Exhibit 10.2

 

 

 

 

SUPPLEMENTAL

EXECUTIVE

BENEFITS

Original Document Effective as of December 31, 2008

Amended and Restated as of April 1, 2015

 

 

 

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INTRODUCTION

This document outlines the supplemental benefits for eligible executive
employees of affiliates of Community Health Systems, Inc. (the “Company”),
including the hospital companies that are consolidated with the Company.
Benefits are provided by the entity that employs the particular eligible
executive (the “Employer”), provided, however, certain benefits are provided
through group plans sponsored by Employer/Community Health Systems, Inc.

 

Plan benefit categories are based upon your position with an affiliate of the
Company. The following benefit categories are referenced throughout this
summary:

 

Executive    Corporate Vice Presidents (includes Vice President (Officer)
(elected by the Board of Directors of the Company) and Vice President
(Non-Officer)) and Above Group l    Corporate Management Grades 7-10 (Sr.
Directors/Directors/Assistant Directors)    Facility Chief Executive Officers
Group 2    Corporate Management Grades 4-6 (Managers/Assistant
Managers/Supervisors)    Facility Chief Financial Officers    Facility Chief
Nursing Officers    Facility Chief Operating Officers    Facility Assistant
Chief Executive Officers    Facility Assistant Chief Financial Officers   
Facility Assistant Chief Nursing Officers    Facility Administrators/Assistant
Administrators

Benefit category determination is the exclusive right of the Employer at its
sole discretion.

As used in this document, “Cause” means gross neglect of duties, which gross
neglect continues more than 30 days after receiving written notice from the
chief executive officer of the Company, its board of directors, or other
officers of the Company or Employer of the actions or inactions constituting
gross neglect; insubordination; intentional misconduct or deliberate disruption
of the workplace and working environment; conviction of a felony; dishonesty,
embezzlement, theft, or fraud committed in connection with employment resulting
in substantial financial harm to the Company; the issuance of any final order
for your removal as an employee or representative of the Company or Employer by
any state or federal regulatory agency; and your material breach of any duty
owed to the Company or Employer, including without limitation the duty of
loyalty. “Cause” shall not include ordinary negligence or failure to act,
whether due to an error in judgment or otherwise, if you have exercised
substantial efforts in good faith to perform the duties reasonably assigned or
appropriate to your position.

 

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SURVIVOR BENEFITS

Survivor benefits are life insurance proceeds intended to provide cash to your
beneficiary(ies) in the event of your death. These Survivor Benefits are
provided through group-term life insurance or a combination of group-term life
insurance and individually-owned life insurance policies, as determined by the
plan sponsor.

Amount of Benefit.

 

Executive

     4X Base Salary   

Group 1

     3X Base Salary   

Group 2

     2X Base Salary   

POST-TERMINATION BENEFITS

Post-termination benefits are generally designed to provide supplemental
retirement benefits. Eligibility (dependant upon the design of the particular
plan, as amended from time to time) may include (or have included in the past)
one or more of the following:

 

  •  

the Employer/Community Health Systems, Inc. Deferred Compensation Plan
(Corporate Vice President (Non-Officer) and above);

 

  •  

the Community Health Systems, Inc. Supplemental Executive Retirement Plan
(Elected Officers (Vice President (Officer) and above));

 

  •  

matching contributions under the Community Health Systems, Inc. 401(k) Plan; and

 

  •  

any other qualified or non-qualified retirement plan of the Company or any
affiliate.

You should refer to the underlying policies and/or plan documents relating to
these benefits to learn more about eligibility and your right to
post-termination benefits under these policies and plans.

 

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SEVERANCE BENEFITS

Payout upon Termination (Salary and Vacation Time).

In the event you are terminated from your employment by your Employer, without
Cause, severance benefits of a multiple of your then base monthly salary will be
paid to you based upon your position, as shown in the schedule below:

 

Benefits Category

    

Severance Multiple

CEO

President (including Division Presidents)

    

24 months

24 months

Executive Vice President

     24 months

Senior Vice President

     12 months

Vice President (Officer)

     12 months

President, Home Care

     12 months

Vice President (Non-Officer)

     9 months

Group 1 (Corp Grades 7-10 & Facility CEO)

     6 months Group 2 (Corp Grades 4-6 & Other Facility Key Hospital Management
positions as defined on Addenum – Severance Benefits – Benefits Categories)     
3 months

The vacation time payout for elected officers (Vice President (Officer) and
above) (for whom no accruals are maintained) shall be based upon a reasonable
estimate of the vacation time taken during the twelve month period preceding the
date of termination.

Additional Payments (to be made no later than March 15th of the year following
termination)

In addition, if your employment is terminated without Cause, you will receive an
additional amount of severance pay determined as follows:

Elected Officers (Vice President (Officer) and Above): the Employer shall pay
the terminated individual, at the same time that the Employer makes annual bonus
payments under the 2004 Employee Performance Incentive Plan (or any replacement
or successor plan providing for similar benefits, collectively the “Incentive
Plan”) to other senior executives, a pro rata portion of the annual bonus that
would have been paid to the terminated individual under the Incentive Plan in
respect of the year in which the termination date occurred had the terminated
individual remained employed through the applicable payment date under the
Incentive Plan, calculated by multiplying such amount by a fraction, the
numerator of which is the number of days in the year though the termination date
and the denominator of which is 365.

Termination within First 12 Months of Employment

If your employment is terminated without Cause before completing 12 full months
of employment, you will only receive one-half of the salary benefits provided
for above and none of the bonus benefit. Severance payments will be in the form
of a lump sum payment or salary continuation, as determined by Employer, and
subject to withholdings and other deductions as described below.

 

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COBRA Payment Limitation

In addition to the severance benefits described above, terminated eligible
executive employees who elect continuation health coverage under COBRA will be
required to pay only the equivalent of the active employee premium for this
coverage for a period of time equal to the time period applicable to such
employee based on the above chart, subject to the eligibility provisions of
COBRA coverage. The difference in the COBRA premium paid and the active employee
premium will be reimbursed to the terminated eligible executive employee upon
receipt of payment confirmation for the full monthly COBRA premium.

Release.

As a condition of providing any payments and/or benefits described above, you
will be required to execute a comprehensive full and final release agreement
satisfactory to the Company and substantially in the form attached as Attachment
1, as amended from time to time.

Stock Options.

The respective Plans and Stock Option Agreements under which they were granted
govern any stock options and any capitalized terms used in this section.
Generally, all vesting will cease on your date of termination of employment,
without regard to the reason, provided, however, if you are terminated for
Cause, all options are forfeited. If your employment is terminated without
Cause, you will have an additional 90 days from the date of termination of
employment to exercise your vested stock options.

Restricted Stock Awards.

The respective Plans and Restricted Stock Award Agreements under which they were
granted govern any awards of restricted stock and any capitalized terms used in
this section. Upon any termination by you, your restricted stock awards that
have not already vested will be forfeited. Upon a termination by your employer
that is without Cause, the award will not be forfeited. Subject to the following
sentence, upon termination by your employer without Cause, or upon death or
disability the award will accelerate and the restrictions will immediately
lapse. Notwithstanding the foregoing, in the event the date of termination is
prior to either (a) the first anniversary date of the award or (b) prior to the
attainment of any performance objective required under any performance based
restricted stock award, then the restrictions will not lapse until both (a) and
(b), if applicable, have been attained, and if attained, then all restrictions
on the entire award shall lapse.

 

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ADDENDUM

Severance Benefits – Benefits Categories

To follow are the job titles associated with the benefits categories as outlined
on page 3 (Severance Benefits):

 

Benefits Category

  

Associated Job Title(s)

CEO    Chief Executive Officer President    President & Chief Financial Officer
   President & Chief Operating Officer    President & Chief Quality Officer   
President, Division Operations Executive VP    Executive Vice President &
General Counsel    Executive Vice President, Administration Senior VP    All
Senior Vice President positions Vice President (Officer)    Vice President
positions classified as Officer level (i.e., elected by the Company Board of
Directors) President, Home Care    President, Home Care Vice President
(Non-Officer)    All Vice President positions classified as Non-Officer level
(i.e., not elected by the Company Board of Directors) Group 1    Corporate
Grades 7-10 to include Senior Director/Director/Assistant Director level
positions    Facility Chief Executive Officer Group 2    Corporate Grades 4-6 to
include Manager/Assistant Manager/Supervisor level positions    Facility Key
Hospital Management positions to include: Chief Financial Officer, Chief Nursing
Officer, Chief Operating Officer, Assistant Chief Executive Officer, Assistant
Chief Financial Officer, Assistant Chief Nursing Officer, Administrator,
Assistant Administrator

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Attachment 1

RELEASE OF CLAIMS AGREEMENT

In consideration of the severance benefits to be paid by the legal entity that
is the Employer (herein so called) of the undersigned Employee (herein so
called)), Employer and the Employee agree and enter into this Release of Claims
Agreement (“Agreement”) as follows:

1.        Termination of Employment.  The Employee acknowledges that the
Employee’s employment with Employer is terminated on and as of date of
termination specified at the end of this Agreement. The Employee further
acknowledges that the Employee has no right of, nor will the Employee seek,
recall, rehire, or reinstatement of employment with Employer, its parent
companies, its subsidiaries, or its affiliates. The parties acknowledge that
Employer is an indirect subsidiary of Community Health Systems, Inc. and that
benefits inuring to Employer pursuant to this Agreement shall inure, as may be
applicable, to Community Health Systems, Inc. and its subsidiaries and their
respective affiliates, directors, officers, employees, and agents.

2.        Severance Pay.  Employer will pay the Employee severance pay in the
gross amount of $            , based on      months of salary [and additional
amount, if applicable], subject to withholding for income taxes and deductions
for employment taxes, in accordance with the CHS/Community Health Systems, Inc.
Supplemental Benefit Plan (“Plan”). Employer may offset from the payment of
severance pay the cost of any Employer property that Employer has agreed to sell
to the Employee.

3.        Medical Benefits.   Provided the Employee properly elects continuation
coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986
(“COBRA”), Employer agrees it will pay for the cost of such continuation
coverage for the Employee (and, to the extent such coverage is provided by
Employer at the time of termination, the Employee’s current eligible spouse and
other current eligible dependents, if any), as provided below, under Employer’s
group health plan in accordance with the provisions of such plan through the
later of the date specified at the end of this Agreement or the date the
Employee becomes eligible under a subsequent employer’s group health plan.
However, the Employee shall pay the amount of monthly premium payment regularly
paid by a then-current regular employee of Employer for such coverage, and
Employer will pay only the difference between the COBRA premium payment and the
portion of the premium paid by the Employee through the later of the date
specified at the end of this Agreement or the date the Employee becomes covered
under a subsequent employer’s group health plan.

4.        Consideration.   The Employee hereby acknowledges that the
consideration for entering into this Agreement is the above-stated severance pay
and benefits contained in Sections 2 and 3. The Employee further acknowledges
that the Employee has been paid all monies owed to and/or earned by the Employee
based upon the Employee’s employment with Employer, its parent companies, its
subsidiaries, or affiliates, including but not limited to wages, bonuses, and
vacation pay.

5.        Release.  The Employee, on the Employee’s own behalf and on behalf of
the Employee’s heirs, executors, administrators, personal representatives,
successors, assigns, agents, servants, and attorneys, whether past, present, or
future (collectively, the “Releasing

 

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Parties”), releases and forever discharges Community Health Systems, Inc., its
subsidiaries, and affiliates, and each of their respective successors, assigns,
agents, servants, representatives, shareholders, owners, members, directors,
officers, and employees, whether past, present, or future, including without
limitation, Employer (collectively, the “Released Parties”), from any and all
claims, causes of action, liabilities, covenants, agreements, obligations,
damages, and/or demands of every nature, character, and description, without
limitation in law, equity, or otherwise, that the Employee had, has, or may now
have, whether known or unknown, whether vicarious, derivative, direct, or
indirect (collectively, the “Released Claims”), including, but not limited to,
(i) any claims under the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964, the Fair Labor Standards Act, the Equal Pay Act, the
Employment Retirement Income Security Act, the Family and Medical Leave Act, the
Americans with Disabilities Act, the Tennessee Human Rights Act, and any other
federal, state or local laws, (ii) any claims for wrongful discharge or wrongful
termination, defamation, breach of contract, breach of any implied duty or
covenant of good faith and fair dealing, retaliation, infliction of emotional
distress, or any other right or claim arising out of or related in any way to
the Employee’s employment with Employer or any of its subsidiaries or affiliates
and/or the termination of the Employee’s employment with Employer or any of its
subsidiaries or affiliates, (iii) any claims for damages (actual, compensatory,
punitive, or otherwise and however characterized), back wages, future wages,
commission payments, bonuses, reinstatement, vacation leave or paid time off
benefits (whether accrued, credited, and/or earned), past and future employee
benefits (except to which there is vested entitlement by law), penalties,
equitable relief, and any and all other loss, expense, or detriment of whatever
kind arising out of or related in any way to the Employee’s employment with
Employer or any of its subsidiaries or affiliates and/or the termination of the
Employee’s employment with Employer or any of its subsidiaries or affiliates;
and (iv) any claims for attorneys’ fees, costs, or expenses; provided, however,
that the foregoing Released Claims shall not include a claim for the payment or
provision of the severance benefits as provided in Section 2 or the COBRA
premium payments provided for in Section 3.

6.        Covenant Not to Sue and Indemnification.   The Employee hereby
specifically covenants and agrees that the Employee shall not initiate, or cause
to be initiated, a lawsuit against Employer or any of the other Released Parties
in the future asserting any Released Claims. Except as prohibited by law, the
Employee further agrees to indemnify Employer and all other Released Parties for
(i) any sum of money that any of them may hereafter be compelled to pay the
Employee or any other Releasing Parties, and (ii) any of Employer’s or other
Released Parties’ legal fees, costs, and expenses associated therewith, on
account of the Employee bringing or allowing to be brought on the Employee’s
behalf any legal action based directly or indirectly upon the Released Claims.

7.        Consideration and Revocation Period.   The Employee has been advised
by Employer of the Employee’s right to seek legal counsel. The Employee also
acknowledges that the Employee has a period of up to 21 days in which to
consider entering into this Agreement, and, as evidenced by the Employee’s
signature here below, acknowledges that the Employee has had the opportunity to
read and review this Agreement and seek legal advice and now, freely and
voluntarily, without coercion, agrees to and understands the significance and
consequences of its terms. The Employee further acknowledges that, following the
date of execution of this Agreement, the Employee has a period of 7 days within
which to revoke the Employee’s

 

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acceptance of the Agreement, in which case this Agreement shall be null and
void, the Employee will be contractually obligated to repay any payments or
other consideration paid to the Employee by Employer under this Agreement, and
Employer will have a right of restitution, recoupment, and setoff to recover
such payments. The Employee understands that, should the Employee not exercise
the Employee’s right to revoke this Agreement within 7 days of the date of
execution, this Agreement shall be held in full force and effect and each party
shall be obligated to comply with its requirements. The parties agree that any
changes made to this Agreement (material or immaterial) will not start the
21-day period referenced above to run again or otherwise require a new 21-day
period for consideration by the Employee.

8.        Nondisparagement.  The Employee agrees that the Employee shall refrain
from engaging in any conduct, verbal or otherwise, that would disparage or harm
the reputation of Employer or any of the other Released Parties. Such conduct
shall include, but not be limited to, any negative statements made orally or in
writing by the Employee about Employer or any of the other Released Parties.

9.        Confidentiality of the Agreement.  The Employee further agrees that
all terms of this Agreement are to be kept confidential and that the Employee
will not discuss or disclose the details or terms of this Agreement to any other
individual, including but not limited to present or former employees of Employer
or any of the other Released Parties, with the exception of the Employee’s
attorney, spouse, accountant, or other tax adviser, provided such persons agree
to maintain the confidentiality of this Agreement.

10.        Property and Confidential Information.  The Employee agrees that the
Employee has returned, or promptly hereafter (but in no event later than three
(3) days from the date of termination of employment) will return, to Employer
any and all property of Employer or any of the other Released Parties including
any and all originals and/or copies of business documents in whatever form
including electronic form. The Employee represents that the Employee has taken
no action to alter or destroy improperly any such property and agrees not to
take any such action directly or indirectly in the future. The Employee further
agrees that the Employee will not directly or indirectly disclose to anyone, or
use for the Employee’s own benefit or the benefit of anyone other than Employer,
any “confidential information” that the Employee has received through the
Employee’s employment with Employer. Confidential information shall include, but
not be limited to, Employer’s business plans and files; hospital management
information; and any other related information of Employer or any of the other
Released Parties. The Employee further agrees that, in the event it appears that
the Employee will be compelled by law or judicial process to disclose any such
confidential information to avoid potential liability, the Employee will notify
Employer in writing immediately upon the Employee’s receipt of a subpoena or
other legal process.

11.        No Admission of Liability.  The Employee agrees and acknowledges that
this Agreement does not constitute any admission by Employer or any of the other
Released Parties of any liability or of any violation of any federal or state
laws or regulations prohibiting employment discrimination, retaliation, breach
of contract, wrongful discharge, wrongful termination, or any other statutory or
common law rights or provisions.

 

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12.        References.  The Employee understands that Employer will provide in
response to inquiries from prospective employers only the Employee’s dates of
employment with Employer, job titles while employed by Employer, and final
salary (with written authorization) while employed by Employer, and the Employee
agrees to advise all prospective employers that any requests for information
concerning employment with Employer should be directed only to the Human
Resources Department in Franklin, Tennessee.

13.        Compliance Disclosure.  In connection with the termination of the
Employee’s employment, and pursuant to the CHS Compliance Program and the Code
of Conduct, the Employee hereby represents and warrants to Employer and the
other Released Parties that the Employee has at all times during the Employee’s
employment complied with the CHS Compliance Program and the Code of Conduct, and
that the Employee has disclosed in writing to the CHS Corporate Compliance
Officer any and all instances of known or suspected violations of laws, rules,
regulations, or corporate policy by any of the Released Parties. Further, the
Employee represents and warrants that the Employee has not brought and has no
intention to bring any whistleblower or similar lawsuits (which terms shall
include, but not be limited to, a qui tam action under the Federal False Claims
Act or any similar laws), claims, or disclosures to any governmental agency that
would subject any of the Released Parties to any liability as a result of any
violations of any laws, rules, or regulations and that the Employee knows of no
facts that would give rise to any such whistleblower or similar lawsuits,
claims, or disclosures to any governmental agency. In the event the
representations and warranties contained herein become inaccurate or untrue
after the date hereof, the Employee agrees that the Employee will notify the CHS
Corporate Compliance Officer, in writing, of the necessary corrections to make
the representations and warranties accurate and true, prior to initiating any
whistleblower or similar lawsuits, claims, or disclosures to any governmental
agency. The Employee also agrees to indemnify against and hold Employer and the
other Released Parties harmless from any loss, cost, damage, or penalty incurred
by Employer or any other Released Parties as a result of any inaccuracy in or
breach of the representations, warranties, or agreements contained herein.

14.         Intellectual Property.

(a)        “Intellectual Property” means any invention, modification, discovery,
design, development, improvement, process, software program, work of authorship,
documentation, formula, data, design, technique, know-how, trade secret, idea,
or other intellectual property right whatsoever or any interest therein, whether
or not patentable or registrable under copyright, trademark, or similar statutes
or subject to analogous protection.

(b)        Employee represents that Employee has disclosed and described to
Employer all Intellectual Property that Employee has solely or jointly
conceived, created, discovered, developed, or reduced to practice during the
period of Employee’s employment with Employer (i) that related at the time of
conception, development, or reduction to practice to the Company’s business or
actual or demonstrably anticipated research or development, (ii) that were
developed, in whole or in part, on the Employer’s time or with the use of any of
the Employer’s equipment, supplies, facilities, or confidential information, or
(iii) that result from any work Employee performed for the Employer (“Company
Intellectual Property”). All Company Intellectual Property and the benefits
thereof are the exclusive property of Employer and its assigns, as works made
for hire or otherwise. Employee hereby assigns to Employer all

 

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rights Employee has, may have, or may acquire in the Company Intellectual
Property without further compensation and shall communicate, without cost or
delay, and without disclosing to others the same, all available information
relating thereto (with all necessary plans and models) to Employer.

(c)        Employee agrees to perform all acts deemed necessary or desirable by
Employer to permit and assist it in perfecting and enforcing the full benefits,
enjoyment, rights, and title throughout the world in the Company Intellectual
Property. Such acts may include, but are not limited to, execution of documents
and assistance or cooperation in the registration and enforcement of applicable
patents and copyrights or other legal proceedings.

(d)        In the event that Employer is unable for any reason whatsoever to
secure Employee’s signature to any lawful and necessary document required to
apply for or execute any patent, copyright, or other applications with respect
to any Company Intellectual Property (including improvements, renewals,
extensions, continuations, divisions or continuations in part thereof), Employee
hereby irrevocably appoints Employer and its duly authorized officers and agents
as Employee’s agents and attorneys-in-fact to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyrights or other rights thereon with the
same legal force and effect as if executed by Employee.

15.         Miscellaneous Provisions.

(a)        This Agreement is executed and delivered within the State of
Tennessee, and the rights, duties, and obligations of the parties hereunder
shall be construed and enforced in accordance with the laws of the State of
Tennessee, except to the extent preempted by the Employee Retirement Income
Security Act of 1974, and without the benefit of any rule of construction under
which a contract may be construed against the drafter. Venue for any lawsuit
arising out of or related to this Agreement will lie in Williamson County.

(b)        This writing together with the Plan represents the entire agreement
and understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings of the parties in connection
therewith; it may not be altered or amended except by mutual agreement evidenced
by a writing signed by both parties and specifically identified as an amendment
to this Agreement.

(c)        Except as specifically provided above, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, personal representatives, successors, and
assigns.

(d)        If any provision or part of any provision of this Agreement is deemed
to be unenforceable in whole by any court of competent jurisdiction, except
Section 5, then the parties agree that such provision shall be severed from the
Agreement and the remainder of the Agreement shall remain in full force and
effect. The parties further agree that, to the extent a court of competent
jurisdiction deems any provision of this Agreement unenforceable in part, such
court shall have the power to modify the terms of the Agreement by adding,
deleting, or changing in its discretion any language necessary to make such
provision enforceable to the maximum extent permitted by law, and the parties
expressly agree to be bound by any such

 

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provision as reformed by the court. Furthermore, if the release provided for
under Section 5 of this Agreement is deemed to be void or otherwise
unenforceable by any court of competent jurisdiction, then the Employee will be
contractually obligated to repay immediately any severance payments and benefits
paid to the Employee by Employer under this Agreement, and Employer will have a
right of restitution, recoupment, and setoff against the Employee for the
recovery of such payments and benefits.

Date of Termination:                                 

EMPLOYER                                                      .:

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

Benefit Payments Guaranteed by:

 

CHS/COMMUNITY HEALTH SYSTEMS, INC.

 

By:

 

 

   

Name:

 

 

   

Title:

 

 

 

 

EMPLOYEE:

Employee’s Signature:                                                          

Employee’s Full Name:                                                        

Date Signed:                                          
                              

Witness’ Signature:                                          
                   

 

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