Exhibit 10.4

 

COMMUNITY HEALTH SYSTEMS, INC.

 

AMENDED AND RESTATED STOCK OPTION AND AWARD PLAN
NONQUALIFIED STOCK OPTION AGREEMENT (DIRECTOR)

 

THIS AGREEMENT, made as of the        day of                              (the
“Grant Date”), between Community Health Systems, Inc. (the “Corporation”), and
                                    , whose address is
                                             (the “Optionee”).

 

WHEREAS, the Corporation 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, officers and directors of the
Corporation and its subsidiaries; and

 

WHEREAS, the Committee responsible for administration of the Plan has determined
to grant an option to the Optionee as provided herein;

 

NOW THEREFORE, the parties hereto agree as follows:

 

1.             Grant of Option.

 

1.1           The Corporation hereby grants to the Optionee the right and option
(the “Option”) to purchase all or any part of an aggregate of
                           (number spelled) whole Shares (such number being
subject to adjustment as provided in Section 10 hereof), on the terms and
conditions set forth in this Agreement and in the Plan, a copy of which has been
provided to the Optionee.

 

1.2           This Option is not intended to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code.

 

1.3.          Except as otherwise defined herein, capitalized terms used in this
Agreement shall have the same definitions as set forth in the Plan.

 

2.             Purchase Price.

 

The price at which the Optionee shall be entitled to purchase Shares upon the
exercise of this Option shall be $               per Share (such price being
subject to adjustment as provided in Section 10 hereof).

 

3.             Duration of Option.

 

The Option shall be exercisable to the extent and in the manner provided herein
for a period of 10 years from the date hereof (the “Exercise Term”); provided,
however, that the Option may be earlier terminated as provided in Section 6 or
Section 8 hereof; provided, further, that the Option may, upon the death of the
Optionee be later exercised for up to one (1) year following the date of the
Optionee’s death if such death occurs prior to the tenth anniversary of the
grant Date.

 

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4.             Exercisability of Option.

 

Unless otherwise provided in this Agreement or the Plan, the Option shall
entitle the Optionee to purchase, in whole at any time or in part from time to
time, fifty percent (50%) of the total number of Shares covered by the Option
after the expiration of one (1) year from the Grant Date and the remaining fifty
percent (50%) of the total number of Shares covered by the Option after the
expiration of the second anniversary of the Grant Date, and each such right of
purchase shall be cumulative and shall continue, unless sooner exercised or
terminated as herein provided, during the remaining period of the Exercise
Term.  Any fractional number of shares resulting from the application of the
foregoing percentages shall be rounded down to the next whole number of Shares.

 

5.             Manner of Exercise and Payment.

 

5.1           Notice of Exercise.  Subject to the terms and conditions of this
Agreement and the Plan, the Option may be exercised by delivery of written
notice to the Company.  Such notice shall state that the Optionee is electing to
exercise the Option and the number of Shares in respect of which the Option is
being exercised and shall be signed by the Optionee or by any guardian,
executor, administrator or other legal representative.  The notice shall be in
the form of Exhibit A attached to this Agreement, or such other form as may be
prescribed by the Corporation from time to time.  The Corporation may require
proof satisfactory to it as to the right of such person to exercise the Option. 
Not less than one hundred (100) shares may be purchased at any one time upon any
exercise of the Option, unless the number of Shares so purchased constitutes the
total number of Shares then purchasable under the Option.

 

5.2           Deliveries.  The notice of exercise described in Section 5.1
hereof shall be accompanied by the full purchase price for the Shares in respect
of which the Option is being exercised, in cash or by check or, if indicated in
the notice, such payment shall follow by check from a registered broker acting
as agent on behalf of the Optionee.  However, at the discretion of the
Committee, the Optionee may pay the exercise price in part or in full by
transferring to the Corporation Shares owned by the Optionee for a period of six
(6) months (or such lesser period as may be permitted by the Committee) prior to
the exercise of the Option.  Any Shares transferred to the Corporation as
payment of the exercise price under an Option shall be valued at their Fair
Market Value on the date of exercise of such Option.

 

5.3           Issuance of Shares.  Upon receipt of notice of exercise, full
payment for the Shares in respect of which the Option is being exercised, and
subject to Section 10, the Corporation shall take such action as may be
necessary under applicable law to affect the issuance to the Optionee of the
number of Shares as to which such exercise was affected.

 

5.4           Stockholder Rights.  The Optionee shall not be deemed to be the
holder of, or to have any of the rights of a holder with respect to any Shares
subject to the Option until (a) the Option shall have been exercised in
accordance with the terms of this Agreement and the Optionee shall have paid the
full purchase price for the number of Shares in respect of which the Option was
exercised and any withholding taxes due in connection with such exercise, (b)
the Corporation shall have issued the Shares to the Optionee, and (c) the
Optionee’s name shall have been entered as a shareholder of record on the books
of the Corporation.  Upon the occurrence of all of the foregoing

 

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events, the Optionee shall have full voting and other ownership rights with
respect to such Shares.

 

6.             Termination of Option.  Subject to Section 7 hereof, each Option
shall terminate on the date which is the tenth anniversary of the Grant Date (or
if later, the first anniversary of the date of the Optionee’s death if such
death occurs prior to such tenth anniversary), unless terminated earlier as
follows:

 

6.1           If the Optionee’s position as a director is terminated for any
reason other than Disability, Death or for Cause, the Optionee may for a period
of three (3) months after such termination exercise his or her option to the
extent, and only to the extent, that the Option or portion thereof was vested
and exercisable as of the date of such termination, after which time the Option
shall automatically terminate in full.

 

6.2           If the Optionee’s position as a director is terminated by reason
of Disability, all of the Option shall immediately become vested and exercisable
and the Optionee may, for a period of twelve (12) months after such termination,
exercise his or her Option, after which time the Option shall automatically
terminate in full.

 

6.3           If the Optionee’s position as a director is terminated by reason
of Death, or if the Optionee dies within three (3) months after termination as
described in Section 6.1 hereof the Option shall immediately become vested and
exercisable and the person or persons to whom such rights under the Option shall
pass by will, or by the laws of descent or distribution may, for a period of
twelve (12) months following the Optionee’s death, exercise the Option, after
which time the Option shall terminate in full.

 

6.4           If the Optionee’s position as a director is terminated for Cause,
the Option granted to the Optionee hereunder shall immediately terminate in full
and no rights thereunder may be exercised.

 

6.5           Except as expressly provided herein to the contrary, the Option,
to the extent not yet vested and exercisable, shall terminate immediately upon
the Optionee’s termination as a director of the Corporation for any reason.

 

7.             Effect of Change of Control.  In the event of a Change in
Control, the Option shall become immediately and fully vested and exercisable
and shall, notwithstanding any shorter period set forth in this Agreement,
remain exercisable for a period ending not before the earlier of (x) the six (6)
month anniversary of the termination of the Optionee’s position as a director or
(y) the expiration of the Exercise Term.

 

8.             Non-Transferability.  The Option shall not be transferable other
than by will or by the laws of descent and distribution or pursuant to a
domestic relations order; provided, however, that the Option may be transferred
to members of the Optionee’s immediate family, to trusts solely for the benefit
of such immediate family members and to partnerships in which such family
members and/or trusts are the only partners.  For this purpose, immediate family
means the Optionee’s spouse, parents, children, stepchildren and grandchildren
and the spouses of such persons, children, stepchildren and grandchildren.

 

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9.             Adjustments.  In the event of a Change in Capitalization, the
Committee may make appropriate adjustments to the number and class of Shares or
other stock or securities subject to this Option and the purchase price for such
Shares or other stock or securities (an “Adjustment”).  In the event of (i) the
liquidation or dissolution of the Corporation or (ii) a merger or consolidation
of the Corporation (a “Transaction”), any such Adjustment may be as provided for
in the plan or agreement of liquidation, dissolution, merger or consolidation. 
If such plan or agreement does not expressly provide for the treatment of the
Option in connection with the Transaction, the Option shall continue in effect
in accordance with its terms and the Optionee shall be entitled to receive in
respect of all Shares subject to the Option, upon exercise of the Option, the
same number and kind of stock, securities, cash, property or other consideration
that each holder of Shares was entitled to receive in the Transaction.  The
Committee’s Adjustment shall be final and binding for all purposes of the Plan
and the Agreement.  No Adjustment provided for in this Section 9 shall require
the Corporation to issue a fractional share, and the total adjustment with
respect to this Agreement shall be limited accordingly.

 

10.           Withholding.  The Corporation shall have the right to deduct form
any amounts payable under this Agreement an amount equal to the federal, state,
and local income taxes and other amounts as may be required by applicable law
and to be withheld (the “Withholding Taxes”).  If the Optionee is entitled to
receive Shares upon exercise of the Option, the Optionee shall pay the
Withholding Taxes to the Corporation in cash prior to the issuance of such
Shares.  In satisfaction of the Withholding Taxes, the Optionee may, unless the
Committee determines otherwise, elect to have withheld a portion of the Shares
issuable to him or her upon exercise of the Option, having an aggregate Fair
Market Value, equal to the Withholding Taxes.

 

11.           No Right to Continued Position.  This Agreement and the Option
shall not confer upon the Optionee any right with respect to continuance of a
position on the Board of Directors of the Corporation, nor shall it interfere in
any way with the right of the Corporation to terminate the Optionee’s board
position as provided under the Corporation’s Bylaws, as amended from time to
time.

 

12.           Entire Agreement.  This Agreement and the Plan constitute the
entire agreement, and supersede all prior agreements and understandings, oral
and written, between the parties hereto with respect to the subject matter
hereof.

 

13.           Execution of Agreement; Modification of Agreement.  This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original and which together shall constitute one and the same instrument. 
This Agreement may be modified, amended, supplemented or terminated by written
agreement of the parties hereto; provided, that the Corporation may modify,
amend, supplement or terminate this Agreement in a writing signed by the
Corporation without any further action by the Optionee if such modification,
amendment, supplement or termination does not adversely affect the Optionee’s
rights hereunder.

 

14.           Invalidity of Provisions.  The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.  If any provision of this Agreement is
held unlawful or unenforceable in any respect, such provision shall be

 

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revised or applied in a manner that renders it lawful and enforceable to the
fullest extent possible.

 

15.           Acknowledgment.  The Optionee hereby acknowledges receipt of a
copy of the Plan and agrees to be bound by all the terms and provisions thereof
as the same may be amended from time to time.  The Optionee hereby acknowledges
that the Optionee has reviewed the Plan and this Agreement and understands his
or her rights and obligations thereunder and hereunder.  The Optionee also
acknowledges that the Optionee has been provided with such information
concerning the Corporation, the Plan and this Agreement as the Optionee and his
or her advisors have requested.

 

16.           Binding Effect.  This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns.

 

17.           Headings.  The headings and captions contained herein are for
convenience only and shall not control or affect the meaning or construction of
any provision hereof.

 

18.           Resolution of Disputes.  Any dispute or disagreement which may
arise under, or as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement shall be determined by the
Committee in good faith, whose determination shall be final, binding and
conclusive for all purposes.

 

19.           Governing Law.  This Agreement and the rights and obligations of
the parties hereto shall be governed by, and construed in accordance with, the
laws of the State of Delaware without giving effect to the principles of
conflicts of laws thereof.

 

20.           Specific Performance.  The parties hereto acknowledge that there
will be no adequate remedy at law for a violation of any of the provisions of
this Agreement and that, in addition to any other remedies which may be
available, all of the provisions of this Agreement shall be specifically
enforceable in accordance with their respective terms.

 

21.           Notice.  All notices and other communications hereunder shall be
in writing and, unless otherwise provided herein, shall be deemed to have been
given when received by the party to whom such notice is to be given at its
address set forth below, or such other address for the party as shall be
specified by notice given pursuant hereto:

 

(a)           If to the Corporation, by regular mail, to:

Community Health Systems, Inc.

155 Franklin Road

Suite 400

Brentwood, TN 37027

Attention:  General Counsel

 

(b)           If to the Optionee or his or her legal representative, to such
person at the address as reflected in the records of the Corporation.

 

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22.           Consent to Jurisdiction.  Each party hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of Tennessee and of the United States of America, in each case
located in the County of Williamson, for any actions, suits or proceedings
arising out of or relating to this Agreement, the Option or the Plan and the
transactions contemplated hereby and thereby (“Litigation”) (and agrees not to
commence any Litigation except in any such court), and further agrees that
service of process, summons, notice or document by U.S. registered mail to such
party’s respective address set forth in Section 22 hereof shall be effective
service of process for any Litigation brought against such party in any such
court.  Each party hereby irrevocably and unconditionally waives any objection
to the laying of venue of any Litigation in the courts of the State of Tennessee
or of the United States of America, in each case located in the County of
Williamson, and hereby further irrevocable and unconditionally waives and agrees
not to plead or claim in any such court that any Litigation brought in any such
court has been brought in an inconvenient forum.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

COMMUNITY HEALTH SYSTEMS, INC.

 

 

 

 

 

 

 

Wayne T. Smith, President and CEO

 

 

 

 

Attest:

 

 

 

 

 

 

 

 

Rachel A. Seifert, Senior Vice President,

 

Secretary and General Counsel

 

 

 

 

 

 

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