As filed with the Securities and Exchange Commission on December 11, 2009
Registration No. 333- __________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
_____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
COMMUNITY HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
CHS/COMMUNITY HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
|
13-3893191
(I.R.S. Employer
Identification Number)
|
|
Delaware
(State or other jurisdiction of
incorporation or organization) |
4000 Meridian Boulevard
Franklin, TN 37067
(Address of principal executive offices)
|
76-0137985
(I.R.S. Employer
Identification Number)
|
CHS/Community Health Systems, Inc. Deferred Compensation Plan
CHS NQDCP
(Full title of the plans)
________________________
Rachel A. Seifert
Senior Vice President, Secretary and General Counsel
4000 Meridian Boulevard
Franklin, TN 37067
(615) 465-7349
(Name, address, and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
|
Title of Securities
to be Registered |
Amount to be Registered |
Proposed Maximum Offering Price Per Share |
Proposed Maximum Aggregate
Offering Price (1) |
Amount of
Registration Fee |
||||||||||||
|
Deferred Compensation Obligations (2)
|
$ | 10,000,000 | 100 | % | $ | 10,000,000 | $ | 558 | ||||||||
|
Deferred Compensation Obligations (3)
|
$ | 50,000,000 | 100 | % | $ | 50,000,000 | $ | 2,790 | ||||||||
|
Deferred Compensation Obligations (Total)
|
$ | 60,000,000 | 100 | % | $ | 60,000,000 | $ | 3,348 | ||||||||
|
(1) |
Estimated solely for the purpose of determining the registration fee pursuant to Rule 457 (h) of the Securities Act.
|
|
(2) |
Deferred compensation obligations under the CHS/Community Health Systems, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) to pay deferred compensation in the future in accordance
with the terms of such plan.
|
|
(3) |
Deferred compensation obligations under the CHS NQDCP (the “NQDCP”) to pay deferred compensation in the future in accordance with
the terms of such plan. |
EXPLANATORY NOTE
The purpose of this Registration Statement is to register $60,000,000 of deferred compensation obligations under the Deferred Compensation Plan and the NQDCP, in the aggregate, topay deferred compensation in the future in accordance with the terms of such plans.
References to “us,” “our,” “we,” “the Company” and “the
Registrants” shall mean Community Health Systems, Inc., a Delaware corporation and its wholly-owned subsidiary CHS/Community Health Systems, Inc., a Delaware corporation, unless the context otherwise requires. “Community Health” refers to Community Health Systems, Inc. and “CHS” refers to CHS/Community Health Systems, Inc.
PART I
The documents containing the information specified in Part I of Form S-8 will be sent or given to plan participants as specified in Rule 428(b)(1) promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
under the Securities Act. Such documents need not be filed with the SEC either as part of this Registration Statement or as prospectuses or prospectus supplementals pursuant to Rule 424. These documents and the documents incorporated by reference into this Registration Statement pursuant to Item 3 of Part II of this Registration Statement constitute a prospectus that meets the requirements of Section
10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THIS REGISTRATION STATEMENT
|
Item 3. |
Incorporation of Documents by Reference |
The SEC allows us to “incorporate by reference” information into this Registration Statement, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this Registration Statement, and later
information that we file with the SEC will automatically update this Registration Statement. We incorporate by reference:
|
(a) |
Our Annual Report filed on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, which contains the Registrant’s audited consolidated financial statements for the fiscal year ended December 31, 2008; |
|
(b) |
Our Quarterly Reports on Form 10-Q filed on April 29, 2009, July 31, 2009 and October 30, 2009 for the periods ended March 31, 2009, June 30, 2009 and September 30, 2009, respectively; and |
|
(c) |
Our Current Reports on Form 8-K filed on February 27, 2009, May 11, 2009 and May 21, 2009. |
In addition, any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934 (the “Exchange Act”), prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date of filing of such documents.
Effective January 1, 2009, the Company adopted a newly effective accounting standard relating to noncontrolling interests in consolidated financial statements, as described more fully in our 2009 unaudited interim consolidated financial statements, as previously issued. The adoption of this new standard did not have a material impact on our
financial condition, results of operations or cash flows. However, it did impact the presentation and disclosure of noncontrolling (minority) interests in our consolidated financial statements. As a result of the retrospective presentation and disclosure requirements of the standard, the Company will be required to reflect the change in presentation and disclosure for all periods presented in future filings.
The principal effect on the prior year consolidated balance sheets is summarized as follows (in thousands):
|
December 31, |
||||||||
|
Consolidated Balance Sheets |
2008 |
2007 |
||||||
|
Equity, as previously reported |
$ |
1,672,865 |
$ |
1,710,804 |
||||
|
AAdjustments to noncontrolling interests for adoption of accounting standards |
28,266 |
39,513 |
||||||
|
Equity, as adjusted |
$ |
1,701,131 |
$ |
1,750,317 |
||||
Additionally, adopting this standard had the effect of reclassifying earnings attributable to noncontrolling interest in the consolidated statement of income from minority interest in earnings used in deriving income from continuing operations to a separate caption titled net income attributable to noncontrolling interests. This
newly captioned line item is presented as a reduction to net income to arrive at net income attributable to Community Health Systems, Inc. in the consolidated statement of income. Thus, as a result of adopting this new standard net income for the years ending December 31, 2008 and 2007 as presented in our Form 10-K for the year ending December 31, 2009 will increase by approximately $40.1 million and $15.2 million, respectively and net income attributable to Community Health Systems, Inc. will be equal to net
income as previously reported prior to the adoption of this standard.
In addition, any future filings made by the Company with the SEC under sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by reference in this prospectus and to be part hereof from the date of filing of such documents.
Any statement contained in any document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed incorporated document modifies or supersedes
such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
Any person, including any beneficial owner, to whom this prospectus is delivered may request copies of this prospectus and any of the documents incorporated by reference in this prospectus, without charge, by written or oral request directed to CHS Investor Relations,
Community Health Systems Professional Services Corp., 4000 Meridian Boulevard, Franklin, TN, telephone (615) 465-7000, on the “Investor Relations” section of the CHS website at http://www.chs.net/investor/index.htm or from the SEC through the SEC’s website at the address provided above. Documents incorporated by reference are available without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference into those documents.
Item 4. Description of Securities
A. Obligations under the Deferred Compensation Plan
The securities offered under this Registration Statement include $10,000,000 of deferred compensation obligations of CHS which may be offered pursuant to the Deferred Compensation Plan to certain members of management and other highly compensated employees of CHS’ management subsidiary and certain other affiliates. The obligations are
unfunded and unsecured obligations of CHS to pay deferred compensation in the future in accordance with the terms of the Deferred Compensation Plan. The obligations rank pari passu with the other unsecured indebtedness of CHS. Community Health guarantees the obligations of CHS under the Deferred Compensation Plan. CHS has entered into a trust arrangement in respect of the Deferred Compensation Plan, which trust holds money or other property delivered to the trustee for payment of benefits
under the Deferred Compensation Plan. However, such arrangement does not, and is not intended to, change the status of the obligations as unsecured general obligations of CHS.
The amount of compensation deferred by participants is determined based on participant elections made in accordance with the provisions of the Deferred Compensation Plan. Under the Deferred Compensation Plan, participants may defer all or a portion of their annual base salary and
bonus in any calendar year. Prior to 2009, CHS and/or its affiliates made certain contributions to participants’ accounts. After 2008, no Company contributions will be made under the Deferred Compensation Plan. Participants are fully vested in their deferral contributions at all times. However, contributions made by CHS and/or its affiliates, if any, become vested ratably on the first, second, third, fourth and fifth completed years of service by a participant.
CHS’ aggregate obligation under the Deferred Compensation Plan at any given time is equal to the sum of participants’ aggregate account balances at such time. Participants’ accounts increase or decrease based on the hypothetical investment of the account balances in one or more investment funds, and are credited
and debited in accordance with the actual financial performance of such funds. Participants elect the investment funds in which their accounts are hypothetically invested. If a participant fails to make an election, the account will be deemed to be invested in a money market or similar fund. These investment funds are merely used as the basis for measuring the value of participants’ accounts. CHS is not required to actually invest in any of these funds.
Participants are entitled to receive distribution of their vested accounts generally upon a termination of employment (including by reason of death). However, participants may elect to receive all or a portion of their accounts on a specified date or dates. Distributions may be made to participants in annual installments
over five or ten years or in a lump sum based on participants’ elections.
In the event of a Change In Control (as defined in the Plan, and which is defined differently in the Deferred Compensation Plan for amounts deferred before 2005 and for amounts deferred after 2004), all amounts in participants’ accounts will be distributed in a lump sum no earlier than 10 days or later than 45 days after the Change
in Control. Also, in the event of an unforeseeable emergency, participants may apply to have all or a portion of their vested accounts distributed to them. In these circumstances, CHS’s retirement committee may distribute to participants an amount determined as reasonably necessary to satisfy the emergency need.
A participant’s interest in his or her accounts under the Deferred Compensation Plan generally cannot be assigned, transferred, garnished, pledged or encumbered by the participant. CHS has reserved the right to amend or terminate the Deferred Compensation Plan at any time, provided that no such amendment or
termination may adversely affect any benefits earned prior to the date of such amendment or termination.
|
B. |
Obligations under the NQDCP |
The securities offered under this Registration Statement include $50,000,000 of deferred compensation obligations of CHS which may be offered pursuant to the NQDCP to certain members of management and other highly compensated employees of CHS and its participating affiliates. The obligations are unfunded and unsecured obligations
of CHS to pay deferred compensation in the future in accordance with the terms of the NQDCP. The obligations rank pari passu with the other unsecured indebtedness of CHS. Community Health guarantees the obligations of CHS under the NQDCP. CHS has entered into a trust arrangement in respect of the NQDCP, which trust holds money or other property delivered to the trustee for payment
of benefits under the NQDCP. However, such arrangement does not, and is not intended to, change the status of the obligations as unsecured general obligations of CHS.
The amount of compensation deferred by participants is determined based on participant elections made in accordance with the provisions of the NQDCP. Under the NQDCP, participants may defer up to 75% of their annual base salary and up to 100% their bonus in any calendar year. In addition to participant deferrals, CHS
and/or its affiliates may make discretionary contributions to participants’ accounts for any year. Participants are fully vested in their deferral contributions at all times. However, employer discretionary credits made by CHS and/or its affiliates, if any, become vested once participants have completed three years of service (or, if earlier, upon death or reaching age 65 or reaching age 55 with 10 years of service). Other employer credits vest as indicated by the employer
prior to the time of contribution.
CHS’ aggregate obligation under the NQDCP at any given time is equal to the sum of participants’ aggregate account balances at such time. Participants’ accounts increase or decrease based on the hypothetical investment of the account balances in one or more investment funds, and are credited and debited in accordance
with the actual financial performance of such funds. Participants elect the investment funds in which their accounts are hypothetically invested. If a participant fails to make an election, CHS’s retirement committee determines the investment allocation of such participant’s accounts. These investment funds are merely used as the basis for measuring the value of participants’ accounts. CHS is not required to actually invest in any of these funds.
Participants are entitled to receive distribution of their vested accounts generally upon a termination of employment (including by reason of death). However, participants may elect to receive all or a portion of their accounts on a specified date or dates. Distributions generally will be made in a lump sum. However,
participants may elect to receive distributions in a lump sum or in installments over a term not to exceed 15 years, in the case of a separation from service occurring after participants reach age of 65, or reach age 55 with 10 years of service. Also, in the event of an unforeseeable emergency, participants may apply to CHS’ retirement committee to have all or a portion of their vested accounts distributed to them.
A participant’s interest in his or her accounts under the NQDCP generally cannot be assigned, transferred, garnished, pledged or encumbered by the participant. CHS has reserved the right to amend or terminate the NQDCP at any time, provided that no amendment may reduce the balance in any participant’s account and upon
the termination of the NQDCP, all benefits under the NQDCP may be distributed to participants as provided in the plan.
Item 5. Interests of Named Experts and Counsel
The validity of the issuance of Deferred Compensation Obligations offered by the Registration Statement will be passed upon for the Registrant by Rachel A. Seifert, Senior Vice President, General Counsel and Secretary of the Registrant. As of September 30, 2009, Ms. Seifert owned 92,111 shares (of which 57,001 shares are subject
to time vesting restrictions) of Common Stock, and held stock options to purchase 160,000 shares of Common Stock of the Registrant. Ms. Seifert also participates in the Deferred Compensation Plan and may be entitled to benefits under that plan.
Item 6. Indemnification of Directors and Officers
A. Community Health Systems, Inc.
Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify any person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation), by reason of the fact that such person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such
action, suit or proceeding, provided such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of such corporation, and, with respect to any criminal actions and proceedings, had no reasonable cause to believe that his conduct was unlawful. A Delaware corporation may indemnify any person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or contemplated action or suit by
or in the right of such corporation, under the same conditions, except that such indemnification is limited to expenses (including attorneys’ fees) actually and reasonably incurred by such person, and except that no indemnification is permitted without judicial approval if such person is adjudged to be liable to such corporation. Where an officer or director of a corporation is successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to above, or any claim, issue
or matter therein, the corporation must indemnify that person against the expenses (including attorneys’ fees) which such officer or director actually and reasonably incurred in connection therewith.
The Restated Certificate of Incorporation of Community Health Systems, Inc. (“Community Health”) provides that its directors shall not be personally liable to Community
Health or its stockholders for monetary damages for breach of fiduciary duties as a director except to the extent otherwise required by Delaware law. The Restated Certificate of Incorporation and Restated By-Laws provide that the directors and officers of Community Health shall be indemnified to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended, against all expenses and liabilities reasonably incurred in connection with service for or on behalf of Community
Health, except with respect to any matter that such director or officer has been adjudicated not to have acted in good faith or in the reasonable belief that his action was in the best interests of Community Health.
Community Health has entered into agreements to indemnify its directors and officers in addition to the indemnification provided for in the Restated Certificate of Incorporation and Restated By-Laws. These agreements, among other things, indemnify
directors and officers of Community Health to the fullest extent permitted by Delaware law for certain expenses (including attorneys’ fees), liabilities, judgments, fines and settlement amounts incurred by such person arising out of or in connection with such person’s service as a director or officer of Community Health or an affiliate of Community Health.
Policies of insurance are maintained by Community Health under which its directors and officers are insured, within the limits and subject to the limitations of the policies, against certain expenses in connection with the defense of, and certain
liabilities which might be imposed as a result of, actions, suits or proceedings to which they are parties by reason of being or having been such directors or officers.
B. CHS/Community Health Systems, Inc.
CHS/Community Health Systems, Inc.’s Restated Certificate of Incorporation provides that its directors shall not be personally liable to it or its stockholders for monetary damages for breach of fiduciary duties as a director except to the extent otherwise required by Delaware law. The By-laws of CHS/Community Health Systems, Inc.
provide for the indemnification of all current and former directors and officers to the fullest extent permitted by Delaware law.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
|
Exhibit No. |
Description of Exhibit
|
|
4.1* |
CHS/Community Health Systems, Inc. Deferred Compensation Plan, effective as of January 1, 2008.
|
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4.2* |
CHS NQDCP, effective as of September 1, 2009.
|
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4.3* |
CHS NQDCP Adoption Agreement, executed as of August 11, 2009.
|
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4.4* |
Guarantee, dated December 9, 2009, made by Community Health in favor of CHS with respect to CHS’ payment obligations under the Deferred Compensation Plan and the NQDCP.
|
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5.1* |
Opinion of Rachel A. Seifert.
|
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23.1 |
Consent of Rachel A. Seifert (included in Exhibit 5.1).
|
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23.2* |
Consent of Deloitte & Touche LLP. |
______________________
|
|
* filed herewith |
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Item 9. |
Undertakings
| |||
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(a) |
The undersigned Registrants hereby undertake:
| |||
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(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
| ||||
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(i) |
To include any prospectus required by Section 10(a)(3) of the Securities Act;
| |||
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(ii) |
To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and
| |||
|
(iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
| |||
|
provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the
Registrants pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.
| ||||
|
(2) |
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
| |||
|
(3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
| |||
|
(b) |
The undersigned Registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of our annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of those securities at that time will be deemed to be the initial bona fide offering.
| |||
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(c) |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrants pursuant to the provisions described in Item 6 of this Registration Statement, or otherwise, the Registrants have been advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether indemnification is against public policy as expressed in the Act and will be governed by the final adjudication of the issue. | |||
SIGNATURES
Pursuant to the requirements of the Securities Act, CHS/Community Health Systems, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Franklin,
State of Tennessee, on December 11, 2009.
|
Community Health Systems, Inc. (Registrant)
| |||
|
By: |
/s/ Wayne T. Smith | ||
|
Name: |
Wayne T. Smith | ||
|
Title: |
Chairman of the Board, President and Chief Executive Officer | ||
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
|
Signature |
Title |
Date |
|
/s/ Wayne T. Smith |
Chairman of the Board, President and
Chief Executive Officer (principal executive officer) |
December 11, 2009 |
|
Wayne T. Smith |
||
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/s/ W. Larry Cash |
Executive Vice President, Chief Financial Officer and
Director (principal financial officer) |
December 11, 2009 |
|
W. Larry Cash
|
||
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/s/ T. Mark Buford |
Vice President and Chief Accounting Officer (principal accounting officer) |
December 11, 2009 |
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T. Mark Buford
|
||
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/s/ John A. Clerico |
Director |
December 11, 2009 |
|
John A. Clerico |
||
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/s/ John A. Fry |
Director |
December 11, 2009 |
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John A. Fry |
||
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/s/ Harvey Klein, M.D. |
Director |
December 11, 2009 |
|
Harvey Klein, M.D. |
||
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/s/ Julia B. North |
Director |
December 11, 2009 |
|
Julia B. North |
||
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/s/ H. Mitchell Watson, Jr. |
Director |
December 11, 2009 |
|
H. Mitchell Watson, Jr. |
Constituting a majority of the Board of Directors of Community Health Systems, Inc.
INDEX TO EXHIBITS
|
Exhibit No. |
Description of Exhibit
|
|
4.1* |
CHS/Community Health Systems, Inc. Deferred Compensation Plan, effective as of January 1, 2008.
|
|
4.2* |
CHS NQDCP, effective as of September 1, 2009.
|
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4.3* |
CHS NQDCP Adoption Agreement, executed as of August 11, 2009.
|
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4.4* |
Guarantee, dated December 9, 2009, made by Community Health in favor of CHS with respect to CHS’ payment obligations under the Deferred Compensation Plan and the NQDCP.
|
|
5.1* |
Opinion of Rachel A. Seifert.
|
|
23.1 |
Consent of Rachel A. Seifert (included in Exhibit 5.1).
|
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23.2* |
Consent of Deloitte & Touche LLP.
|
|
|
______________________ |
|
|
* filed herewith |
Exhibit 4.1
CHS/COMMUNITY
HEALTH SYSTEMS, INC.
DEFERRED
COMPENSATION PLAN
January
1, 2008
TABLE OF CONTENTS
Page
|
DEFINITIONS
AND CONSTRUCTION
|
1
|
|
ARTICLE II
|
ADMINISTRATION
|
5
|
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ARTICLE III
|
PARTICIPATION
|
6
|
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ARTICLE IV
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BENEFITS
|
7
|
|
ARTICLE V
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VESTING
|
8
|
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ARTICLE VI
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TRUST
|
8
|
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ARTICLE VII
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PAYMENT
OF BENEFITS
|
8
|
|
ARTICLE VIII
|
HARDSHIP
DISTRIBUTIONS
|
10
|
|
ARTICLE IX
|
CHANGE
IN CONTROL
|
10
|
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ARTICLE X
|
NATURE
OF THE PLAN
|
11
|
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ARTICLE XI
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EMPLOYMENT
RELATIONSHIP
|
11
|
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ARTICLE XII
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AMENDMENT
AND TERMINATION
|
11
|
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ARTICLE XIII
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CLAIMS
PROCEDURE
|
12
|
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ARTICLE XIV
|
MISCELLANEOUS
|
13
|
|
EXHIBIT
A
|
PRE-2005
PLAN DOCUMENT
|
14
|
- i -
CHS/COMMUNITY
HEALTH SYSTEMS, INC.
DEFERRED
COMPENSATION PLAN
W I T N E
S S E T H:
WHEREAS,
CHS/Community Health Systems, Inc. (the “Company”) has previously established
and currently maintains the CHS/Community Health Systems, Inc. Deferred
Compensation Plan (the “Plan”); and
WHEREAS,
the Company has previously amended and restated the Plan in order to establish a
deferred compensation arrangement under the Plan for deferrals made on or after
January 1, 2005, in compliance with Internal Revenue Code Section 409A and the
guidance related thereto; and
WHEREAS,
the Company wishes to amend and restate the Plan to incorporate required
provisions for compliance with Code Section 409A and the final Treasury
regulations promulgated thereunder and to make certain other
changes;
NOW,
THEREFORE, the Plan is hereby amended and restated, effective as of January 1,
2008, except as otherwise provided herein, as follows:
ARTICLE I
DEFINITIONS
AND CONSTRUCTION
1.1 Definitions. Where
the following words and phrases appear in the Plan, they shall have the
respective meanings set forth below, unless their context clearly indicates to
the contrary:
(1) Account: An
account shall be established for a Member that is credited with amounts
determined pursuant to Sections 4.1 and 4.2 of the Plan. As of any
Determination Date, a Member’s benefit under the Plan shall be equal to the
amount credited to his Account as of such date. If a Member has made
an election to defer a portion of his Compensation until a specified date
pursuant to Section 3.4, the account described herein shall consist of such
subaccounts as are necessary to segregate such deferral from the other amounts
deferred by the Member.
(2) Affiliate: Any
subsidiary of Community Health Systems, Inc., the corporate parent of the
Company.
(3) Bonus: A
bonus paid by the Company or an Affiliate to a Member for services rendered or
labor performed while a Member during a Plan Year other than an Incentive
Compensation Bonus.
(4) Bonuses: A
Bonus or an Incentive Compensation Bonus.
(5) Change in
Control: The occurrence of any of the following events, but
only to the extent such event would constitute a change in the ownership or
effective control of CHS, or in the ownership of a substantial portion of the
assets of CHS, as set
-
1 -
forth in Code Section 409A(a)(2)(A)(v) and
defined in regulations promulgated by the U.S. Department of Treasury
thereunder:
(b) The
individuals who, as of the date hereof, are members of the Board of CHS
(“Incumbent Board”), cease for any reason to constitute at least a majority of
the members of the Board of CHS or, following a Merger (as hereinafter defined)
that results in CHS having a Parent Corporation (as hereinafter defined), the
board of directors of the ultimate Parent Corporation; provided, however, that
if the election, or nomination for election, by the CHS common stockholders, of
any new director was approved by a vote of at least two-thirds of the Incumbent
Board of CHS, such new director shall, for purposes of the Plan, be considered
as a member of the Incumbent Board of CHS; provided further, however, that no
individual shall be considered a member of the Incumbent Board of CHS if such
individual initially assumed office as a result of either an actual or
threatened Election Contest (as described in Rule 14a-11 promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of CHS (“Proxy
Contest”), including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) The
consummation of:
(1) A
merger, consolidation or reorganization with or into the Company or in which
securities of the Company are issued (“Merger”), unless such Merger, is a
Non-Control Transaction. A Non-Control Transaction shall mean a Merger
where:
(A) the
stockholders of CHS immediately before such Merger own, directly or indirectly,
immediately following such Merger, at least 50% of the combined voting power of
the outstanding voting securities of (x) the corporation resulting from
such Merger (“Surviving Corporation”), if 50% or more of the combined voting
power of the then outstanding voting securities of the Surviving Corporation is
not Beneficially Owned, directly
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or
indirectly, by another Person (“Parent Corporation”), or (y) if there are
one or more Parent Corporations, the ultimate Parent Corporation;
and
(B) the
individuals who were members of the Incumbent Board of CHS immediately prior to
the execution of the agreement providing for such Merger, constitute at least a
majority of the members of the board of directors of (x) the Surviving
Corporation, if there is no Parent Corporation, or (y) if there are one or
more Parent Corporations, the ultimate Parent Corporation.
(2) A
complete liquidation or dissolution of CHS; or
(3) The
sale or other disposition of all, or substantially all, of the assets of CHS to
any Person (other than a transfer to a Subsidiary or under conditions that
would constitute a Non-Control Transaction with the disposition of assets being
regarded as a Merger for this purpose or the distribution to the CHS’
stockholders of the stock of a Subsidiary or any other assets).
Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (“Subject Person”) acquired Beneficial Ownership of more than the
permitted amount of the then-outstanding Shares or Voting Securities as a result
of the acquisition of Shares or Voting Securities by CHS which, by reducing the
number of Shares or Voting Securities then-outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Shares or Voting Securities by CHS, and after
such share acquisition by CHS the Subject Person
becomes the Beneficial Owner of any additional Shares or Voting Securities which
increases the percentage of the then-outstanding Shares or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall
occur.
(6) CHS: Community
Health Systems, Inc., a Delaware corporation.
(7) Code: The
Internal Revenue Code of 1986, as amended.
(8) Committee: The
administrative committee appointed by the Company to administer the Plan, if
any, which committee shall consist of the same persons designated by the Company
pursuant to the terms of the Retirement Plan to act on behalf of the
Company.
(9) Company:
CHS/Community Health Systems, Inc.
(10) Company Matching
Contributions: Contributions made to the Retirement Plan by
the Company or an Affiliate on a Member’s behalf pursuant to Section 4.1(b) of
the Retirement Plan or otherwise as provided for therein.
(11) Compensation: The
total base salary paid by the Company or an Affiliate during the Plan Year to or
for the benefit of a Member for services rendered or labor performed while a
Member as determined by the Company in its sole discretion.
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(12) Contributing Member:
A Member who, for a Plan Year, made a deferral election pursuant to Section 3.2,
Section 3.3 and/or Section 3.4.
(13) Determination
Date. The last day of the Plan Year, or such other dates as
established by the plan administrator.
(14) ERISA: Employee
Retirement Income Security Act of 1974, as amended.
(15) Incentive Compensation
Bonus: Performance-based compensation, as such term is defined
under Code Section 409A and the regulations promulgated thereunder, paid by the
Company or an Affiliate to a Member for services rendered or labor performed
while a Member during the entire Plan Year.
(16) Investment(s): Any
investment fund(s) offered through the Trustee or its affiliates.
(17) Investment Gains or
Losses: Actual gains or losses realized from investments
applied to a Member’s Account as of each Determination Date pursuant to
Section 4.1 of the Plan, after deducting applicable investment-related
costs and expenses, if any. For the Determination Date, such Member’s
Account may be reduced or increased for an amount equal to the Federal or state
income taxes that the Company is required to pay or expects to realize in
relation to such investment(s)’ taxable gain or loss realized during such
year.
(18) Limitations: Benefit
limitations imposed on the Retirement Plan under the Employee Retirement Income
Security Act of 1974, as amended, and under sections 401(a)(17), 401(k)(3),
401(m)(2), 402(g) and 415 of the Internal Revenue Code of 1986, as
amended.
(19) Member: Any
employee of the Company or an Affiliate who has been designated by the Committee
as a Member of the Plan until such employee ceases to be a Member in accordance
with Section 3.1 of the Plan.
(20) Plan: CHS/Community
Health Systems, Inc. Deferred Compensation Plan, as amended from time to
time.
(21) Plan
Year: The twelve-consecutive month period commencing January 1
and ending December 31 of each year.
(22) Retirement Plan:
Community Health Systems, Inc. 401(k) Plan.
(23) Separation from
Service: The termination of employment with the Company, as
set forth in Code Section 409A(a)(2)(A)(i) and defined in regulations
promulgated by the U.S. Department of Treasury thereunder, provided that no
separation from service shall occur while a Member is on military leave, sick
leave, or other bona fide leave of absence not extending beyond six months, or,
if longer, so long as the Member’s right to reemployment is provided either by
statute or by contract. If a period of leave exceeds six months and
the Member’s right to reemployment is not provided
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either by
statute or contract, for the purposes of the Plan, the employment relationship
is deemed to terminate on the first date immediately following such six-month
period; provided, however, that that a Member shall not be deemed to have
Separated from Service on account of a leave of absence until the first date
immediately following the end of a 29-month period of leave (if the employment
relationship is not terminated sooner) where such leave is due to any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than six
months and where such impairment causes the Member to be unable to perform the
duties of his or her position of employment or any substantially similar
position of employment.
(24) Specified
Employee: A key employee, as defined in Code Section 416(i)
without regard to Section 416(i)(5), of an employer any stock of which is
publicly traded on an established securities market or otherwise. The
identification date for determining a key employee shall be December
31. For the purposes of this definition, the term employer shall
refer to the entity for whom the services are performed by the Specified
Employee and with respect to whom the legally binding right to compensation
arises together with and all entities with whom such entity would be considered
a single employer under Code Section 414(b) or Code Section 414(c).
(25) SSP: CHS
401(k) Supplemental Savings Plan.
(26) Trust
Agreement: The agreement entered into between the Company and
the Trustee establishing a trust to hold and invest contributions made by the
Company under the Plan and from which all or a portion of the amounts payable
under the Plan to Members and their beneficiaries will be
distributed.
(27) Trust
Assets: All assets held by the Trustee under the Trust
Agreement.
(28) Trustee: The
trustee or trustees qualified and acting under the Trust Agreement at any
time.
1.2 Number and
Gender. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and the plural to include the
singular. Wherever appropriate herein, the masculine gender, where
appearing in this Plan, shall be deemed to include the feminine gender and vice
versa.
1.3 Headings. The
headings of Articles and Sections herein are included solely for convenience,
and, if there is any conflict between such headings and the text of the Plan,
the text shall control.
ARTICLE II
ADMINISTRATION
The Plan
shall be administered by the Committee, which shall be authorized, subject to
the provisions of the Plan, to establish rules and regulations and make such
interpretations and determinations as it may deem necessary or advisable for the
proper administration of the Plan
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and all such rules, regulations, interpretations, and
determinations shall be binding on all Plan Members and their
beneficiaries. The Committee shall be composed of not less than three
individuals. Each member of the Committee shall serve until he
resigns or is removed by the Company. Upon the resignation or removal
of a member of the Committee, the Company shall appoint a substitute
member. No member of the Committee shall have any right to vote or
decide upon any matter relating solely to himself under the Plan or to vote in
any case in which his individual right to claim any benefit under the Plan is
particularly involved. In any case in which a Committee member is so
disqualified to act, and the remaining members cannot agree, the Company shall
appoint a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is
disqualified. All expenses incurred in connection with the
administration of the Plan shall be borne by the Company.
ARTICLE III
PARTICIPATION
3.1 Eligibility. Any
employee of the Company or an Affiliate shall become a Member upon designation
by the Committee. Once an employee has been designated as a Member,
he shall automatically continue to be a Member until he ceases to be an employee
of the Company or an Affiliate or is removed as a Member by the
Committee. Notwithstanding the preceding provisions of this
Section 3.1, participation in this Plan shall at all times be limited to a
selected group of management or highly compensated employees of the Company and
its Affiliates.
3.2 Compensation Deferral
Election. Any Member may elect to defer receipt of a whole
percentage or amount of his Compensation during a Plan Year under the
Plan. A Member’s election to defer receipt of Compensation shall be
made prior to the beginning of such Plan Year and shall be irrevocable for such
Plan Year. The reduction in a Member’s Compensation pursuant to his
election shall be effected by Compensation reductions each payroll period within
the Plan Year. For new Members, the election shall be made within
thirty (30) days of becoming eligible.
3.3 Bonus Deferral
Election. Any Member may elect to defer receipt of a whole
percentage or amount of his Bonus or Incentive Compensation Bonus for any Plan
Year under the Plan. A Member’s election to defer receipt of any
Bonus shall be made prior to the beginning of such Plan Year and shall be
irrevocable for such Plan Year. A Member’s election to defer receipt
of any Incentive Compensation Bonus for any Plan Year shall be made at least six
months prior to the end of the Plan Year. The election to defer
receipt of such whole percentage of a Member’s Bonus or Incentive Compensation
Bonus pursuant to the deferral election above shall be effected by a reduction
in the amount of the Bonus or Incentive Compensation Bonus to which such
deferral election relates.
3.4 Targeted Deferral
Election. Subject to the rules in Section 3.2, any Member may
elect to defer receipt of a whole percentage or amount of any portion of the
Member’s Compensation until a specific future date by executing a deferral form
designed for such purpose as specified by the Committee. Upon the
occurrence of any such date specified by a Member in such an election form, the
deferred amount, without the Investment(s) Gains or Losses
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attributable thereto, shall be distributed to the
Member. Until so distributed, such deferral amounts shall continue to
be a part of the Member’s Account.
3.5 Investment
Request. A Member may request the Committee to invest or
change the investment of all or a portion of his Account in any
Investments. A Member may make such request at any time, provided
that the Committee shall only be obligated to direct the Trustee to make such
Investment or change such Investment as soon as reasonably practicable and
within the guidelines and requirements established by the Trustee for the
investment of funds held in the Account. A Member who does not
request the Committee to invest any portion of his Account shall have the funds
held in such Account in a money market or similar fund.
ARTICLE IV
BENEFITS
4.1 Deferral
Contributions. As of the last day of each payroll period of
each Plan Year, a Member’s Account shall be credited with an amount equal to the
Compensation deferred under the Plan pursuant to an election by the Member as
described in Article III for such payroll period. As of the
last day of the payroll period in which Bonuses are paid, a Member’s Account
shall be credited with an amount equal to the Bonuses deferred under the Plan
pursuant to an election by the Member as described in Article III.
4.2 Matching
Contributions. As of the last day of each Plan Year, or, if
later, the date on which the Company Matching Contributions are made under the
Retirement Plan for any such Plan Year, the Member’s Account of each
Contributing Member during such Plan Year who remains employed by the Company on
such date shall be credited with an amount equal to the following:
(1) the
Company Matching Contributions to which such Contributing Member would have been
entitled under the Retirement Plan taking into account both (i) the salary
deferrals made by such Contributing Member to the Retirement Plan for the Plan
Year, and (ii) the deferrals made by such Contributing Member under this Plan
pursuant to Sections 3.2, 3.3, or 3.4 for the same Plan Year (up to a
combined maximum of six percent (6.00%) of such Contributing Member’s
Compensation assuming that none of the Limitations were imposed);
minus
(2) the
Company Matching Contributions, if any, actually made on behalf of such
Contributing Member under the Retirement Plan for such Plan Year;
minus
(3) the
Company contributions, if any, to accounts actually made on behalf of such
Contributing Member under the SSP for such Plan Year.
In
addition, if (i) the total of such Contributing Member’s salary deferrals under
the Retirement Plan (as adjusted after application of the Limitations) and
deferrals pursuant to the SSP and Sections 3.2, 3.3 or 3.4 under this Plan is
less than 6.00% of such Contributing Member’s Compensation for a Plan Year; and
(ii) the Contributing Member elects to increase his or her deferrals under this
Plan by all or any portion of any salary deferrals to the Retirement Plan that
are returned to the Contributing Member as a result of the application of the
Limitations within
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- -
120 days
after receipt of such returned salary deferrals, even if such increased
deferrals are made in the next Plan Year, such increased deferrals shall also be
taken into account in subparagraph (i) above until the total of the Contributing
Member’s salary deferrals under the Retirement Plan, SSP, and deferrals under
this Plan for the Plan Year equals 6.00% of the Contributing Member’s
Compensation.
Effective
as of January 1, 2009, no additional amounts shall be credited to a Contributing
Member’s Account pursuant to this Section 4.2.
ARTICLE V
VESTING
All
amounts credited to a Member’s Account shall be fully vested and not subject to
forfeiture for any reason; provided, however, the amounts credited to a Member’s
Account pursuant to Section 4.2, including any Investment Gains or Losses
allocable to such credits, shall be subject to the same vesting schedule as that
set forth in the Retirement Plan. Notwithstanding the preceding
sentence, the benefits payable to each Member hereunder constitute an unfunded,
unsecured obligation of the Company, and the assets held by the Company and the
Trustee remain subject to the claims of the Company’s creditors.
ARTICLE VI
TRUST
The
Company may, from time to time and in its sole discretion, pay and deliver money
or other property to the Trustee for the payment of benefits under the
Plan. Notwithstanding any provision in the Plan to the contrary,
distributions due under the Plan to or on behalf of Members shall be made by the
Trustee in accordance with the terms of the Trust Agreement and the Plan;
provided, however, that the Company shall remain obligated to pay all amounts
due to such persons under the Plan. To the extent that Trust Assets
are not sufficient to pay any amounts due under the Plan to or on behalf of the
Members when such amounts are due, the Company shall pay such amounts
directly. Nothing in the Plan or the Trust Agreement shall relieve
the Company of its obligation to make the distributions required in Article VII
hereof except to the extent that such obligation is satisfied by the application
of funds held by the Trustee under the Trust Agreement. Any recipient
of benefits hereunder shall have no security or other interest in Trust
Assets. Any and all Trust Assets shall remain subject to the claims
of the general creditors of the Company, present and future, and no payment
shall be made under the Plan unless the Company is then
solvent. Should an inconsistency or conflict exist between the
specific terms of the Plan and those of the Trust Agreement, then the relevant
terms of the Trust Agreement shall govern and control.
ARTICLE VII
PAYMENT OF
BENEFITS
7.1 Separation from
Service. Upon a Member’s Separation from Service with the
Company or an Affiliate for any reason, the amount credited to such Member’s
Account as of the
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Determination Date immediately preceding such Member’s Separation
from Service, adjusted for any amount deferred and Investment Gains or Losses
realized from such Determination Date to the date of the Member’s Separation
from Service, shall be distributed to such Member or, if the Member’s Separation
from Service is on account of death, to the Member’s beneficiary as determined
pursuant to Section 7.2 below.
7.2 Death. Upon
a Member’s death, the amount credited to such Member’s Account as of the
Determination Date immediately preceding the date of such Member’s death,
adjusted for any amount deferred and Investment Gains or Losses realized from
such Determination Date to the date of the Member’s death, shall be distributed
to such Member’s designated beneficiary. The Member, by written
instrument filed with the Committee in such manner and form as the Committee may
prescribe, may designate one or more beneficiaries to receive such
payment. The beneficiary designation may be changed from time to time
prior to the death of the Member. In the event that the Committee has
no valid beneficiary designation on file, the amount credited to such Member’s
Account shall be distributed to the Member’s surviving spouse, if any, or if the
Member has no surviving spouse, to the executor or administrator of the Member’s
estate, as applicable.
7.3 Targeted
Deferrals. If a Member has made one or more targeted deferrals
pursuant to Section 3.4, upon the date specified in any election form used by
the Member to make such election, the amount credited in the subaccount of the
Member’s Account which relates to such deferral as of the Determination Date
immediately preceding such specified date shall be distributed to such
Member. If some event takes place that would entitle a Member to a
distribution under Sections 7.1 or 7.2 prior to such specified date, the amounts
in such subaccount shall be distributed along with any other amounts in the
Member’s Account pursuant to Section 7.1 or 7.2.
7.4 Time of
Payment. Payment of a Member’s benefit hereunder shall be made
as soon as administratively feasible following the date on which the Member or
his beneficiary becomes entitled to such benefit pursuant to Sections 7.1, 7.2,
or 7.3, but no earlier than 10 days thereafter and no later than 45 days
thereafter, except for the Company Matching Contributions as provided
herein. If a Member’s Separation from Service or death or any other
events that entitle the Member to a distribution occurs within the first four
months of a year, the portion of the Company Matching Contributions for the
preceding Plan Year that has been credited to a Member’s Account shall be
distributed to such Member no later than the earlier of (i) the date of which
the calculation of such contributions has been finalized or (ii) May 1 of the
year of termination of employment or death, or any other events which shall
entitle the Member to a distribution. In all other events, the 10
days and 45 days limitation shall apply to the distribution of the Member’s
entire Account balance, unless expressly provided
otherwise. Notwithstanding the foregoing, for a Specified Employee,
distributions may not be made before the day immediately following the date that
is six (6) months after the date of the Member’s Separation from Service (or, if
earlier, the date of death of the Member). Also, notwithstanding the
foregoing, a Member may elect to delay the time of payment under the following
conditions: (i) such election shall not take effect until at least 12
months after the date on which the election is made; (ii) with respect to a
payment made upon Separation from Service, a targeted deferral, or as a result
of a Change in Control, the first payment with respect to which such election is
made be deferred for a period of not less than 5 years from the date such
payment would otherwise
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have been made; and (iii) any election related to a targeted
deferral may not be made less than 12 months prior to the date of the first
scheduled payment. Notwithstanding anything in this Section 7.4 to the contrary,
an election relating to the time of payment may be made as permitted under Code
Section 409A and applicable guidance of the Internal Revenue Service.
7.5 Form of
Payment. For purposes of distributing all of a Member’s
Account, the form of any payment to a Member or his designated beneficiary shall
be in a lump sum, paid in cash or by check; provided, however, if an election is
made to delay the time of payment under Section 7.4, such payments shall be
made, at the election of the Member, in a lump sum, in five (5) annual
installments, or in ten (10) annual installments. Notwithstanding
anything in this Section 7.5 to the contrary, an election relating to the form
of payment may be made as permitted under Code Section 409A and applicable
guidance of the Internal Revenue Service.
7.6 2008 Transitional Rule
Election. By election made no later than December 31,
2008, a Member may elect to change the time or form of payment of a Member’s
Account and the election shall not be treated as a change in time or form of
payment under Code Section 409A(a)(4) or an acceleration of payment under Code
Section 409A(a)(3). Such election may apply only to amounts that
would not otherwise be payable in 2008 and may not cause an amount to be paid in
2008 that would not otherwise be payable in 2008.
ARTICLE VIII
HARDSHIP
DISTRIBUTIONS
Upon
written application by a Member who has experienced an unforeseeable emergency,
the Committee may distribute to such Member an amount not to exceed the lesser
of the amount credited to such Member’s Account or the amount determined by the
Committee as being reasonably necessary to satisfy the emergency need (a
“Hardship Distribution”). For purposes of this Article VIII, an
unforeseeable emergency shall mean a severe financial hardship to the Member
resulting from an illness or accident of the Member, the Member's spouse, or a
dependent (as defined in Code Section 152(a)) of the Member, loss of the
Member's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Member. The requirement for a Hardship Distribution is met only
if, as determined under regulations of the Secretary of Treasury, the amounts
distributed with respect to an emergency do not exceed the amounts necessary to
satisfy such emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Member's assets
(to the extent the liquidation of such assets would not itself cause severe
financial hardship).
ARTICLE IX
CHANGE IN
CONTROL
Notwithstanding
any provision of the Plan to the contrary, in the event of a Change in Control,
the amount credited to such Member’s Account as of the Determination Date
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immediately preceding such Change in Control, adjusted for any
amount deferred and Investment Gains or Losses realized from such Determination
Date to the date of the Change in Control, shall be distributed to such Member
in a single lump sum payment as soon as administratively feasible, but no
earlier than 10 days thereafter and no later than 45 days after the date of the
Change in Control.
ARTICLE X
NATURE OF THE
PLAN
The Plan
shall constitute an unfunded, unsecured obligation of the Company to make cash
payments in accordance with the provisions of the Plan. The Plan is
not intended to meet the qualification requirements of section 401 of the
Internal Revenue Code of 1986, as amended. The Company in its sole
discretion may set aside such amounts for the payment of Accounts as the Company
may from time to time determine. Neither the establishment of the
Plan, the operation thereof, nor the setting aside of any amounts shall be
deemed to create a funding arrangement. No Member shall have any
security or other interest in any such amounts set aside or any other assets of
the Company.
The
arrangement provided for in this January 1, 2008, amendment of the Plan shall
apply only with respect to amounts deferred after December 31,
2004. For amounts deferred before January 1, 2005, such deferrals
shall be governed by the arrangement in place prior to the January 1, 2005,
amendment of the Plan, as set forth in Exhibit A. No provision of
this document is intended to be and shall not be a material modification of the
arrangement in place as of October 3, 2004. To the extent any term of
this document constitutes a material modification (that is, a benefit or right
existing as of October 3, 2004, is enhanced or a new benefit or right is added)
to the prior arrangement, such modification shall be of no force or
effect.
ARTICLE XI
EMPLOYMENT
RELATIONSHIP
Nothing
in the adoption or implementation of the Plan shall confer on any employee the
right to continued employment by the Company or an Affiliate or affect in any
way the right of the Company or an Affiliate to terminate his employment at any
time. For the purposes of the Plan, any question as to whether and
when there has been a termination of a Member’s employment, and the cause of
such termination, shall be determined by the Committee, and its determination
shall be final.
ARTICLE XII
AMENDMENT AND
TERMINATION
The
Company may amend or terminate the Plan, by written action, without the consent
of the Members; provided, however, that no such amendment or termination shall
adversely affect any benefits that have been earned prior to any such amendment
or termination, except as required by law.
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ARTICLE XIII
CLAIMS
PROCEDURE
The
Committee shall have full power and authority to interpret, construe, and
administer the Plan, and the Committee’s interpretations and construction
hereof, and actions hereunder, including the value, amount, timing, form, or
recipient of any payment to be made hereunder, shall be binding and conclusive
on all persons for all purposes. Notwithstanding the foregoing, the
determination of a Change in Control event will be objectively determinable
under Article IX and the Committee shall not have discretionary authority
to determine whether a Change in Control has occurred.
In the
event that a claim for a benefit is wholly or partially denied, the Committee
shall, within 90 days after receipt of the claim by the Plan, provide the
claimant with a written statement setting forth the specific reasons for the
adverse determination; reference to the specific plan provisions on which the
determination is based; a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and a description of the Plan’s review
procedures and time limits applicable to such procedures, including a statement
of the claimant’s right to bring a civil action under Section 502(a) of the
ERISA following an adverse benefit determination on review.
The
claimant will have 60 days following receipt of an adverse benefit determination
within which to appeal the determination. During such time, the
Participant will have the opportunity to submit written comment, documents,
records, and other information relating to the claim for
benefits. The claimant will be provided, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claim for benefits. The review will take into
account all comments, documents, records, and other information submitted by the
claimant relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.
The
Committee will notify the claimant within 60 days after receipt of the
claimant's request for review by the Plan. In the case of an adverse
benefit determination, the notification shall set forth, in a manner calculated
to be understood by the claimant the specific reason or reasons for the adverse
determination; reference to the specific plan provisions on which the benefit
determination is based; a statement that the claimant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the claimant's claim for
benefits; and a statement describing any voluntary appeal procedures offered by
the plan and the claimant's right to obtain the information about such
procedures, and a statement of the claimant's right to bring an action under
section 502(a) of ERISA.
No member
of the Committee shall be liable to any person for any action taken or omitted
in connection with the interpretation and administration of the Plan unless
attributable to his own willful misconduct or lack of good
faith. Claimants who are members of the Committee shall not
participate in any action or determination regarding their own benefits
hereunder.
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ARTICLE XIV
MISCELLANEOUS
14.1 Indemnification. The
Company shall indemnify and hold harmless each member of the Committee and any
other persons acting on its behalf, against any and all expenses and liabilities
arising out of his or her administrative functions or fiduciary
responsibilities, excepting only expenses and liabilities arising out of the
individual’s own willful misconduct or lack of good faith. Expenses
against which such person shall be indemnified hereunder include, without
limitation, the amounts of any settlement or judgment, costs, counsel fees and
related charges reasonably incurred in connection with a claim asserted or a
proceeding brought or settlement thereof.
14.2 Withholding
Taxes. The Company shall have the right to deduct from any
payments made under this Plan, any federal, state or local taxes required by law
to be withheld with respect to such payments.
14.3 Nonalienation of
Benefits. Subject to income tax withholding, benefits payable
under this Plan shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution
or levy of any kind, either voluntary or involuntary, including any such
liability that is for alimony or other payments for the support of a spouse or
former spouse, or for any other relative of the Member, prior to actually being
received; and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to benefits payable
hereunder shall be void. The Company shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements or
torts of any person entitled to benefits hereunder.
14.4 Severability. If
any provision of the Plan shall be held illegal or invalid for any reason, said
illegality or invalidity shall not affect the remaining provisions hereof;
rather, each provision shall be fully severable and the Plan shall be construed
and enforced as if said illegal or invalid provision had never been included
herein.
14.5 Jurisdiction. The
situs of the Plan hereby created is Tennessee. All provisions of the
Plan shall be construed in accordance with the laws of Tennessee except to the
extent preempted by federal law.
IN
WITNESS WHEREOF, the undersigned has caused this Plan to be executed on the
24th day
of December, 2008, to be effective as of January 1, 2008.
|
|
||
|
By:
|
/s/
Rachel A. Seifert
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|
|
Title:
|
Senior
Vice President
|
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- 13 -
EXHIBIT
A
CHS/COMMUNITY
HEALTH SYSTEMS, INC.
DEFERRED
COMPENSATION PLAN
As
Amended Effective October 1, 1993; January 1, 1994; January 1,
1995;
April 1,
1999; July 1, 2000; January 1, 2001; and June 30, 2002
Original
Effective Date: June 1, 1991
- 14 -
EXHIBIT
A
TABLE OF
CONTENTS
|
ARTICLE I
|
DEFINITIONS
AND CONSTRUCTION
|
14
|
|
ARTICLE II
|
ADMINISTRATION
|
|
17
|
|
ARTICLE III
|
PARTICIPATION
|
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17
|
|
ARTICLE IV
|
BENEFITS
|
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18
|
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ARTICLE V
|
VESTING
|
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20
|
|
ARTICLE VI
|
TRUST
|
|
21
|
|
ARTICLE VII
|
PAYMENT
OF BENEFITS
|
21
|
|
ARTICLE VIII
|
HARDSHIP
DISTRIBUTIONS
|
22
|
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ARTICLE IX
|
SALE
OF THE COMPANY
|
23
|
|
ARTICLE X
|
NATURE
OF THE PLAN
|
23
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|
ARTICLE XI
|
EMPLOYMENT
RELATIONSHIP
|
23
|
|
ARTICLE XII
|
AMENDMENT
AND TERMINATION
|
24
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ARTICLE XIII
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CLAIMS
PROCEDURE
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24
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ARTICLE XIV
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MISCELLANEOUS
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25
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- 15 -
EXHIBIT A
CHS/COMMUNITY
HEALTH SYSTEMS, INC.
DEFERRED
COMPENSATION PLAN
W I T N E
S S E T H:
WHEREAS,
Community Health Investment Corporation (formerly CHS Management Corporation)
has previously established the CHS/Community Health Systems, Inc. Deferred
Compensation Plan (the “Plan”) to provide retirement and incidental benefits for
certain executive employees of the company, effective June 1, 1991;
and
WHEREAS,
the Plan was amended in certain respects, effective December 1, 1991;
and
WHEREAS,
effective January 1, 1992, Community Health Systems, Inc. (the “Company”)
adopted the Plan and assumed all of the duties and responsibilities of Community
Health Investment Corporation; and
WHEREAS,
the Plan was further amended in certain respects effective October 1, 1993,
January 1, 1994, January 1, 1995, April 1, 1999, July 1, 2000, and January
1, 2001, including the change in the name of the Company to CHS/Community Health
Systems, Inc.; and
WHEREAS,
the Company wishes to amend the Plan further as provided herein;
NOW,
THEREFORE, the Plan shall be and is hereby amended and restated in this form,
effective as of June 30, 2002, except as otherwise provided herein
ARTICLE
I
Definitions and
Construction
1.1 Definitions. Where
the following words and phrases appear in the Plan, they shall have the
respective meanings set forth below, unless their context clearly indicates to
the contrary:
(1) Account: A
memorandum bookkeeping account established on the records of the Company for a
Member that is credited with amounts determined pursuant to Sections 4.1 and 4.2
of the Plan. As of any Determination Date, a Member’s benefit under
the Plan shall be equal to the amount credited to his Account as of such
date. If a Member has made an election to defer a portion of his
Compensation until a specified date pursuant to Section 3.4, the account
described herein shall consist of such subaccounts as are necessary to segregate
such deferral from the other amounts deferred by the Member.
(2) Affiliate: Any
subsidiary of Community Health Systems, Inc., the corporate parent of the
Company.
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EXHIBIT
A
(3) Benefit Exchange
Agreement: An agreement entered into between certain Members and the
Company in connection with the surrender of the Member’s interest in the Split
Dollar Agreement and the Member’s vested interest in the cash value of the
variable life insurance policy that is subject to the terms of the Split Dollar
Agreement, as it may be amended.
(4) Bonus: The
bonus paid by the Company or an Affiliate to a Member pursuant to an employment
agreement between the Company or an Affiliate and the Member or otherwise for
services rendered or labor performed while a Member.
(5) Change of
Control: A Change of Control occurs in the event of a sale of
all or substantially all of the stock or assets of the Company to a purchaser if
the debt-to-equity ratio of the purchaser, taking into account the sale of the
stock or assets of the Company, is greater than .75 to 1 as determined by the
Committee immediately prior to the sale.
(6) Committee: The
administrative committee appointed by the Company to administer the Plan, if
any, which committee shall consist of the same persons designated by the Company
pursuant to the terms of the Retirement Plan to act on behalf of the Company, as
the administrator of such Plan.
(7) Company:
CHS/Community Health Systems, Inc.
(8) Company Matching
Contributions: Contributions made to the Retirement Plan
by the Company or an Affiliate on a Member’s behalf pursuant to Section 4.1(b)
of the Retirement Plan or otherwise as provided for therein.
(9) Compensation: The
total base salary paid by the Company or an Affiliate during the Plan Year to or
for the benefit of a Member for services rendered or labor performed while a
Member.
(10) Contributing Member:
A Member who, for a Plan Year, made a deferral election pursuant to Section 3.2,
Section 3.3 and/or Section 3.4.
(11) Determination
Date. The last business day of each quarter in a calendar
year.
(12) Earnings
Credit: The earnings applied to a Member’s Account as of each
Determination Date pursuant to Section 4.2(b).
(13) Effective
Date: June 1, 1991.
(14) Investment(s): Any
investment fund(s) offered through the Trustee or its affiliates including
Nations Fund, Inc., Nations Fund Trust, or Nations Fund Portfolios, Inc. (or
their successors).
(15) Investment Gains or
Losses: Actual gains or losses realized from investments
applied to a Member’s Account as of each Determination Date pursuant to
Section 4.2(a) of the Plan, after deducting applicable investment-related
costs and expenses, if any. For the Determination Date, such Member’s
Account shall be reduced or increased for an amount equal to the Federal or
state income taxes that the Company is required to pay or expects to realize in
relation to such investment(s)’ taxable gain or loss realized during such
year.
- 17 -
(16) Limitations: Benefit
limitations imposed on the Retirement Plan under the Employee Retirement Income
Security Act of 1974, as amended, and under sections 401(a)(17), 401(k)(3),
401(m)(2), 402(g) and 415 of the Internal Revenue Code of 1986, as
amended.
(17) Member: Any
employee of the Company or an Affiliate who has been designated by the Committee
as a Member of the Plan until such employee ceases to be a Member in accordance
with Section 3.1 of the Plan.
(18) Plan: CHS/Community
Health Systems, Inc. Deferred Compensation Plan, as amended from time to
time.
(19) Plan
Year: The seven-month period commencing June 1, 1991, and
ending December 31, 1991 and each twelve-consecutive month period commencing
January 1 of each year thereafter.
(20) Post-Termination Benefits
Deposit: Certain deposit provided for under the terms of the
Split Dollar Agreement.
(21) Retirement Plan:
Community Health Systems, Inc. 401(k) Plan.
(22) Split Dollar
Agreement: An agreement entered into between the Company and the Member
pursuant to the provisions of the Supplemental Survivor Accumulation portion of
the Community Health Systems, Inc. Supplemental Benefits Plan.
(23) SSP: CHS
401(k) Supplemental Savings Plan.
(24) Trust
Agreement: The agreement entered into between the Company and
the Trustee establishing a trust to hold and invest contributions made by the
Company under the Plan and from which all or a portion of the amounts payable
under the Plan to Members and their beneficiaries will be
distributed.
(25) Trust
Assets: All assets held by the Trustee under the Trust
Agreement.
(26) Trustee: The
trustee or trustees qualified and acting under the Trust Agreement at any
time.
1.2 Number and Gender.
Wherever appropriate herein, words used in the singular shall be considered to
include the plural and the plural to include the singular. The
masculine gender, where appearing in this Plan, shall be deemed to include the
feminine gender and vice versa.
1.3 Headings. The
headings of Articles and Sections herein are included solely for convenience and
if there is any conflict between such headings and the text of the Plan, the
text shall control.
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EXHIBIT
A
ARTICLE
II
ADMINISTRATION
The Plan
shall be administered by the Committee that shall be authorized, subject to the
provisions of the Plan, to establish rules and regulations and make such
interpretations and determinations as it may deem necessary or advisable for the
proper administration of the Plan and all such rules, regulations,
interpretations, and determinations shall be binding on all Plan Members and
their beneficiaries. The Committee shall be composed of not less than
three individuals. Each member of the Committee shall serve until he
resigns or is removed by the Company. Upon the resignation or removal
of a member of the Committee, the Company shall appoint a substitute
member. No member of the Committee shall have any right to vote or
decide upon any matter relating solely to himself under the Plan or to vote in
any case in which his individual right to claim any benefit under the Plan is
particularly involved. In any case in which a Committee member is so
disqualified to act, and the remaining members cannot agree, the Company shall
appoint a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is
disqualified. All expenses incurred in connection with the
administration of the Plan shall be borne by the Company.
ARTICLE
III
PARTICIPATION
3.1 Eligibility. Any
employee of the Company or an Affiliate shall become a Member upon designation
by the Committee. Once an employee has been designated as a Member,
he shall automatically continue to be a Member until he ceases to be an employee
of the Company or an Affiliate or is removed as a Member by the
Committee. Notwithstanding the preceding provisions of this
Section 3.1, participation in this Plan shall at all times be limited to a
selected group of management or highly compensated employees of the
Company.
3.2 Compensation Deferral
Election. Any Member may elect to defer receipt of a whole
percentage of his Compensation for one or more calendar quarters during a Plan
Year under the Plan. A Member’s election to defer receipt of
Compensation for any calendar quarter(s) of a Plan Year shall be made prior to
the beginning of such calendar quarter(s) of the Plan Year and shall be
irrevocable for such calendar quarter(s) of the Plan Year. The
reduction in a Member’s Compensation pursuant to his election shall be effected
by Compensation reductions as of each payroll period within the election
period.
3.3 Bonus Deferral
Election. Any Member may elect to defer receipt of a whole
percentage of his Bonus for any Plan Year under the Plan. A Member’s
election to defer receipt of his Bonus for any Plan Year shall be made prior to
the earlier of (i) the date on which such bonus becomes payable and
ascertainable, or (ii) October 1 of such Plan Year for which such Bonus is
payable, and shall be irrevocable for such Plan Year. The election to
defer receipt of such whole percentage of a Member’s Bonus pursuant to the
deferral election above shall be effected by a reduction in the amount of the
Bonus to which such deferral election relates.
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19 -
EXHIBIT
A
3.4 Targeted Deferral
Election. In general, all amounts deferred by a Member
pursuant to Sections 3.2 and 3.3 shall be held for the Member and distributed
following the Member’s termination of employment or the occurrence of a hardship
event pursuant to Sections 7.1, 7.2 and 8.1. Notwithstanding the
preceding sentence, a Member may also defer the receipt of any portion of the
Member’s Compensation otherwise deferred pursuant to the provisions of Sections
3.2 and 3.3 until a specific future date, by executing a deferral form designed
for such purpose as specified by the Committee. Upon the occurrence
of any such date specified by a Member in such an election form, the deferred
amount, and the Earnings Credit and Investment(s) Gains or Losses attributable
thereto, shall be distributed to the Member. Until so distributed,
such deferral amounts shall continue to be a part of the Member’s
Account.
3.5 Investment
Request. A Member may request the Committee to invest or
change the investment of all or a portion of his Account in any
Investments. A Member may make such request at any time, provided
that the Committee shall only be obligated to direct the Trustee to make such
investment or charge such investment as soon as reasonably practicable and
within the guidelines and requirements established by the Trustee for the
investment of funds held in the Account. A Member who does not
request the Committee to invest any portion of his Account shall have the funds
held in such Account in a money market fund offered through the Trustee or its
affiliates.
3.6 Post-Termination Benefits
Deposit. Notwithstanding any provision of the Plan to the
contrary, the Company may make for any Member an annual contribution equal to
that portion of Post-Termination Benefit Deposits to be made to the Plan as
calculated under the terms of any Benefits Exchange Agreement between the Member
and the Company.
ARTICLE
IV
BENEFITS
4.1 Amount of
Benefit.
(a) Deferral
Contributions. As of the last day of each payroll period of
each Plan Year, a Member’s Account shall be credited with an amount equal to the
Compensation deferred under the Plan pursuant to an election by the Member as
described in Article III for such payroll period. Effective as
of June 30, 2002, as of the last day of each payroll period of each Plan Year, a
Member’s Account shall be credited with an amount equal to that portion of
Post-Termination Benefit Deposits made to the Plan, if any, as calculated under
the terms of the Benefits Exchange Agreement between the Member and the
Company.
(b) Matching
Contributions. As of the last day of each Plan Year, or, if
later, the date on which the Company Matching Contributions are made under the
Retirement Plan for any such Plan Year, the Member’s Account of each
Contributing Member during such Plan Year who remains employed by the Company on
such date shall be credited with an amount equal to the following:
(1) the
Company Matching Contributions to which such Contributing Member would have been
entitled under the Retirement Plan taking into account
-
20 -
EXHIBIT
A
both
(i) the salary deferrals made by such Contributing Member to the Retirement Plan
for the Plan Year, and (ii) the deferrals made by such Contributing Member under
this Plan pursuant to Sections 3.1, 3.2, or 3.3 for the same Plan
Year (up to a combined maximum of six percent (6.00%) of such
Contributing Member’s Compensation assuming that none of the Limitations were
imposed); minus
(2) the
Company Matching Contributions, if any, actually made on behalf of such
Contributing Member under the Retirement Plan for such Plan Year;
minus
(3) the
Company contributions, if any, to accounts actually made on behalf of such
Contributing Member under the SSP for such Plan Year.
In
addition, if (i) the total of such Contributing Member’s salary deferrals under
the Retirement Plan (as adjusted after application of the Limitations) and
deferrals pursuant to the SSP and Sections 3.1, 3.2 or 3.3 under this Plan is
less than 6.00% of such Contributing Member’s Compensation for a Plan Year; and
(ii) the Contributing Member elects to increase his or her deferrals under this
Plan by all or any portion of any salary deferrals to the Retirement Plan that
are returned to the Contributing Member as a result of the application of the
Limitations within 120 days after receipt of such returned salary deferrals,
even if such increased deferrals are made in the next Plan Year; such increased
deferrals shall also be taken into account in subparagraph (a) above until the
total of the Contributing Member’s salary deferrals under the Retirement Plan,
SSP, and deferrals under this Plan for the Plan Year equals 6.00% of the
Contributing Member’s Compensation.
(c) Benefit Exchange Agreement
Contributions. Effective for Plan Years beginning on or after
January 1, 2002, the Company shall credit to the Account of each Member who has
entered into a Benefit Exchange Agreement with the Company the following
amounts, as specified under the terms of each such Benefit Exchange
Agreement:
| (1) all unpaid 2001 and 2002 variable life insurance policy premium payments required under the terms of the Split Dollar Agreement; | |
| (2) an amount equal to 100% of the net cash surrender value of such variable life insurance policy on the date such policy is surrendered by the Company; and | |
| (3) if required by the Member’s Benefit Exchange Agreement, annual amounts equal to the premium payments to such variable life insurance policy that would have been required under the Split Dollar Agreement for years after 2002, reduced each year by the actual cost of providing supplemental life insurance coverage to the Member pursuant to the terms of the Benefit Exchange Agreement. | |
As of any
Determination Date, the benefit to which a Member or his beneficiary shall be
entitled under the Plan shall be equal to the amount credited to such Member’s
Account as of such date.
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21 -
EXHIBIT
A
(d) Special
Contributions. For the Plan Year beginning January 1, 2003,
the Company shall make a special one-time cash contribution to each
Participant’s Account in an amount equal to the dollar value of the matching
contributions that were forfeited by the Participants under the Retirement Plan
for the plan years of the Retirement Plan that ended on December 31, 2001, and
December 31, 2002. The Plan Administrator shall determine the dollar
value of all such forfeited matching contributions, which determination shall be
final and binding on all Participants. Such special contributions
shall be made no later than September 15, 2003, unless the Plan Administrator
has not yet finally determined the amount of the forfeited matching
contributions, in which event such contributions shall be made not later than 30
days after such forfeited matching contributions are finally determined by the
Plan Administrator. Notwithstanding the foregoing, no such special
contribution shall be made for a Member if the Company makes a similar
contribution for a Member to the SSP.
4.2 Investment
Credit. As of each Determination Date, the Account of each
Member shall be credited with Investment Gains or Losses as provided
in this Section 4.2.
|
|
(a)
|
If
a Member has requested in accordance with Section 3.5 of the Plan that all
or a portion of his Account be invested in any particular Investment(s),
the Account of such Member shall be credited with the Investment Gains or
Losses since the preceding Determination
Date.
|
|
|
(b)
|
Any
portion of a Member’s Account, the investment of which has not been
requested by the Member, shall be credited with the Earnings Credit for
such Determination Date.
|
|
|
(c)
|
A
Member’s Account shall not be credited with any Investment Credit under
this Section 4.2 on the Company Matching Contributions portion
credited to his Account as of the last day of each Plan Year pursuant to
Section 4.1 of the Plan until the Company actually makes the cash
deposit of such Matching Contributions with the
Trustee.
|
ARTICLE
V
VESTING
All
amounts credited to a Member’s Account shall be fully vested and not subject to
forfeiture for any reason; provided, however, the amounts credited to a Member’s
Account pursuant to the second paragraph of Section 4.1, including any Earnings
Credit and/or Investment Gains or Losses allocable to such credits, shall be
subject to the same vesting schedule as that set forth in the Retirement
Plan. Notwithstanding the preceding sentence, the benefits payable to
each Member hereunder constitute an unfunded, unsecured obligation of the
Company, and the assets held by the Company and the Trustee remain subject to
the claims of the Company’s creditors.
- 22 -
EXHIBIT
A
ARTICLE
VI
TRUST
The
Company may, from time to time and in its sole discretion, pay and deliver money
or other property to the Trustee for the payment of benefits under the
Plan. Notwithstanding any provision in the Plan to the contrary,
distributions due under the Plan to or on behalf of Members shall be made by the
Trustee in accordance with the terms of the Trust Agreement and the Plan;
provided, however, that the Company shall remain obligated to pay all amounts
due to such persons under the Plan. To the extent that Trust Assets
are not sufficient to pay any amounts due under the Plan to or on behalf of the
Members when such amounts are due, the Company shall pay such amounts
directly. Nothing in the Plan or the Trust Agreement shall relieve
the Company of its obligation to make the distributions required in Article VII
hereof except to the extent that such obligation is satisfied by the application
of funds held by the Trustee under the Trust Agreement. Any recipient
of benefits hereunder shall have no security or other interest in Trust
Assets. Any and all Trust Assets shall remain subject to the claims
of the general creditors of the Company, present and future, and no payment
shall be made under the Plan unless the Company is then
solvent. Should an inconsistency or conflict exist between the
specific terms of the Plan and those of the Trust Agreement, then the relevant
terms of the Trust Agreement shall govern and control.
ARTICLE
VII
PAYMENT OF
BENEFITS
7.1 Termination of
Employment. Upon a Member’s termination of employment with the
Company or an Affiliate for any reason, the amount credited to such Member’s
Account as of the Determination Date immediately preceding such Member’s
termination of employment, adjusted for any amount deferred and Earnings Credit
and Investment(s) Income or Loss realized from such Determination Date to the
date of the Member’s termination of employment, shall be distributed to such
Member or, if the Member’s termination of employment is on account of death, to
the Member’s beneficiary as determined pursuant to Section 7.2
below.
7.2 Death. Upon
a Member’s death, the amount credited to such Member’s Account as of the
Determination Date immediately preceding the date of such Member’s death,
adjusted for any amount deferred and Earnings Credit and Investment Gains or
Losses realized from such Determination Date to the date of the Member’s death,
shall be distributed to such Member’s designated beneficiary. The
Member, by written instrument filed with the Committee in such manner and form
as the Committee may prescribe, may designate one or more beneficiaries to
receive such payment. The beneficiary designation may be changed from
time to time prior to the death of the Member. In the event that the
Committee has no valid beneficiary designation on file, the amount credited to
such Member’s Account shall be distributed to the Member’s surviving spouse, if
any, or if the Member has no surviving spouse, to the executor or administrator
of the Member’s estate.
7.3 Targeted
Deferrals. If a Member has made one or more targeted deferrals
pursuant to Section 3.4, upon the date specified in any election form used by
the Member to
-
23 -
EXHIBIT
A
make
such election, the amount credited in the subaccount of the Member’s Account
which relates to such deferral as of the Determination Date immediately
preceding such specified date shall be distributed to such Member. If
some event takes place that would entitle a Member to a distribution under
Sections 7.1 or 7.2 prior to such specified date, the amounts in such subaccount
shall be distributed along with any other amounts in the Member’s Account
pursuant to Section 7.1 or 7.2.
7.4 Time of
Payment. Payment of a Member’s benefit hereunder shall be made
(or commence if payment is in the form of an annuity contract) as soon as
administratively feasible following the date on which the Member or his
beneficiary becomes entitled to such benefit pursuant to Sections 7.1, 7.2, or
7.3, but no earlier than 10 days thereafter and no later than 45 days
thereafter, except for the Company Matching Contributions as provided
herein. If a Member’s termination of employment or death or any other
events which caused termination of the Plan, occurs within the first four months
of a year, the portion of the Company Matching Contributions for the preceding
Plan Year that has been credited to a Member’s Account shall be distributed to
such Member no later than the earlier of (i) the date of which the calculation
of such contributions has been finalized or (ii) May 1 of the year of
termination of employment or death, or any other events which shall entitle the
Member to a distribution. In all other events, the 10 days and 45
days limitation shall apply to the distribution of the Member’s entire Account
balance, unless expressly provided otherwise.
7.5 Form of
Payment. For purposes of distributing all of a Member’s
Account other than any portion thereof attributable to targeted deferrals and
earnings thereon, the form of any payment to a Member or his designated
beneficiary shall be in substantially equal annual installments over a period of
ten (10) years, paid in cash or by certified check, with the first such payment
to be made on the first business day of the calendar year following the Member’s
termination of employment (for purposes of payments made pursuant to Section
7.1) or death (for purposes of payments made pursuant to Section 7.2), unless
the Member has made an election to receive such distribution in the form of a
lump sum payment or in five (5) substantially equal installment payments in such
manner and form as prescribed by the Committee. Any election, or
subsequent election, made by the Member pursuant to this Section shall not be
effective until the passage of twelve (12) consecutive months before the date of
the Member’s termination of employment with the Company or an Affiliate, if
payment is required pursuant to Section 7.1, or the Member’s date of death, if
the payment is required pursuant to Section 7.2. All distributions of
that portion of a Member’s Account attributable to any targeted deferral and
earnings thereon shall be distributed in a single lump sum payment, in cash or
certified check, on the date specified by the Member in the election form used
to make the targeted deferral, or as soon thereafter as administratively
possible.
ARTICLE
VIII
HARDSHIP
DISTRIBUTIONS
Upon
written application by a Member who has experienced an unforeseeable emergency,
as determined by the Committee, the Committee may distribute to such Member an
amount not to exceed the lesser of the amount credited to such Member’s Account
or the amount determined by the Committee as being reasonably necessary to
satisfy the emergency need. For
-
24 -
EXHIBIT
A
purposes
of this Article VIII, a hardship distribution pursuant to an unforeseeable
emergency shall be authorized in the event of severe financial hardship to the
Member resulting from a sudden and unexpected illness or accident of the Member
or his dependent, loss of the Member’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the Member’s control. An unforeseeable emergency will
not include the need to send a Member’s child to college or the desire to
purchase a home. Additionally, the Member must demonstrate that the
hardship may not be relieved through reimbursement or compensation by insurance
or otherwise, by liquidation of the Member’s assets, to the extent the
liquidation of such assets would not itself cause severe financial hardship, or
by cessation of deferrals under this Plan.
ARTICLE
IX
SALE OF THE
COMPANY
In the
event of a sale of all or substantially all of the stock or assets of the
Company, either (a) the purchaser shall assume the liabilities of the Plan and
shall continue to operate the Plan in accordance with the provisions set forth
herein (including any subsequent amendments hereto) or (b) the Plan shall be
terminated and the amount credited to each Member’s Account shall be distributed
in a lump sum payment in cash or by certified check to each such Member in
accordance with Section 7.4. However, should such sale result in a Change
of Control, the Plan shall be terminated and the amount credited to each
Member’s Account shall be distributed in a lump sum payment in cash or by
certified check to each such Member in accordance with Section 7.4.
ARTICLE
X
NATURE OF THE
PLAN
The Plan
shall constitute an unfunded, unsecured obligation of the Company to make cash
payments in accordance with the provisions of the Plan. The Plan is
not intended to meet the qualification requirements of section 401 of the
Internal Revenue Code of 1986, as amended. The Company in its sole
discretion may set aside such amounts for the payment of Accounts as the Company
may from time to time determine. Neither the establishment of the
Plan, the operation thereof, nor the setting aside of any amounts shall be
deemed to create a funding arrangement. No Member shall have any
security or other interest in any such amounts set aside or any other assets of
the Company.
ARTICLE
XI
EMPLOYMENT
RELATIONSHIP
Nothing
in the adoption or implementation of the Plan shall confer on any employee the
right to continued employment by the Company or an Affiliate or affect in any
way the right of the Company or an Affiliate to terminate his employment at any
time. Any question as to whether and when there has been a
termination of a Member’s employment, and the cause of such termination, shall
be determined by the Committee, and its determination shall be
final.
- 25 -
EXHIBIT
A
ARTICLE
XII
AMENDMENT AND
TERMINATION
The
Company may amend or terminate the Plan, by resolution duly adopted, without the
consent of the Members; provided, however, that no such amendment or termination
shall adversely affect any benefits which have been earned prior to any such
amendment or termination. Further, upon termination of the Plan, the
Committee, in its sole discretion, may elect to distribute the amount credited
to each Member’s Account in a lump sum cash payment in accordance with
Section 7.4; provided, however, in the event of a Change of Control, the
amount credited to each Member’s Account must be distributed in accordance with
Section 7.4.
ARTICLE
XIII
CLAIMS
PROCEDURE
The
Committee shall have full power and authority to interpret, construe and
administer the Plan, and the Committee’s interpretations and construction
hereof, and actions hereunder, including the timing, form, amount or recipient
of any payment to be made hereunder, shall be binding and conclusive on all
persons for all purposes. In the event that an individual’s claim for
a benefit is denied or modified, the Committee shall provide such individual
with a written statement setting forth the specific reasons for such denial or
modification in a manner calculated to be understood by the
individual. Any such written statement shall reference the pertinent
provisions of the Plan upon which the denial or modification is based and shall
explain the Plan’s claim review procedure. Such individual may,
within forty-five (45) days of receipt of such written statement, make written
request to the Committee for review of its initial decision. Within
forty-five (45) days following such request for review, the Committee shall,
after affording such individual a reasonable opportunity for a full and fair
hearing, render its final decision in writing to such
individual. Notwithstanding the preceding sentence, should a Member’s
claim be related to the preceding Plan Year’s Company Matching Contributions,
the Committee shall render its final decision on the later of (i) forty-five
(45) days following such request for review, or (ii) 120 days after the end of
the preceding Plan Year. No member of the Committee shall be liable
to any person for any action taken or omitted in connection with the
interpretation and administration of the Plan unless attributable to his own
willful misconduct or lack of good faith. Members of the Committee
shall not participate in any action or determination regarding their own
benefits hereunder.
ARTICLE
XIV
MISCELLANEOUS
14.1 Indemnification. The
Company shall indemnify and hold harmless each member of the Committee and any
other persons acting on its behalf, against any and all expenses and liabilities
arising out of his or her administrative functions or fiduciary
responsibilities, excepting only expenses and liabilities arising out of the
individual’s own willful misconduct or lack of good faith. Expenses
against which such person shall be indemnified hereunder include, without
-
26 -
EXHIBIT
A
limitation,
the amounts of any settlement or judgment, costs, counsel fees and related
charges reasonably incurred in connection with a claim asserted or a proceeding
brought or settlement thereof.
14.2 Effective
Date. The Plan shall become operative and effective as of the
Effective Date and shall continue until amended or terminated as provided in
Article XII.
14.3 Withholding
Taxes. The Company shall have the right to deduct from any
payments made under this Plan, any federal, state or local taxes required by law
to be withheld with respect to such payments.
14.4 Nonalienation of
Benefits. Subject to income tax withholding, benefits payable
under this Plan shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution
or levy of any kind, either voluntary or involuntary, including any such
liability which is for alimony or other payments for the support of a spouse or
former spouse, or for any other relative of the Member, prior to actually being
received; and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to benefits payable
hereunder shall be void. The Company shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements or
torts of any person entitled to benefits hereunder.
14.5 Severability. If
any provision of the Plan shall be held illegal or invalid for any reason, said
illegality or invalidity shall not affect the remaining provisions hereof;
rather, each provision shall be fully severable and the Plan shall be construed
and enforced as if said illegal or invalid provision had never been included
herein.
14.6 Jurisdiction. The
situs of the Plan hereby created is Tennessee. All provisions of the
Plan shall be construed in accordance with the laws of Tennessee except to the
extent preempted by federal law.
- 27 -
Exhibit
4.2
THE
EXECUTIVE NONQUALIFIED EXCESS PLAN
PLAN
DOCUMENT
THE
EXECUTIVE NONQUALIFIED EXCESS PLAN
Section
1. Purpose:
By
execution of the Adoption Agreement, the Employer has adopted the Plan set forth
herein, and in the Adoption Agreement, to provide a means by which certain
management Employees or Independent Contractors of the Employer may elect to
defer receipt of current Compensation from the Employer in order to provide
retirement and other benefits on behalf of such Employees or Independent
Contractors of the Employer, as selected in the Adoption Agreement. The Plan is
intended to be a nonqualified deferred compensation plan that complies with the
provisions of Section 409A of the Internal Revenue Code (the "Code"). The Plan
is also intended to be an unfunded plan maintained primarily for the purpose of
providing deferred compensation benefits for a select group of management or
highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(l) of
the Employee Retirement Income Security Act of 1974 ("ERISA") and independent
contractors. Notwithstanding any other provision of this Plan, this Plan shall
be interpreted, operated and administered in a manner consistent with these
intentions.
Section
2. Definitions:
As used
in the Plan, including this Section 2, references to one gender shall include
the other, unless otherwise indicated by the context:
2.1 "Active Participant" means,
with respect to any day or date, a Participant who is in Service on such day or
date; provided, that a Participant shall cease to be an Active Participant (i)
immediately upon a determination by the Committee that the Participant has
ceased to be an Employee or Independent Contractor, or (ii) at the end of the
Plan Year that the Committee determines the Participant no longer meets the
eligibility requirements of the Plan.
2.2 "Adoption Agreement" means the
written agreement pursuant to which the Employer adopts the Plan. The Adoption
Agreement is a part of the Plan as applied to the Employer.
2.3 "Beneficiary" means the
person, persons, entity or entities designated or determined pursuant to the
provisions of Section 13 of the Plan.
2.4 "Board" means the Board of
Directors of the Company, if the Company is a corporation. If the Company is not
a corporation, "Board" shall mean the Company.
2.5 "Change in Control Event"
means an event described in Section 409A(a)(2)(A)(v) of the Code (or any
successor provision thereto) and the regulations thereunder.
2.6 "Committee" means the persons
or entity designated in the Adoption Agreement to administer the Plan. If the
Committee designated in the Adoption Agreement is unable to serve, the Employer
shall satisfy the duties of the Committee provided for in Section
9.
2.7 "Company" means the company
designated in the Adoption Agreement as such.
2.8 "Compensation" shall have the
meaning designated in the Adoption Agreement.
2.9 "Crediting Date" means the
date designated in the Adoption Agreement for crediting the amount of any
Participant Deferral Credits to the Deferred Compensation Account of a
Participant. Employer Credits may be credited to the Deferred Compensation
Account of a Participant on any day that securities are traded on a national
securities exchange.
2.10 "Deferred Compensation Account"
means the account maintained with respect to each Participant under the
Plan. The Deferred Compensation Account shall be credited with Participant
Deferral Credits and Employer Credits, credited or debited for deemed investment
gains or losses, and adjusted for payments in accordance with the rules and
elections in effect under Section 8. The Deferred Compensation Account of a
Participant shall include any In-Service or Education Account of the
Participant, if applicable.
2.11 "Disabled" means Disabled
within the meaning of Section 409A of the Code and the regulations thereunder.
Generally, this means that the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering Employees of the
Employer.
2.12 "Education Account" is an
In-Service Account which will be used by the Participant for educational
purposes.
2.13 "Effective Date" shall be the
date designated in the Adoption Agreement.
2.14 "Employee" means an individual
in the Service of the Employer if the relationship between the individual and
the Employer is the legal relationship of employer and employee. An individual
shall cease to be an Employee upon the Employee's separation from
Service.
2.15 "Employer" means the Company,
as identified in the Adoption Agreement, and any Participating Employer which
adopts this Plan. An Employer may be a corporation, a limited liability company,
a partnership or sole proprietorship.
2.16 "Employer Credits" means the
amounts credited to the Participant's Deferred Compensation Account by the
Employer pursuant to the provisions of Section 4.2.
2.17 "Grandfathered Amounts" means,
if applicable, the amounts that were deferred under the Plan and were earned and
vested within the meaning of Section 409A of the Code and regulations thereunder
as of December 31, 2004. Grandfathered Amounts shall be subject to the terms
designated in the Adoption Agreement.
2.18 "Independent Contractor" means
an individual in the Service of the Employer if the relationship between the
individual and the Employer is not the legal relationship of employer and
employee. An individual shall cease to be an Independent Contractor upon the
termination of the Independent Contractor's Service. An Independent Contractor
shall include a director of the Employer who is not an Employee.
2.19 "In-Service Account" means a
separate account to be kept for each Participant that has elected to take
in-service distributions as described in Section 5.4. The In-Service Account
shall be adjusted in the same manner and at the same time as the Deferred
Compensation Account under Section 8 and in accordance with the rules and
elections in effect under Section 8.
2.20 "Normal Retirement Age" of a
Participant means the age designated in the Adoption Agreement.
2.21 "Participant" means with
respect to any Plan Year an Employee or Independent Contractor who has been
designated by the Committee as a Participant and who has entered the Plan or who
has a Deferred Compensation Account under the Plan; provided that if the
Participant is an Employee, the individual must be a highly compensated or
management employee of the Employer within the meaning of Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA.
2.22 "Participant Deferral Credits"
means the amounts credited to the Participant's Deferred Compensation
Account by the Employer pursuant to the provisions of Section 4.1.
2.23 "Participating Employer" means
any trade or business (whether or not incorporated) which adopts this Plan with
the consent of the Company identified in the Adoption Agreement.
2.24 "Participation Agreement"
means a written agreement entered into between a Participant and the
Employer pursuant to the provisions of Section 4.1
2.25 "Performance-Based Compensation"
means compensation where the amount of, or entitlement to, the
compensation is contingent on the satisfaction of preestablished organizational
or individual performance criteria relating to a performance period of at least
twelve months. Organizational or individual performance criteria are considered
preestablished if established in writing within 90 days after the commencement
of the period of service to which the criteria relates, provided that the
outcome is substantially uncertain at the time the criteria are established.
Performance-based compensation may include payments based upon subjective
performance criteria as provided in regulations and administrative guidance
promulgated under Section 409A of the Code.
2.26 "Plan" means The Executive
Nonqualified Excess Plan, as herein set out and as set out in the Adoption
Agreement, or as duly amended. The name of the Plan as applied to the Employer
shall be designated in the Adoption Agreement.
2.27 "Plan-Approved Domestic Relations
Order" shall mean a judgment, decree, or order (including the approval of
a settlement agreement) which is:
2.27.1 Issued
pursuant to a State's domestic relations law;
2.27.2 Relates
to the provision of child support, alimony payments or marital property rights
to a Spouse, former Spouse, child or other dependent of the
Participant;
2.27.3 Creates
or recognizes the right of a Spouse, former Spouse, child or other dependent of
the Participant to receive all or a portion of the Participant's benefits under
the Plan;
2.27.4 Requires
payment to such person of their interest in the Participant's benefits in an
immediate lump payment; and
2.27.5 Meets
such other requirements established by the Committee.
2.28 "Plan Year" means the
twelve-month period ending on the last day of the month designated in the
Adoption Agreement; provided that the initial Plan Year may have fewer than
twelve months.
2.29 "Qualifying Distribution Event"
means (i) the Separation from Service of the Participant, (ii) the date
the Participant becomes Disabled, (iii) the death of the Participant, (iv) the
time specified by the Participant for an In-Service or Education Distribution,
(v) a Change in Control Event, or (vi) an Unforeseeable Emergency, each to the
extent provided in Section 5.
2.30 "Seniority Date" shall have
the meaning designated in the Adoption Agreement.
2.31 "Separation from Service" or
"Separates from Service"
means a "separation from service" within the meaning of Section 409A of
the Code.
2.32 "Service" means employment by
the Employer as an Employee. For purposes of the Plan, the employment
relationship is treated as continuing intact while the Employee is on military
leave, sick leave, or other bona fide leave of absence if the period of such
leave does not exceed six months, or if longer, so long as the Employee's right
to reemployment is provided either by statute or contract. If the Participant is
an Independent Contractor, "Service" shall mean the period during which the
contractual relationship exists between the Employer and the Participant. The
contractual relationship is not terminated if the Participant anticipates a
renewal of the contract or becomes an Employee.
2.33 "Service Bonus" means any
bonus paid to a Participant by the Employer which is not Performance-Based
Compensation.
2.34 "Specified Employee" means an
employee who meets the requirements for key employee treatment under Section
416(i)(l)(A)(i), (ii) or (iii) of the Code (applied in accordance with the
regulations thereunder and without regard to Section 416(i)(5) of the Code) at
any time during the twelve month period ending on December 31 of each year (the
"identification date"). Unless binding corporate action is taken to establish
different rules for determining Specified Employees for all plans of the Company
and its controlled group members that are subject to Section 409A of the Code,
the foregoing rules and the other default rules under the regulations of Section
409A of the Code shall apply. If the person is a key employee as of any
identification date, the person is treated as a Specified Employee for the
twelve-month period beginning on the first day of the fourth month following the
identification date.
2.35 "Spouse" or ''Surviving Spouse" means,
except as otherwise provided in the Plan, a person who is the legally married
spouse or surviving spouse of a Participant.
2.36 "Unforeseeable Emergency"
means an "unforeseeable emergency" within the meaning of Section 409A of
the Code.
2.37 "Years of Service" means each
Plan Year of Service completed by the Participant. For vesting purposes, Years
of Service shall be calculated from the date designated in the Adoption
Agreement and Service shall be based on service with the Company and all
Participating Employers.
Section
3. Participation:
The
Committee in its discretion shall designate each Employee or Independent
Contractor who is eligible to participate in the Plan. A Participant who
separates from Service with the Employer and who later returns to Service will
not be an Active Participant under the Plan except upon satisfaction of such
terms and conditions as the Committee shall establish upon the Participant's
return to Service, whether or not the Participant shall have a balance remaining
in the Deferred Compensation Account under the Plan on the date of the return to
Service.
Section
4. Credits to Deferred
Compensation Account:
4.1 Participant Deferral Credits.
To the extent provided in the Adoption Agreement, each Active Participant
may elect, by entering into a Participation Agreement with the Employer, to
defer the receipt of Compensation from the Employer by a dollar amount or
percentage specified in the Participation Agreement. The amount of Compensation
the Participant elects to defer, the Participant Deferral Credit, shall be
credited by the Employer to the Deferred Compensation Account maintained for the
Participant pursuant to Section 8. The following special provisions shall apply
with respect to the Participant Deferral Credits of a Participant:
4.1.1 The
Employer shall credit to the Participant's Deferred Compensation Account on each
Crediting Date an amount equal to the total Participant Deferral Credit for the
period ending on such Crediting Date.
4.1.2 An
election pursuant to this Section 4.1 shall be made by the Participant by
executing and delivering a Participation Agreement to the Committee. Except as
otherwise provided in this Section 4.1, the Participation Agreement shall become
effective with respect to such Participant as of the first day of January
following the date such Participation Agreement is received by the Committee. A
Participant's election may be changed at any time prior to the last permissible
date for making the election as permitted in this Section 4.1, and shall
thereafter be irrevocable. The election of a Participant shall continue in
effect for subsequent years until modified by the Participant as permitted in
this Section 4.1.
4.1.3 A
Participant may execute and deliver a Participation Agreement to the Committee
within 30 days after the date the Participant first becomes eligible to
participate in the Plan to be effective as of the first payroll period next
following the date the Participation Agreement is fully executed. Whether a
Participant is treated as newly eligible for participation under this Section
shall be determined in accordance with Section 409A of the Code and the
regulations thereunder, including (i) rules that treat all elective deferral
account balance plans as one plan, and (ii) rules that treat a previously
eligible employee as newly eligible if his benefits had been previously
distributed or if he has been ineligible for 24 months. For Compensation that is
earned based upon a specified performance period (for example, an annual bonus),
where a deferral election is made under this Section but after the beginning of
the performance period, the election will only apply to the portion of the
Compensation equal to the total amount of the Compensation for the service
period multiplied by the ratio of the number of days remaining in the
performance period after the election over the total number of days in the
performance period.
4.1.4 A
Participant may unilaterally modify a Participation Agreement (either to
terminate, increase or decrease the portion of his future Compensation which is
subject to deferral within the percentage limits set forth in Section 4.1 of the
Adoption Agreement) by providing a written modification of the Participation
Agreement to the Committee. The modification shall become effective as of the
first day of January following the date such written modification is received by
the Committee.
4.1.5 If
the Participant performed services continuously from the later of the beginning
of the performance period or the date upon which the performance criteria are
established through the date upon which the Participant makes an initial
deferral election, a Participation Agreement relating to the deferral of
Performance-Based Compensation may be executed and delivered to the Committee no
later than the date which is 6 months prior to the end of the performance
period, provided that in no event may an election to defer Performance-Based
Compensation be made after such Compensation has become readily
ascertainable.
4.1.6 If
the Employer has a fiscal year other than the calendar year, Compensation
relating to Service in the fiscal year of the Employer (such as a bonus based on
the fiscal year of the Employer), of which no amount is paid or payable during
the fiscal year, may be deferred at the Participant's election if the election
to defer is made not later than the close of the Employer's fiscal year next
preceding the first fiscal year in which the Participant performs any services
for which such Compensation is payable.
4.1.7 Compensation
payable after the last day of the Participant's taxable year solely for services
provided during the final payroll period containing the last day of the
Participant's taxable year (i.e., December 31) is treated for purposes of this
Section 4.1 as Compensation for services performed in the subsequent taxable
year.
4.1.8 The
Committee may from time to time establish policies or rules consistent with the
requirements of Section 409A of the Code to govern the manner in which
Participant Deferral Credits may be made.
4.1.9 If
a Participant becomes Disabled or applies for and is eligible for a distribution
on account of an Unforeseeable Emergency during a Plan Year, his deferral
election for such Plan Year shall be cancelled.
4.2 Employer Credits. If
designated by the Employer in the Adoption Agreement, the Employer shall cause
the Committee to credit to the Deferred Compensation Account of each Active
Participant an Employer Credit as determined in accordance with the Adoption
Agreement. A Participant must make distribution elections with respect to any
Employer Credits credited to his Deferred Compensation Account by the deadline
that would apply under Section 4.1 for distribution elections with respect to
Participant Deferral Credits credited at the same time, on a Participation
Agreement that is timely executed and delivered to the Committee pursuant to
Section 4.1.
4.3 Deferred Compensation Account.
All Participant Deferral Credits and Employer Credits shall be credited
to the Deferred Compensation Account of the Participant as provided in Section
8.
Section
5. Qualifying Distribution
Events:
5.1 Separation from Service. If
the Participant Separates from Service with the Employer, the vested balance in
the Deferred Compensation Account shall be paid to the Participant by the
Employer as provided in Section 7. Notwithstanding the foregoing, no
distribution shall be made earlier than six months after the date of Separation
from Service (or, if earlier, the date of death) with respect to a Participant
who as of the date of Separation from Service is a Specified Employee of a
corporation the stock in which is traded on an established securities market or
otherwise. Any payments to which such Specified Employee would be entitled
during the first six months following the date of Separation from Service shall
be accumulated and paid on the first day of the seventh month following the date
of Separation from Service.
5.2 Disability. If the Employer
designates in the Adoption Agreement that distributions are permitted under the
Plan when a Participant becomes Disabled, and the Participant becomes Disabled
while in Service, the vested balance in the Deferred Compensation Account shall
be paid to the Participant by the Employer as provided in Section
7.
5.3 Death. If the Participant dies
while in Service, the Employer shall pay a benefit to the Participant's
Beneficiary in the amount designated in the Adoption Agreement. Payment of such
benefit shall be made by the Employer as provided in Section 7.
5.4 In-Service or Education
Distributions. If the Employer designates in the Adoption Agreement that
in-service or education distributions are permitted under the Plan, a
Participant may designate in the Participation Agreement to have a specified
amount credited to the Participant's In-Service or Education Account for
in-service or education distributions at the date specified by the Participant.
In no event may an in-service or education distribution of an amount be made
before the date that is two years after the first day of the year in which such
amount was credited to the In-Service or Education Account. Notwithstanding the
foregoing, if a Participant incurs a Qualifying Distribution Event prior to the
date on which the entire balance in the In-Service or Education Account has been
distributed, then the balance in the In-Service or Education Account on the date
of the Qualifying Distribution Event shall be paid as provided under Section 7.1
for payments on such Qualifying Distribution Event.
5.5 Change in Control Event. If
the Employer designates in the Adoption Agreement that distributions are
permitted under the Plan upon the occurrence of a Change in Control Event, the
Participant may designate in the Participation Agreement to have the vested
balance in the Deferred Compensation Account paid to the Participant upon a
Change in Control Event by the Employer as provided in Section 7.
5.6 Unforeseeable Emergency. If
the Employer designates in the Adoption Agreement that distributions are
permitted under the Plan upon the occurrence of an Unforeseeable Emergency
event, a distribution from the Deferred Compensation Account may be made to a
Participant in the event of an Unforeseeable Emergency, subject to the following
provisions:
5.6.1 A
Participant may, at any time prior to his Separation from Service for any
reason, make application to the Committee to receive a distribution in a lump
sum of all or a portion of the vested balance in the Deferred Compensation
Account (determined as of the date the distribution, if any, is made under this
Section 5.6) because of an Unforeseeable Emergency. A distribution because of an
Unforeseeable Emergency shall not exceed the amount required to satisfy the
Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of such distribution, after taking into account the
extent to which the Unforeseeable Emergency may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant's assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship) or by stopping current deferrals under
the Plan pursuant to Section 4.1.9.
5.6.2 The
Participant's request for a distribution on account of Unforeseeable Emergency
must be made in writing to the Committee. The request must specify the nature of
the financial hardship, the total amount requested to be distributed from the
Deferred Compensation Account, and the total amount of the actual expense
incurred or to be incurred on account of the Unforeseeable
Emergency.
5.6.3 If
a distribution under this Section 5.6 is approved by the Committee, such
distribution will be made as soon as practicable following the date it is
approved. The processing of the request shall be completed as soon as
practicable from the date on which the Committee receives the properly completed
written request for a distribution on account of an Unforeseeable Emergency. If
a Participant's Separation from Service occurs after a request is approved in
accordance with this Section 5.6.3, but prior to distribution of the full amount
approved, the approval of the request shall be automatically null and void and
the benefits which the Participant is entitled to receive under the Plan shall
be distributed in accordance with the applicable distribution provisions of the
Plan.
5.6.4 The
Committee may from time to time adopt additional policies or rules consistent
with the requirements of Section 409A of the Code to govern the manner in which
such distributions may be made so that the Plan may be conveniently
administered.
Section
6. Vesting:
A
Participant shall be fully vested in the portion of his Deferred Compensation
Account attributable to Participant Deferral Credits, and all income, gains and
losses attributable thereto. A Participant shall become fully vested in the
portion of his Deferred Compensation Account attributable to Employer Credits,
and income, gains and losses attributable thereto, in accordance with the
vesting schedule and provisions designated by the Employer in the Adoption
Agreement. If a Participant's Deferred Compensation Account is not fully vested
upon Separation from Service, the portion of the Deferred Compensation Account
that is not fully vested shall thereupon be forfeited.
Section
7. Distribution
Rules:
7.1 Payment Options. The Employer
shall designate in the Adoption Agreement the payment options which may be
elected by the Participant (lump sum, annual installments, or a combination of
both). Different payment options may be made available for each Qualifying
Distribution Event, and different payment options may be available for different
types of Separations from Service, all as designated in the Adoption Agreement.
The Participant shall elect in the Participation Agreement the method under
which the vested balance in the Deferred Compensation Account will be
distributed from among the designated payment options. The Participant may at
such time elect a different method of payment for each Qualifying Distribution
Event as specified in the Adoption Agreement. If the Participant is permitted by
the Employer in the Adoption Agreement to elect different payment options and
does not make a valid election, the vested balance in the Deferred Compensation
Account will be distributed as a lump sum.
Notwithstanding
the foregoing, if certain Qualifying Distribution Events occur prior to the date
on which the vested balance of a Participant's Deferred Compensation Account is
completely paid pursuant to this Section 7.1 following the occurrence of certain
initial Qualifying Distribution Events, the following rules apply:
7.1.1 If
the initial Qualifying Distribution Event is a Separation from Service or
Disability, and the Participant subsequently dies, the remaining unpaid vested
balance of a Participant's Deferred Compensation Account shall be paid as a lump
sum.
7.1.2 If
the initial Qualifying Distribution Event is a Change in Control Event, and any
subsequent Qualifying Distribution Event occurs (except an In-Service or
Education Distribution described in Section 2.29(iv)), the remaining unpaid
vested balance of a Participant's Deferred Compensation Account shall be paid as
provided under Section 7.1 for payments on such subsequent Qualifying
Distribution Event.
7.2 Timing of Payments. Payment
shall be made in the manner elected by the Participant and shall commence as
soon as practicable after (but no later than 60 days after) the distribution
date elected for the Qualifying Distribution Event. In the event the Participant
fails to make a valid election of the payment method, the distribution will be
made in a single lump sum payment as soon as practicable after (but no later
than 60 days after) the Qualifying Distribution Event. A payment may be further
delayed to the extent permitted in accordance with regulations and guidance
under Section 409A of the Code.
7.3 Installment Payments. If the
Participant elects to receive installment payments upon a Qualifying
Distribution Event, the payment of each annual installment shall be made on the
anniversary of the date of the first installment payment, and the amount of the
annual installment shall be adjusted on such anniversary for credits or debits
to the Participant's account pursuant to Section 8 of the Plan. Such adjustment
shall be made by dividing the balance in the Deferred Compensation Account on
such date by the number of annual installments remaining to be paid hereunder;
provided that the last annual installment due under the Plan shall be the entire
amount credited to the Participant's account on the date of
payment.
7.4 De Minimis Amounts.
Notwithstanding any payment election made by the Participant, if the
Employer designates a pre-determined de minimis amount in the Adoption
Agreement, the vested balance in the Deferred Compensation Account of the
Participant will be distributed in a single lump sum payment if at the time of a
permitted Qualifying Distribution Event the vested balance does not exceed such
pre-determined de minimis amount; provided, however, that such distribution will
be made only where the Qualifying Distribution Event is a Separation from
Service, death, Disability (if applicable) or Change in Control Event (if
applicable). Such payment shall be made on or before the later of (i) December
31 of the calendar year in which the Qualifying Distribution Event occurs, or
(ii) the date that is 2-1/2 months after the Qualifying Distribution Event
occurs. In addition, the Employer may distribute a Participant's vested balance
at any time if the balance does not exceed the limit in Section 402(g)(1)(B) of
the Code and results in the termination of the Participant's entire interest in
the Plan as provided under Section 409A of the Code.
7.5 Subsequent Elections. With the
consent of the Committee, a Participant may delay or change the method of
payment of the Deferred Compensation Account subject to the following
requirements:
7.5.1 The
new election may not take effect until at least 12 months after the date on
which the new election is made.
7.5.2 If
the new election relates to a payment for a Qualifying Distribution Event other
than the death of the Participant, the Participant becoming Disabled, or an
Unforeseeable Emergency, the new election must provide for the deferral of the
payment for a period of at least five years from the date such payment would
otherwise have been made.
7.5.3 If
the new election relates to a payment from the In-Service or Education Account,
the new election must be made at least 12 months prior to the date of the first
scheduled payment from such account.
For
purposes of this Section 7.5 and Section 7.6, a payment is each separately
identified amount to which the Participant is entitled under the Plan; provided,
that entitlement to a series of installment payments is treated as the
entitlement to a single payment.
7.6 Acceleration Prohibited. The
acceleration of the time or schedule of any payment due under the Plan is
prohibited except as expressly provided in regulations and administrative
guidance promulgated under Section 409A of the Code (such as accelerations for
domestic relations orders and employment taxes). It is not an acceleration of
the time or schedule of payment if the Employer waives or accelerates the
vesting requirements applicable to a benefit under the Plan.
Section
8. Accounts; Deemed Investment;
Adjustments to Account:
8.1 Accounts. The Committee shall
establish a book reserve account, entitled the "Deferred Compensation Account,"
on behalf of each Participant. The Committee shall also establish an In-Service
or Education Account as a part of the Deferred Compensation Account of each
Participant, if applicable. The amount credited to the Deferred Compensation
Account shall be adjusted pursuant to the provisions of Section
8.3.
8.2 Deemed Investments. The
Deferred Compensation Account of a Participant shall be credited with an
investment return determined as if the account were invested in one or more
investment funds made available by the Committee. The Participant shall elect
the investment funds in which his Deferred Compensation Account shall be deemed
to be invested. Such election shall be made in the manner prescribed by the
Committee and shall take effect upon the entry of the Participant into the Plan.
The investment election of the Participant shall remain in effect until a new
election is made by the Participant. In the event the Participant fails for any
reason to make an effective election of the investment return to be credited to
his account, the investment return shall be determined by the
Committee.
8.3 Adjustments to Deferred Compensation
Account. With respect to each Participant who has a Deferred Compensation
Account under the Plan, the amount credited to such account shall be adjusted by
the following debits and credits, at the times and in the order
stated:
8.3.1 The
Deferred Compensation Account shall be debited each business day with the total
amount of any payments made from such account since the last preceding business
day to him or for his benefit.
8.3.2 The
Deferred Compensation Account shall be credited on each Crediting Date with the
total amount of any Participant Deferral Credits and Employer Credits to such
account since the last preceding Crediting Date.
8.3.3 The
Deferred Compensation Account shall be credited or debited on each day
securities are traded on a national stock exchange with the amount of deemed
investment gain or loss resulting from the performance of the investment funds
elected by the Participant in accordance with Section 8.2. The amount of such
deemed investment gain or loss shall be determined by the Committee and such
determination shall be final and conclusive upon all concerned.
Section
9. Administration by
Committee:
9.1 Membership of Committee. If
the Committee consists of individuals appointed by the Board, they will serve at
the pleasure of the Board. Any member of the Committee may resign, and his
successor, if any, shall be appointed by the Board.
9.2 General Administration. The
Committee shall be responsible for the operation and administration of the Plan
and for carrying out its provisions. The Committee shall have the full authority
and discretion to make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan and decide or resolve any and
all questions, including interpretations of this Plan, as may arise in
connection with this Plan. Any such action taken by the Committee shall be final
and conclusive on any party. To the extent the Committee has been granted
discretionary authority under the Plan, the Committee's prior exercise of such
authority shall not obligate it to exercise its authority in a like fashion
thereafter. The Committee shall be entitled to rely conclusively upon all
tables, valuations, certificates, opinions and reports furnished by any actuary,
accountant, controller, counsel or other person employed or engaged by the
Employer with respect to the Plan. The Committee may, from time to time, employ
agents and delegate to such agents, including employees of the Employer, such
administrative or other duties as it sees fit.
9.3 Indemnification. To the extent
not covered by insurance, the Employer shall indemnify the Committee, each
employee, officer, director, and agent of the Employer, and all persons formerly
serving in such capacities, against any and all liabilities or expenses,
including all legal fees relating thereto, arising in connection with the
exercise of their duties and responsibilities with respect to the Plan, provided
however that the Employer shall not indemnify any person for liabilities or
expenses due to that person's own gross negligence or willful
misconduct
Section
10. Contractual
Liability:
10.1 Contractual Liability. Unless
otherwise elected in the Adoption Agreement, the Company shall be obligated to
make all payments hereunder. This obligation shall constitute a contractual
liability of the Company to the Participants, and such payments shall be made
from the general funds of the Company. The Company shall not be required to
establish or maintain any special or separate fund, or otherwise to segregate
assets to assure that such payments shall be made, and the Participants shall
not have any interest in any particular assets of the Company by reason of its
obligations hereunder. To the extent that any person acquires a right to receive
payment from the Company, such right shall be no greater than the right of an
unsecured creditor of the Company.
10.2 Trust. The Employer may
establish a trust to assist it in meeting its obligations under the Plan. Any
such trust shall conform to the requirements of a grantor trust under Revenue
Procedures 92-64 and 92-65 and at all times during the continuance of the trust
the principal and income of the trust shall be subject to claims of general
creditors of the Employer under federal and state law. The establishment of such
a trust would not be intended to cause Participants to realize current income on
amounts contributed thereto, and the trust would be so interpreted and
administered.
Section
11. Allocation of
Responsibilities:
The
persons responsible for the Plan and the duties and responsibilities allocated
to each are as follows:
11.1 Board.
|
|
(i)
|
To
amend the Plan;
|
|
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(ii)
|
To
appoint and remove members of the Committee;
and
|
|
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(iii)
|
To
terminate the Plan as permitted in Section
14.
|
11.2 Committee.
|
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(i)
|
To
designate Participants;
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|
(ii)
|
To
interpret the provisions of the Plan and to determine the rights of the
Participants under the Plan, except to the extent otherwise provided in
Section 16 relating to claims
procedure;
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|
|
(iii)
|
To
administer the Plan in accordance with its terms, except to the extent
powers to administer the Plan are specifically delegated to another person
or persons as provided in the Plan;
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|
|
(iv)
|
To
account for the amount credited to the Deferred Compensation Account of a
Participant;
|
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|
(v)
|
To
direct the Employer in the payment of
benefits;
|
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(vi)
|
To
file such reports as may be required with the United States Department of
Labor, the Internal Revenue Service and any other government agency to
which reports may be required to be submitted from time to time;
and
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|
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(vii)
|
To
administer the claims procedure to the extent provided in Section
16.
|
Section
12. Benefits Not Assignable;
Facility of Payments:
12.1 Benefits Not Assignable. No
portion of any benefit credited or paid under the Plan with respect to any
Participant shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt so to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the
same shall be void, nor shall any portion of such benefit be in any manner
payable to any assignee, receiver or any one trustee, or be liable for his
debts, contracts, liabilities, engagements or torts. Notwithstanding the
foregoing, in the event that all or any portion of the benefit of a Participant
is transferred to the former Spouse of the Participant incident to a divorce,
the Committee shall maintain such amount for the benefit of the former Spouse
until distributed in the manner required by an order of any court having
jurisdiction over the divorce, and the former Spouse shall be entitled to the
same rights as the Participant with respect to such benefit.
12.2 Plan-Approved Domestic Relations
Orders. The Committee shall establish procedures for determining whether
an order directed to the Plan is a Plan- Approved Domestic Relations Order. If
the Committee determines that an order is a Plan-Approved Domestic Relations
Order, the Committee shall cause the payment of amounts pursuant to or segregate
a separate account as provided by (and to prevent any payment or act which might
be inconsistent with) the Plan-Approved Domestic Relations Order.
12.3 Payments to Minors and Others.
If any individual entitled to receive a payment under the Plan shall be
physically, mentally or legally incapable of receiving or acknowledging receipt
of such payment, the Committee, upon the receipt of satisfactory evidence of his
incapacity and satisfactory evidence that another person or institution is
maintaining him and that no guardian or committee has been appointed for him,
may cause any payment otherwise payable to him to be made to such person or
institution so maintaining him. Payment to such person or institution shall be
in full satisfaction of all claims by or through the Participant to the extent
of the amount thereof.
Section
13. Beneficiary:
The
Participant's beneficiary shall be the person, persons, entity or entities
designated by the Participant on the beneficiary designation form provided by
and filed with the Committee or its designee. If the Participant does not
designate a beneficiary, the beneficiary shall be his Surviving Spouse. If the
Participant does not designate a beneficiary and has no Surviving Spouse, the
beneficiary shall be the Participant's estate. The designation of a beneficiary
may be changed or revoked only by filing a new beneficiary designation form with
the Committee or its designee. If a beneficiary (the "primary beneficiary") is
receiving or is entitled to receive payments under the Plan and dies before
receiving all of the payments due him, the balance to which he is entitled shall
be paid to the contingent beneficiary, if any, named in the Participant's
current beneficiary designation form. If there is no contingent beneficiary, the
balance shall be paid to the estate of the primary beneficiary. Any beneficiary
may disclaim all or any part of any benefit to which such beneficiary shall be
entitled hereunder by filing a written disclaimer with the Committee before
payment of such benefit is to be made. Such a disclaimer shall be made in a form
satisfactory to the Committee and shall be irrevocable when filed. Any benefit
disclaimed shall be payable from the Plan in the same manner as if the
beneficiary who filed the disclaimer had predeceased the
Participant.
Section
14. Amendment and Termination of
Plan:
The
Company may amend any provision of the Plan or terminate the Plan at any time;
provided, that in no event shall such amendment or termination reduce the
balance in any Participant's Deferred Compensation Account as of the date of
such amendment or termination, nor shall any such amendment affect the terms of
the Plan relating to the payment of such Deferred Compensation Account.
Notwithstanding the foregoing, the following special provisions shall
apply:
14.1 Termination in the Discretion of the
Employer. Except as otherwise provided in Sections 14.2, the Company in
its discretion may terminate the Plan and distribute benefits to Participants
subject to the following requirements and any others specified under Section
409A of the Code:
14.1.1 All
arrangements sponsored by the Employer that would be aggregated with the Plan
under Section 1.409A-l(c) of the Treasury Regulations are
terminated.
14.1.2 No
payments other than payments that would be payable under the terms of the Plan
if the termination had not occurred are made within 12 months of the termination
date.
14.1.3 All
benefits under the Plan are paid within 24 months of the termination
date.
14.1.4 The
Employer does not adopt a new arrangement that would be aggregated with the Plan
under Section 1.409A-1(c) of the Treasury Regulations providing for the deferral
of compensation at any time within 3 years following the date of termination of
the Plan.
14.1.5 The
termination does not occur proximate to a downturn in the financial health of
the Employer.
14.2 Termination Upon Change in Control
Event. If the Company terminates the Plan within thirty days preceding or
twelve months following a Change in Control Event, the Deferred Compensation
Account of each Participant shall become fully vested and payable to the
Participant in a lump sum within twelve months following the date of
termination, subject to the requirements of Section 409A of the
Code.
Section
15. Communication to
Participants:
The
Employer shall make a copy of the Plan available for inspection by Participants
and their beneficiaries during reasonable hours at the principal office of the
Employer.
Section
16. Claims
Procedure:
The
following claims procedure shall apply with respect to the Plan:
16.1 Filing of a Claim for Benefits.
If a Participant or Beneficiary (the "claimant") believes that he is
entitled to benefits under the Plan which are not being paid to him or which are
not being accrued for his benefit, he shall file a written claim therefore with
the Committee.
16.2 Notification to Claimant of Decision.
Within 90 days after receipt of a claim by the Committee (or within 180
days if special circumstances require an extension of time), the Committee shall
notify the claimant of the decision with regard to the claim. In the event of
such special circumstances requiring an extension of time, there shall be
furnished to the claimant prior to expiration of the initial 90-day period
written notice of the extension, which notice shall set forth the special
circumstances and the date by which the decision shall be furnished. If such
claim shall be wholly or partially denied, notice thereof shall be in writing
and worded in a manner calculated to be understood by the claimant, and shall
set forth: (i) the specific reason or reasons for the denial; (ii) specific
reference to pertinent provisions of the Plan on which the denial is based;
(iii) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and (iv) an explanation of the procedure for review of
the denial and the time limits applicable to such procedures, including a
statement of the claimant's right to bring a civil action under ERISA following
an adverse benefit determination on review. Notwithstanding the foregoing, if
the claim relates to a disability determination, the Committee shall notify the
claimant of the decision within 45 days (which may be extended for an additional
30 days if required by special circumstances).
16.3 Procedure for Review. Within
60 days following receipt by the claimant of notice denying his claim, in whole
or in part, or, if such notice shall not be given, within 60 days following the
latest date on which such notice could have been timely given, the claimant may
appeal denial of the claim by filing a written application for review with the
Committee. Following such request for review, the Committee shall fully and
fairly review the decision denying the claim. Prior to the decision of the
Committee, the claimant shall be given an opportunity to review pertinent
documents and to submit issues and comments in writing.
16.4 Decision on Review. The
decision on review of a claim denied in whole or in part by the Committee shall
be made in the following manner:
16.4.1 Within
60 days following receipt by the Committee of the request for review (or within
120 days if special circumstances require an extension of time), the Committee
shall notify the claimant in writing of its decision with regard to the claim.
In the event of such special circumstances requiring an extension of time,
written notice of the extension shall be furnished to the claimant prior to the
commencement of the extension. Notwithstanding the foregoing, if the claim
relates to a disability determination, the Committee shall notify the claimant
of the decision within 45 days (which may be extended for an additional 45 days
if required by special circumstances).
16.4.2 With
respect to a claim that is denied in whole or in part, the decision on review
shall set forth specific reasons for the decision, shall be written in a manner
calculated to be understood by the claimant, and shall set forth:
|
|
(i)
|
the
specific reason or reasons for the adverse
determination;
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|
|
(ii)
|
specific
reference to pertinent Plan provisions on which the adverse determination
is based;
|
|
|
(iii)
|
a
statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records,
and other information relevant to the claimant's claim for benefits;
and
|
|
|
(iv)
|
a
statement describing any voluntary appeal procedures offered by the Plan
and the claimant's right to obtain the information about such procedures,
as well as a statement of the claimant's right to bring an action under
ERISA section 502(a).
|
16.4.3 The
decision of the Committee shall be final and conclusive.
16.5 Action by Authorized Representative
of Claimant. All actions set forth in this Section 16 to be taken by the
claimant may likewise be taken by a representative of the claimant duly
authorized by him to act in his behalf on such matters. The Committee may
require such evidence as either may reasonably deem necessary or advisable of
the authority to act of any such representative.
Section
17. Miscellaneous
Provisions:
17.1 Set off. Notwithstanding any
other provision of this Plan, the Employer may reduce the amount of any payment
otherwise payable to or on behalf of a Participant hereunder (net of any
required withholdings) at the time payment is due by the amount of any loan,
cash advance, extension of credit or other obligation of the Participant to the
Employer that is then due and payable, and the Participant shall be deemed to
have consented to such reduction. In addition, the Employer may at any time
offset a Participant's Deferral Compensation Account by an amount up to $5,000
to collect any such amount in accordance with the requirements of Section 409A
of the Code.
17.2 Notices. Each Participant who
is not in Service and each Beneficiary shall be responsible for furnishing the
Committee or its designee with his current address for the mailing of notices
and benefit payments. Any notice required or permitted to be given to such
Participant or Beneficiary shall be deemed given if directed to such address and
mailed by regular United States mail, first class, postage prepaid. If any check
mailed to such address is returned as undeliverable to the addressee, mailing of
checks will be suspended until the Participant or Beneficiary furnishes the
proper address. This provision shall not be construed as requiring the mailing
of any notice or notification otherwise permitted to be given by posting or by
other publication.
17.3 Lost Distributees. A benefit
shall be deemed forfeited if the Committee is unable to locate the Participant
or Beneficiary to whom payment is due on or before the fifth anniversary of the
date payment is to be made or commence; provided, that the deemed investment
rate of return pursuant to Section 8.2 shall cease to be applied to the
Participant's account following the first anniversary of such date; provided
further, however, that such benefit shall be reinstated if a valid claim is made
by or on behalf of the Participant or Beneficiary for all or part of the
forfeited benefit.
17.4 Reliance on Data. The Employer
and the Committee shall have the right to rely on any data provided by the
Participant or by any Beneficiary. Representations of such data shall be binding
upon any party seeking to claim a benefit through a Participant, and the
Employer and the Committee shall have no obligation to inquire into the accuracy
of any representation made at any time by a Participant or
Beneficiary.
17.5 Receipt and Release for Payments.
Subject to the provisions of Section 17.1, any payment made from the Plan
to or with respect to any Participant or Beneficiary, or pursuant to a
disclaimer by a Beneficiary, shall, to the extent thereof, be in full
satisfaction of all claims hereunder against the Plan and the Employer with
respect to the Plan. The recipient of any payment from the Plan may be required
by the Committee, as a condition precedent to such payment, to execute a receipt
and release with respect thereto in such form as shall be acceptable to the
Committee.
17.6 Headings. The headings and
subheadings of the Plan have been inserted for convenience of reference and are
to be ignored in any construction of the provisions hereof.
17.7 Continuation of Employment.
The establishment of the Plan shall not be construed as conferring any
legal or other rights upon any Employee or any persons for continuation of
employment, nor shall it interfere with the right of the Employer to discharge
any Employee or to deal with him without regard to the effect thereof under the
Plan.
17.8 Merger or Consolidation; Assumption
of Plan. No Employer shall consolidate or merge into or with another
corporation or entity, or transfer all or substantially all of its assets to
another corporation, partnership, trust or other entity (a "Successor Entity")
unless such Successor Entity shall assume the rights, obligations and
liabilities of the Employer under the Plan and upon such assumption, the
Successor Entity shall become obligated to perform the terms and conditions of
the Plan. Nothing herein shall prohibit the assumption of the obligations and
liabilities of the Employer under the Plan by any Successor Entity.
17.9 Construction. The Employer
shall designate in the Adoption Agreement the state according to whose laws the
provisions of the Plan shall be construed and enforced, except to the extent
that such laws are superseded by ERISA and the applicable requirements of the
Code.
17.10 Taxes. The Employer or other
payor may withhold a benefit payment under the Plan or a Participant's wages, or
the Employer may reduce a Participant's Account balance, in order to meet any
federal, state, or local or employment tax withholding obligations with respect
to Plan benefits, as permitted under Section 409A of the Code. The Employer or
other payor shall report Plan payments and other Plan-related information to the
appropriate governmental agencies as required under applicable
laws.
Section
18. Transition
Rules:
This
Section 18 does not apply to plans newly established on or after January 1,
2009.
18.1 2005 Election Termination.
Notwithstanding Section 4.1.4, at any time during 2005, a Participant may
terminate a Participation Agreement, or modify a Participation Agreement to
reduce the amount of Compensation subject to the deferral election, so long as
the Compensation subject to the terminated or modified Participation Agreement
is includible in the income of the Participant in 2005 or, if later, in the
taxable year in which the amounts are earned and vested.
18.2 2005 Deferral Election. The
requirements of Section 4.1.2 relating to the timing of the Participation
Agreement shall not apply to any deferral elections made on or before March 15,
2005, provided that (a) the amounts to which the deferral election relate have
not been paid or become payable at the time of the election, (b) the Plan was in
existence on or before December 31, 2004, (c) the election to defer compensation
is made in accordance with the terms of the Plan as in effect on December 31,
2005 (other than a requirement to make a deferral election after March 15,
2005), and (d) the Plan is otherwise operated in accordance with the
requirements of Section 409A of the Code.
18.3 2005 Termination of Participation;
Distribution. Notwithstanding anything in this Plan to the contrary, at
any time during 2005, a Participant may terminate his or her participation in
the Plan and receive a distribution of his Deferred Compensation Account balance
on account of that termination, so long as the full amount of such distribution
is includible in the Participant's income in 2005 or, if later, in the taxable
year of the Participant in which the amount is earned and vested.
18.4 Payment Elections.
Notwithstanding the provisions of Sections 7.1 or 7.5 of the Plan, a
Participant may elect on or before December 31, 2008, the time or form of
payment of amounts subject to Section 409A of the Code provided that such
election applies only to amounts that would not otherwise be payable in the year
of the election and does not cause an amount to paid in the year of the
election that would not otherwise be payable in such
year.
FIRST
AMENDMENT TO THE
CHS
NQDCP
WHEREAS, CHS/Community Health
Systems, Inc. (the "Company") has previously established and currently maintains
the CHS NQDCP Plan (the "Plan"); and
WHEREAS, the Company has
retained the right to amend the Plan in Section 14 of the Plan; and
WHEREAS, the Company desires
to amend the Plan to not allow for assignments pursuant to domestic relations
orders, effective as of April 1, 2009; and
NOW, THEREFORE, the Plan is
hereby amended in the following respects:
1. Effective
as of April 1, 2009, the text of Section 2.27 shall be deleted and shall instead
be marked "Reserved."
2. Effective
as of April 1, 2009, the last sentence of Section 12.1 shall be
deleted.
3. Effective
as of April 1, 2009, Section 12.2 shall be deleted and Section 12.3 shall
be renumbered as Section 12.2.
4. Except as
otherwise provided in this First Amendment, the Plan shall remain in full force
and effect.
SIGNED this 31st day
of March, 2009, effective as of the dates set forth herein.
|
CHS/COMMUNITY
HEALTH SYSTEMS, INC.
|
|||
|
By:
|
/s/
Rachel A. Seifert
|
||
|
Title:
|
Senior
Vice
President
|
||
Exhibit 4.3
NOTE:
Execution of this Adoption Agreement creates a legal liability of the Employer
with significant tax consequences to the Employer and Participants. The Employer
should obtain legal and tax advice from its professional advisors before
adopting the Plan. Principal Life Insurance Company disclaims all liability for
the legal and tax consequences which result from the elections made by the
Employer in this Adoption Agreement.
Principal Life
Insurance Company, Raleigh, NC 27612
A member of the
Principal Financial Group®
THE
EXECUTIVE NONQUALIFIED "EXCESS" PLAN
ADOPTION
AGREEMENT
THIS
AGREEMENT is the adoption by CHS/Community Health Systems,
Inc. (the "Company") of the CHS/Community Health
Systems, Inc. Nonqualified Deferred Compensation Plan ("Plan").
W I T N E S S E T
H:
WHEREAS,
the Company desires to adopt the Plan as an unfunded, nonqualified deferred
compensation plan; and
WHEREAS,
the provisions of the Plan are intended to comply with the requirements of
Section 409A of the Code and the regulations thereunder and shall apply to
amounts subject to section 409A; and
WHEREAS,
the Company has been advised by Principal Life Insurance Company to obtain legal
and tax advice from its professional advisors before adopting the
Plan,
NOW,
THEREFORE, the Company hereby adopts the Plan in accordance with the terms and
conditions set forth in this Adoption Agreement:
ARTICLE
I
Terms
used in this Adoption Agreement shall have the same meaning as in the
Plan,
unless some other meaning is expressly herein set forth. The Employer hereby
represents and warrants that the Plan has been adopted by the Employer upon
proper authorization and the Employer hereby elects to adopt the Plan for the
benefit of its Participants as referred to in the Plan. By the execution of this
Adoption Agreement, the Employer hereby agrees to be bound by the terms of the
Plan.
ARTICLE
II
The
Employer hereby makes the following designations or elections for the purpose of
the Plan:
|
2.6
|
Committee:
|
The
duties of the Committee set forth in the Plan shall be satisfied
by:
|
| ___ |
(a)
|
Company
|
|
| ___ |
(b)
|
The
administrative committee appointed by the Board to serve at the pleasure
of the Board.
|
|
| ___ |
(c)
|
Board.
|
|
|
XX
|
(d)
|
Other
(specify): CHS/Community
Health Systems, Inc. Retirement
Committee.
|
|
2.8
|
Compensation:
|
The
"Compensation" of a Participant shall mean all of a
Participant's:
|
|
XX
|
(a)
|
Base
salary.
|
|
| ___ |
(b)
|
Service
Bonus.
|
|
| ___ |
(c)
|
Performance-Based
Compensation earned in a period of 12 months or more.
|
|
| ___ |
(d)
|
Commissions.
|
|
| ___ |
(e)
|
Compensation
received as an Independent Contractor reportable on Form
1099.
|
|
|
XX
|
(f)
|
Other:
Bonus
|
|
|
2.9
|
Crediting
Date:
|
The
Deferred Compensation Account of a Participant shall be credited with the
amount of any Participant Deferral to such account at the time
designated
below:
|
| ___ |
(a)
|
The
last business day of each Plan Year.
|
|
| ___ |
(b)
|
The
last business day of each calendar quarter during the Plan
Year.
|
|
| ___ |
(c)
|
The
last business day of each month during the Plan Year.
|
|
| ___ |
(d)
|
The
last business day of each payroll period during the Plan
Year.
|
|
| ___ |
(e)
|
Each
pay day as reported by the Employer.
|
|
|
XX
|
(f)
|
Any
business day on which Participant Deferrals are received by the
administrative recordkeeper.
|
|
| ___ |
(g)
|
Other:
___________________________________________.
|
|
2.13
|
Effective
Date:
|
| ___ |
(a)
|
This
is a newly-established Plan, and the Effective Date of the Plan is
_______________.
|
|
|
XX
|
(b)
|
This
is an amendment and restatement of a plan named Triad
Hospitals, Inc. Deferred Compensation Plan with an effective date
of January
1, 2005, an amendment and restatement of a plan named Quorum
Nonqualified Retirement Plan with an effective date of July
1, 1994, an
amendment and restatement of a plan named River
Region Physicans’ Nonqualified Retirement Plan with an effective
date of November 1, 1994, an amendment and
restatement of a plan named Kosciusko
Physicans’ Nonqualified Retirement Plan with an effective
date of February 1, 1999, an amendment and
restatement of a plan named Mary
Black Health Systems, LLC Nonqualified Retirement Plan with an effective
date of July
1, 1996 and an amendment and restatement of a plan named CHS NQDCP with an
effective date of November
1, 2008.
The Effective Date of this amended and
restated Plan is September
1, 2009.
|
|
XX
|
(i)
|
All
amounts in Deferred Compensation Accounts shall be subject to the
provisions of this amended and restated Plan.
|
|
| ___ |
(ii)
|
Any
Grandfathered Amounts shall be subject to the Plan rules in effect on
October 3, 2004.
|
|
2.20
|
Normal
Retirement
Age:
|
The
Normal Retirement Age of a Participant shall
be:
|
| ___ |
(a)
|
Age
___.
|
|
| ___ |
(b)
|
The
later of age ___ or the _______ anniversary of the participation
commencement date. The participation commencement date is the first day of
the first Plan Year in which the Participant commenced participation in
the Plan.
|
|
|
XX
|
(c)
|
Other:
The later of age 65 or
age 55 and 10 Years of Service based on Section
6(f)(1).
|
|
2.23
|
Participating
Employer(s):
|
As
of the Effective Date, the following Participating Employer(s) are parties
to the Plan:
|
|
Name of Employer
|
Address
|
Telephone No.
|
EIN
|
|||
|
CHS/Community
Health Systems, Inc.
|
4000
Meridian Blvd.
|
615-465-7000
|
76-0137985
|
|||
|
Franklin,
TN 37067
|
||||||
|
2.26
|
Plan:
|
The
name of the Plan is
|
| CHS NQDCP. |
|
2.28
|
Plan
Year:
|
The
Plan Year shall end each year on the last day of the month of December.
|
|
2.30
|
Seniority
Date:
|
The
date on which a Participant has:
|
| ___ |
(a)
|
Attained
age ___.
|
|
| ___ |
(b)
|
Completed
__ Years of Service from First Date of Service.
|
|
| ___ |
(c)
|
Attained
age __ and completed __ Years of Service from First Date of
Service.
|
|
| ___ |
(d)
|
Attained
an age as elected by the Participant.
|
|
|
XX
|
(e)
|
Attained
age 65
or attained age 55 and completed
10
Years of Service from based on Section 6(f)(1).
|
|
| ___ |
(f)
|
Not
applicable – distribution elections for Separation from Service are not
based on Seniority Date
|
|
4.1
|
Participant
Deferral Credits:
|
Subject
to the limitations in Section 4.1 of the Plan, a Participant may elect to
have his Compensation
(as selected in Section 2.8 of this Adoption Agreement) deferred within
the annual limits below by the following percentage or amount as
designated in writing to the
Committee:
|
|
XX
|
(a)
|
Base
salary:
|
|
minimum
deferral: __________%
|
|
maximum
deferral : $__________ or ____75______%
|
| ___ |
(b)
|
Service
Bonus:
|
|
minimum
deferral: __________%
|
|
maximum
deferral : $__________ or
__________%
|
| ___ |
(c)
|
Performance-Based
Compensation:
|
|
minimum
deferral: __________%
|
|
maximum
deferral : $__________ or
__________%
|
| ___ |
(d)
|
Commissions:
|
|
minimum
deferral: __________%
|
|
maximum
deferral : $__________ or
__________%
|
| ___ |
(e)
|
Form
1099 Compensation:
|
|
minimum
deferral: __________%
|
|
maximum
deferral : $__________ or
__________%
|
|
XX
|
(f)
|
Other: Bonus
|
|
minimum
deferral: __________%
|
|
maximum
deferral : $__________ or ____100______%
|
| ___ |
(g)
|
Participant
deferrals not allowed.
|
|
4.2
|
Employer
Credits:
|
Employer
Credits will be made in the following
manner:
|
|
XX
|
(a)
|
Employer Discretionary
Credits: The Employer may make discretionary credits to the
Deferred Compensation Account of each Active Participant in an amount
determined as follows:
|
|
XX
|
(i)
|
An
amount determined each Plan Year by the Employer.
|
|
| ___ |
(ii)
|
Other:
_______________________________________.
|
|
XX
|
(b)
|
Other Employer Credits:
The Employer may make other credits to the Deferred Compensation Account
of each Active Participant in an amount determined as
follows:
|
|
XX
|
(i)
|
An
amount determined each Plan Year by the Employer.
|
|
| ___ |
(ii)
|
Other:
_______________________________________.
|
| ___ |
(c)
|
Employer
Credits not allowed.
|
|
5.2
|
Disability
of a Participant:
|
| ___ |
(a)
|
A
Participant's becoming Disabled shall be a Qualifying Distribution Event
and the Deferred Compensation Account shall be paid by the Employer as
provided in Section 7.1.
|
|
|
XX
|
(b)
|
A
Participant becoming Disabled shall not be a
Qualifying Distribution Event.
|
|
5.3
|
Death
of a Participant:
|
If
the Participant dies while in Service, the Employer shall pay a benefit to
the Beneficiary in
an amount equal to the vested balance in the Deferred Compensation Account
of the Participant determined as of the date payments to the Beneficiary
commence, plus:
|
| ___ |
(a)
|
An
amount to be determined by the Committee.
|
|
| ___ |
(b)
|
Other:
________________________________.
|
|
|
XX
|
(c)
|
No
additional benefits.
|
|
5.4
|
In-Service
or Education Distributions:
|
In-Service
and Education Accounts are permitted under the
Plan:
|
|
XX
|
(a)
|
In-Service
Accounts are allowed with respect
to:
|
|
XX
|
Participant Deferral Credits
only. (Effective
1/1/09)
|
|
| ___ | Employer Credits only. | |
|
XX
|
Participant
Deferral and Employer Credits. (Effective
through 12/31/08)
|
|
|
In-service
distributions may be made in the following manner:
|
||
|
XX
|
Single
lump sum payment.
|
|
|
XX
|
Annual
installments over a term certain not to exceed 3
years.
|
|
|
Education
Accounts are allowed with respect to:
|
||
| ___ |
Participant
Deferral Credits only.
|
|
| ___ |
Employer
Credits only.
|
|
| ___ |
Participant
Deferral and Employer Credits.
|
|
|
Education
Accounts distributions may be made in the following
manner:
|
||
| ___ |
Single
lump sum payment.
|
|
| ___ |
Annual
installments over a term certain not to exceed __
years.
|
|
|
If
applicable, amounts not vested at the time payments due under this Section
cease will be:
|
||
| ___ |
Forfeited
|
|
| ___ |
Distributed
at Separation from Service if vested at that
time
|
|
|
(b)
|
No
In-Service or Education Distributions
permitted.
|
|
5.5
|
Change
in Control Event:
|
| ___ |
(a)
|
Participants
may elect upon initial enrollment to have accounts distributed upon a
Change in Control Event.
|
|
|
XX
|
(b)
|
A
Change in Control shall not be a
Qualifying Distribution Event.
|
|
5.6
|
Unforeseeable
Emergency Event:
|
|
|
|
XX
|
(a)
|
Participants
may apply to have accounts distributed upon an Unforeseeable Emergency
event.
|
|
| ___ |
(b)
|
An
Unforeseeable Emergency shall not be
a Qualifying Distribution Event
|
|
6.
|
Vesting:
|
An
Active Participant shall be fully vested in the Employer Credits made
to the Deferred Compensation Account upon the first to occur of the
following events:
|
|
XX
|
(a)
|
Normal
Retirement Age.
|
|
|
XX
|
(b)
|
Death.
|
|
| ___ |
(c)
|
Disability.
|
|
| ___ |
(d)
|
Change
in Control Event
|
|
| ___ |
(e)
|
Other:
________________________________.
|
|
|
XX
|
(f)
|
Satisfaction
of the vesting requirement as specified below:
|
|
|
XX
|
Employer
Discretionary Credits:
|
| ___ |
(i)
|
Immediate
100% vesting.
|
|
|
XX
|
(ii)
|
100%
vesting after 3
Years of Service.
|
|
| ___ |
(iii)
|
100%
vesting at age __.
|
|
| ___ |
(iv)
|
Number
of
Years
Vested
of
Service
Percentage
|
|
Less
than
|
1
|
__%
|
||
|
1
|
__%
|
|||
|
2
|
__%
|
|||
|
3
|
__%
|
|||
|
4
|
__%
|
|||
|
5
|
__%
|
|||
|
6
|
__%
|
|||
|
7
|
__%
|
|||
|
8
|
__%
|
|||
|
9
|
__% | |||
|
10
or more
|
__%
|
|
For
this purpose, Years of Service of a Participant shall be calculated from
the date designated below:
|
|
XX
|
(1)
|
First
Day of Service.
|
|
| ___ |
(2)
|
Effective
Date of Plan Participation.
|
|
| ___ |
(3)
|
Each
Crediting Date. Under this option (3), each Employer Credit shall vest
based on the Years of Service of a Participant from the Crediting Date on
which each Employer Discretionary Credit is made to his or her Deferred
Compensation Account.
|
|
XX
|
Other
Employer Credits:
|
| ___ |
(i)
|
Immediate
100% vesting.
|
|
| ___ | (ii) |
100%
vesting after ___ Years of Service.
|
|
| ___ | (iii) |
100%
vesting at age __.
|
|
| XX | (iv) | As indicated by the Employer prior to the time of contribution and subject to approval of administration capability by Principal. | |
| ___ |
(v)
|
Number
of
Years
Vested
of
Service
Percentage
|
|
Less
than
|
1
|
__%
|
||||
|
1
|
__%
|
|||||
|
2
|
__%
|
|||||
|
3
|
__%
|
|||||
|
4
|
__%
|
|||||
|
5
|
__%
|
|||||
|
6
|
__%
|
|||||
|
7
|
__%
|
|||||
|
8
|
__%
|
|||||
|
9
|
__% | |||||
|
10
or more
|
__%
|
|||||
|
For
this purpose, Years of Service of a Participant shall be calculated from
the date designated below:
|
| ___ |
(1)
|
First
Day of Service.
|
|
| ___ |
(2)
|
Effective
Date of Plan Participation.
|
|
| ___ |
(3)
|
Each
Crediting Date. Under this option (3), each Employer Credit shall vest
based on the Years of Service of a Participant from the Crediting Date on
which each Employer Discretionary Credit is made to his or her Deferred
Compensation Account.
|
|
7.1
|
Payment
Options:
|
Any
benefit payable under the Plan upon a permitted Qualifying Distribution
Event may
be made to the Participant or his Beneficiary (as applicable) in any of
the following payment forms, as selected by the Participant in the
Participation Agreement:
|
|
(a)
|
Separation from Service prior to Seniority Date,
or Separation from Service if Seniority Date is Not
Applicable
|
|
XX
|
(i)
|
A
lump sum.
|
|
| ___ |
(ii)
|
Annual
installments over a term certain as elected by the Participant not to
exceed ___ years.
|
|
| ___ |
(iii)
|
Other:
____________________________.
|
|
(b)
|
Separation from Service on or After Seniority
Date, If Applicable
|
|
XX
|
(i)
|
A
lump sum.
|
|
|
XX
|
(ii)
|
Annual
installments over a term certain as elected by the Participant not to
exceed 15
years.
|
|
| ___ |
(iii)
|
Other:
_____________________________.
|
|
(c)
|
Separation from Service Upon a Change in Control
Event
|
| ___ |
(i)
|
A
lump sum.
|
|
| ___ |
(ii)
|
Annual
installments over a term certain as elected by the Participant not to
exceed ___ years.
|
|
|
XX
|
(iii)
|
Other:
Not
Applicable.
|
|
(d)
|
Death
|
|
XX
|
(i)
|
A
lump sum.
|
|
| ___ |
(ii)
|
Annual
installments over a term certain as elected by the Participant not to
exceed ___ years.
|
|
| ___ |
(iii)
|
Other:
______________________________.
|
|
(e)
|
Disability
|
| ___ |
(i)
|
A
lump sum.
|
|
| ___ |
(ii)
|
Annual
installments over a term certain as elected by the Participant not to
exceed ___
years.
|
|
| ___ |
(iii)
|
Other:
______________________________.
|
|
|
XX
|
(iv)
|
Not
applicable.
|
|
|
If
applicable, amounts not vested at the time payments due under this Section
cease will be:
|
|||
| ___ |
Forfeited
|
||
| ___ |
Distributed
at Separation from Service if vested at that
time
|
||
|
(f)
|
Change in Control
Event
|
| ___ |
(i)
|
A
lump sum.
|
|
| ___ |
(ii)
|
Annual
installments over a term certain as elected by the Participant not to
exceed ___ years.
|
|
| ___ |
(iii)
|
Other:
|
|
|
XX
|
(iv)
|
Not
applicable.
|
|
|
If
applicable, amounts not vested at the time payments due under this Section
cease will be:
|
|||
| ___ |
Forfeited
|
||
| ___ |
Distributed
at Separation from Service if vested at that
time
|
||
|
7.4
|
De
Minimis Amounts.
|
|
|
| ___ |
(a)
|
Notwithstanding
any payment election made by the Participant, the vested balance in the
Deferred Compensation Account of the Participant will be distributed in a
single lump sum payment at the time designated under the Plan if at the
time of a permitted Qualifying Distribution Event that is either a
Separation from Service, death, Disability (if applicable) or Change in
Control Event (if applicable) the vested balance does not exceed ______. In addition, the
Employer may distribute a Participant's vested balance at any time if the
balance does not exceed the limit in Section 402(g)(1)(B) of the Code and
results in the termination of the Participant's entire interest in the
Plan
|
|
|
XX
|
(b)
|
There
shall be no pre-determined de minimis amount under the Plan; however, the
Employer may distribute a Participant's vested balance at any time if the
balance does not exceed the limit in Section 402(g)(1)(B) of the Code and
results in the termination of the Participant's entire interest in the
Plan.
|
|
10.1
|
Contractual
Liability:
|
Liability
for payments under the Plan shall be the responsibility of
the:
|
|
XX
|
(a)
|
Company.
|
|
| ___ |
(b)
|
Employer
or Participating Employer who employed the Participant when amounts were
deferred.
|
14. Amendment
and Termination of Plan: Notwithstanding
any provision in this Adoption Agreement or the Plan to the contrary, Sections
2.23,
2.8, 4.1 and 7.1(b) of the Plan shall be amended to read as provided in
attached Exhibit A,
and Section 4.1.2 of the
Plan shall be amended to read as provided in attached Exhibit B.
17.9 Construction: The
provisions of the Plan shall be construed and enforced according to the laws of
the State of Tennessee,
except to the extent that such laws are superseded by ERISA and the applicable
provisions of the Code.
IN
WITNESS WHEREOF, this Agreement has been executed as of the day and year stated
below.
|
CHS/Community Health Systems,
Inc.
Name
of Employer
|
|||
|
By:
|
/s/
James W. Doucette
|
||
|
Authorized
Person
|
|||
|
Date:
|
8/11/09
|
||
Exhibit
A
Section
2.8
Notwithstanding
Section 2.8 of the Adoption Agreement, Section 2.8 of the Plan, or any other
terms of the Adoption Agreement or Plan to the contrary, “Compensation” of a
Participant shall mean Base salary and Service Bonus attributable to 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, and
bonuses). Compensation shall also include all of the following types
of elective contributions and all of the following types of deferred
compensation: elective contributions that are made by the Employer on
behalf of a Participant that are not includible in gross income under Code
Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B), and 403(b).
However,
Compensation shall exclude all of the following items (even if includible in
gross income): reimbursements or other expense allowances, fringe benefits (cash
and non-cash), moving expenses, and welfare benefits. In addition,
Compensation shall also exclude the following: (a) 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; (b) amounts realized from
the sale, exchange or other disposition of stock acquired under an incentive
stock option; (c) other amounts that received special tax benefits (whether or
not the amounts are actually excludable from the gross income of the
Participant) unless specifically included above; (d) amounts received as
severance pay; and (e) amounts received after severance from employment,
provided, however, that Compensation shall include Post-Severance
Compensation.
“Post-Severance
Compensation" means payments made within 2 ½ months after severance from
employment (within the meaning of Code Section 401(k)(2)(B)(i)(I)) if they are
payments that, absent a severance from employment, would have been paid to the
Employee while the Employee continued in employment with the Employer and are
regular compensation for services during the Employee's regular working hours,
compensation for services outside the Employee's regular working hours (such as
overtime or shift differential), commissions, bonuses, or other similar
compensation, and payments for accrued bona fide sick, vacation or other leave,
but only if the Employee would have been able to use the leave if employment had
continued. Any payments not described above are not considered compensation if
paid after severance from employment, even if they are paid within 2 ½ months
following severance from employment, except for payments to an individual who
does not currently perform services for the Employer by reason of qualified
military service (within the meaning of Code Section 414(u)(1)) to the extent
these payments do not exceed the amounts the individual would have received if
the individual had continued to perform services for the Employer rather than
entering qualified military service.
Section
2.23
Notwithstanding
Section 2.23 of the Adoption Agreement, Sections 2.15, 2.23, and 2.24 of the
Plan, or any other terms of the Adoption Agreement or Plan to the contrary, a
“Participating Employer" shall include any corporation that is a member of a
controlled group of corporations (as defined in Code Section 414(b)) that
includes the Company; any trade or business (whether or not incorporated) that
is under common control (as defined in Code Section 414(c)) with the Company;
any organization (whether or not incorporated) that is a member of an affiliated
service group (as defined in Code Section 414(m)) which includes the Company;
and any other entity required to be aggregated with the Company under Code
Section 414(o), regardless of whether such corporation, trade or business,
organization, or entity formally adopts the Plan.
Section
4.1
Notwithstanding
Section 4.1 of the Adoption Agreement, Section 4.1 of the Plan, or any other
terms of the Adoption Agreement or Plan to the contrary, with respect to a
Participant who elects to defer Compensation made with respect to plan years
commencing prior to January 1, 2009, the minimum deferral shall be
$2,000.
Section
7.1(b)
Notwithstanding
Section 7.1(b) of the Adoption Agreement, Section 7.1 or 7.3 of the Plan, or any
other terms of the Adoption Agreement or Plan to the contrary, the minimum
number of years with respect to annual installments payment option shall be two
(2) years with respect to plan years commencing prior to January 1,
2009.
Exhibit
B
to
the
Adoption Agreement for the
Executive
Nonqualified Excess Plan
In accordance with
Section 14 of the Adoption Agreement (the “AA”) for the Executive Nonqualified
Excess Plan as adopted for the CHS NQDCP (the “Plan”), which permits
CHS/Community Health Systems, Inc., as sponsor of the Plan, to amend the terms
of the AA and the Plan, CHS/Community Health Systems, Inc. hereby adopts this
Exhibit B to the AA concurrently with the adoption of the Plan. All
other provisions of the Plan and AA remain in force and unamended.
1. Section
4.1.2 of the Plan shall be amended by deleting the final sentence thereto and
replacing it with the following sentence:
The
election of a Participant shall be effective only with respect to the calendar
year credits on account of which the election is made.
Exhibit 4.4
GUARANTEE
This Guarantee, dated December 9, 2009,
is made by Community Health Systems, Inc. (“CHS”), a Delaware corporation, in
favor of its wholly owned subsidiary CHS/Community Health Systems, Inc. (the
“Company”), a Delaware corporation, with regard to the payment obligations of
the Company under the CHS NQDCP (the “NQDCP”) and CHS/Community Health Systems,
Inc. Deferred Compensation Plan (the “DCP”) (collectively, the
“Plans”).
WITNESSETH
WHEREAS
the Company sponsors the Plans and maintains certain payment obligations under
the Plans; and
WHEREAS,
CHS desires to guarantee the payment obligations of the Company under the
Plans;
NOW
THEREFORE, for good and valuable consideration, CHS agrees as
follows:
1. Guarantee. CHS
absolutely, unconditionally and irrevocably guarantees to the Company the
payments required to made by the Company under the Plans.
a. NQDCP. Without
limiting the foregoing, with respect to the NQDCP, CHS guarantees the payment to
Participants and Beneficiaries of amounts credited, or required to be credited,
including Participant Deferral Credits and Employer Credits to the Participants’
Deferred Compensation Account and In-Service Account in whatever form of payment
option permitted under the NQDCP. The obligation of CHS shall be in
addition to the obligation of the Company under Section 10.1 or any other
provisions of the NQDCP. The guarantee of CHS with respect to the
NQDCP shall extend to the obligations of the Company under that certain Trust of
the CHS NQDCP to make deposits of cash or other property.
b. DCP. Without
limiting the foregoing, with respect to the DCP, CHS guarantees the payment to
Members and Beneficiaries of amounts credited, or required to be credited, to
the Accounts of Members or Beneficiaries under the DCP from Deferral
Contributions and Matching Contributions Amounts in whatever form of payment
option permitted under the DCP. The obligation of CHS shall be in
addition to the obligation of the Company under the DCP. The
guarantee of CHS with respect to the DCP shall extend to the obligations of the
Company under that certain Community Health Systems Deferred Compensation Plan
Trust to make deposits of money or other property.
2. Guarantor Bound. CHS agrees that its
obligations under this Guarantee shall not be lessened, discharged or released,
in whole or in part, or terminated except only by the permanent and irrevocable
payment and performance in full of the payment obligations of the Company under
the Plans, and CHS waives the benefit of all privileges
and
defenses that are or may hereafter be available to guarantors, indemnitors or
sureties. Nothing contained in, and no omission from, the other
provisions of this Guarantee is intended or shall be construed or interpreted so
as to limit the generality of this section.
3. Continuing
Guarantee. The Guarantor agrees
that this Guarantee is a continuing guarantee, unlimited as to duration and
amount, for all of the obligations set forth herein.
4. Miscellaneous
a. Entire Agreement.
This Guarantee constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes any and all prior agreements
or understandings, written or oral, with respect thereto.
b. Choice of Law. This Guarantee is made under and shall be governed by and construed in accordance with the laws of the State of Delaware.
c. Successors and
Assigns. This Guarantee shall be
binding upon the Guarantor and its successors and permitted assigns, and the
benefits hereof shall extend to the Company and its successors and
assigns. The Guarantor may not assign or transfer all or any part of
its rights, if any, or obligations hereunder without the prior written consent
of the Company and any purported transfer of such rights or obligations made
without the prior written consent of the Company shall be void.
d. Defined
Terms. Capitalized terms not defined in this Guarantee will
have the meanings set forth in the Plans, as applicable.
IN WITNESS WHEREOF the Guarantor has
signed and delivered this Guarantee on the 9th day
of December, 2009.
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COMMUNITY
HEALTH SYSTEMS, INC.
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By:
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/s/
Rachel A. Seifert
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Name:
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Rachel
A. Seifert
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Title:
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Senior
Vice
President
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Exhibit 5.1 |
[Letterhead of Community Health Systems, Inc.]
December 11, 2009
RE: Registration Statement on Form S-8
Ladies and Gentlemen:
I am the Senior Vice President, General Counsel and Secretary for Community Health Systems, Inc., a Delaware corporation (the “Company”). I am delivering this opinion in connection with the registration, pursuant to a Registration Statement on Form S-8
(the “Form S-8”), of the offer and sale of up to $60,000,000 of deferred compensation obligations of CHS/Community Health Systems, Inc., a Delaware corporation (the “Deferred Compensation Obligations”), under the CHS NQDCP and the CHS/Community Health Systems, Inc. Deferred Compensation Plan (the “Plans”). The
obligations of CHS/Community Health Systems, Inc. (“CHS”) under the Plans are guaranteed by the Company. With your permission, all assumptions and statements of reliance herein have been made without any independent investigation or verification on our part except to the extent otherwise expressly stated, and I express no opinion with respect to the subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, I have (i) investigated such questions of law, (ii) examined originals or certified, conformed or reproduction copies of such agreements, instruments, documents and records of the Company and CHS, such certificates of public officials and such other documents, and (iii) received such information
from officers and representatives of the Company and CHS as I have deemed necessary or appropriate for the purposes of this opinion.
In all such examinations, I have assumed the legal capacity of all natural persons executing documents, the genuineness of all signatures, the authenticity of original and certified documents and the conformity to original or certified documents of all copies submitted to us as conformed or reproduction copies. As to various
questions of fact relevant to the opinions expressed herein, I have relied upon, and assume the accuracy of, representations and warranties contained in the documents and certificates and oral or written statements and other information of or from representatives of the Company and CHS and others and assume compliance on the part of all parties to the documents with their covenants and agreements contained therein. I also have assumed that any future changes to the terms and conditions of the Plans
will be duly authorized by CHS and will comply with all applicable laws.
Based upon the foregoing and subject to the limitations, qualifications and assumptions set forth herein, I am of the opinion that the issuance of the Deferred Compensation Obligations has been duly authorized by CHS and, when created and issued in accordance with the terms of the Plans, will be valid and binding obligations of CHS, enforceable
in accordance with their terms, except as limited by bankruptcy, insolvency, or other laws of general application relating to or affecting creditors’ remedies or by general principles of equity. In addition, I am of the opinion that Company’s guarantee of the Deferred Compensation Obligations has been duly authorized by the Company and is a valid and binding obligation of the Company, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, or other laws of
general application relating to or affecting creditors’ remedies or by general principles of equity.
The opinion expressed herein is limited to the General Corporation Law of the State of Delaware (the “GCLD”) and applicable provisions of the Delaware Constitution, in each case as currently in effect, and reported judicial decisions interpreting the GCLD and
the Delaware Constitution. The opinions expressed herein are given as of the date hereof, and I undertake no obligation to supplement this letter if any applicable laws change after the date hereof or if I become aware of any facts that might change the opinions expressed herein after the date hereof or for any other reason. I hereby consent to the filing of this opinion as an exhibit to the Form S-8 relating to the registration of the Deferred Compensation Obligations.
The opinions expressed herein are solely for your benefit in connection with the Form S-8 and may not be relied on in any manner or for any purpose by any other person or entity.
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Very truly yours, | |
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/s/ Rachel A. Seifert
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Rachel A. Seifert | |
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Senior Vice President, General Counsel and Secretary |
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-8 of our reports (which reports express an unqualified opinion and include an explanatory paragraph referring to the Company adopting Statement of Financial Accounting Standards No. 157, Fair Value Measurements effective
January 1, 2008) relating to the consolidated financial statements and financial statement schedule of Community Health Systems, Inc. and the effectiveness of Community Health Systems, Inc.'s internal control over financial reporting dated February 26, 2009, appearing in the Annual Report on Form 10-K of Community Health Systems, Inc. for the year ended December 31, 2008.
/s/ Deloitte & Touche LLP
Nashville, TennesseeDecember 11, 2009