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
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DEFINITIONS AND
CONSTRUCTION
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1
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ADMINISTRATION
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5
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PARTICIPATION
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5
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BENEFITS
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6
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VESTING
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8
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TRUST
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9
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PAYMENT OF
BENEFITS
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9
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HARDSHIP
DISTRIBUTIONS
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10
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SALE OF THE
COMPANY
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11
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NATURE OF THE
PLAN
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11
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EMPLOYMENT
RELATIONSHIP
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11
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AMENDMENT AND
TERMINATION
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12
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CLAIMS
PROCEDURE
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12
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MISCELLANEOUS
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12
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CHS/COMMUNITY HEALTH SYSTEMS,
INC.
DEFERRED COMPENSATION PLAN
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
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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:
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(1)
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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.
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(2)
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Affiliate : Any subsidiary of Community Health
Systems, Inc., the corporate parent of the Company.
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(3)
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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.
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(4)
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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.
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(5)
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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.
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(6)
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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.
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(7)
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Company : CHS/Community Health Systems,
Inc.
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(8)
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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.
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(9)
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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.
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(10)
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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.
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(11)
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Determination Date
. The last business day
of each quarter in a calendar year.
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(12)
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Earnings Credit
: The earnings applied
to a Member’s Account as of each Determination Date pursuant
to Section 4.2(b).
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(13)
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Effective Date
: June 1,
1991.
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(14)
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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).
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(15)
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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
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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.
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(16)
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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.
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(17)
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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.
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(18)
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Plan : CHS/Community Health Systems, Inc.
Deferred Compensation Plan, as amended from time to
time.
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(19)
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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.
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(20)
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Post-Termination Benefits
Deposit :
Certain deposit provided for under the terms of the Split Dollar
Agreement.
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(21)
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Retirement Plan
: Community Health
Systems, Inc. 401(k) Plan.
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(22)
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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.
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(23)
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SSP: CHS 401(k) Supplemental Savings
Plan.
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(24)
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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.
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(25)
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Trust Assets : All assets held by the Trustee
under the Trust Agreement.
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(26)
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Trustee : The trustee or trustees qualified
and acting under the Trust Agreement at any time.
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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.
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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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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.
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 an integral 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 an
integral 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 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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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
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