Document:

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                                                                    Exhibit 10.5

                         COMMUNITY HEALTH SYSTEMS, Inc.

                        2000 STOCK OPTION AND AWARD PLAN

                           (As Adopted April 25, 2000)

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                         Community Health Systems, Inc.

                        2000 STOCK OPTION AND AWARD PLAN

         1.       PURPOSE.

                  The purpose of this Plan is to strengthen Community Health
Systems, Inc., a Delaware corporation (the "Company") and its Subsidiaries, by
providing an incentive to its employees, officers, consultants and directors and
thereby encouraging them to devote their abilities and industry to the success
of the Company's business enterprise. It is intended that this purpose be
achieved by extending to employees (including future employees who have received
a formal written offer of employment), officers, consultants and directors of
the Company and its Subsidiaries an added long-term incentive for high levels of
performance and unusual efforts through the grant of Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights, Performance Units and
Performance Shares, Share Awards, Phantom Stock and Restricted Stock (as each
term is herein defined).

         2.       DEFINITIONS.

                  For purposes of the Plan:

                  2.1 "Affiliate" means any entity, directly or indirectly,
controlled by, controlling or under common control with the Company or any
corporation or other entity acquiring, directly or indirectly, all or
substantially all the assets and business of the Company, whether by operation
of law or otherwise.

                  2.2 "Agreement" means the written agreement between the
Company and an Optionee or Grantee evidencing the grant of an Option or Award
and setting forth the terms and conditions thereof.

                  2.3 "Award" means a grant of Restricted Stock, Phantom Stock,
a Stock Appreciation Right, a Performance Award, a Share Award or any or all of
them.

                  2.4 "Board" means the Board of Directors of the Company.

                  2.5 "Cause" means:

                      (a) in the case of an Optionee or Grantee whose employment
with the Company or a Subsidiary is subject to the terms of an employment
agreement between such Optionee or Grantee and the Company or Subsidiary, which
employment agreement includes a definition of "Cause", the term "Cause" as used
in this Plan or any Agreement

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shall have the meaning set forth in such employment agreement during the period
that such employment agreement remains in effect; and

                      (b) in all other cases, (i) intentional failure to perform
reasonably assigned duties, (ii) dishonesty or willful misconduct in the
performance of duties, (iii) involvement in a transaction in connection with the
performance of duties to the Company or any of its Subsidiaries which
transaction is adverse to the interests of the Company or any of its
Subsidiaries and which is engaged in for personal profit or (iv) willful
violation of any law, rule or regulation in connection with the performance of
duties (other than traffic violations or similar offenses); PROVIDED, HOWEVER,
that following a Change in Control clause (i) of this Section 2.5(b) shall not
constitute "Cause."

                  2.6 "Change in Capitalization" means any increase or reduction
in the number of Shares, or any change (including, but not limited to, in the
case of a spin-off, dividend or other distribution in respect of Shares, a
change in value) in the Shares or exchange of Shares for a different number or
kind of shares or other securities of the Company or another corporation, by
reason of a reclassification, recapitalization, merger, consolidation,
reorganization, spin-off, split-up, issuance of warrants or rights or
debentures, stock dividend, stock split or reverse stock split, cash dividend,
property dividend, combination or exchange of shares, repurchase of shares,
change in corporate structure or otherwise.

                  2.7 A "Change in Control" shall mean the occurrence of any of
the following:

                      (a) An acquisition (other than directly from the Company)
of any voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section 13(d) or 14(d) of
the Exchange Act), other than Forstmann Little & Co. Equity Partnership - V,
L.P. and Forstmann Little & Co. Subordinated Debt and Equity Management Buyout
Partnership - VI, L.P. or any of their Affiliates, immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than fifty percent (50%) of the then outstanding
Shares or the combined voting power of the Company's then outstanding Voting
Securities; PROVIDED, HOWEVER, in determining whether a Change in Control has
occurred pursuant to this Section 2.7(a), Shares or Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly, by
the Company (for purposes of this definition, a "Related Entity"),

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(ii) the Company or any Related Entity, or (iii) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);

                      (b) The individuals who, as of April 25, 2000 are members
of the Board (the "Incumbent Board"), cease for any reason to constitute at
least a majority of the members of the Board or, following a Merger which
results in a Parent Corporation, the board of directors of the ultimate Parent
Corporation; PROVIDED, HOWEVER, that if the election, or nomination for election
by the Company's common stockholders, of any new director was approved by a vote
of at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Plan, be considered as a member of the Incumbent Board;
PROVIDED FURTHER, HOWEVER, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or

                      (c) The consummation of:

                          (i) A merger, consolidation or reorganization with or
into the Company or in which securities of the Company are issued (a "Merger"),
unless such Merger, is a "Non-Control Transaction." A "Non-Control Transaction"
shall mean a Merger where:

                              (A) the stockholders of the Company, immediately
before such Merger own directly or indirectly immediately following such Merger,
at least fifty percent (50%) of the combined voting power of the outstanding
voting securities of (x) the corporation resulting from such Merger (the
"Surviving Corporation"), if fifty percent (50%) or more of the combined voting
power of the then outstanding voting securities of the Surviving Corporation is
not Beneficially Owned, directly or indirectly by another Person (a "Parent
Corporation"), or (y) if there are one or more Parent Corporations, the ultimate
Parent Corporation; and

                              (B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for such Merger, constitute at least a majority of the members of the board of
directors of (x) the Surviving Corporation, if there is no Parent Corporation,
or (y) if there are one or more Parent Corporations, the ultimate Parent
Corporation.

                          (ii) A complete liquidation or dissolution of the
Company; or

                          (iii) The sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Related Entity or

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under conditions that would constitute a Non-Control Transaction with the
disposition of assets being regarded as a Merger for this purpose or the
distribution to the Company's stockholders of the stock of a Related Entity or
any other assets).

                  Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then outstanding
Shares or Voting Securities as a result of the acquisition of Shares or Voting
Securities by the Company which, by reducing the number of Shares or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Shares or Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of
any additional Shares or Voting Securities which increases the percentage of the
then outstanding Shares or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.

                  If an Eligible Individual's employment is terminated by the
Company without Cause prior to the date of a Change in Control but the Eligible
Individual reasonably demonstrates that the termination (A) was at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a change in control or (B) otherwise arose in connection
with, or in anticipation of, a Change in Control which has been threatened or
proposed, such termination shall be deemed to have occurred after a Change in
Control for purposes of this Plan provided a Change in Control shall actually
have occurred.

                  2.8 "Code" means the Internal Revenue Code of 1986, as
amended.

                  2.9 "Committee" means a committee, as described in Section
3.1, appointed by the Board from time to time to administer the Plan and to
perform the functions set forth herein.

                  2.10 "Company" means Community Health Systems, Inc.

                  2.11 "Director" means a director of the Company.

                  2.12 "Disability" means:

                       (a) in the case of an Optionee or Grantee whose
employment with the Company or a Subsidiary is subject to the terms of an
employment agreement between such Optionee or Grantee and the Company or
Subsidiary, which employment agreement includes a definition of "Disability",
the term "Disability" as used in this Plan or any

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Agreement shall have the meaning set forth in such employment agreement during
the period that such employment agreement remains in effect; or

                       (b) the term "Disability" as used in the Company's
long-term disability plan, if any; or

                       (c) in all other cases, the term "Disability" as used in
this Plan or any Agreement shall mean a physical or mental infirmity which
impairs the Optionee's or Grantee's ability to perform substantially his or her
duties for a period of one hundred eighty (180) consecutive days.

                  2.13 "Division" means any of the operating units or divisions
of the Company designated as a Division by the Committee.

                  2.14 "Dividend Equivalent Right" means a right to receive all
or some portion of the cash dividends that are or would be payable with respect
to Shares.

                  2.15 "Eligible Individual" means any of the following
individuals who is designated by the Committee as eligible to receive Options or
Awards subject to the conditions set forth herein: (a) any director, officer or
employee of the Company or a Subsidiary, (b) any individual to whom the Company
or a Subsidiary has extended a formal, written offer of employment, or (c) any
consultant or advisor of the Company or a Subsidiary.

                  2.16 "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

                  2.17 "Fair Market Value" on any date means the closing sales
prices of the Shares on such date on the principal national securities exchange
on which such Shares are listed or admitted to trading, or, if such Shares are
not so listed or admitted to trading, the average of the per Share closing bid
price and per Share closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System or such other
market in which such prices are regularly quoted, or, if there have been no
published bid or asked quotations with respect to Shares on such date, the Fair
Market Value shall be the value established by the Board in good faith and, in
the case of an Incentive Stock Option, in accordance with Section 422 of the
Code.

                  2.18 "Grantee" means a person to whom an Award has been
granted under the Plan.

                  2.19 "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.

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                  2.20 "Initial Public Offering" means the consummation of the
first public offering of Shares pursuant to a registration statement (other than
a Form S-8 or successor forms) filed with, and declared effective by, the
Securities and Exchange Commission.

                  2.21 "Nonemployee Director" means a director of the Company
who is a "nonemployee director" within the meaning of Rule 16b-3 promulgated
under the Exchange Act.

                  2.22 "Nonqualified Stock Option" means an Option which is not
an Incentive Stock Option.

                  2.23 "Option" means a Nonqualified Stock Option, an Incentive
Stock Option, or any or all of them.

                  2.24 "Optionee" means a person to whom an Option has been
granted under the Plan.

                  2.25 "Outside Director" means a director of the Company who is
an "outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.

                  2.26 "Parent" means any corporation which is a parent
corporation within the meaning of Section 424(e) of the Code with respect to the
Company.

                  2.27 "Performance Awards" means Performance Units, Performance
Shares or either or both of them.

                  2.28 "Performance-Based Compensation" means any Option or
Award that is intended to constitute "performance based compensation" within the
meaning of Section 162(m)(4)(C) of the Code and the regulations promulgated
thereunder.

                  2.29 "Performance Cycle" means the time period specified by
the Committee at the time Performance Awards are granted during which the
performance of the Company, a Subsidiary or a Division will be measured.

                  2.30 "Performance Objectives" has the meaning set forth in
Section 8.

                  2.31 "Performance Shares" means Shares issued or transferred
to an Eligible Individual under Section 8.

                  2.32 "Performance Units" means Performance Units granted to an
Eligible Individual under Section 8.

                  2.33 "Phantom Stock" means a right granted to an Eligible
Individual under Section 9 representing a number of hypothetical Shares.

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                  2.34 "Plan" means Community Health Systems, Inc. 1999 Stock
Option and Award Plan, as amended and restated from time to time.

                  2.35 "Pooling Transaction" means an acquisition of the Company
in a transaction which is intended to be treated as a "pooling of interests"
under generally accepted accounting principles.

                  2.36 "Restricted Stock" means Shares issued or transferred to
an Eligible Individual pursuant to Section 7.

                  2.37 "Share Award" means an Award of Shares granted pursuant
to Section 9.

                  2.38 "Shares" means the Class A Common Stock of the Company,
par value $.01 per share, and any other securities into which such shares are
changed or for which such shares are exchanged.

                  2.39 "Stock Appreciation Right" means a right to receive all
or some portion of the increase in the value of the Shares as provided in
Section 6 hereof.

                  2.40 "Subsidiary" means (i) except as provided in subsection
(ii) below, any corporation which is a subsidiary corporation within the meaning
of Section 424(f) of the Code with respect to the Company, and (ii) in relation
to the eligibility to receive Options or Awards other than Incentive Stock
Options and continued employment for purposes of Options and Awards (unless the
Committee determines otherwise), any entity, whether or not incorporated, in
which the Company directly or indirectly owns 50% or more of the outstanding
equity or other ownership interests.

                  2.41 "Successor Corporation" means a corporation, or a Parent
or Subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of the
Code applies.

                  2.42 "Ten-Percent Stockholder" means an Eligible Individual,
who, at the time an Incentive Stock Option is to be granted to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, or of a Parent or a Subsidiary.

                  2.43 "Transition Period" means the period beginning with an
Initial Public Offering and ending as of the earlier of (i) the date of the
first annual meeting of shareholders of the Company at which directors are to be
elected that occurs after the close of the third calendar year following the
calendar year in which the Initial Public Offering occurs, or (ii) the
expiration of the "reliance period" under Treasury Regulation ss.
1.162-27(f)(2).

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         3.       ADMINISTRATION.

                  3.1 The Plan shall be administered by the Committee, which
shall hold meetings at such times as may be necessary for the proper
administration of the Plan. The Committee shall keep minutes of its meetings. If
the Committee consists of more than one (1) member, a quorum shall consist of
not fewer than two (2) members of the Committee and a majority of a quorum may
authorize any action. Any decision or determination reduced to writing and
signed by a majority of all of the members of the Committee shall be as fully
effective as if made by a majority vote at a meeting duly called and held. The
Committee shall consist of at least one (1) Director and may consist of the
entire Board; PROVIDED, HOWEVER, that from and after the date of an Initial
Public Offering, (A) if the Committee consists of less than the entire Board,
then with respect to any Option or Award to an Eligible Individual who is
subject to Section 16 of the Exchange Act, the Committee shall consist of at
least two (2) Directors each of whom shall be a Nonemployee Director and (B) to
the extent necessary for any Option or Award intended to qualify as
Performance-Based Compensation to so qualify, the Committee shall consist of at
least two (2) Directors, each of whom shall be an Outside Director. For purposes
of the preceding sentence, if one or more members of the Committee is not a
Nonemployee Director and an Outside Director but recuses himself or herself or
abstains from voting with respect to a particular action taken by the Committee,
then the Committee, with respect to that action, shall be deemed to consist only
of the members of the Committee who have not recused themselves or abstained
from voting. Subject to applicable law, the Committee may delegate its authority
under the Plan to any other person or persons.

                  3.2 No member of the Committee shall be liable for any action,
failure to act, determination or interpretation made in good faith with respect
to this Plan or any transaction hereunder. The Company hereby agrees to
indemnify each member of the Committee for all costs and expenses and, to the
extent permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or otherwise
dealing with any claim, cause of action or dispute of any kind arising in
connection with any actions in administering this Plan or in authorizing or
denying authorization to any transaction hereunder.

                  3.3 Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time to:

                      (a) determine those Eligible Individuals to whom Options
shall be granted under the Plan and the number of such Options to be granted and
to prescribe the terms and conditions (which need not be identical) of each such
Option, including the exercise price per Share, the vesting schedule and the
duration of each Option, and make any amendment or modification to any Option
Agreement consistent with the terms of the Plan;

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                      (b) select those Eligible Individuals to whom Awards shall
be granted under the Plan and to determine the number of Shares in respect of
which each Award is granted, the terms and conditions (which need not be
identical) of each such Award, and make any amendment or modification to any
Award Agreement consistent with the terms of the Plan;

                      (c) to construe and interpret the Plan and the Options and
Awards granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable, including so that the Plan and the
operation of the Plan complies with Rule 16b-3 under the Exchange Act, the Code
to the extent applicable and other applicable law, and otherwise to make the
Plan fully effective. All decisions and determinations by the Committee in the
exercise of this power shall be final, binding and conclusive upon the Company,
its Subsidiaries, the Optionees and Grantees, and all other persons having any
interest therein;

                      (d) to determine the duration and purposes for leaves of
absence which may be granted to an Optionee or Grantee on an individual basis
without constituting a termination of employment or service for purposes of the
Plan;

                      (e) to exercise its discretion with respect to the powers
and rights granted to it as set forth in the Plan; and

                      (f) generally, to exercise such powers and to perform such
acts as are deemed necessary or advisable to promote the best interests of the
Company with respect to the Plan.

         4.       STOCK SUBJECT TO THE PLAN; GRANT LIMITATIONS.

                  4.1 The maximum number of Shares that may be made the subject
of Options and Awards granted under the Plan is __________.* The Company shall
reserve for the purposes of the Plan, out of its authorized but unissued Shares
or out of Shares

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*    6% of the sum of the number of shares of Class A common stock (i)
     outstanding on a fully diluted basis as of the date the Plan is adopted by
     the Board and (ii) issued after the date hereof as a result of the
     Company's recapitalization and registered public offering (each as
     described in Amendment No. 1 of the Form S-1 filed by the Company with the
     Securities and Exchange Commission on April 19, 2000); it being understood
     that in connection with the Company's recapitalization, the shares of Class
     A common stock are being redesignated as "Common Stock" (whereupon the
     shares of capital stock issuable upon options granted under this Plan or
     otherwise shall be the Common Stock).

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held in the Company's treasury, or partly out of each, such number of Shares as
shall be determined by the Board.

                  4.2 Upon the granting of an Option or an Award, the number of
Shares available under Section 4.1 for the granting of further Options and
Awards shall be reduced as follows:

                      (a) In connection with the granting of an Option or an
Award (other than the granting of a Performance Unit denominated in dollars),
the number of Shares shall be reduced by the number of Shares in respect of
which the Option or Award is granted or denominated; PROVIDED, HOWEVER, that if
any Option is exercised by tendering Shares, either actually or by attestation,
to the Company as full or partial payment of the exercise price, the maximum
number of Shares available under Section 4.1 shall be increased by the number of
Shares so tendered.

                      (b) In connection with the granting of a Performance Unit
denominated in dollars, the number of Shares shall be reduced by an amount equal
to the quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.

                  4.3 Whenever any outstanding Option or Award or portion
thereof, expires, is canceled, is settled in cash (including the settlement of
tax withholding obligations using Shares) or is otherwise terminated for any
reason without having been exercised or payment having been made in respect of
the entire Option or Award, the Shares allocable to the expired, canceled,
settled or otherwise terminated portion of the Option or Award may again be the
subject of Options or Awards granted hereunder.

                  4.4 In no event may more than 30,000 Shares be issued upon the
exercise of Incentive Stock Options granted under the Plan.

         5.       OPTION GRANTS FOR ELIGIBLE INDIVIDUALS.

                  5.1 AUTHORITY OF COMMITTEE. Subject to the provisions of the
Plan, the Committee shall have full and final authority to select those Eligible
Individuals who will receive Options, and the terms and conditions of the grant
to such Eligible Individuals shall be set forth in an Agreement. Incentive Stock
Options may be granted only to Eligible Individuals who are employees of the
Company or any Subsidiary.

                  5.2 EXERCISE PRICE. The purchase price or the manner in which
the exercise price is to be determined for Shares under each Option shall be
determined by the Committee and set forth in the Agreement; PROVIDED, HOWEVER,
that the exercise price per Share under each Incentive Stock Option shall not be
less than 100% of the Fair

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Market Value of a Share on the date the Option is granted (110% in the case of
an Incentive Stock Option granted to a Ten-Percent Stockholder).

                  5.3 MAXIMUM DURATION. Options granted hereunder shall be for
such term as the Committee shall determine, provided that an Incentive Stock
Option shall not be exercisable after the expiration of ten (10) years from the
date it is granted (five (5) years in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder) and a Nonqualified Stock Option shall not
be exercisable after the expiration of ten (10) years from the date it is
granted; PROVIDED, HOWEVER, that unless the Committee provides otherwise, an
Option (other than an Incentive Stock Option) may, upon the death of the
Optionee prior to the expiration of the Option, be exercised for up to one (1)
year following the date of the Optionee's death even if such period extends
beyond ten (10) years from the date the Option is granted. The Committee may,
subsequent to the granting of any Option, extend the term thereof, but in no
event shall the term as so extended exceed the maximum term provided for in the
preceding sentence.

                  5.4 VESTING. Subject to Section 5.10, each Option shall become
exercisable in such installments (which need not be equal) and at such times as
may be designated by the Committee and set forth in the Agreement. To the extent
not exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
Option expires. The Committee may accelerate the exercisability of any Option or
portion thereof at any time.

                  5.5 DEFERRED DELIVERY OF OPTION SHARES. The Committee may, in
its discretion permit Optionees to elect to defer the issuance of Shares upon
the exercise of one or more Nonqualified Stock Options granted pursuant to the
Plan. The terms and conditions of such deferral shall be determined at the time
of the grant of the Option or thereafter and shall be set forth in the Agreement
evidencing the Option.

                  5.6 LIMITATIONS ON INCENTIVE STOCK OPTIONS. To the extent that
the aggregate Fair Market Value (determined as of the date of the grant) of
Shares with respect to which Incentive Stock Options granted under the Plan and
"incentive stock options" (within the meaning of Section 422 of the Code)
granted under all other plans of the Company or its Subsidiaries (in either case
determined without regard to this Section 5.6) are exercisable by an Optionee
for the first time during any calendar year exceeds $100,000, such Incentive
Stock Options shall be treated as Nonqualified Stock Options. In applying the
limitation in the preceding sentence in the case of multiple Option grants,
Options which were intended to be Incentive Stock Options shall be treated as
Nonqualified Stock Options according to the order in which they were granted
such that the most recently granted Options are first treated as Nonqualified
Stock Options.

                  5.7 NON-TRANSFERABILITY. No Option shall be transferable by
the Optionee otherwise than by will or by the laws of descent and distribution
or, in the case

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of an Option other than an Incentive Stock Option, pursuant to a domestic
relations order (within the meaning of Rule 16a-12 promulgated under the
Exchange Act), and an Option shall be exercisable during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal representative.
Notwithstanding the foregoing, the Committee may set forth in the Agreement
evidencing an Option (other than an Incentive Stock Option) at the time of grant
or thereafter, 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, and for purposes of this Plan, a transferee of an Option shall be
deemed to be the Optionee. 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. The terms of
an Option shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs and successors of the Optionee.

                  5.8 METHOD OF EXERCISE. The exercise of an Option shall be
made only by a written notice delivered in person or by mail to the Secretary of
the Company at the Company's principal executive office, specifying the number
of Shares to be exercised and, to the extent applicable, accompanied by payment
therefor and otherwise in accordance with the Agreement pursuant to which the
Option was granted; PROVIDED, HOWEVER, that Options may not be exercised by an
Optionee for twelve months following a hardship distribution to the Optionee, to
the extent such exercise is prohibited under Treasury Regulation ss.
1.401(k)-1(d)(2)(iv)(B)(4). The exercise price for any Shares purchased pursuant
to the exercise of an Option shall be paid in either of the following forms (or
any combination thereof): (a) cash or (b) the transfer, either actually or by
attestation, to the Company of Shares that have been held by the Optionee for at
least six (6) months (or such lesser period as may be permitted by the
Committee) prior to the exercise of the Option, such transfer to be upon such
terms and conditions as determined by the Committee or (c) a combination of cash
and the transfer of Shares; PROVIDED, HOWEVER, that the Committee may determine
that the exercise price shall be paid only in cash. In addition, Options 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 Company as payment of the exercise price under an
Option shall be valued at their Fair Market Value on the day of exercise of such
Option. If requested by the Committee, the Optionee shall deliver the Agreement
evidencing the Option to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares.

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                  5.9 RIGHTS OF OPTIONEES. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until (a)
the Option shall have been exercised pursuant to the terms thereof, (b) the
Company shall have issued and delivered Shares to the Optionee, and (c) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.

                  5.10 EFFECT OF CHANGE IN CONTROL. In the event an Optionee's
employment with the Company and its Subsidiaries is terminated by the Company
without Cause following a Change in Control, or in the case of a Director who is
not an employee of the Company or any Subsidiary, his services as a Director of
the Company ceases following a Change in Control, each Option held by the
Optionee as of the date of termination of the Optionee's employment or service
shall become immediately and fully exercisable and shall, notwithstanding any
shorter period set forth in the Agreement evidencing the Option, 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 service or (y)
the expiration of the stated term of the Option. In addition, the Agreement
evidencing the grant of an Option may provide for any other treatment of the
Option in the event of a Change in Control.

         6.       STOCK APPRECIATION RIGHTS.

                  The Committee may in its discretion, either alone or in
connection with the grant of an Option, grant Stock Appreciation Rights in
accordance with the Plan, the terms and conditions of which shall be set forth
in an Agreement. If granted in connection with an Option, a Stock Appreciation
Right shall cover the same Shares covered by the Option (or such lesser number
of Shares as the Committee may determine) and shall, except as provided in this
Section 6, be subject to the same terms and conditions as the related Option.

                  6.1 TIME OF GRANT. A Stock Appreciation Right may be granted
(a) at any time if unrelated to an Option, or (b) if related to an Option,
either at the time of grant or at any time thereafter during the term of the
Option.

                  6.2 STOCK APPRECIATION RIGHT RELATED TO AN OPTION.

                      (a) EXERCISE. A Stock Appreciation Right granted in
connection with an Option shall be exercisable at such time or times and only to
the extent that the related Options are exercisable, and will not be
transferable except to the extent the related Option may be transferable. A
Stock Appreciation Right granted in connection with an Incentive Stock Option
shall be exercisable only if the Fair Market Value of a

                                      -13-
<PAGE>

Share on the date of exercise exceeds the exercise price specified in the
related Incentive Stock Option Agreement.

                      (b) AMOUNT PAYABLE. Upon the exercise of a Stock
Appreciation Right related to an Option, the Grantee shall be entitled to
receive an amount determined by multiplying (i) the excess of the Fair Market
Value of a Share on the date of exercise of such Stock Appreciation Right over
the per Share exercise price under the related Option, by (ii) the number of
Shares as to which such Stock Appreciation Right is being exercised.
Notwithstanding the foregoing, the Committee may limit in any manner the amount
payable with respect to any Stock Appreciation Right by including such a limit
in the Agreement evidencing the Stock Appreciation Right at the time it is
granted.

                      (c) TREATMENT OF RELATED OPTIONS AND STOCK APPRECIATION
RIGHTS UPON EXERCISE. Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of the
number of Shares as to which the Stock Appreciation Right is exercised, and upon
the exercise of an Option granted in connection with a Stock Appreciation Right,
the Stock Appreciation Right shall be canceled to the extent of the number of
Shares as to which the Option is exercised or surrendered.

                  6.3 STOCK APPRECIATION RIGHT UNRELATED TO AN OPTION. The
Committee may grant to Eligible Individuals Stock Appreciation Rights unrelated
to Options. Stock Appreciation Rights unrelated to Options shall contain such
terms and conditions as to exercisability (subject to Section 6.7), vesting and
duration as the Committee shall determine, but in no event shall they have a
term of greater than ten (10) years; provided, however, that the Committee may
provide that Stock Appreciation right may, upon the death of the Grantee, be
exercised for up to one (1) year following the date of the Grantee's death even
if such period extends beyond ten (10) years from the date the Stock
Appreciation Right is granted. Upon exercise of a Stock Appreciation Right
unrelated to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (a) the excess of the Fair Market Value of a Share on
the date of exercise of such Stock Appreciation Right over the Fair Market Value
of a Share on the date the Stock Appreciation Right was granted, by (b) the
number of Shares as to which the Stock Appreciation Right is being exercised.
Notwithstanding the foregoing, the Committee may limit in any manner the amount
payable with respect to any Stock Appreciation Right by including such a limit
in the Agreement evidencing the Stock Appreciation Right at the time it is
granted.

                  6.4 NON-TRANSFERABILITY. No Stock Appreciation Right shall be
transferable by the Grantee otherwise than by will or by the laws of descent and
distribution or pursuant to a domestic relations order (within the meaning of
Rule 16a-12 promulgated under the Exchange Act), and such Stock Appreciation
Right shall be exercisable during the lifetime of such Grantee only by the
Grantee or his or her guardian

                                      -14-
<PAGE>

or legal representative. The terms of such Stock Appreciation Right shall be
final, binding and conclusive upon the beneficiaries, executors, administrators,
heirs and successors of the Grantee.

                  6.5 METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercised by a Grantee only by a written notice delivered in person or by mail
to the Secretary of the Company at the Company's principal executive office,
specifying the number of Shares with respect to which the Stock Appreciation
Right is being exercised. If requested by the Committee, the Grantee shall
deliver the Agreement evidencing the Stock Appreciation Right being exercised
and the Agreement evidencing any related Option to the Secretary of the Company
who shall endorse thereon a notation of such exercise and return such Agreement
to the Grantee.

                  6.6 FORM OF PAYMENT. Payment of the amount determined under
Sections 6.2(b) or 6.3 may be made in the discretion of the Committee solely in
whole Shares in a number determined at their Fair Market Value on the date of
exercise of the Stock Appreciation Right, or solely in cash, or in a combination
of cash and Shares. If the Committee decides to make full payment in Shares and
the amount payable results in a fractional Share, payment for the fractional
Share will be made in cash.

                  6.7 EFFECT OF CHANGE IN CONTROL. In the event a Grantee's
employment with the Company is terminated by the Company without Cause following
a Change in Control, each Stock Appreciation Right held by the Grantee shall
become immediately and fully exercisable and shall, notwithstanding any shorter
period set forth in the Agreement evidencing the Stock Appreciation Right,
remain exercisable for a period ending not before the earlier of the six (6)
month anniversary of (x) the termination of the Grantee's employment or (y) the
expiration of the stated term of the Stock Appreciation Right. In addition, the
Agreement evidencing the grant of a Stock Appreciation Right unrelated to an
Option may provide for any other treatment of the Stock Appreciation Rights in
the event of a Change in Control.

         7.       RESTRICTED STOCK.

                  7.1 GRANT. The Committee may grant Awards to Eligible
Individuals of Restricted Stock, which shall be evidenced by an Agreement
between the Company and the Grantee. Each Agreement shall contain such
restrictions, terms and conditions as the Committee may, in its discretion,
determine and (without limiting the generality of the foregoing) such Agreements
may require that an appropriate legend be placed on Share certificates. Awards
of Restricted Stock shall be subject to the terms and provisions set forth below
in this Section 7.

                  7.2 RIGHTS OF GRANTEE. Shares of Restricted Stock granted
pursuant to an Award hereunder shall be issued in the name of the Grantee as
soon as reasonably

                                      -15-
<PAGE>

practicable after the Award is granted provided that the Grantee has executed an
Agreement evidencing the Award, the appropriate blank stock powers and, in the
discretion of the Committee, an escrow agreement and any other documents which
the Committee may require as a condition to the issuance of such Shares. If a
Grantee shall fail to execute the Agreement evidencing a Restricted Stock Award,
or any documents which the Committee may require within the time period
prescribed by the Committee at the time the Award is granted, the Award shall be
null and void. At the discretion of the Committee, Shares issued in connection
with a Restricted Stock Award shall be deposited together with the stock powers
with an escrow agent (which may be the Company) designated by the Committee.
Unless the Committee determines otherwise and as set forth in the Agreement,
upon delivery of the Shares to the escrow agent, the Grantee shall have all of
the rights of a stockholder with respect to such Shares, including the right to
vote the Shares and to receive all dividends or other distributions paid or made
with respect to the Shares.

                  7.3 NON-TRANSFERABILITY. Until all restrictions upon the
Shares of Restricted Stock awarded to a Grantee shall have lapsed in the manner
set forth in Section 7.4, such Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated.

                  7.4 LAPSE OF RESTRICTIONS.

                      (a) GENERALLY. Restrictions upon Shares of Restricted
Stock awarded hereunder shall lapse at such time or times and on such terms and
conditions as the Committee may determine. The Agreement evidencing the Award
shall set forth any such restrictions.

                      (b) EFFECT OF CHANGE IN CONTROL. The Committee may
determine at the time of the grant of an Award of Restricted Stock the extent to
which the restrictions upon Shares of Restricted Stock shall lapse upon a Change
in Control. The Agreement evidencing the Award shall set forth any such
provisions.

                  7.5 TREATMENT OF DIVIDENDS. At the time an Award of Shares of
Restricted Stock is granted, the Committee may, in its discretion, determine
that the payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on such Shares by the Company shall be (a) deferred until the
lapsing of the restrictions imposed upon such Shares and (b) held by the Company
for the account of the Grantee until such time. In the event that dividends are
to be deferred, the Committee shall determine whether such dividends are to be
reinvested in Shares (which shall be held as additional Shares of Restricted
Stock) or held in cash. If deferred dividends are to be held in cash, there may
be credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of deferred dividends in
respect of Shares of

                                      -16-
<PAGE>

Restricted Stock (whether held in cash or as additional Shares of Restricted
Stock), together with interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Shares in respect of which the deferred
dividends were paid, and any dividends deferred (together with any interest
accrued thereon) in respect of any Shares of Restricted Stock shall be forfeited
upon the forfeiture of such Shares.

                  7.6 DELIVERY OF SHARES. Upon the lapse of the restrictions on
Shares of Restricted Stock, the Committee shall cause a stock certificate to be
delivered to the Grantee with respect to such Shares, free of all restrictions
hereunder.

         8.       PERFORMANCE AWARDS.

                  8.1 PERFORMANCE UNITS. The Committee, in its discretion, may
grant Awards of Performance Units to Eligible Individuals, the terms and
conditions of which shall be set forth in an Agreement between the Company and
the Grantee. Performance Units may be denominated in Shares or a specified
dollar amount and, contingent upon the attainment of specified Performance
Objectives within the Performance Cycle, represent the right to receive payment
as provided in Section 8.3(c) of (i) in the case of Share-denominated
Performance Units, the Fair Market Value of a Share on the date the Performance
Unit was granted, the date the Performance Unit became vested or any other date
specified by the Committee, (ii) in the case of dollar-denominated Performance
Units, the specified dollar amount or (iii) a percentage (which may be more than
100%) of the amount described in clause (i) or (ii) depending on the level of
Performance Objective attainment; PROVIDED, HOWEVER, that, the Committee may at
the time a Performance Unit is granted specify a maximum amount payable in
respect of a vested Performance Unit. Each Agreement shall specify the number of
Performance Units to which it relates, the Performance Objectives which must be
satisfied in order for the Performance Units to vest and the Performance Cycle
within which such Performance Objectives must be satisfied.

                      (a) VESTING AND FORFEITURE. Subject to Sections 8.3(c) and
8.4, a Grantee shall become vested with respect to the Performance Units to the
extent that the Performance Objectives set forth in the Agreement are satisfied
for the Performance Cycle.

                      (b) PAYMENT OF AWARDS. Subject to Section 8.3(c), payment
to Grantees in respect of vested Performance Units shall be made as soon as
practicable after the last day of the Performance Cycle to which such Award
relates unless the Agreement evidencing the Award provides for the deferral of
payment, in which event the terms and conditions of the deferral shall be set
forth in the Agreement. Subject to Section 8.4, such payments may be made
entirely in Shares valued at their Fair Market Value, entirely in cash, or in
such combination of Shares and cash as the Committee in its discretion shall
determine at any time prior to such payment; PROVIDED, HOWEVER, that if

                                      -17-
<PAGE>

the Committee in its discretion determines to make such payment entirely or
partially in Shares of Restricted Stock, the Committee must determine the extent
to which such payment will be in Shares of Restricted Stock and the terms of
such Restricted Stock at the time the Award is granted.

                  8.2 PERFORMANCE SHARES. The Committee, in its discretion, may
grant Awards of Performance Shares to Eligible Individuals, the terms and
conditions of which shall be set forth in an Agreement between the Company and
the Grantee. Each Agreement may require that an appropriate legend be placed on
Share certificates. Awards of Performance Shares shall be subject to the
following terms and provisions:

                      (a) RIGHTS OF GRANTEE. The Committee shall provide at the
time an Award of Performance Shares is made the time or times at which the
actual Shares represented by such Award shall be issued in the name of the
Grantee; PROVIDED, HOWEVER, that no Performance Shares shall be issued until the
Grantee has executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the discretion of the Committee, an escrow agreement and
any other documents which the Committee may require as a condition to the
issuance of such Performance Shares. If a Grantee shall fail to execute the
Agreement evidencing an Award of Performance Shares, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow agreement and any
other documents which the Committee may require within the time period
prescribed by the Committee at the time the Award is granted, the Award shall be
null and void. At the discretion of the Committee, Shares issued in connection
with an Award of Performance Shares shall be deposited together with the stock
powers with an escrow agent (which may be the Company) designated by the
Committee. Except as restricted by the terms of the Agreement, upon delivery of
the Shares to the escrow agent, the Grantee shall have, in the discretion of the
Committee, all of the rights of a stockholder with respect to such Shares,
including the right to vote the Shares and to receive all dividends or other
distributions paid or made with respect to the Shares.

                      (b) NON-TRANSFERABILITY. Until any restrictions upon the
Performance Shares awarded to a Grantee shall have lapsed in the manner set
forth in Sections 8.2(c) or 8.4, such Performance Shares shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee. The Committee may also
impose such other restrictions and conditions on the Performance Shares, if any,
as it deems appropriate.

                      (c) LAPSE OF RESTRICTIONS. Subject to Sections 8.3(c) and
8.4, restrictions upon Performance Shares awarded hereunder shall lapse and such
Performance Shares shall become vested at such time or times and on such terms,
conditions and satisfaction of Performance Objectives as the Committee may, in
its discretion, determine at the time an Award is granted.

                                      -18-
<PAGE>

                      (d) TREATMENT OF DIVIDENDS. At the time the Award of
Performance Shares is granted, the Committee may, in its discretion, determine
that the payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on Shares represented by such Award which have been issued by
the Company to the Grantee shall be (i) deferred until the lapsing of the
restrictions imposed upon such Performance Shares and (ii) held by the Company
for the account of the Grantee until such time. In the event that dividends are
to be deferred, the Committee shall determine whether such dividends are to be
reinvested in shares of Stock (which shall be held as additional Performance
Shares) or held in cash. If deferred dividends are to be held in cash, there may
be credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of deferred dividends in
respect of Performance Shares (whether held in cash or in additional Performance
Shares), together with interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Performance Shares in respect of which
the deferred dividends were paid, and any dividends deferred (together with any
interest accrued thereon) in respect of any Performance Shares shall be
forfeited upon the forfeiture of such Performance Shares.

                      (e) DELIVERY OF SHARES. Upon the lapse of the restrictions
on Performance Shares awarded hereunder, the Committee shall cause a stock
certificate to be delivered to the Grantee with respect to such Shares, free of
all restrictions hereunder.

                  8.3 PERFORMANCE OBJECTIVES

                      (a) ESTABLISHMENT. Performance Objectives for Performance
Awards may be expressed in terms of (i) earnings per Share, (ii) Share price,
(iii) pre-tax profits, (iv) net earnings, (v) return on equity or assets, (vi)
sales, (vii) any combination of the foregoing or (viii) prior to the end of the
Transition Period, such other criteria as the Committee may determine.
Performance Objectives may be in respect of the performance of the Company, any
of its Subsidiaries, any of its Divisions or any combination thereof.
Performance Objectives may be absolute or relative (to prior performance of the
Company or to the performance of one or more other entities or external indices)
and may be expressed in terms of a progression within a specified range. The
Performance Objectives with respect to a Performance Cycle shall be established
in writing by the Committee by the earlier of (x) the date on which a quarter of
the Performance Cycle has elapsed or (y) the date which is ninety (90) days
after the commencement of the Performance Cycle, and in any event while the
performance relating to the Performance Objectives remain substantially
uncertain.

                      (b) EFFECT OF CERTAIN EVENTS. At the time of the granting
of a Performance Award, or at any time thereafter, in either case to the extent
permitted under Section 162(m) of the Code and the regulations thereunder
without adversely affecting the treatment of the Performance Award as
Performance-Based Compensation, the

                                      -19-
<PAGE>

Committee may provide for the manner in which performance will be measured
against the Performance Objectives (or may adjust the Performance Objectives) to
reflect the impact of specified corporate transactions, accounting or tax law
changes and other extraordinary or nonrecurring events.

                      (c) DETERMINATION OF PERFORMANCE. Prior to the vesting,
payment, settlement or lapsing of any restrictions with respect to any
Performance Award that is intended to constitute Performance-Based Compensation
made to a Grantee who is subject to Section 162(m) of the Code, the Committee
shall certify in writing that the applicable Performance Objectives have been
satisfied to the extent necessary for such Award to qualify as Performance Based
Compensation.

                  8.4 EFFECT OF CHANGE IN CONTROL. The Agreements evidencing
Performance Shares and Performance Units may provide for the treatment of such
Awards (or portions thereof) in the event of a Change in Control, including, but
not limited to, provisions for the adjustment of applicable Performance
Objectives.

                  8.5 NON-TRANSFERABILITY. Until the vesting of Performance
Units or the lapsing of any restrictions on Performance Shares, as the case may
be, such Performance Units or Performance Shares shall not be sold, transferred
or otherwise disposed of and shall not be pledged or otherwise hypothecated.

         9.       OTHER SHARE BASED AWARDS.

                  9.1 SHARE AWARDS. The Committee may grant a Share Award to any
Eligible Individual on such terms and conditions as the Committee may determine
in its sole discretion. Share Awards may be made as additional compensation for
services rendered by the Eligible Individual or may be in lieu of cash or other
compensation to which the Eligible Individual is entitled from the Company.

                  9.2 PHANTOM STOCK AWARDS.

                      (a) GRANT. The Committee may, in its discretion, grant
shares of Phantom Stock to any Eligible Individuals. Such Phantom Stock shall be
subject to the terms and conditions established by the Committee and set forth
in the applicable Agreement.

                      (b) PAYMENT OF AWARDS. Upon the vesting of a Phantom Stock
Award, the Grantee shall be entitled to receive a cash payment in respect of
each share of Phantom Stock which shall be equal to the Fair Market Value of a
Share as of the date the Phantom Stock Award was granted, or such other date as
determined by the Committee at the time the Phantom Stock Award was granted. The
Committee may, at the time a Phantom Stock Award is granted, provide a
limitation on the amount payable in respect of

                                      -20-
<PAGE>

each share of Phantom Stock. In lieu of a cash payment, the Committee may settle
Phantom Stock Awards with Shares having a Fair Market Value equal to the cash
payment to which the Grantee has become entitled.

         10.      EFFECT OF A TERMINATION OF EMPLOYMENT.

                  The Agreement evidencing the grant of each Option and each
Award shall set forth the terms and conditions applicable to such Option or
Award upon a termination or change in the status of the employment of the
Optionee or Grantee by the Company, a Subsidiary or a Division (including a
termination or change by reason of the sale of a Subsidiary or a Division),
which shall be as the Committee may, in its discretion, determine at the time
the Option or Award is granted or thereafter.

         11.      ADJUSTMENT UPON CHANGES IN CAPITALIZATION.

                      (a) In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate adjustments, if any, to
(i) the maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted under the Plan, (ii) the
number and class of Shares or other stock or securities which are subject to
outstanding Options or Awards granted under the Plan and the exercise price
therefor, if applicable, and (iii) the Performance Objectives.

                      (b) Any such adjustment in the Shares or other stock or
securities (i) subject to outstanding Incentive Stock Options (including any
adjustments in the exercise price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code, or (ii)
subject to outstanding Options or Awards that are intended to qualify as
Performance-Based Compensation shall be made in such a manner as not to
adversely affect the treatment of the Option or Award as Performance-Based
Compensation.

                      (c) If, by reason of a Change in Capitalization, a Grantee
of an Award shall be entitled to, or an Optionee shall be entitled to exercise
an Option with respect to, new, additional or different shares of stock or
securities of the Company or any other corporation, such new, additional or
different shares shall thereupon be subject to all of the conditions,
restrictions and performance criteria which were applicable to the Shares
subject to the Award or Option, as the case may be, prior to such Change in
Capitalization.

         12.      EFFECT OF CERTAIN TRANSACTIONS.

                  Subject to Sections 5.10, 6.7, 7.4(b) and 8.4 or as otherwise
provided in an Agreement, in the event of (a) the liquidation or dissolution of
the Company or (b) a

                                      -21-
<PAGE>

merger or consolidation of the Company (a "Transaction"), the Plan and the
Options and Awards issued hereunder shall continue in effect in accordance with
their respective terms, except that following a Transaction either (i) each
outstanding Option or Award shall be treated as provided for in the agreement
entered into in connection with the Transaction or (ii) if not so provided in
such agreement, each Optionee and Grantee shall be entitled to receive in
respect of each Share subject to any outstanding Options or Awards, as the case
may be, upon exercise of any Option or payment or transfer in respect of any
Award, the same number and kind of stock, securities, cash, property or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share; PROVIDED, HOWEVER, that such stock,
securities, cash, property, or other consideration shall remain subject to all
of the conditions, restrictions and performance criteria which were applicable
to the Options and Awards prior to such Transaction. The treatment of any Option
or Award as provided in this Section 12 shall be conclusively presumed to be
appropriate for purposes of Section 11.

         13.      INTERPRETATION.

                  Following the required registration of any equity security of
the Company pursuant to Section 12 of the Exchange Act:

                      (a) The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Committee shall interpret and
administer the provisions of the Plan or any Agreement in a manner consistent
therewith. Any provisions inconsistent with such Rule shall be inoperative and
shall not affect the validity of the Plan.

                      (b) Unless otherwise expressly stated in the relevant
Agreement, each Option, Stock Appreciation Right and Performance Award granted
under the Plan is intended to be Performance-Based Compensation. The Committee
shall not be entitled to exercise any discretion otherwise authorized hereunder
with respect to such Options or Awards if the ability to exercise such
discretion or the exercise of such discretion itself would cause the
compensation attributable to such Options or Awards to fail to qualify as
Performance-Based Compensation.

                      (c) To the extent that any legal requirement of Section 16
of the Exchange Act or Section 162(m) of the Code as set forth in the Plan
ceases to be required under Section 16 of the Exchange Act or Section 162(m) of
the Code, that Plan provision shall cease to apply.

         14.      POOLING TRANSACTIONS.

                  Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event of a Change in Control which is also
intended to constitute a

                                      -22-
<PAGE>

Pooling Transaction, the Committee shall take such actions, if any, as are
specifically recommended by an independent accounting firm retained by the
Company to the extent reasonably necessary in order to assure that the Pooling
Transaction will qualify as such, including but not limited to (a) deferring the
vesting, exercise, payment, settlement or lapsing of restrictions with respect
to any Option or Award, (b) providing that the payment or settlement in respect
of any Option or Award be made in the form of cash, Shares or securities of a
successor or acquirer of the Company, or a combination of the foregoing, and (c)
providing for the extension of the term of any Option or Award to the extent
necessary to accommodate the foregoing, but not beyond the maximum term
permitted for any Option or Award.

         15.      TERMINATION AND AMENDMENT OF THE PLAN OR MODIFICATION OF
                  OPTIONS AND AWARDS.

                  15.1 PLAN AMENDMENT OR TERMINATION. Plan shall terminate on
the day preceding the tenth anniversary of the date of its adoption by the Board
and no Option or Award may be granted thereafter. The Board may sooner terminate
the Plan and the Board may at any time and from time to time amend, modify or
suspend the Plan; PROVIDED, HOWEVER, that:

                      (a) no such amendment, modification, suspension or
termination shall impair or adversely alter any Options or Awards theretofore
granted under the Plan, except with the consent of the Optionee or Grantee, nor
shall any amendment, modification, suspension or termination deprive any
Optionee or Grantee of any Shares which he or she may have acquired through or
as a result of the Plan; and

                      (b) to the extent necessary under any applicable law,
regulation or exchange requirement no amendment shall be effective unless
approved by the stockholders of the Company in accordance with applicable law,
regulation or exchange requirement.

                  15.2 MODIFICATION OF OPTIONS AND AWARDS. No modification of an
Option or Award shall adversely alter or impair any rights or obligations under
the Option or Award without the consent of the Optionee or Grantee, as the case
may be.

         16.      NON-EXCLUSIVITY OF THE PLAN.

                  The adoption of the Plan by the Board shall not be construed
as amending, modifying or rescinding any previously approved incentive
arrangement or as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.

                                      -23-
<PAGE>

         17.      LIMITATION OF LIABILITY.

                  As illustrative of the limitations of liability of the
Company, but not intended to be exhaustive thereof, nothing in the Plan shall be
construed to:

                      (a) give any person any right to be granted an Option or
Award other than at the sole discretion of the Committee;

                      (b) give any person any rights whatsoever with respect to
Shares except as specifically provided in the Plan;

                      (c) limit in any way the right of the Company or any
Subsidiary to terminate the employment of any person at any time; or

                      (d) be evidence of any agreement or understanding,
expressed or implied, that the Company will employ any person at any particular
rate of compensation or for any particular period of time.

         18.      REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.

                  18.1 Except as to matters of federal law, the Plan and the
rights of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of Delaware without giving effect to
conflicts of laws principles thereof.

                  18.2 The obligation of the Company to sell or deliver Shares
with respect to Options and Awards granted under the Plan shall be subject to
all applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.

                  18.3 The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock Options
the tax benefits under the applicable provisions of the Code and regulations
promulgated thereunder.

                  18.4 Each Option and Award is subject to the requirement that,
if at any time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.

                                      -24-
<PAGE>

                  18.5 Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), and is not
otherwise exempt from such registration, such Shares shall be restricted against
transfer to the extent required by the Securities Act and Rule 144 or other
regulations thereunder. The Committee may require any individual receiving
Shares pursuant to an Option or Award granted under the Plan, as a condition
precedent to receipt of such Shares, to represent and warrant to the Company in
writing that the Shares acquired by such individual are acquired without a view
to any distribution thereof and will not be sold or transferred other than
pursuant to an effective registration thereof under said Act or pursuant to an
exemption applicable under the Securities Act or the rules and regulations
promulgated thereunder. The certificates evidencing any of such Shares shall be
appropriately amended or have an appropriate legend placed thereon to reflect
their status as restricted securities as aforesaid.

         19.      MISCELLANEOUS.

                  19.1 MULTIPLE AGREEMENTS. The terms of each Option or Award
may differ from other Options or Awards granted under the Plan at the same time,
or at some other time. The Committee may also grant more than one Option or
Award to a given Eligible Individual during the term of the Plan, either in
addition to, or in substitution for, one or more Options or Awards previously
granted to that Eligible Individual.

                  19.2     WITHHOLDING OF TAXES.

                           (a) At such times as an Optionee or Grantee
recognizes taxable income in connection with the receipt of Shares or cash
hereunder (a "Taxable Event"), the Optionee or Grantee shall pay to the Company
an amount equal to the federal, state and local income taxes and other amounts
as may be required by law to be withheld by the Company in connection with the
Taxable Event (the "Withholding Taxes") prior to the issuance, or release from
escrow, of such Shares or the payment of such cash. The Company shall have the
right to deduct from any payment of cash to an Optionee or Grantee an amount
equal to the Withholding Taxes in satisfaction of the obligation to pay
Withholding Taxes. The Committee may provide in an Agreement evidencing an
Option or Award at the time of grant or thereafter, that the Optionee or
Grantee, in satisfaction of the obligation to pay Withholding Taxes to the
Company, may elect to have withheld a portion of the Shares issuable to him or
her pursuant to the Option or Award having an aggregate Fair Market Value equal
to the Withholding Taxes.

                           (b) If an Optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Optionee pursuant to the exercise of an
Incentive Stock Option within the two-year period commencing on the day after
the date of the grant or within the

                                      -25-
<PAGE>

one-year period commencing on the day after the date of transfer of such Share
or Shares to the Optionee pursuant to such exercise, the Optionee shall, within
ten (10) days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office.

                  19.3 EFFECTIVE DATE. The effective date of this Plan shall be
as determined by the Board, subject only to the approval by the holders of a
majority of the securities of the Company entitled to vote thereon, in
accordance with the applicable laws within twelve (12) months of the adoption of
the Plan by the Board.

                  19.4 POST-TRANSITION PERIOD. Following the Transition Period,
any Option, Stock Appreciation Right or Performance Award granted under the Plan
which is intended to be Performance-Based Compensation, shall be subject to the
approval of the material terms of the Plan by a majority of the shareholders of
the Company in accordance with Section 162(m) of the Code and the regulations
promulgated thereunder.

                                      -26-<PAGE>

                                                                    EXHIBIT 10.8

                            INDEMNIFICATION AGREEMENT

            INDEMNIFICATION AGREEMENT, dated as of [ ], 2000, by and among
Community Health Systems, Inc. (formerly known as Community Health Systems
Holdings Corp.), a Delaware corporation (the "Company"), CHS/Community Health
Systems, Inc., a Delaware corporation and a wholly-owned subsidiary of the
Company ("CHS/Community Health Systems, Inc."), and the director and/or officer
of the Company whose name appears on the signature page of this Agreement
("Indemnitee").

                                    RECITALS

      A. Highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or officers or in other capacities
unless they are provided with reasonable protection through insurance or
indemnification against risks of claims and actions against them arising out of
their service to and activities on behalf of the corporations.

      B. The Board of Directors of the Company (the "Board") has determined that
the Company should act to assure its directors and officers that there will be
increased certainty of such protection in the future.

      C. It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

      D. Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

      E. In consideration of the benefits received and to be received by
CHS/Community Health Systems, Inc. in connection with actions taken and to be
taken by the Board and by the officers of the Company, CHS/Community Health
Systems, Inc. has determined that it is in the best interest of CHS/Community
Health Systems, Inc. for the reasons set forth above to be a party to this
Agreement and to provide indemnification to the directors and officers of the
Company in connection with their service to and activities on behalf of the
Company, CHS/Community Health Systems, Inc. and their respective subsidiaries.

      F. CHS/Community Health Systems, Inc. acknowledges that for purposes of
this Agreement the directors and officers of the Company who enter into this
Agreement are serving in such capacities at the request of CHS/Community Health
Systems, Inc.

      G. CHS/Community Health Systems, Inc. further acknowledges that such
directors and officers are willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company, thereby benefiting
CHS/Community Health Systems, Inc. and its

<PAGE>

subsidiaries,  on the condition that  CHS/Community  Health Systems,  Inc. enter
into, and provide indemnification pursuant to, this Agreement.

                                    AGREEMENT

            In consideration of the premises and the covenants contained herein,
the Company, CHS/Community Health Systems, Inc. and Indemnitee do hereby
covenant and agree as follows:

            1.    DEFINITIONS.

                  (a)  For purposes of this Agreement:

                        (i) "Affiliate" shall mean any corporation, partnership,
joint venture, trust or other enterprise in respect of which Indemnitee is or
was or will be serving as a director or officer directly or indirectly at the
request of the Company or CHS/Community Health Systems, Inc., and including, but
not limited to, service with respect to an employee benefit plan.

                        (ii) "Disinterested Director" shall mean a director of
the Company who is not or was not a party to the Proceeding in respect of which
indemnification is being sought by Indemnitee.

                        (iii) "Expenses" shall include all attorneys' fees and
costs, retainers, court costs, transcripts, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees and all other disbursements or expenses
incurred in connection with asserting or defending claims.

                        (iv) "fines" shall include any excise taxes assessed on
Indemnitee with respect to any employee benefit plan.

                        (v) "Independent Counsel" shall mean a law firm or
lawyer that neither is presently nor in the past year has been retained to
represent: (i) the Company, CHS/Community Health Systems, Inc. or Indemnitee in
any matter material to any such party or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder in any matter material to
such other party. Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any firm or person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing any of the Company, CHS/Community Health Systems, Inc. or
Indemnitee in an action to determine Indemnitee's right to indemnification under
this Agreement. All Expenses of the Independent Counsel incurred in connection
with acting pursuant to this Agreement shall be borne by the Company.

                        (vi) "Losses" shall mean all expenses, liabilities,
losses and claims (including attorneys' fees, judgments, fines, excise taxes
under the Employee Retirement Income Security Act of 1974, as amended from time
to time, penalties and amounts to be paid in settlement) incurred in connection
with any Proceeding.

                                      -2-
<PAGE>

                        (vii) "Proceeding" shall include any threatened, pending
or completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding, whether civil,
criminal, administrative or investigative.

                  (b) For purposes of this Agreement, a person who acted in good
faith and in a manner such person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the Company" as
referred to in this Agreement; the term "serving at the request of the Company
or CHS/Community Health Systems, Inc." shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants or beneficiaries; and references to
the "Company" or "CHS/Community Health Systems, Inc." shall include, in addition
to the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify Indemnitee in its capacity as a director, officer, or employee or
agent, so that Indemnitee shall stand in the same position under this Agreement
with respect to the resulting or surviving corporation as Indemnitee would have
with respect to such constituent corporation if its separate existence had
continued.

            2. SERVICE BY INDEMNITEE. Indemnitee agrees to begin or continue to
serve the Company or any Affiliate as a director and/or officer. Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company or CHS/Community Health Systems, Inc. and
Indemnitee, and the termination of Indemnitee's relationship with the Company or
CHS/Community Health Systems, Inc. or an Affiliate by either party hereto shall
not be restricted by this Agreement.

            3. INDEMNIFICATION. The Company and CHS/Community Health Systems,
Inc. jointly and severally agree to indemnify Indemnitee for, and hold
Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director or officer of the Company or of an
Affiliate (collectively referred to as an "Officer or Director of the Company")
to the fullest extent permitted by the laws of the State of Delaware in effect
on the date hereof or as such laws may from time to time hereafter be amended to
increase the scope of such permitted indemnification. Without diminishing the
scope of the indemnification provided by this Section, the rights of
indemnification of Indemnitee provided hereunder shall include but shall not be
limited to those rights set forth hereinafter.

            4. ACTION OR PROCEEDING OTHER THAN AN ACTION BY OR IN THE RIGHT OF
THE COMPANY OR CHS/COMMUNITY HEALTH SYSTEMS, INC. Indemnitee shall be entitled
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to or is involved
(including, without limitation, as a witness) in any Proceeding (other than an
action by or in the right of the Indemnitee (unless approved in advance in
writing by the Company's Board of Directors), the Company or CHS/Community
Health

                                      -3-
<PAGE>

Systems, Inc., as the case may be) by reason of (a) the fact that Indemnitee is
or was an Officer or Director of the Company or any other entity which
Indemnitee is or was or will be serving at the request of the Company or
CHS/Community Health Systems, Inc., as the case may be, or (b) anything done or
not done by Indemnitee in any such capacity.

            5. ACTIONS BY OR IN THE RIGHT OF THE COMPANY. Indemnitee shall be
entitled to the indemnification rights provided herein if Indemnitee is a person
who was or is a party or is threatened to be made a party to or is involved
(including, without limitation, as a witness) in any Proceeding brought by or in
the right of the Company or CHS/Community Health Systems, Inc. to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or any Affiliate, or (b) anything done or not
done by Indemnitee in any such capacity. Pursuant to this Section, Indemnitee
shall be indemnified against Losses or Expenses incurred or suffered by
Indemnitee or on Indemnitee's behalf in connection with the defense or
settlement of any Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company or CHS/Community Health Systems, Inc. Notwithstanding the foregoing
provisions of this Section, no such indemnification shall be made in respect of
any claim, issue or matter as to which Delaware law expressly prohibits such
indemnification by reason of an adjudication of liability of Indemnitee to the
Company or CHS/Community Health Systems, Inc. unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such Losses and
Expenses which the Court of Chancery or such other court shall deem proper.

            6. INDEMNIFICATION FOR LOSSES AND EXPENSES OF PARTY WHO IS WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been wholly successful on the merits or otherwise in
any Proceeding referred to in Sections 3, 4 or 5 hereof on any claim, issue or
matter therein, Indemnitee shall be indemnified against all Losses and Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company and CHS/Community Health Systems, Inc.
jointly and severally agree to indemnify Indemnitee to the maximum extent
permitted by law against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter. In any review
or Proceeding to determine the extent of indemnification, the Company shall bear
the burden of proving any lack of success and which amounts sought in indemnity
are allocable to claims, issues or matters which were not successfully resolved.
For purposes of this Section and without limitation, the termination of any such
claim, issue or matter by dismissal with or without prejudice shall be deemed to
be a successful resolution as to such claim, issue or matter.

            7. PAYMENT FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of the
fact that Indemnitee is or was an Officer or Director of the Company or any
Affiliate, as the case may be, a witness in any

                                      -4-
<PAGE>

Proceeding, the Company and CHS/Community Health Systems, Inc. jointly and
severally agree to pay to Indemnitee all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee's behalf in connection therewith.

            8. ADVANCEMENT OF EXPENSES AND COSTS. All Expenses incurred by or on
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
by the Company or CHS/Community Health Systems, Inc. in advance of the final
disposition of such Proceeding within twenty days after the receipt by the
Company or CHS/Community Health Systems, Inc. of a statement or statements from
Indemnitee requesting from time to time such advance or advances, whether or not
a determination to indemnify has been made under Section 9. Indemnitee's
entitlement to such advancement of Expenses shall include those incurred in
connection with any Proceeding by Indemnitee seeking an adjudication or award in
arbitration pursuant to this Agreement. The financial ability of Indemnitee to
repay an advance shall not be a prerequisite to the making of such advance. Such
statement or statements shall reasonably evidence such Expenses incurred (or
reasonably expected to be incurred) by Indemnitee in connection therewith and
shall include or be accompanied by a written undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified therefor pursuant to the terms of
this Agreement.

            9. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.

                  (a) When seeking indemnification under this Agreement (which
shall not include in any case the right of Indemnitee to receive payments
pursuant to Section 7 and Section 8 hereof, which shall not be subject to this
Section 9), Indemnitee shall submit a written request for indemnification to the
Company and CHS/Community Health Systems, Inc. Determination of Indemnitee's
entitlement to indemnification shall be made promptly, but in no event later
than 60 days after receipt by the Company and CHS/Community Health Systems, Inc.
of Indemnitee's written request for indemnification. The Secretary of the
Company shall, promptly upon receipt of Indemnitee's request for
indemnification, advise the Board that Indemnitee has made such request for
indemnification.

                  (b) The entitlement of Indemnitee to indemnification under
this Agreement shall be determined, with respect to a person who is a director
or officer at the time of such determination, in the specific case (1) by the
Board of Directors by a majority vote of the Disinterested Directors, even
though less than a quorum, or (2) by a committee of the Disinterested Directors
designated by majority vote of the Disinterested Directors, even though less
than a quorum, or (3) if there are no Disinterested Directors, or if such
Disinterested Directors so direct, by Independent Counsel, or (4) by the
stockholders. The entitlement of the Indemnitee to indemnification shall be
determined with respect to any person who is not a director or officer at the
time of such determination by any means reasonably determined by the Company.

                                      -5-
<PAGE>

                  (c) In the event the determination of entitlement is to be
made by Independent Counsel, such Independent Counsel shall be selected by the
Board and the Board of Directors of CHS/Community Health Systems, Inc. and
approved by Indemnitee. Upon failure of the Board and the Board of Directors of
CHS/Community Health Systems, Inc. to so select such Independent Counsel or upon
failure of Indemnitee to so approve, such Independent Counsel shall be selected
by the American Arbitration Association of New York, New York or such other
person as such Association shall designate to make such selection.

                  (d) If a determination is made pursuant to Section 9(b) is
that Indemnitee is not entitled to indemnification to the full extent of
Indemnitee's request, Indemnitee shall have the right to seek entitlement to
indemnification in accordance with the procedures set forth in Section 10
hereof.

                  (e) If a determination with respect to entitlement to
indemnification shall not have been made within 60 days after receipt by the
Company and CHS/Community Health Systems, Inc. of such request, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be absolutely entitled to such indemnification, absent
(i) misrepresentation by Indemnitee of a material fact in the request for
indemnification or (ii) a final judicial determination that all or any part of
such indemnification is expressly prohibited by law.

                  (f) The termination of any Proceeding by judgment, order,
settlement or conviction, or upon a plea of NOLO CONTENDERE or its equivalent,
shall not, of itself, adversely affect the rights of Indemnitee to
indemnification hereunder except as may be specifically provided herein, or
create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or CHS/Community Health Systems, Inc., as the case may
be, or create a presumption that (with respect to any criminal action or
proceeding) Indemnitee had reasonable cause to believe that Indemnitee's conduct
was unlawful.

                  (g) For purposes of any determination of good faith hereunder,
Indemnitee shall be deemed to have acted in good faith if in taking such action
Indemnitee relied on the records or books of account of the Company or an
Affiliate, including financial statements, or on information supplied to
Indemnitee by the officers of the Company or an Affiliate in the course of their
duties, or on the advice of legal counsel for the Company or an Affiliate or on
information or records given or reports made to the Company or an Affiliate by
an independent certified public accountant or by an appraiser or other expert
selected with reasonable care to the Company or an Affiliate. The Company shall
have the burden of establishing the absence of good faith. The provisions of
this Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

                  (h) The knowledge and/or actions, or failure to act, of any
other director, officer, agent or employee of the Company or an Affiliate shall
not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.

                                      -6-
<PAGE>

            10. REMEDIES IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO
      ADVANCE EXPENSES.

                  (a) In the event that (i) a determination is made that
Indemnitee is not entitled to indemnification hereunder, (ii) advances are not
made pursuant to Section 8 hereof or (iii) payment has not been timely made
following a determination of entitlement to indemnification pursuant to Section
9 hereof, Indemnitee shall be entitled to seek a final adjudication either
through an arbitration proceeding or in an appropriate court of the State of
Delaware or any other court of competent jurisdiction of Indemnitee's
entitlement to such indemnification or advance.

                  (b) In the event a determination has been made in accordance
with the procedures set forth in Section 9 hereof, in whole or in part, that
Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration referred to in Section 10(a) shall be DE NOVO and Indemnitee shall
not be prejudiced by reason of any such prior determination that Indemnitee is
not entitled to indemnification, and the Company shall bear the burdens of proof
specified in Sections 6 and 9 hereof in such proceeding.

                  (c) If a determination is made or deemed to have been made
pursuant to the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company and CHS/Community Health Systems, Inc. shall be
bound by such determination in any judicial proceeding or arbitration in the
absence of (i) a misrepresentation of a material fact by Indemnitee or (ii) a
final judicial determination that all or any part of such indemnification is
expressly prohibited by law.

                  (d) To the extent deemed appropriate by the court, interest
shall be paid by the Company or CHS/Community Health Systems, Inc., or both, to
Indemnitee at a reasonable interest rate for amounts which the Company or
CHS/Community Health Systems, Inc., or both, indemnifies or is obliged to
indemnify Indemnitee for the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advancement of any Expenses) and
ending with the date on which such payment is made to Indemnitee by the Company
or CHS/Community Health Systems, Inc., or both.

            11. EXPENSES INCURRED BY INDEMNITEE TO ENFORCE THIS AGREEMENT. All
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be
jointly and severally borne by the Company and CHS/Community Health Systems,
Inc. In the event that Indemnitee is a party to or intervenes in any proceeding
in which the validity or enforceability of this Agreement is at issue or seeks
an adjudication to enforce Indemnitee's rights under, or to recover damages for
breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole in such
action, shall be entitled to recover from the Company and CHS/Community Health
Systems, Inc., and shall be jointly and severally indemnified by the Company and
CHS/Community Health Systems, Inc. against, any Expenses incurred by Indemnitee.
If it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the

                                      -7-
<PAGE>

claims, issues or matters for which Indemnitee is entitled to indemnification
and for claims, issues or matters for which Indemnitee is not so entitled.

            12. NON-EXCLUSIVITY. The rights of indemnification and to receive
advances as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under any law,
certificate of incorporation, by-law, other agreement, vote of stockholders or
resolution of directors or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. To the
extent Indemnitee would be prejudiced thereby, no amendment, alteration,
rescission or replacement of this Agreement or any provision hereof shall be
effective as to Indemnitee with respect to any action taken or omitted by such
Indemnitee in Indemnitee's position with the Company or an Affiliate or any
other entity which Indemnitee is or was serving at the request of the Company or
CHS/Community Health Systems, Inc. prior to such amendment, alteration,
rescission or replacement.

            13. DURATION OF AGREEMENT. This Agreement shall apply to any claim
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of: (a) ten years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described in
Section 3, 4 or 5 hereof; or (b) one year after the final termination of all
pending or threatened Proceedings of the kind described herein with respect to
Indemnitee. This Agreement shall be binding upon the Company and CHS/Community
Health Systems, Inc. and their respective successors and assigns and shall inure
to the benefit of Indemnitee and Indemnitee's spouse, assigns, heirs, devisee,
executors, administrators or other legal representatives.

            14. MAINTENANCE OF D&O INSURANCE.

                  (a) The Company and CHS/Community Health Systems, Inc. each
hereby covenants and agrees with Indemnitee that, so long as Indemnitee shall
continue to serve as an Officer or Director of the Company and thereafter so
long as Indemnitee shall be subject to any possible claim or threatened, pending
or completed Proceeding, whether civil, criminal or investigative, by reason of
the fact that Indemnitee was an Officer or Director of the Company or any other
entity which Indemnitee was serving at the request of the Company or
CHS/Community Health Systems, Inc., the Company and CHS/Community Health
Systems, Inc. shall maintain in full force and effect (i) the directors' and
officers' liability insurance issued by the insurer and having the policy amount
and deductible as currently in effect with respect to directors and officers of
the Company or any of its subsidiaries and (ii) any replacement or substitute
policies issued by one or more reputable insurers providing in all respects
coverage at least comparable to and in the same amount as that currently
provided under such existing policy (collectively, "D&O Insurance").

                  (b) In all policies of D&O Insurance, Indemnitee shall be
named as an insured in such a manner as to provide Indemnitee the same rights
and benefits, subject to the same limitations, as are accorded to the Company's
directors or officers most favorably insured by such policy.

                                      -8-
<PAGE>

                  (c) Notwithstanding anything to the contrary set forth in (a)
above, the Company and CHS/Community Health Systems, Inc. shall have no
obligation to maintain D&O Insurance if the Company and CHS/Community Health
Systems, Inc. determine in good faith that such insurance is not reasonably
available, the premium cost for such insurance is disproportionate to the amount
of coverage provided or the coverage provided by such insurance is limited by
exclusions so as to provide an insufficient benefit.

            15. SEVERABILITY. Should any part, term or condition hereof be
declared illegal or unenforceable or in conflict with any other law, the
validity of the remaining portions or provisions hereof shall not be affected
thereby, and the illegal or unenforceable portions hereof shall be and hereby
are redrafted to conform with applicable law, while leaving the remaining
portions hereof intact.

            16. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

            17.   HEADINGS.  Section  headings are for convenience only and do
not control or affect  meaning or  interpretation  of any terms or  provisions
hereof.

            18. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by each
of the parties hereto.

            19. NO DUPLICATIVE PAYMENT. The Company and CHS/Community Health
Systems, Inc. shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee
has otherwise actually received such payment (net of Expenses incurred in
collecting such payment) under any insurance policy, contract, agreement or
otherwise.

            20. NOTICES. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed,
enclosed in a registered or certified postpaid envelope, in any general or
branch office of the United States Postal Service, or sent by Federal Express or
other similar overnight courier service, addressed to the address of the parties
stated below or to such changed address as such party may have fixed by notice
or, if given by telecopier, when such telecopy is transmitted and the
appropriate answerback is received.

            (a)   If to Indemnitee, to the address appearing on the signature
                  page hereof.

            (b)   If to the Company or CHS/Community Health Systems, Inc. to:

                  Community Health Systems, Inc.
                  155 Franklin Road, Suite 400
                  Brentwood, TN 37027
                  Attention: Vice President and General Counsel

                                      -9-
<PAGE>

            21. GOVERNING LAW. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the internal laws of
the State of Delaware without regard to its conflicts of law rules.

            22. ENTIRE AGREEMENT. Subject to the provisions of Section 12
hereof, this Agreement constitutes the entire understanding between the parties
and supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter hereof. This Agreement may not be amended
or otherwise modified except in writing duly executed by all of the parties. A
waiver by any party of any breach or violation of this Agreement shall not be
deemed or construed as a waiver of any subsequent breach or violation thereof.

                                      -10-
<PAGE>

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

                                    COMMUNITY HEALTH SYSTEMS, INC.

                                    By:____________________________________

                                    Name:__________________________________

                                    Title:_________________________________

                                    CHS/COMMUNITY HEALTH SYSTEMS, INC.

                                    By:____________________________________

                                    Name:__________________________________

                                    Title:_________________________________

                                   INDEMNITEE

                                    Name:___________________________________

                                    Address:________________________________

                                    City and State:_________________________

                                    Telecopier Number:______________________

                                      -11-

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