Exhibit 10.3

 

COMMUNITY HEALTH SYSTEMS, INC.

 

AMENDED AND RESTATED 2000 STOCK OPTION AND AWARD PLAN
NONQUALIFIED STOCK OPTION AGREEMENT (EMPLOYEE)

 

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. 2000
Stock Option and Award Plan, as amended (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, thirty-three and one-third percent (33 1/3%) of the total number of Shares
covered by the Option after the expiration of one (1) year from the Grant Date
and an additional thirty-three and one-third percent (33 1/3%) of the total
number of Shares covered by the Option after the expiration of each of the
second and third anniversaries 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.  In addition, an Option may be exercised through a
registered broker-dealer pursuant to such cashless exercise procedures which
are, from time to time, deemed acceptable by the Committee.  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 11, 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

 

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

 

6.             Termination of Option.  Subject to Sections 7 and 8 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 employment of the Optionee 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 employment of the Optionee 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 employment of the Optionee 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 employment of the Optionee 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 Employee’s termination of employment with 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 employment or (y) the expiration of the Exercise Term.

 

8.             Prohibited Activities

 

8.1           Prohibition Against Certain Activities.  The Optionee agrees that
(a) the Optionee will not at any time during his or her employment (other than
in the course of his or her employment) with the Corporation or any Affiliate
thereof, or after any termination of employment, directly or indirectly disclose
or furnish to any other

 

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person or use for the Optionee’s own or any other person’s account any
confidential or proprietary knowledge or any other information which is not a
matter of public knowledge obtained during the course of his or her employment
with, or other performance of services for (including service as a director of),
the Corporation or any Affiliate thereof or any predecessor of any of the
foregoing, no matter from where or in what manner the Optionee may have acquired
such knowledge or information, and the Optionee shall retain all such knowledge
and information in trust for the benefit of the Corporation, its Affiliates and
the successors and assigns of any of them, (b) the Optionee will not at any time
during his or her employment with the Corporation or any Affiliate thereof, or
for three (3) years following any termination of employment, directly or
indirectly solicit for employment, including, without limitation, recommending
to any subsequent employer the solicitation for employment of, any person who at
the time of the solicitation is employed by the Corporation or any Affiliate
thereof, (c) the Optionee will not at any time during his or her employment
with, or performance of services for (including service as a director of), the
Corporation or any Affiliate thereof or after any termination of employment,
publish any statement or make any statement (under circumstances reasonably
likely to become public or that he might reasonably expect to become public)
critical of the Corporation or any Affiliate of the Corporation, or in any way
adversely affecting or otherwise maligning the business reputation of any of the
foregoing entities, and (d) the Optionee will not breach the provisions of
Section 9 hereof (any activity described in clause (a), (b), (c) or (d) of this
Section 8.1 being herein referred to as a “Prohibited Activity”).

 

8.2           Right to Terminate Option.  The Optionee understands that the
Corporation is granting to the Optionee an option to purchase Shares hereunder
to reward the Optionee for the Optionee’s future efforts and loyalty to the
Corporation and its Affiliates by giving the Optionee the opportunity to
participate in the potential future appreciation of the Corporation. 
Accordingly, if, at any time during which any portion of the Option, including
any exercisable portion, is outstanding (a) if the Optionee engages in any
Prohibited Activity, or (b) the Optionee engages in any Competitive Activity (as
hereinafter defined), or (c) the Optionee is convicted of a crime against the
Corporation or any of its Affiliates, then, in addition to any other rights and
remedies available to the Corporation, the Corporation shall be entitled, at its
option, to terminate the Option, including any exercisable portion thereof,
which shall then be of no further force and effect.

 

The term “Competitor” shall mean any person that competes either directly or
indirectly through one or more Affiliates with any of the businesses in which,
at the time the Optionee’s employment is terminated, the Corporation or any of
its subsidiaries is engaged.

 

The term “Competitive Activity” shall mean engaging in any of the following
activities:  (i) serving as a director of any Competitor; (ii) directly or
indirectly (x) controlling any Competitor or (y) owning any equity or debt
interests in any Competitor (other than equity or debt interests which are
publicly traded and do not exceed 2% of the particular class of interests
outstanding) (it being understood that, if any such interests in any Competitor
are owned by an investment vehicle or other entity in which the Optionee owns an
equity interest, a portion of the interests in such Competitor owned by such
entity shall be attributed to the Optionee, such portion determined by applying
the percentage of the equity interest in such entity owned by the Optionee to
the interests in such Competitor owned by such entity); (iii) directly or
indirectly soliciting,

 

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diverting, taking away, appropriating or otherwise interfering with any of the
customers or suppliers of the Corporation or any Affiliate of the Corporation;
(iv) employment by (including serving as an officer or director of) or providing
consulting services to any Competitor; provided, however, that if the Competitor
has more than one discrete and readily distinguishable part of its business,
employment by or providing consulting services to any Competitor shall be
Competitive Activity only if (1) his or her employment duties are at or
involving the part of the Competitor’s business that competes with any of the
businesses conducted by the Company or any of its subsidiaries (the “Competing
Operations”), including serving in a capacity where any person at the Competing
Operations reports to the Optionee, or (2) the consulting services are provided
to or involve the Competing Operations.  For purposes of this definition, the
term “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of any Competitor,
whether through the ownership of equity or debt interests, by contract or
otherwise.

 

9.             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
parents, children, stepchildren and grandchildren.

 

10.           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 10 shall require
the Corporation to issue a fractional share, and the total adjustment with
respect to this Agreement shall be limited accordingly.

 

11.           Withholding.

 

The Corporation shall have the right to deduct from 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 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,

 

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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.

 

12.           No Right to Continued Employment.

 

This Agreement and the Option shall not confer upon the Optionee any right with
respect to continuance of employment by the Corporation or any Affiliate
thereof, nor shall it interfere in any way with the right of the Corporation or
any Affiliate thereof to terminate the Optionee’s employment at any time.

 

13.           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.

 

14.           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.

 

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

 

16.           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.

 

17.           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.

 

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18.           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.

 

19.           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.

 

20.           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.

 

21.           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.

 

22.           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.

 

23.           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

 

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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 irrevocably 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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