PERFORMANCE BASED RESTRICTED
STOCK AWARD AGREEMENT
(Most Highly Compensated Executive Officers)
Community Health Systems,
Inc.
THIS AGREEMENT
governs your award of restricted stock made by Community Health
Systems, Inc., a Delaware corporation (the “ Company
”).
WHEREAS, the
Company has adopted the Community Health Systems, Inc. Amended and
Restated 2000 Stock Option and Award Plan (the “ Plan
”) in order to provide additional incentive to certain
employees and directors of the Company and its
Subsidiaries;
WHEREAS, the
Compensation Committee (the “Committee”) of the Board
of Directors (as described in Section 3.1 of the Plan) has
determined to grant to you an Award of Restricted Stock as provided
herein to encourage your efforts toward the continuing success of
the Company;
WHEREAS, the
Committee has determined to place a performance-based restriction
on the Award of Restricted Stock to better align your economic
interests with those of the other stockholders of the Company and
to ensure that the compensation attributable to this Award of
Restricted Stock constitutes “qualified performance-based
compensation” pursuant to IRC §162(m) and the
regulations promulgated thereunder; and
WHEREAS, the
Committee has established the Performance Objective (as defined in
Section 3.1 below) (a) utilizing objectively determinable
criteria, (b) on a date which is prior to the ninetieth
(90 th
) day of the Company’s fiscal
year, and (c) at a time when the attainment of the Performance
Objective is substantially uncertain.
NOW, THEREFORE,
the parties hereto agree as follows:
1. Grant of
Restricted Stock.
1.1 The Company
hereby grants to you an award of Shares of Performance Based
Restricted Stock (the “ Award ”). The Shares of
Performance Based Restricted Stock granted pursuant to this Award
shall be issued in the form of book entry Shares in your name as
soon as reasonably practicable after the Date of Grant and shall be
subject to your acceptance of this grant (or your estate, if
applicable) by online communication with the Company’s option
plan administrator, as may be determined from time to time, and in
accordance with Section 9 hereof.
1.2 This Agreement
shall be construed in accordance and consistent with, and subject
to, the provisions of the Plan (the provisions of which are hereby
incorporated by reference) and, except as otherwise expressly set
forth herein, the capitalized terms used in this Agreement shall
have the same definitions as set forth in the Plan.
2.
Restrictions on Transfer.
The Shares of
Performance Based Restricted Stock issued under this Agreement may
not be sold, transferred or otherwise disposed of and may not be
pledged or otherwise hypothecated until all restrictions on such
Performance Based Restricted Stock shall have lapsed in the manner
provided in Section 3, 4 or 5 hereof.
1
3.
Performance Objective; Lapse of Restrictions.
3.1 The Award is
subject to the Company attaining the following “Performance
Objective” (herein so called): The Company’s
“income per share from continuing operations for the fiscal
year” in which granted, as reported by the Company in its
earnings release for such fiscal year, shall be not less than the
amount which is seventy-five percent (75%) of the low end of the
projected “income per share from continuing operations for
the fiscal year,” in which granted as stated in the
Company’s Form 8-K filed with the SEC for the current fiscal
year. The Performance Objective shall be adjusted upward or
downward in the event the Company enters into one or more material
acquisition or divestiture transactions and as a result thereof or
in connection therewith files one or more Forms 8-K issuing revised
guidance to investors projecting a higher or lower “income
per share from continuing operations for the fiscal year” in
which granted, (but only to the extent such change in guidance is
attributable to the material acquisition and/or divestiture
transactions). The adjusted Performance Objective shall be
seventy-five percent (75%) of the low end of the range of revised
projected “income per share from continuing operations for
fiscal year” in which granted. For purposes of this
Agreement, “material acquisition” or “material
divestiture” transaction shall mean any single transaction or
series of related transactions in which the consideration exceeds
fifteen percent (15%) of the Company’s assets on a
consolidated basis. The computation of “income per share from
continuing operations” shall be adjusted for Changes in
Capitalization (as defined in the Plan).
3.2 Except as
provided in Sections 4, 5 and 6 hereof, if the Performance
Objective is not attained, the Award shall lapse in its
entirety.
3.3 Except as
provided in Sections 4, 5 and 6 hereof, if the Performance
Objective is attained, one-third (1/3) of the number of Shares of
Performance Based Restricted Stock issued hereunder (rounded up to
the next whole Share, if necessary) shall vest, and the
restrictions with respect to such Performance Based Restricted
Stock shall lapse, on each of the first three (3) anniversaries of
the Date of Grant.
4. Effect of
Certain Terminations of Employment.
If your employment
terminates as a result of your death or Disability, in each case if
such termination occurs on or after the Date of Grant, all Shares
of Performance Based Restricted Stock which have not become vested
in accordance with Section 3 or 5 hereof shall vest, and the
restrictions on such Performance Based Restricted Stock shall
lapse, as of the date of such termination. If your employment is
terminated by your employer for any reas
|
