)   50% of the first 6% of eligible compensation the employee contributes to the Plan if the participant has at least ten (10) but no more than nineteen (19) years of service; and

  c)   66.67% of the first 6% of eligible compensation the employee contributes to the Plan if the participant has at least twenty (20) years of service.

Effective as of July 1, 2004, Employees of Pottstown Hospital Company, LLC whose employment is governed by a collective bargaining agreement between the Affiliated Employer and “employee representatives” under which retirement benefits were the subject of good faith bargaining shall be eligible to participate in the Plan.

For the period beginning January 1, 2004, and ending December 31, 2004, each Employee of Pottstown Imaging Center, LLC who is a Participant in the Plan and (i) has at least 1,000 Hours of Service for the Affiliated Employer during this applicable Plan Year, (ii) is a Non-Highly Compensated Employee, and (iii) is otherwise eligible to share in matching contributions shall receive a discretionary matching contribution in an amount equal to fifty percent (50%) of such Participant’s Elective Contribution for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year.

Effective July 1, 2004, a “Merger and Transfer Agreement” was executed in order to merge the Galesburg Cottage Hospital Retirement Plan into the Community Health Systems, Inc. 401(k) Plan.

Effective September 30, 2004, a “Plan-To-Plan Transfer Agreement” was executed in order to transfer all of the outstanding shares of the capital stock in the Community Health Systems, Inc. 401(k) Plan of National Healthcare of Pocahontas Inc., Randolph County Clinic Corp., Sabine Medical Center, Inc. and Sabine Medical Clinic, Inc. into the Associated Healthcare Systems 401(k) Retirement Plan.

Vesting. The balance in the participants’ Deferred and Rollover Accounts is at all times fully vested and nonforfeitable. A participant becomes 20% vested in his/her “Matching Account” after one year of service and an additional 20% for each year of service thereafter until fully vested. A participant is credited with one year of service if he/she works 500 or more hours during the Plan year. Termination of participation in the Plan prior to the scheduled vesting period results in forfeiture of the unvested portion of a participant’s Matching Account. These forfeitures shall be applied to reduce the Company’s matching contribution payments made to the Plan in future periods. Forfeitures of $394,864 and $323,748 were applied against the Company’s matching contribution payments for the years ended December 31, 2004 and 2003, respectively.

Payment of Benefits. A participant or his/her designated beneficiary is entitled to a distribution of the total value of his/her accounts upon his/her retirement at age 65, becoming totally and permanently disabled or death. Upon the termination of employment of a participant before reaching his/her 65th birthday for reasons other than death, he/she is entitled to receive the total value of his/her Deferred and Rollover Accounts and the vested portion of his/her Matching Account. While the participant is employed, he/she can withdraw only in the event of financial hardship. Such withdrawals are limited to the value of his/her Deferred and Rollover Accounts and the vested portion of his/her Matching account. The Retirement Committee shall require a participant requesting a hardship withdrawal to submit proof

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which demonstrates an immediate and heavy financial need which cannot be reasonably satisfied from other resources of the participant.

Funding. The Company shall transfer to the Trustee, as soon as practical, the full matching contribution after the close of the Plan year.

Investments Options. Contributions to the Plan shall be invested by the Trustee according to the participant’s instruction in one or in a combination of several fund options. Participants may change their investment election or initiate transfers between funds on a monthly basis by giving notice to the Plan Administrator.

Plan Termination. Although it has not expressed any intent to do so, the Company’s Board of Directors has the right to discontinue its contributions at any time and to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974. In the event of Plan termination, participants will become 100% vested in their respective accounts.

Participant Notes Receivable. Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Loan transactions are treated as a transfer to (from) the investment fund from (to) the Participant Loan Fund. Loan terms range from 1-5 years or up to 15 years for the purchase of a primary residence. The loans are secured by the balance in the participant’s account and bear interest at a rate commensurate with local prevailing rates as determined by the Trustee. Interest rates range from 4.0% to 10.5% as of December 31, 2004. Principal and interest is paid ratably over the term of the loan through payroll deductions.

Reclassifications. Certain contributions presented in prior years’ statement of changes in net assets available for benefits have been reclassified from participant contributions to conversions and rollovers to conform with the current year presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting. The Plan’s financial statements are prepared under the accrual method of accounting.

Use of Estimates. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets available for benefits and changes therein. Actual results could differ from these estimates. The Plan utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits.

Valuation of Investments. The Plan’s investments are stated at fair value. Securities traded on the national securities exchange are valued at the last reported sales price on the last business day of the plan year. Investments traded in the over-the counter market and listed securities for which no sale was reported on that date are valued at the average of the last reported bid and asked prices. The fair values of the participation units owned by the Plan in pooled separate accounts are based on a redemption value established by the Record keeper. The Plan’s investments in pooled separate accounts consist of investments in accounts established by the Record keeper solely for the purpose of investing the assets of one or more plans. Investments in collective investment funds or regulated investment companies are valued at the net asset value per share/unit on the valuation date. Short-term investments, if any, are stated

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at amortized cost, which approximates market value. Participant loans are valued at their outstanding balance, which approximates fair value.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Dividends are recorded on the ex-dividend date.

Expenses. The participants of all funds are charged with expenses in connection with the purchase and sale of shares in each respective fund. Also, the participants in the Plan are charged a per-participant administrative fee. Participants paid $431,210 and $376,056 in administrative costs to the Trustee in 2004 and 2003, respectively. All other expenses incurred in the administration of the Plan are borne by the Company. The Company paid $93,959 and $49,324 for Plan expenses in 2004 and 2003, respectively.

Payment of Benefits. Benefits are recorded when paid.

3. TAX STATUS
The Plan received a determination letter dated June 16, 2004, in which the IRS stated that the Plan was in compliance with the applicable requirements of Section 401(a) and Section 501(c) of the Internal Revenue Code (“the Code”).

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4. INVESTMENTS
Investments that represent five percent or more of the net assets available for benefits as of December 31, 2004 and 2003 are as follows:

         
Investment   Fair Value  
December 31, 2004:
       
Scudder Stable Value Fund (2)
  $ 25,918,018  
Scudder Flag Investment Value Builder A
    22,865,966  
CHS Stock Fund
    20,406,127  
Scudder Stock Index Fund (1)
    19,249,544  
Scudder Large Cap Value A
    17,392,109  
Growth Fund of America — A
    15,681,721  
Scudder Fixed Income Fund A
    13,430,598  
Scudder — Dreman Hi Return Equity — A
    9,995,604  
Templeton Foreign — A
    9,979,108  
Franklin Small-Mid Cap Growth A
    9,127,346  
Scudder Mid Cap Growth — A
    6,774,372  
December 31, 2003:
       
Scudder Stable Value Fund II(2)
  $ 18,109,177  
Scudder Flag Investment Value Builder A
    18,015,558  
Scudder Stock Index Fund (1)
    16,044,410  
CHS Company Stock Fund
    14,175,644  
Scudder Contrarian A
    11,332,348  
Scudder Fixed Income Fund A
    9,407,258  
Growth Fund of America — A
    7,427,329  
Scudder — Dreman Hi Return Equity — A
    6,366,347  
Janus Worldwide
    6,168,217  
Scudder Technology — A
    6,162,333  
 
(1)   A pooled separate account
(2)   A collective investment fund

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The following schedule presents the net appreciation (depreciation) in fair value for each significant class of investment for the years ended December 31, 2004 and 2003:

                 
    2004     2003  
Mutual funds
  $ 9,080,921     $ 15,772,874  
Common/collective trust funds (1)
    1,813,213       3,444,251  
CHS Company Stock Fund
    989,219       3,629,363  
 
           
 
  $ 11,883,353     $ 22,846,488  
 
           
 
(1)   Includes pooled separate accounts and collective investment funds.

5. SUBSEQUENT EVENTS

The Fourth Amendment to the Plan was effective on March 28, 2005, to incorporate required provisions under the Economic Growth and Tax Relief Reconciliation Act of 2001. This revision redefines the section “Determination of Benefits upon Termination.” If a Terminated Participant does not specify the designation of a distribution that is in excess of $1,000 to be made to an eligible retirement plan in a direct rollover or does not elect to receive the distribution directly, the Administrator shall make a direct transfer of such distribution to an individual retirement plan designated by the Administrator.

During the first quarter of 2005, CHS sold five hospitals. The participant’s plan assets aggregating approximately $9.1 million are subject to future withdrawal from the Plan should these former participants choose to roll over such amounts to another qualified or self-directed retirement plan.

******

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COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2004

                 
Identity of Issue, Borrower,   Description of Investment Including Maturity Date,   Current  
Lessor or Similar Party   Rate of Interest, Collateral, Par or Maturity Value   Value  
*
  Scudder Investments   Scudder Stable Value Fund   $ 25,918,019  
*
  Scudder Investments   Scudder Stable Value Fund II     2  
*
  Scudder Investments   Scudder Fixed Income Fund A     13,430,598  
*
  Scudder Investments   Scudder Flag Investment Value Builder A     22,865,966  
*
  Scudder Investments   Scudder Stock Index Fund     19,249,544  
*
  Scudder Investments   Scudder-Dreman Hi Return Equity A     9,995,604  
*
  Scudder Investments   Scudder Global Discovery A     5,952,553  
*
  Scudder Investments   Scudder Large Cap Value A     17,392,109  
 
  Franklin Templeton   Franklin Small-Mid Cap Growth A     9,127,346  
*
  Scudder Investments   Scudder Mid Cap Growth - A     6,774,372  
 
  Capital Research and Management Company   Growth Fund of America - A     15,681,721  
 
  Allianz Dresdner Asset Mgt of America   Pimco PEA Renaissance - A     2,995,789  
 
  Credit Suisse Asset Mgt, LLC   CS Small Cap Value A     2,547,019  
*
  Scudder Investments   Scudder Pathway Conservative - A     2,202,048  
*
  Scudder Investments   Scudder Pathway Growth - A     3,341,862  
*
  Scudder Investments   Scudder Pathway Moderate - A     4,865,055  
 
  Templeton   Templeton Foreign - A     9,979,108  
 
  Templeton   Templeton Growth - A     54,523  
*
  Community Health Systems, Inc. (CHS)   CHS Company Stock Fund     20,406,127  
 
             
*
  Various participants   Participant notes receivable with interest rates
ranging from 4.0% to 10.5% and maturities ranging
from January 1, 2005 to August 29, 2014.
    4,002,822  
 
             
 
          $ 196,782,187  
 
             
 
*   Identified party-in-interest

12


Table of Contents

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

         
  COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
 
Date: June 28, 2005  By:   /s/ Wayne T. Smith    
    Wayne T. Smith   
    Chairman of the Board
President and Chief Executive Officer 
 
 
         
     
Date: June 28, 2005  By:   /s/ W. Larry Cash    
    W. Larry Cash   
    Executive Vice President, Chief Financial Officer and Director   
 
         
     
Date: June 28, 2005  By:   /s/ T. Mark Buford    
    T. Mark Buford   
    Vice President and Corporate Controller   
 

13


Table of Contents

EXHIBIT INDEX

     
Exhibit    
Number   Description
10.1
  First Amendment to the Community Health Systems, Inc. 401(k) Plan dated December 1, 2003.
 
   
10.2
  Second Amendment to the Community Health Systems, Inc. 401(k) Plan dated January 1, 2004.
 
   
10.3
  CHS/Community Health Systems, Inc. Officer’s Certificate dated May 14, 2004.
 
   
10.4
  Third Amendment to the Community Health Systems, Inc. 401(k) Plan dated May 18, 2004.
 
   
10.5
  Merger and Transfer Agreement between Galesburg Cottage Hospital Retirement Plan and Community Health Systems, Inc. 401(k) Plan dated July 1, 2004.
 
   
10.6
  Plan-To-Plan Transfer Agreement between Associated Healthcare Systems 401(k) Retirement Plan and Community Health Systems, Inc. 401(k) Plan dated September 30, 2004.
 
   
23
  Consent of Independent Registered Public Accounting Firm

14


                                                                    Exhibit 10.1





                             FIRST AMENDMENT TO THE
                   COMMUNITY HEALTH SYSTEMS, INC. 401(K) PLAN

         WHEREAS, CHS/Community Health Systems, Inc. (the "Company") has
previously established and currently maintains the Community Health Systems,
Inc. 401(k) Plan (the "Plan"); and

         WHEREAS, the Company has retained the right to amend the Plan in
Section 8.1 of the Plan; and

         WHEREAS, the Company wishes to amend the Plan as a result of certain
technical corrections to the Economic Growth and Tax Relief Reconciliation Act
of 2001 under the Job Creation and Worker Assistance Act of 2002, and as a
result of other Internal Revenue guidance, effective as of January 1, 2002; and

         WHEREAS, the Company wishes to amend the definition of Compensation to
clarify the exclusion of amounts received by a Plan Participant as severance
pay, effective as of January 1, 2003; and

         WHEREAS, the Company wishes to amend the definition of Eligible
Employees to clarify the exclusion of "non-benefited" and Leased Employees,
effective as of January 1, 2003; and

         WHEREAS, the Company wishes to amend the definition of Normal
Retirement Age, effective as of January 1, 2003; and

         WHEREAS, the Company wishes to amend the Plan to increase the maximum
elective deferral percentage available under the Plan and allow catch-up
contributions, effective as of January 1, 2004; and

         WHEREAS, the Board of Directors has approved of such changes to the
Plan and this First Amendment.

         NOW, THEREFORE, the Plan is hereby amended in the following respects,
effective as of the dates set forth herein:

         1. The first sentence of Section 1.10 of the Plan, "Compensation," is
hereby deleted and replaced as follows, effective as of January 1, 2003:

                  "Compensation" with respect to any Participant means wages,
         salaries, and fees for professional services and other amounts received
         (without regard to whether or not an amount is paid in cash) for
         personal services actually rendered in the course of employment with
         the Employer to the extent the amounts are includible in gross income
         (including, but not limited to, commissions paid salespersons,
         compensation for services on the basis of a percentage of profits,
         commissions on insurance premiums, tips, bonuses, fringe benefits, and



                                      -1-




                                                                    Exhibit 10.1






         reimbursements, or other expense allowances under a nonaccountable plan
         (as described in Regulation 1.62-2(c)) and excluding the following: (a)
         Employer contributions to a plan of deferred compensation that are not
         includible in the Participant's gross income for the taxable year in
         which contributed, Employer contributions under a simplified employee
         pension plan, or any distributions from a plan of deferred
         compensation; (b) amounts realized from the exercise of a nonqualified
         stock option, or when restricted stock (or property) held by the
         Participant either becomes freely transferable or is no longer subject
         to a substantial risk of forfeiture; (c) amounts realized from the
         sale, exchange or other disposition of stock acquired under an
         incentive stock option; (d) other amounts that received special tax
         benefits, or contributions made by the Employer (whether or not under a
         salary reduction agreement) towards the purchase of an annuity
         described in Code Section 403(b) (whether or not the amounts are
         actually excludable from the gross income of the Participant); and (e)
         amounts received as severance pay.

         2. The following paragraph shall be added as the second to the last
paragraph of Section 1.17 of the Plan, "Eligible Employee," effective as of
January 1, 2003:

                  Employees who are classified by the Employer as
         "non-benefited" employees and Leased Employees shall not be eligible to
         participate in this Plan.

         3. The first sentence of Section 1.41 of the Plan, "Normal Retirement
Age," is hereby deleted and replaced as follows, effective as of January 1,
2003:

                  "Normal Retirement Age" means the Participant's 65th birthday,
         provided that, for Eligible Employees of Plateau Medical Center, such
         age shall be 59 1/2.

         4. Subsection (b) of Section 4.1 of the Plan, "Formula for Determining
Employer Contribution," is hereby deleted and replaced as follows, effective as
of January 1, 2004:

                  On behalf of each Participant who is eligible to share in
         matching contributions for the Plan Year, a discretionary matching
         contribution that is a percentage of such Participant's Elective
         Contribution for such Plan Year that does not exceed 6% of the
         Participant's Compensation for the Plan Year. The Employer may allocate
         in its sole discretion and in a nondiscriminatory manner a different
         matching contribution for the Plan Year to Participants at each of its
         different facilities, as set forth in Exhibit B, as may be amended from
         time to time by the Administrator. Catch-up contributions made by a
         Participant pursuant to Section 4.2(k) of the Plan shall not be treated
         as part of such Participant's Elective Contribution for purposes of
         applying the Employer's discretionary matching contribution under this
         Section 4.1 (b).

         5. Subsection (a) of Section 4.2 of the Plan, Participant's Salary
Reduction Election," is hereby deleted and replaced in its entirety as follows,
effective as of January 1, 2004:



                                      -2-




                                                                    Exhibit 10.1


                  Each Participant may elect to defer Compensation that would
         have been received in the Plan Year, but for the deferral election, by
         1% up to 25%. A deferral election (or modification of an earlier
         election) may not be made with respect to Compensation that is
         currently available on or before the date the Participant executed such
         election. For purposes of this Section, Compensation shall be
         determined prior to any reductions made pursuant to Code Sections 125,
         132(f)(4), 402(e)(3), 402(h)(l)(B), 403(b) or 457(b), and Employee
         contributions described in Code Section 414(h)(2) that are treated as
         Employer contributions. The amount by which Compensation is reduced
         shall be that Participant's Deferred Compensation and be treated as an
         Employer Elective Contribution and allocated to that Participant's
         Elective Account.

         6. Subsection (k) of Section 4.2 of the Plan, "Participant's Salary
Reduction Election," is hereby added as follows, effective as of January 1,
2004:

                  Employees who are eligible to make Elective Deferrals under
         the Plan and who have attained age 50 before the close of the calendar
         year shall be eligible to make catch-up contributions in accordance
         with, and subject to the limitations of, Code Section 414(v). Such
         catch-up contributions shall not be taken into account for purposes of
         the provisions of the Plan implementing the required limitations of
         Code Sections 402(g) and 415. The Plan shall not be treated as failing
         to satisfy the provisions of the Plan implementing the requirements of
         Code Sections 401(k)(3), 410(b) or 416 by reason of the making of such
         catch-up contributions.

         7. The Plan is further amended as set forth in the attached
         Exhibit A.

         8. Except as otherwise provided in this First Amendment, the
         Plan shall remain in full force and effect.

         SIGNED this 1st day of December, 2003, effective as of the dates set
forth herein.


                                              CHS/COMMUNITY HEALTH SYSTEMS, INC.

                                              By: /s/ LINDA K PARSONS
                                                  -------------------
                                              Title: VICE PRESIDENT
                                                     ----------------


                                      -3-




                                                                    Exhibit 10.1





                             FIRST AMENDMENT TO THE

                   COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN

                                    EXHIBIT A

         I. Adoption and effective date of amendment. This amendment of the
Community Health Systems, Inc. 401(k) Plan (the "Plan") is adopted to reflect
certain provisions of the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA"), the Job Creation and Worker Assistance Act of 2002, and other
Internal Revenue Service guidance. This amendment is intended in part as good
faith compliance with the requirements of EGTRRA and is to be construed in
accordance with EGTRRA and guidance issued thereunder. This amendment shall be
effective as of January 1, 2002, except as otherwise provided herein.

         II. Supersession of inconsistent provisions. This amendment shall
supersede the provisions of the Plan to the extent those provisions are
inconsistent with the provisions of this amendment.

         III. Hardship distributions. In the event a Participant has received a
hardship distribution pursuant to Treasury Regulation 1.401(k)-l(d)(2)(iv)(B)
from any other plan maintained by the Employer, then such Participant shall not
be permitted to elect to have Deferred Compensation contributed to the Plan for
a period of twelve (12) months following the receipt of the distribution.
Notwithstanding any provision of the Plan to the contrary, the dollar limitation
under Code Section 402(g) shall not be reduced, with respect to the
Participant's taxable year following the taxable year in which the hardship
distribution was made, by the amount of such Participant's Deferred
Compensation, if any, contributed pursuant to this Plan (and any other plan
maintained by the Employer) for the taxable year of the hardship distribution.

         IV. Required Minimum Distributions.

         Section 1. General Rules

         1.1. Effective Date. The provisions of this Article IV shall apply for
purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year.

         1.2. Precedence. The requirements of this Article IV shall take
precedence over any inconsistent provisions of the Plan.

         1.3. Requirements of Treasury Regulations Incorporated. All
distributions required under this Article IV will be determined and made in
accordance with the Treasury Regulations under section 401(a)(9) of the Internal
Revenue Code.



                                      -1-




                                                                    Exhibit 10.1

         Section 2. Time and Manner of Distribution.

         2.1. Required Beginning Date. The Participant's entire interest will be
distributed, or begin to be distributed, to the Participant no later than the
Participant's Required Beginning Date.

         2.2. Death of Participant Before Distributions Begin. If the
Participant dies before distributions begin, the Participant's entire interest
will be distributed, or begin to be distributed, no later than as follows:

                  (a) If the Participant's surviving spouse is the Participant's
         sole Designated Beneficiary, then distributions to the surviving spouse
         will begin by December 31 of the calendar year immediately following
         the calendar year in which the Participant died, or by December 31 of
         the calendar year in which the Participant would have attained age 70
         1/2, if later.

                  (b) If the Participant's surviving spouse is not the
         Participant's sole Designated Beneficiary, then distributions to the
         Designated Beneficiary will begin by December 31 of the calendar year
         immediately following the calendar year in which the Participant died.

                  (c) If there is no Designated Beneficiary as of September 30
         of the year following the year of the Participant's death, the
         Participant's entire interest will be distributed by December 31 of the
         calendar year containing the fifth anniversary of the Participant's
         death.

                  (d) If the Participant's surviving spouse is the Participant's
         sole Designated Beneficiary and the surviving spouse dies after the
         Participant but before distributions to the surviving spouse begin,
         this section 2.2, other than section 2.2(a), will apply as if the
         surviving spouse were the Participant.

         For purposes of this section 2.2 and section 4, unless section 2.2(d)
applies, distributions are considered to begin on the Participant's Required
Beginning Date. If section 2.2(d) applies, distributions are considered to begin
on the date distributions are required to begin to the surviving spouse under
section 2.2(a). If distributions under an annuity purchased from an insurance
company irrevocably commence to the Participant before the Participant's
Required Beginning Date (or to the Participant's surviving spouse before the
date distributions are required to begin to the surviving spouse under section
2.2(a)), the date distributions are considered to begin is the date
distributions actually commence.

         2.3. Forms of Distribution. Unless the Participant's interest is
distributed in the form of an annuity purchased from an insurance company or in
a single sum on or before the Required Beginning Date, as of the first
Distribution Calendar Year distributions will be made in accordance with
sections 3 and 4 of this Article IV. If the Participant's interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the requirements of
section 401(a)(9) of the Code and the Treasury Regulations.



                                      -2-




                                                                    Exhibit 10.1






         Section 3. Required Minimum Distributions During Participant's
Lifetime.

         3.1. Amount of Required Minimum Distribution For Each Distribution
Calendar Year. During the Participant's lifetime, the minimum amount that will
be distributed for each Distribution Calendar Year is the lesser of:

                  (a) the quotient obtained by dividing the Participant's
         Account Balance by the distribution period in the Uniform Lifetime
         Table set forth in section 1.401(a)(9)-9 of the Treasury Regulations,
         using the Participant's age as of the Participant's birthday in the
         Distribution Calendar Year; or

                  (b) if the Participant's sole Designated Beneficiary for the
         Distribution Calendar Year is the Participant's spouse, the quotient
         obtained by dividing the Participant's Account Balance by the number in
         the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of
         the Treasury Regulations, using the Participant's and spouse's attained
         ages as of the Participant's and spouse's birthdays in the Distribution
         Calendar Year.

         3.2. Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death. Required minimum distributions will be determined under
this section 3 beginning with the first Distribution Calendar Year and up to and
including the Distribution Calendar Year that includes the Participant's date of
death.

         Section 4. Required Minimum Distributions After Participant's Death.

         4.1. Death On or After Date Distributions Begin.

                  (a) Participant Survived by Designated Beneficiary. If the
         Participant dies on or after the date distributions begin and there is
         a Designated Beneficiary, the minimum amount that will be distributed
         for each Distribution Calendar Year after the year of the Participant's
         death is the quotient obtained by dividing the Participant's Account
         Balance by the longer of the remaining Life Expectancy of the
         Participant or the remaining Life Expectancy of the Participant's
         Designated Beneficiary, determined as follows:

                  (1)      The Participant's remaining Life Expectancy is
                           calculated using the age of the Participant in the
                           year of death, reduced by one for each subsequent
                           year.

                  (2)      If the Participant's surviving spouse is the
                           Participant's sole Designated Beneficiary, the
                           remaining Life Expectancy of the surviving spouse is
                           calculated for each Distribution Calendar Year after
                           the year of the Participant's death using the
                           surviving spouse's age as of the spouse's birthday in
                           that year. For Distribution Calendar Years after the
                           year of the surviving spouse's death, the remaining
                           Life Expectancy of the surviving spouse is calculated
                           using the age of the surviving spouse as of the
                           spouse's birthday in the calendar year of the
                           spouse's death, reduced by one for each subsequent
                           calendar year.



                                      -3-




                                                                    Exhibit 10.1





                  (3)      If the Participant's surviving spouse is not the
                           Participant's sole Designated Beneficiary, the
                           Designated Beneficiary's remaining Life Expectancy is
                           calculated using the age of the beneficiary in the
                           year following the year of the Participant's death,
                           reduced by one for each subsequent year.

                  (b) No Designated Beneficiary. If the Participant dies on or
         after the date distributions begin and there is no Designated
         Beneficiary as of September 30 of the year after the year of the
         Participant's death, the minimum amount that will be distributed for
         each Distribution Calendar Year after the year of the Participant's
         death is the quotient obtained by dividing the Participant's Account
         Balance by the Participant's remaining Life Expectancy calculated using
         the age of the Participant in the year of death, reduced by one for
         each subsequent year.

         4.2. Death Before Date Distributions Begin.

                  (a) Participant Survived by Designated Beneficiary. If the
         Participant dies before the date distributions begin and there is a
         Designated Beneficiary, the minimum amount that will be distributed for
         each Distribution Calendar Year after the year of the Participant's
         death is the quotient obtained by dividing the Participant's Account
         Balance by the remaining Life Expectancy of the Participant's
         Designated Beneficiary, determined as provided in section 4.1.

                  (b) No Designated Beneficiary. If the Participant dies before
         the date distributions begin and there is no Designated Beneficiary as
         of September 30 of the year following the year of the Participant's
         death, distribution of the Participant's entire interest will be
         completed by December 31 of the calendar year containing the fifth
         anniversary of the Participant's death.

                  (c) Death of Surviving Spouse Before Distributions to
         Surviving Spouse Are Required to Begin. If the Participant dies before
         the date distributions begin, the Participant's surviving spouse is the
         Participant's sole Designated Beneficiary, and the surviving spouse
         dies before distributions are required to begin to the surviving spouse
         under section 2.2(a), this section 4.2 will apply as if the surviving
         spouse were the Participant.

         Section 5. Definitions.

         5.1. Designated Beneficiary. The individual who is designated as the
beneficiary under the Plan and is the designated beneficiary under section
401(a)(9) of the Internal Revenue Code and section 1.401(a)(9)-l, Q&A-4, of the
Treasury Regulations.

         5.2. Distribution Calendar Year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin under section 2.2. The required minimum distribution for the
Participant's first Distribution



                                      -4-




                                                                    Exhibit 10.1


Calendar Year will be made on or before the Participant's Required Beginning
Date. The required minimum distribution for other Distribution Calendar Years,
including the required minimum distribution for the Distribution Calendar Year
in which the Participant's Required Beginning Date occurs, will be made on or
before December 31 of that Distribution Calendar Year.

         5.3. Life Expectancy. Life expectancy as computed by use of the Single
Life Table in section 1.401(a)(9)-9 of the Treasury Regulations.

         5.4. Participant's Account Balance. The account balance as of the last
valuation date in the calendar year immediately preceding the Distribution
Calendar Year (Valuation Calendar Year) increased by the amount of any
contributions made and allocated or Forfeitures allocated to the account balance
as of dates in the Valuation Calendar Year after the valuation date and
decreased by distributions made in the Valuation Calendar Year after the
valuation date. The account balance for the Valuation Calendar Year includes any
amounts rolled over or transferred to the Plan either in the Valuation Calendar
Year or in the Distribution Calendar Year if distributed or transferred in the
Valuation Calendar Year.

         5.5 Required Beginning Date. The date specified in Section 6.5 of the
Plan.



                                      -5-

                                                                    EXHIBIT 10.2


                             SECOND AMENDMENT TO THE

                   COMMUNITY HEALTH SYSTEMS, INC. 401(K) PLAN

                                JANUARY 1, 2004

         WHEREAS, CHS/Community Health Systems, Inc. (the "Company") has
previously established and currently maintains the Community Health Systems,
Inc. 401(k) Plan (the "Plan"); and

         WHEREAS, the Company has retained the right to amend the Plan in
Section 8.1 of the Plan; and

         WHEREAS, the Company wishes to amend the Plan to allow for installment
and other forms of distribution of benefits, effective as of January 1, 2004;
and

         WHEREAS, the Board of Directors has approved of such amendment to the
Plan.

         NOW, THEREFORE, the Plan is hereby amended in the following respects,
effective as of January 1, 2004:

         1.       Section 6.5(a) is hereby deleted and replaced as follows:

                  (a) The Administrator, pursuant to the election of the
         Participant, shall direct the Trustee to distribute to a Participant or
         such Participant's Beneficiary any amount to which the Participant is
         entitled under the Plan in one or more of the following methods:

                  (1)      One lump-sum cash payment;

                  (2)      Partial cash payments;

                  (3)      Partial cash payments over a period certain.

                  (4)      Cash payments over a period certain in monthly,
                  quarterly, semi annual, or annual installments. The period
                  over which such payment is to be made shall not extend beyond
                  the Participant's life expectancy (or the life expectancy of
                  the Participant and the Participant's designated beneficiary).

         2.       Except as otherwise provided in this Second Amendment, the
Plan shall remain in full force and effect.

                                      -1-




                                                                    Exhibit 10.2


         SIGNED this _________ day of _________________, 2004, effective as
January 1, 2004.


                                    CHS/COMMUNITY HEALTH SYSTEMS, INC.



                                    By:    /s/ LINDA PARSONS
                                           ----------------------------------

                                    Title: Vice President
                                           ----------------------------------




                                      -2-

                                                                    Exhibit 10.3

                       CHS/COMMUNITY HEALTH SYSTEMS, INC.

                              OFFICER'S CERTIFICATE


The undersigned, Linda Parsons, in her capacity as Vice President of
CHS/Community Health Systems, Inc. (the "Company"), does hereby certify on
information and belief the following with respect to the Community Health
Systems, Inc. 401(k) Plan (the "Plan"):

         1.       The Fourth Amendment to the Plan, restated as of January 1,
                  2002, was executed on April 8, 2003.

         2.       The Fifth Amendment to the Plan, restated as of January 1,
                  2002, was executed on May 7, 2003.

         3.       The Sixth Amendment to the Plan, restated as of January 1,
                  2002, was executed on July 18, 2003.

         IN WITNESS WHEREOF, I have executed this Officer's Certificate solely
in my capacity as an officer of the Company on the 14th day of May, 2004.


                                         CHS/COMMUNITY HEALTH SYSTEMS, INC.


                                         By: /s/ LINDA PARSONS, V. P.
                                             -----------------------------------
                                             Linda Parsons, Vice President


                                                                    EXHIBIT 10.4


                             THIRD AMENDMENT TO THE

                   COMMUNITY HEALTH SYSTEMS, INC. 401(K) PLAN


         WHEREAS, CHS/Community Health Systems, Inc. (the "Company") has
previously established and currently maintains the Community Health Systems,
Inc. 401(k) Plan (the "Plan"); and

         WHEREAS, the Company has retained the right to amend the Plan in
Section 8.1 of the Plan; and

         WHEREAS, the Company wishes to amend the Plan to clarify provisions
relating to eligibility for Employer Matching Contributions under the Plan,
effective as of January 1, 2004; and

         WHEREAS, the Company wishes to amend the Plan in connection with the
acquisition of Galesburg Cottage Hospital to include special provisions relating
to the transfer and assignment to the Plan of the accounts of participants in
the Galesburg Cottage Hospital Retirement Plan, effective as of July 1, 2004;
and

         WHEREAS, the Company wishes to amend the Plan exhibits relating to
eligibility and employer contributions; and

         WHEREAS, the Board of Directors has approved of such amendment to the
Plan.

         NOW, THEREFORE, the Plan is hereby amended in the following respects,
effective as of the dates set forth herein:

         1. The following subsection shall be added to the Plan as Section
4.1(h), effective as of July 1, 2004:

                  (h) The amount of the total after-tax contributions made by
         Participants who were participants in the Galesburg Cottage Hospital
         Retirement Plan prior to July 1, 2004, which contributions were
         transferred to the Plan.

         2. Paragraph (2) of subsection (b) of Section 4.4 of the Plan,
"Allocation of Contribution, Forfeitures and Earnings," is hereby deleted and
replaced in its entirety as follows, effective as of January 1, 2004:

         (2) With respect to the Employer Matching Contribution made pursuant to
         Section 4. l(b), except for the Employer Elective Contribution to
         another plan maintained by the Employer, to each Participant's matching
         Account in an amount to be determined in accordance with Section
         4.1(b). Such Account shall be subject to the applicable vesting
         schedule. Only Participants who are actively employed at the beginning
         of the last day of the Plan Year by the Employer or an Affiliated
         Employer whose Employees are eligible for a matching contribution

                                      -1-




                                                                    EXHIBIT 10.4


         under Section 4.1(b) shall be eligible to share in the Employer
         Matching Contribution for the year. However, if a Participant incurs a
         1-Year Break in Service while still employed by the Employer, such
         Participant will not be eligible to share in any matching contributions
         for future Plan Years until the Participant completes 500 Hours of
         Service during a Plan Year, at which point the Participant will be
         eligible to share in the Employer Matching Contributions for all
         succeeding Plan Years in accordance with the other provisions of the
         Plan. Notwithstanding the foregoing, a Participant who is employed by
         the Employer or an Affiliated Employer whose Employees are eligible for
         a matching contribution under Section 4.1(b) and who retires (normal or
         late), has a Total and Permanent Disability, or dies during the Plan
         Year, shall be deemed to have been employed at the beginning of the
         last day of such Plan Year.

         3. Subsection (e) is hereby added to Section 6.10 of the Plan,
"Pre-Retirement Distribution," as follows, effective July 1, 2004:

                  (e) Notwithstanding any provision of this Section 6.10 to the
         contrary, pre-retirement distributions may be made pursuant to Section
         6.10(a) from the vested portion of a Participant's Account that is
         attributable to employer matching contributions under the Galesburg
         Cottage Hospital Retirement Plan.

         4. Paragraph (1) of Section 5 of the Good Faith Amendment of the
Community Health Systems, Inc. 401(k) Plan for the Economic Growth and Tax
Relief Reconciliation Act of 2001 (the "EGTRRA Addendum") is hereby deleted and
replaced in its entirety, effective July 1, 2004:

                  1. Effective March 1, 2002, with the consent of the
         Administrator, provided the trust from which such funds are transferred
         permits the transfer to be made and the transfer will not jeopardize
         the tax exempt status of the Plan or Trust or create adverse tax
         consequences for the Employer, amounts may be transferred (within the
         meaning of Code Section 414(l)) to this Plan in a direct rollover from
         a qualified plan described in section 401(a) or 403(a) of the Code,
         excluding after-tax employee contributions, an annuity contract
         described in section 403(b) of the Code, excluding after-tax employee
         contributions, and an eligible plan under section 457(b) of the Code
         that is maintained by a state, political subdivision of a state, or any
         agency or instrumentality of a state or political subdivision of a
         state. Notwithstanding the preceding sentence, effective July 1, 2004,
         amounts attributable to after-tax employee contributions may be
         transferred to this Plan from the Galesburg Cottage Hospital Retirement
         Plan.

         5. Exhibits A, B, and C of the Plan are hereby deleted and replaced in
their entirety in substantially the same form as set forth in the Exhibits
attached hereto, effective as of the dates set forth therein.

         6. Except as otherwise provided in this Third Amendment, the Plan shall
remain in full force and effect.


                                      -2-





                                                                    EXHIBIT 10.4


         SIGNED this 18th day of May, 2004, effective as of the dates set forth
herein.




                                    CHS/COMMUNITY HEALTH SYSTEMS, INC.




                                    By:    /s/ LINDA K PARSONS
                                           ------------------------------------

                                    Title: Vice President
                                           ------------------------------------

                                      -3-



                                                                    EXHIBIT 10.4


                       CHS/COMMUNITY HEALTH SYSTEMS, INC.

                   WRITTEN CONSENT OF THE BOARD OF DIRECTORS


         The undersigned, being all of the members of the Board of Directors of
CHS/Community Health Systems, Inc. (the "Company"), do hereby consent to the
taking of this action without a meeting, and, as evidenced by their signatures
below, the following resolutions are hereby adopted, ratified, and confirmed:

         WHEREAS, the Company has previously established and currently maintains
the Community Health Systems, Inc. 401(k) Plan (the "Plan"); and

         WHEREAS, the Company has retained the right to amend the Plan in
Section 8.1 of the Plan; and

         WHEREAS, the Company wishes to amend the Plan to clarify provisions
relating to eligibility for Employer Matching Contributions under the Plan,
effective as of January 1, 2004; and

         WHEREAS, the Company wishes to amend the Plan in connection with the
acquisition of Galesburg Cottage Hospital to include special provisions relating
to the transfer and assignment to the Plan of the accounts of participants in
the Galesburg Cottage Hospital Retirement Plan, effective July 1, 2004; and

         WHEREAS, the Company wishes to amend the Plan exhibits relating to
eligibility and employer contributions; and

         WHEREAS, the directors have received a copy of the Third Amendment to
the Plan attached hereto for such purposes and wish to approve of the Third
Amendment to the Plan.

         NOW, THEREFORE, BE IT RESOLVED, that the Plan be and the same is hereby
amended as reflected in the Third Amendment, effective as of the dates set forth
therein.

         BE IT FURTHER RESOLVED, that any officer of the Company be and he or
she is hereby authorized and directed to execute the attached Third Amendment
and to take all other such actions, and to sign all such other documents, as may
be necessary to carry out the intent of the foregoing resolutions.

         SIGNED this 18th day of May, 2004, effective as of the dates set forth
herein.

                                             /s/ WAYNE T. SMITH
                                             -----------------------------------
                                             Wayne T. Smith

                                             /s/ W. LARRY CASH
                                             -----------------------------------
                                             W. Larry Cash

                                             /s/ RACHEL A. SEIFERT
                                             -----------------------------------
                                             Rachel A. Seifert



                                                                    EXHIBIT 10.4

                                    EXHIBIT A

                                   ELIGIBILITY

         Notwithstanding any provision of the Plan to the contrary, the
following provisions shall apply to eligibility to participate in the Plan under
Section 1.17:

1.       Effective as of July 1, 2002, Employees of Northampton Hospital
         Corporation shall be eligible to participate in the Plan including
         Employees whose employment is governed by a collective bargaining
         agreement between the Affiliated Employer and "employee
         representatives" under which retirement benefits were the subject of
         good faith bargaining.

2.       Effective as of January 1, 2003, Employees of Watsonville Hospital
         Corporation shall not be Eligible Employees except for Employees who
         have ever been Highly Compensated Employees of Watsonville Hospital
         Corporation and who are not Employees whose employment is governed by a
         collective bargaining agreement between the Affiliated Employer and
         "employee representatives" under which retirement benefits were the
         subject of good faith bargaining.

3.       Effective for the period beginning August 1, 2003, and ending December
         31, 2003, Employees of Pottstown Hospital Company, LLC who are
         hospital-based physicians shall not be eligible to participate in the
         Plan. For purposes of the foregoing, "hospital-based physician" means a
         physician Employee of Pottstown Hospital Company, LLC whose primary
         place of employment is Pottstown Memorial Medical Center.

4.       Effective for the period beginning August 1, 2003, and ending December
         31, 2003, Employees of Pottstown Imaging Center, LLC shall be eligible
         to participate in the Plan for purposes of allocation of the
         discretionary contribution described in Exhibit C; provided, however,
         that such Employees shall not be eligible to make elective
         contributions under the Plan.

5.       Effective as of July 1, 2004, Employees of Pottstown Hospital Company,
         LLC whose employment is governed by a collective bargaining agreement
         between the Affiliated Employer and "employee representatives" under
         which retirement benefits were the subject of good faith bargaining
         shall be eligible to participate in the Plan.

                                      A-1




                                                                    EXHIBIT 10.4




                                   EXHIBIT B

                        EMPLOYER MATCHING CONTRIBUTIONS


         Notwithstanding any provision of the Plan to the contrary, the
following provisions shall apply to the Employer matching contributions under
Section 4.1(b) of the Plan:

1.       Effective as of January 1, 2002, Eligible Employees of Northampton
         Hospital Corporation whose employment is governed by a collective
         bargaining agreement shall not be eligible to share in matching
         contributions made pursuant to Section 4.1(b).

2.       Effective as of January 1, 2003, the matching contribution made on
         behalf of those Participants who are eligible to share in matching
         contributions and who are employed by Northampton Hospital Corporation
         shall be 50% of such Participant's Elective Contribution for such Plan
         Year that does not exceed 6% of the Participant's Compensation for the
         Plan Year. For the period beginning on July 1, 2002, and ending on
         December 31, 2002, the discretionary matching contribution was 50% of
         such Participant's Elective Contribution for such Plan Year that does
         not exceed 6% of the Participant's Compensation for the Plan Year.

3.       For the Plan Years beginning January 1, 2003, and ending December 31,
         2004, each Employee of Petersburg Hospital Company, LLC who is a
         Participant in the Plan and (i) has at least 1,000 Hours of Service for
         an Affiliated Employer during the applicable Plan Year, and (ii) is
         otherwise eligible to share in matching contributions shall receive a
         discretionary matching contribution in an amount equal to:

                  (A) 1/3 of such Participant's Elective Contribution for such
                  Plan Year that does not exceed 6% of the Participant's
                  Compensation for the Plan Year if the Participant has at least
                  one (1) but no more than nine (9) Years of Service;

                  (B) 1/2 of such Participant's Elective Contribution for such
                  Plan Year that does not exceed 6% of the Participant's
                  Compensation for the Plan Year if the Participant has at least
                  ten (10) but no more than nineteen (19) Years of Service; and

                  (C) 2/3 of such Participant's Elective Contribution for such
                  Plan Year that does not exceed 6% of the Participant's
                  Compensation for the Plan Year if the Participant has at least
                  twenty (20) Years of Service.

         Notwithstanding the foregoing, an Employee of Petersburg Hospital
         Company, LLC who is a Participant in the Plan and is a Highly
         Compensated Employee who is eligible to share in matching contributions
         for the Plan Year shall only receive a discretionary matching
         contribution that is a percentage of such Participant's Elective
         Contribution for the Plan Year that does not exceed 6% of the
         Participant's Compensation for the Plan Year.


                                      B-l





                                                                    EXHIBIT 10.4

4.       Effective as of August 1, 2003, each Employee of Pottstown Hospital
         Company, LLC who is a Participant in the Plan shall not be eligible to
         share in matching contributions made pursuant to Section 4.1(b).
         Notwithstanding the foregoing, effective as of January 1, 2004, each
         Employee of Pottstown Hospital Company, LLC who is a Participant in the
         Plan and (i) is a Highly Compensated Employee, and (ii) is otherwise
         eligible to share in matching contributions for the Plan Year shall
         receive a discretionary matching contribution that is a percentage of
         such Participant's Elective Contribution for the Plan Year that does
         not exceed 6% of the Participant's Compensation for the Plan Year.
         Notwithstanding the foregoing, effective for the Plan Year beginning
         January 1, 2004, each physician Employee of Pottstown Hospital Company,
         LLC who is a Participant in the Plan and (i) is not a hospital-based
         physician, (ii) is a Non-Highly Compensated Employee, and (iii) is
         otherwise eligible to share in matching contributions shall receive a
         discretionary matching contribution in an amount equal to fifty percent
         (50%) of such Participant's Elective Contribution for such Plan Year
         that does not exceed 6% of the Participant's Compensation for the Plan
         Year. For purposes of the foregoing, "hospital-based physician" means a
         physician Employee of Pottstown Hospital Company, LLC whose primary
         place of employment is Pottstown Memorial Medical Center.

5.       For the period beginning August 1, 2003, and ending December 31, 2004,
         each Employee of Pottstown Clinic Company, LLC who is a Participant in
         the Plan and (i) has at least 1,000 Hours of Service for the Affiliated
         Employer during the applicable Plan Year, (ii) is a Non-Highly
         Compensated Employee, and (iii) is otherwise eligible to share in
         matching contributions shall receive a discretionary matching
         contribution in an amount equal to fifty percent (50%) of such
         Participant's Elective Contribution for such Plan Year that does not
         exceed 6% of the Participant's Compensation for the Plan Year.

6.       For the period beginning January 1, 2004, and ending December 31, 2004,
         each Employee of Pottstown Imaging Center, LLC who is a Participant in
         the Plan and (i) has at least 1,000 Hours of Service for the Affiliated
         Employer during the applicable Plan Year, (ii) is a Non-Highly
         Compensated Employee, and (iii) is otherwise eligible to share in
         matching contributions shall receive a discretionary matching
         contribution in an amount equal to fifty percent (50%) of such
         Participant's Elective Contribution for such Plan Year that does not
         exceed 6% of the Participant's Compensation for the Plan Year.

                                      B-2




                                                                    EXHIBIT 10.4

                                   EXHIBIT C
                         EMPLOYER SPECIAL CONTRIBUTIONS

         Notwithstanding any provision of the Plan to the contrary, the
following provisions shall apply to the Employer special contributions in
Section 4.1(g) of the Plan:

         1.    The Employer shall make a special one-time contribution of
               $500 to the Plan as of August 1, 2002, for each Eligible Employee
               who was eligible to participate in the Easton Hospital Employees'
               Pension Plan immediately prior to June 30, 2002. Such
               contribution shall be 100% vested and shall be made regardless of
               an Eligible Employee's election not to participate in the Plan.

         2.    Effective for the period beginning August 1, 2003, and ending
               December 31, 2003, each Participant who is an Employee of
               Pottstown Imaging Center, LLC and who completes at least 1,000
               Hours of Service for the Pottstown Imaging Center, LLC during a
               Plan Year shall receive an allocation of a discretionary
               contribution in an amount equal to 3% of the Participant's
               Compensation for such Plan Year. If the discretionary
               contribution allocated to such Participants is not large enough
               to provide such an allocation to all such Participants, each
               Participant shall receive a fractional share of the discretionary
               contribution, the numerator of which is the Participant's
               Compensation and the denominator of which is the total
               Compensation of all similarly situated Participants. The Vested
               portion of such Participant's Account attributable to the
               Employer's discretionary contribution shall be a percentage of
               the total amount credited to the Participant's Account,
               determined on the basis of Years of Service and prior service
               credits, if any, according to the following schedule:
Years of Service Vesting Percentage Less than 5 0% 5 or more 100%
C-1

                                                                    EXHIBIT 10.5


                          MERGER AND TRANSFER AGREEMENT

                   GALESBURG COTTAGE HOSPITAL RETIREMENT PLAN

                                       AND

                   COMMUNITY HEALTH SYSTEMS, INC. 401(K) PLAN

         Scudder Trust Company, as directed trustee ("Trustee") of the Galesburg
Cottage Hospital Retirement Plan ("Galesburg Plan") and separately of the
Community Health Systems, Inc. 401(k) Plan ("CHS Plan"), Galesburg Cottage
Hospital ("Galesburg"), and CHS/Community Health Systems, Inc. ("CHS") enter
into this MERGER AND TRANSFER AGREEMENT ("Agreement") by and among themselves in
their separate, respective capacities as the Trustee and plan administrators of
the Galesburg Plan and of the CHS Plan.

                                   WITNESSETH:

         WHEREAS, CHS and its affiliate Galesburg Hospital Corporation have
agreed to purchase substantially all of the assets of Galesburg according to the
terms of that certain Asset Purchase Agreement entered into by and between the
parties as of March 15, 2004, as amended; and

         WHEREAS, in connection with its purchase of substantially all of the
assets of Galesburg, CHS wishes to merge the Galesburg Plan with and into the
CHS Plan, effective as of July 1, 2004, and Galesburg wishes to effect and
consent to such merger; and

         WHEREAS, the Galesburg Plan grants the Trustee and plan administrator
of the Galesburg Plan specific authority, and Galesburg as the plan
administrator directs the Trustee, to enter into a transfer of plan assets
agreement or to transfer plan assets as a party to any such agreement; and

         WHEREAS, the CHS Plan grants the Trustee and plan administrator of the
CHS Plan specific authority, and CHS as the plan administrator directs the
Trustee, to accept the transfer of plan assets; and

         WHEREAS, Galesburg deems it in the best interest of the administration
of the Galesburg Plan and in the best interest of the participants in the
Galesburg Plan to transfer and assign all participant accounts in the Galesburg
Plan to the CHS Plan in a plan merger; and

         WHEREAS, CHS deems it in the best interest of the administration of the
CHS Plan to accept the transfer and assignment of all participant accounts from
the Galesburg Plan to the CHS Plan in a plan merger.

         NOW, THEREFORE, for and in consideration of the premises, the Trustee
and plan administrators, acting in their respective capacities on behalf of the
CHS Plan and on behalf of the Galesburg Plan, hereby agree as follows:

                  (1) EMPLOYER MATCHING CONTRIBUTION. Prior to June 30, 2004,
Galesburg shall contribute and allocate to the accounts of eligible participants
in the Galesburg


                                      -1-






                                                                    EXHIBIT 10.5




Plan the employer matching contributions to which such participants are entitled
under the terms of the Galesburg Plan for the period ending June 30, 2004, and
all prior periods.

                  (2) TRANSFER OF ASSETS. Following such allocation of employer
matching contributions, the Galesburg Plan trustee shall transfer and assign
directly to the CHS Plan trustee the accounts of all participants in the
Galesburg Plan.

                  (3) HOLDING AND INVESTMENT OF ASSETS. The Trustee and plan
administrator of the CHS Plan shall thereafter hold, invest, administer and
distribute the assets of the Galesburg Plan transferred and assigned in
accordance with the terms of the CHS Plan.

                  (4) PARTICIPANTS' ACCOUNTS. With respect to the accounts of
the participants in the Galesburg Plan transferred to the CHS Plan, the
following conditions shall apply:

                      (a) The sum of the account balances in the Galesburg Plan
                          and the CHS Plan shall equal the fair market value
                          (determined as of the date of the merger) of the
                          entire plan assets of the CHS Plan as of the date of
                          the merger;

                      (b) The assets of the Galesburg Plan and CHS Plan shall be
                          combined to form the assets of the CHS Plan as merged;

                      (c) Immediately after the merger, each participant in the
                          CHS Plan as merged shall have an account balance equal
                          to the sum of the account balances each participant
                          had in the Galesburg Plan immediately prior to the
                          merger;

                      (d) Participants shall continue to vest in their interest
                          in the amounts attributable to the Galesburg Plan in
                          accordance with the vesting schedule set forth in the
                          CHS Plan; and

                      (e) The transfer of the accounts shall not result in
                          elimination of any Internal Revenue Code Section
                          411(d)(6) protected benefit, except to the extent
                          permitted by the Internal Revenue Code or the Treasury
                          Regulations thereunder, and CHS shall amend the CHS
                          Plan to prevent the elimination of any such benefit.

                  (5) BINDING EFFECT. The terms and conditions of this Agreement
shall bind the Trustee (and its successors) of the Galesburg Plan and of the CHS
Plan and shall operate as if fully set forth within the CHS Plan.

                  (6) EFFECTIVE DATE. The merger of the plans and the transfer
and assignment of account balances in the Galesburg Plan to the CHS Plan shall
take place as of July 1, 2004.

         IN WITNESS WHEREOF, the plan administrators have signed this Agreement
in their fiduciary capacities on behalf of the Galesburg Plan and separately on
behalf of the CHS Plan, and Scudder Trust Company has signed this Agreement, at
the direction of Galesburg and CHS as the plan administrators of their
respective plans, solely in its capacity as directed trustee on


                                      -2-






                                                                    Exhibit 10.5


behalf of the Galesburg Plan and separately on behalf of the CHS Plan, as set
forth following their names below on this 1st day of July, 2004.


                                GALESBURG COTTAGE HOSPITAL--Plan
                                Administrator of the Galesburg Cottage Hospital
                                Retirement Plan

                                    BY:   /s/ [ILLEGIBLE]
                                        ---------------------------------------

                                    Title:  President & CEO
                                           ------------------------------------



                                CHS/COMMUNITY HEALTH SYSTEMS, INC.--
                                Plan Administrator of the Community Health
                                Systems, Inc. 401(k) Plan

                                    BY:   /s/ [ILLEGIBLE]
                                        ---------------------------------------

                                    Title:  Vice President
                                           ------------------------------------



                                Scudder Trust Company--Trustee of the Galesburg
                                Cottage Hospital Retirement Plan

                                    BY:   /s/ [ILLEGIBLE]
                                        ---------------------------------------

                                    Title:  Vice President
                                           ------------------------------------



                                Scudder Trust Company--Trustee of the
                                Community Health Systems, Inc. 401(k) Plan


                                    BY:   /s/ [ILLEGIBLE]
                                        ---------------------------------------

                                    Title:  Vice President
                                           ------------------------------------




                                      -3-




                                                                    Exhibit 10.5

(BC LOGO) (BOULT o CUMMINGS  o                                    B. David Joffe
CONNERS o BERRY PLC LETTERHEAD)                                    (615)252-2368
                                                              Fax: (615)252-6368
                                                 Email: djoffe@boultcummings.com

                                  July 20, 2004

Mr. Chip Cain
Community Health Systems, Inc.
155 Franklin Road, Suite 400
P.O. Box 217
Brentwood, TN 37024-0217

      RE:   MERGER AND TRANSFER AGREEMENT ENTERED INTO BY GALESBURG COTTAGE
            HOSPITAL RETIREMENT PLAN AND COMMUNITY HEALTH SYSTEMS, INC. 401(k)
            PLAN

 Dear Chip:

         Enclosed you will find for your files a fully-executed original Merger
and Trust Agreement as referenced above. If you have any questions regarding
this matter, please do not hesitate to contact me.

                                     Yours truly,

                                     BOULT, CUMMINGS, CONNERS & BERRY, PLC

                                     By:  /s/ B. DAVID JOFFE

                                          B. David Joffe



BDJ/sl
Enclosure
cc:  Ms. Linda Parsons (w/encl.)


                                   LAW OFFICES
    414 UNION STREET o SUITE 1600 o P.O. BOX 198062 o NASHVILLE o TN o 37219
      TELEPHONE 615.244.2582 FACSIMILE 615.252.6380 WWW.BOULTCUMMINGS.OOM

                                                                    Exhibit 10.6



                         PLAN-TO-PLAN TRANSFER AGREEMENT

              ASSOCIATED HEALTHCARE SYSTEMS 401(k) RETIREMENT PLAN

                                       AND

                   COMMUNITY HEALTH SYSTEMS, INC. 401(K) PLAN

         A. Ronald Turner and James L. Marshall, Jr. (collectively the
"Associated Trustee"), as Co-Trustees of the Associated Healthcare Systems
401(k) Retirement Plan (the "Associated Plan"); Scudder Trust Company (the "CHS
Trustee"), as the directed Trustee of the Community Health Systems, Inc. 401(k)
Plan (the "CHS Plan"); Associated Healthcare Systems, Inc. ("Associated"), as
the Plan Administrator of the Associated Plan; and the CHS/Community Health
Systems, Inc. Retirement Committee ("CHS"), as the Plan Administrator of the CHS
Plan, enter into this Plan-to-Plan Transfer Agreement ("Agreement") by and among
themselves in their separate, respective capacities as the Trustees and Plan
Administrators of the Associated Plan and CHS Plan as of the 30th day of
September, 2004 (the "Effective Date").

                                   WITNESSETH:

         WHEREAS, Associated has agreed to purchase all of the outstanding
shares of the capital stock of National Healthcare of Pocahontas, Inc., Randolph
County Clinic Corp., Sabine Medical Center, Inc., and Sabine Medical Clinic,
Inc. ("Facilities"), according to the terms of that certain Purchase Agreement
entered into by and between Associated, CHS, Hallmark Holdings Corp., and CHS
Holdings Corp., on July 2,2004; and

         WHEREAS, employees of the Facilities are eligible to participate in the
CHS Plan, subject to the terms of the CHS Plan; and

         WHEREAS, employees of the Facilities will become eligible to
participate in the Associated Plan following the sale of shares, subject to the
terms of the Associated Plan; and

         WHEREAS, the CHS Plan and the Associated Plan are intended to be
tax-qualified under Section 401(a) of the Internal Revenue Code ("Code"); and

         WHEREAS, in connection with its sale of shares in the Facilities, CHS
wishes to effect the transfer of the CHS Plan accounts of the employees of the
Facilities who are participants in the CHS Plan to the Associated Plan,
effective as of the Effective Date, and Associated wishes to effect and consent
to such transfer; and

         WHEREAS, the Plan Administrator of the CHS Plan has the authority to
enter into a transfer of plan assets agreement, and to direct the CHS Trustee
Plan to effect any such transfer; and

         WHEREAS, the Associated Plan grants the Associated Trustee and the Plan
Administrator of the Associated Plan specific authority, and Associated as the
plan administrator directs the Associated Trustee, to enter into a transfer of
plan assets agreement; and





                                        -1-



                                                                    Exhibit 10.6



         WHEREAS, CHS deems it in the best interest of the administration of the
CHS Plan and in the best interest of the participants in the CHS Plan who are
employees of the Facilities to transfer and assign all such participant and
related accounts in the CHS Plan to the Associated Plan on the terms set forth
herein; and

         WHEREAS, Associated deems it in the best interest of the administration
of the Associated Plan and in the best interests of the employees at the
Facilities who will become eligible to participate in the Associated Plan, to
accept the transfer and assignment to the Associated Plan of the participant and
related accounts in the CHS Plan on the terms set forth herein.

         NOW, THEREFORE, for and in consideration of the premises, the Trustees
and Plan Administrators, acting in their respective capacities on behalf of the
CHS Plan and on behalf of the Associated Plan, hereby agree as follows:

                  (1) TRANSFER OF ASSETS. The CHS Trustee shall transfer and
assign directly to the Associated Trustee the accounts and related assets of all
participants in the CHS Plan who are employees of the Facilities, including the
accounts and related assets of any beneficiaries of such employees and of any
alternate payees with respect to such employees and any participant plan loans,
and the Associated Trustee shall accept such transfer and assignment to the
Associated Plan.


                  (2) HOLDING AND INVESTMENT OF ASSETS. The Associated Trustee
and Associated shall thereafter hold, invest, administer, and distribute the
assets of the CHS Plan transferred and assigned in accordance with the terms of
the Associated Plan.


                  (3) PARTICIPANTS' ACCOUNTS. With respect to the accounts of
the participants in the CHS Plan transferred to the Associated Plan, the
following conditions shall apply:

                      (a) The sum of the transferred CHS Plan account balances
                          and the account balances in the Associated Plan shall
                          equal the fair market value (determined as of the date
                          of transfer) of the entire plan assets of the
                          Associated Plan as required under Treas. Reg.
                          Section 1.414(1)-1(d)(1)

                      (b) The transferred assets of the CHS Plan and the assets
                          of the . Associated Plan immediately prior to the
                          transfer shall be combined to form the assets of the
                          Associated Plan as required under Treas. Reg. Section
                          1.414(1)-1(d)(2);

                      (c) Immediately after the transfer, each participant whose
                          account is transferred to the Associated Plan shall
                          have an account balance equal to the sum of the
                          account balances each participant had in the CHS Plan
                          immediately prior to the transfer as required under
                          Treas. Reg. Section 1.414(1)-1(d)(3);







                                      - 2-




                                                                    Exhibit 10.6

                      (d) Participants shall continue to vest in their interest
                          in the amounts attributable to the CHS Plan in
                          accordance with the vesting schedule set forth in the
                          Associated Plan, which will be no less generous than
                          the vesting schedule in the CHS Plan;

                      (e) The transfer of the accounts shall not result in
                          elimination of any Code Section 411(d)(6) protected
                          benefit, except to the extent permitted by the
                          Internal Revenue Code of 1986 or the Treasury
                          Regulations promulgated thereunder, and Associated
                          shall amend the Associated Plan to prevent the
                          elimination of any such benefit; and

                      (f) Plan loans of participants in the CHS Plan shall
                          continue under the Associated Plan according to the
                          same terms and conditions and no plan loans shall be
                          deducted from the CHS Plan account balances or the
                          transferred assets.

                  (4) BINDING EFFECT. The terms and conditions of this Agreement
shall bind the Trustees (and their successors) of the Associated Plan and of the
CHS Plan and shall operate as if fully set forth within the Associated Plan.

                  (5) REPRESENTATIONS.

                      (a) Associated hereby represents and warrants to CHS and
                          the CHS Trustee as 'follows: The Associated Plan is
                          intended to be and has been intended since its
                          inception to be qualified and tax-exempt under the
                          provisions of Sections 401 (a) and 501 (a) of the
                          Code; is and has been since its inception in material
                          compliance with its terms and, both as to form and in
                          operation, with the requirements prescribed by law
                          that are applicable to such plan. All returns,
                          reports, and disclosure statements required to be made
                          with respect to the Associated Plan have been timely
                          filed or delivered. The Associated Plan is not
                          currently and has not been under audit, inquiry, or
                          investigation, and there are no outstanding issues
                          with reference to the Associated Plan pending before
                          any governmental agency. Other than routine claims for
                          benefits, there are no actions, audits, arbitrations,
                          suits, claims, or investigations pending or threatened
                          against or with respect to the Associated Plan, and
                          there are no threatened or pending claims with respect
                          to the Associated Plan alleging a breach of fiduciary
                          duty or violation of law, nor is there any basis for
                          such.

                      (b) CHS hereby represents and warrants to Associated and
                          the Associated Trustee as follows: The CHS Plan is
                          intended to be and has been intended since its
                          inception to be qualified and tax-exempt under the
                          provisions of Sections 401(a) and 501(a) of the Code;
                          is and has been since its inception in material
                          compliance with its terms and, both as to form and in
                          operation, with the



                                      -3-




                                                                    Exhibit 10.6




                          requirements prescribed by law that are applicable to
                          such plan. All returns, reports, and disclosure
                          statements required to be made with respect to the CHS
                          Plan have been timely filed or delivered. The CHS Plan
                          is not currently and has not been under audit,
                          inquiry, or investigation, and there are no
                          outstanding issues with reference to the CHS Plan
                          pending before any governmental agency. Other than
                          routine claims for benefits, there are no actions,
                          audits, arbitrations, suits, claims, or investigations
                          pending or threatened against or with respect to the
                          CHS Plan, and there are no threatened or pending
                          claims with respect to the CHS Plan alleging a breach
                          of fiduciary duty or violation of law, nor is there
                          any basis for such.

                  (6) INDEMNIFICATION.

                      (a) Associated hereby agrees to defend, indemnify, and
                          hold harmless CHS (including, without limitation, the
                          trustees, officers, directors, independent
                          contractors, employees, agents, plan fiduciaries,
                          successors, and assigns of CHS, its parent, and
                          subsidiaries) for, from, and/or against any and all
                          claims, losses, liabilities, damages, costs
                          (including, without limitation, court costs and costs
                          of appeal) and expenses (including, without
                          limitation, reasonable attorneys' fees and fees of
                          expert consultants and witnesses) that the indemnified
                          parties incur as a result of, with respect to, arising
                          out of, or related to any breach by Associated or
                          Associated Trustee of this Agreement and/or the
                          transfer contemplated by this Agreement.

                      (b) CHS hereby agrees to defend, indemnify, and hold
                          harmless Associated (including, without limitation,
                          the trustees, officers, directors, independent
                          contractors, employees, agents, plan fiduciaries,
                          successors, and assigns of Associated, its parent, and
                          subsidiaries) for, from, and/or against any and all
                          claims, losses, liabilities, damages, costs
                          (including, without limitation, court costs and costs
                          of appeal) and expenses (including, without
                          limitation, reasonable attorneys' fees and fees of
                          expert consultants and witnesses) that the indemnified
                          parties incur as a result of, with respect to, arising
                          out of, or related to any breach by CHS or CHS Trustee
                          of this Agreement and/or the transfer contemplated by
                          this Agreement.

                  (7) EFFECTIVE DATE. The transfer and assignment herein
described of account balances in the CHS Plan to the Associated Plan shall take
place as of the Effective Date.

                  (8) MULTIPLE COUNTERPARTS. This Assignment may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.




                                      -4-


                                                                    Exhibit 10.6




IN WITNESS WHEREOF, the Plan Administrators have signed this Agreement in their
fiduciary capacities on behalf of the Associated Plan and separately on behalf
of the CHS Plan; the Associated Trustee has signed this Agreement, at the
direction of Associated as the Plan Administrator of the Associated Plan, solely
in its capacity as Trustee of the Associated Plan; and the CHS Trustee has
signed this Agreement, at the direction of CHS as the Plan Administrator of the
CHS Plan, solely in its capacity as directed Trustee of the CHS Plan, below as
of the Effective Date.




                                ASSOCIATED HEALTHCARE SYSTEMS, INC.

                                Plan Administrator of the Associated Healthcare
                                Systems 401(k) Retirement Plan

                                  By:     /s/ KRISTINE HILL
                                          --------------------------------------
                                          Kristine Hill,
                                  Title:  Director of HR and Risk Management


                                CHS/COMMUNITY HEALTH SYSTEMS, INC.
                                RETIREMENT COMMITTEE

                                Plan Administrator of the Community Health
                                Systems, Inc. 401(k) Plan

                                  By:     /s/ LINDA K. PARSONS
                                          --------------------------------------
                                          Linda K. Parsons,
                                  Title:  Member of the Committee


                                A. RONALD TURNER AND JAMES L.
                                MARSHALL, JR.

                                Co-Trustees of the Associated Healthcare Systems
                                401(k) Retirement Plan



                                          A. RONALD TURNER
                                          --------------------------------------
                                          A. Ronald Turner, Trustee

                                          JAMES L. MARSHALL
                                          --------------------------------------
                                          James L. Marshall, Trustee


                                SCUDDER TRUST COMPANY

                                Trustee of the Community Health Systems, Inc.
                                401(k) Plan

                                  By:     [Illegible]
                                          --------------------------------------

                                  Title:  Vice President
                                          --------------------------------------

                                      -5-






                                                                      EXHIBIT 23



CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos.
333-121283, 333-107810, 333-100349, 333-61614 and 333-44870 of Community Health
Systems, Inc. on Form S-8 of our report dated June 28, 2005, appearing in this
Annual Report on Form 11-K of Community Health Systems, Inc. 401(k) Plan for the
year ended December 31, 2004.

/s/ Deloitte & Touche LLP

Nashville, Tennessee
June 28, 2005