Document:

Exhibit 10.4

 

COMMUNITY HEALTH SYSTEMS, INC.

 

AMENDED AND RESTATED STOCK OPTION
AND AWARD PLAN

NONQUALIFIED STOCK OPTION
AGREEMENT (DIRECTOR)

 

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

 

WHEREAS, the Corporation has adopted the Community
Health Systems, Inc. Amended and Restated 2000 Stock Option and Award Plan (the
“Plan”) in order to provide additional incentive to certain employees, officers
and directors of the Corporation and its subsidiaries; and

 

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

 

NOW THEREFORE, the parties hereto agree as follows:

 

1.             Grant of Option.

 

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

 

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

 

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

 

2.             Purchase Price.

 

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

 

3.             Duration of Option.

 

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

 

 

4.             Exercisability of Option.

 

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

 

5.             Manner of Exercise and Payment.

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

Community Health Systems, Inc.

155 Franklin Road

Suite 400

Brentwood, TN 37027

Attention: 
General Counsel

 

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

 

 

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

 

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

 

	
   

  	
  COMMUNITY HEALTH SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Wayne T. Smith, President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Rachel A. Seifert, Senior Vice President,

  	
   

  
	
  Secretary and General CounselEXHIBIT 10.20

                                 PROMISSORY NOTE
                                 ---------------

US$1,000,000                                      Dated:   As of October 1, 2004

     FOR VALUE RECEIVED, the undersigned, MARCELLUS GROUP, L.L.C. a New York
limited liability company ("Maker"), hereby promises to pay to the order of
CROWN MILL RESTORATION DEVELOPMENT, L.L.C. a New York limited liability company
("Holder") the principal sum of One Million Dollars ($1,000,000)(the "Principal
Amount"), on or by November 1, 2006 (the "Maturity Date"), plus accrued and
unpaid interest as set forth below on the dates and in the installments set
forth below.

     1. The Maker shall pay to the Holder installments in the amount of
US$25,946.98 which shall be due and payable on the first day of November, 2004
and on the first day of each month thereafter through and including the Maturity
Date or earlier termination of this Note. Payments on this Note shall be applied
first to reduce any interest which shall have accrued hereunder, and then to
reduce the outstanding principal balance hereof. This Note may be prepaid by
Maker at any time, in whole or in part, together with all interest accrued to
the date of such prepayment without premium or penalty, upon notice to Holder.
Principal and interest shall be payable in lawful money of the United States of
America in immediately available funds, without any deduction, setoff or
counterclaim, at the address of Holder specified herein.

     2. This Note shall bear interest on the unpaid principal amount hereof
commencing on the date hereof at a rate of 8.0% per annum. Upon the occurrence
and during the continuance of an Event of Default, interest shall accrue on the
unpaid principal amount of this Note, from the date of such default until the
earlier of the date the principal sum is paid in full or, if applicable, the
date such default is cured, at the rate of 10% per annum (but not higher than
the applicable maximum rate provided by law). Any unpaid Accrued interest on the
outstanding principal amount of this Note shall be payable on the Maturity Date,
unless accelerated as a result of the occurrence of an Event of Default as set
forth below.

     3. The principal amount of this Note may be prepaid, at the option of
Maker, in whole at any time, together with all accrued interest upon ten (10)
days prior written notice to Holder.

     4. The unpaid principal amount of this Note, the accrued interest thereon
and all other obligations of Maker hereunder (collectively, the "Obligations"),
at the option of Holder, shall become immediately due and payable upon the
occurrence of any of the following events of default ("Events of Default"):

        (a) Maker shall fail to pay: (i) any installment payment pursuant to
Section 1 above within thirty (30) days of its due date; (ii) any principal or
accrued interest under this Note within thirty (30) days after the Maturity
Date; or (iii) any of the other monetary obligations to be paid by it under this
Note within thirty (30) days of the due date for payment of same.

<PAGE>

        (b) Maker shall default in the observance or performance of any material
agreements, covenants or conditions contained in this Note or in any other
document or instrument referred to herein or therein (except the failure to pay
monetary obligations) and fail to cure such default within thirty (30) business
days of the date Maker obtains notice thereof whether from Holder or otherwise.

        (c) Any present or future representation or warranty made by or on
behalf of Maker whether contained herein shall be false or incorrect in any
material respect when such representation or warranty is made.

        (d) The occurrence of any of the following with respect to Maker:
dissolution; termination of existence; insolvency; business cessation; calling
of a meeting of creditors; appointment of a receiver for any property;
assignment for the benefit of creditors or admit in writing its inability to pay
its debts as they become due; voluntary commencement of any proceeding under any
bankruptcy or insolvency law; commencement of any involuntary proceeding under
any bankruptcy or insolvency law and if any such involuntary proceeding is not
dismissed within 45 days or the relief requested is granted; entry of a court
order which enjoins or restrains the conduct of business in the ordinary course.

     5. Maker shall reimburse Holder for all costs and expenses incurred by
Holder and shall pay the reasonable fees, disbursements and out of pocket
expenses of counsel to Holder in connection with the enforcement of Holder's
rights hereunder. Maker shall also pay any and all taxes (other than taxes on or
measured by net income of the holder of this Note) recording fees, filing
charges, search fees or similar items incurred or payable in connection with the
execution and delivery of this Note.

     6. Maker shall indemnify, defend and save Holder harmless from and against
any and all claims, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees, disbursements and out of pocket
expenses) of any nature whatsoever which may be asserted against or incurred by
Holder arising out of or in any manner occasioned by or any failure by Maker to
perform any of its obligations hereunder.

     7. Maker agrees to do such further acts and to execute and deliver to
Holder such additional agreements, instruments and documents as Holder may
reasonably require or deem advisable to effectuate the purposes of this Note, or
to confirm to Holder its rights, powers and remedies under this Note.

     8. (a) Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered or transmitted personally by
messenger, by recognized overnight courier, telecopied or mailed (by registered
or certified mail, postage prepaid) as follows:

                           (i) If to Maker, one copy to:

                           MARCELLUS GROUP, LLC
                           22 West Main Street
                           Marcellus, New York 13108
                           Attention: V. William Lucchetti, Jr.

                                       2

<PAGE>

                           (ii) If to the Holder:

                           Crown Mill Restoration Development, LLC
                           25 Broad Street, Tower Suite I
                           New York, New York 10004
                           Attention: V. William Lucchetti, Jr.

        (b) Each such notice or other communication shall be effective: (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in Section 8(a) (with confirmation of transmission received by the
sender); or (ii) if given by any other means, when received at the address
specified in Section 8(a). Any party by notice given in accordance with this
Section 8 to the other party may designate another address (or telecopier
number) or person for receipt of notices hereunder.

     9. This Note contains the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements, written or
oral, with respect thereto.

     10. This Note may be amended, superseded, cancelled, renewed or extended
only by a written instrument signed by Holder and Maker. Any provisions hereof
may be waived by a party but any such waiver must be in writing signed by such
party and any such waiver shall be effective only in the specific instance and
for the specific purpose for which given. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.

     11. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed entirely within such State, without regard to the conflict of laws
rules thereof.

     12. Maker irrevocably: (a) agrees that any suit, action or other legal
proceeding arising out of this Agreement may be brought in the courts of the
State of New York or the courts of the United States located in New York County,
New York; (b) consents to the jurisdiction of each court in any such suit,
action or proceeding; (c) waives any objection which it may have to the laying
of venue of any such suit, action or proceeding in any of such courts; (d)
waives the right to assert any counterclaim in any such suit, action and
proceeding; and (e) waives the right to a trial by jury in any such suit, action
or other legal proceeding.

     13. This Note and all of its provisions, rights and obligations shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, assigns and legal representatives. Nothing herein express
or implied is intended or shall be construed to confer upon or to give anyone

                                       3

<PAGE>

other than the parties hereto and their respective heirs, legal representatives
and successors any rights or benefits under or by reason of this Agreement and
no other party shall have any right to enforce any of the provisions of this
Agreement.

     14. If any provision of this Note for any reason shall be held to be
illegal, invalid or unenforceable, such illegality shall not affect any other
provision of this Note, but this Note shall be construed as if such illegal,
invalid or unenforceable provision had never been included herein.

         IN WITNESS WHEREOF, the undersigned has executed this Promissory Note
as of the date first written above.

ATTEST:
                                            MAKER:
                                            MARCELLUS GROUP, LLC

/s/                                         By:  /s/
-----------------------------                  -------------------------------
                                            Name:     V. William Lucchetti, Jr.
                                            Title:    Manager

                                       4

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