AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT
Exhibit 10.22
AMENDED AND RESTATED
THIS
AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT made as of the ___ day of
, 2008, by and among Community Health Systems, Inc. (the “Corporation”),
Community Health Systems Professional Services Corporation (the “Employer”), and
(the “Executive”).
WHEREAS, the Board of Directors of the Corporation and the Board of Directors of the
Employer (the “Boards”) recognize that the possibility of a Change in Control (as
hereinafter defined) exists and that the threat or the occurrence of a Change in Control can
result in significant distraction of the Employer’s key management personnel because of the
uncertainties inherent in such a situation;
WHEREAS, the Boards have determined that it is essential and in the best interest of the
Employer, and the Corporation and its stockholders, for the Employer to retain the services of
the Executive in the event of a threat or occurrence of a Change in Control and to ensure the
Executive’s continued dedication and efforts in such event without undue concern for the
Executive’s personal financial and employment security;
WHEREAS, in order to induce the Executive to remain in the employ of the Employer,
particularly in the event of a threat or the occurrence of a Change in Control, the Employer
desires to enter into this Agreement with the Executive to provide the Executive with certain
benefits in the event the Executive’s employment is terminated as a result of, or in connection
with, a Change in Control;
WHEREAS, the Corporation and the Executive previously entered into a change in control
severance agreement (the “Prior Agreement”); and
WHEREAS, the Corporation and the Executive desire to amend and restate the Prior Agreement
to comply with Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as
amended (“Code”), and the regulations issued thereunder.
NOW, THEREFORE, in consideration of the respective agreements of the parties contained
herein, it is agreed as follows:
1. Term of Agreement. This Agreement shall commence as of December 31, 2008, and
shall continue in effect until December 31, 2010 (the “Term”); provided,
however, that on December 31, 2009, and on each December 31st thereafter, the Term shall
automatically be extended for one (1) year unless either the Executive or the Employer shall have
given written notice to the other at least ninety (90) days prior thereto (i.e., on or before
October 1st immediately preceding) that the Term shall not be so extended; provided, further,
however, that following the occurrence of a Change in Control, the Term shall not expire prior to
the expiration of thirty-six months (36) months1 after such occurrence.
| 1 | 36 months applies to CEO, CFO, and SVPs; change to 24 months for VPs. |
2. Termination of Employment. If the Executive’s employment with the Employer and
with all other Affiliates of the Corporation shall be terminated, the Executive shall be entitled
to the following compensation and benefits:
(a) If the Executive experiences a “separation from service” (within the meaning of Section
409A(a)(2)(A)(i) of the Code) with the Employer and all other Affiliates of the Corporation as a
result of (i) termination of Executive’s employment by the Employer without Cause (other than by
reason of the Executive’s Disability) within thirty-six (36) months2 following a Change
in Control, or (ii) by the Executive’s termination of his or her employment for Good Reason within
twenty-four (24) months3 following a Change of Control, the Executive shall be entitled
to the following:
(i) the Employer shall pay the Executive the Executive’s Accrued Compensation;
(ii) the Employer shall pay the Executive, at the same time that the Employer makes annual
bonus payments under the Incentive Plan to other senior Executives, a pro rata portion of the
annual bonus that would have been paid to the Executive under the Incentive Plan in respect of the
year in which the Termination Date occurred had the Executive remained employed through the
applicable payment date under the Incentive Plan, calculated by multiplying such amount by a
fraction, the numerator of which is the number of days in the year through the Termination Date and
the denominator of which is 365 .
(iii) the Employer shall pay the Executive as severance pay and in lieu of any further
compensation for periods subsequent to the Termination Date, an amount determined by multiplying
(A) three (3)4 times the sum of (i) the Executive’s Base Amount and (ii) the Executive’s
Bonus Amount;
(iv) (A) for thirty-six (36)5 months following the Termination Date (the
“Continuation Period”), the Employer shall arrange, at its sole expense, to provide the
Executive with health and welfare benefits (other than long-term disability insurance benefits)
that are substantially similar to the better of (when considered in the aggregate) (X) those health
and welfare benefits (other than long-term disability insurance benefits) that the Executive was
receiving or entitled to receive immediately prior to the Change in Control, and (Y) those health
and welfare benefits (other than long-term disability insurance benefits) that the Executive was
receiving or entitled to receive immediately prior to the Termination Date, and (B) such
Continuation Period will be considered service with the Employer for the purpose of determining
service credits under or in respect of any health and welfare benefits applicable to the Executive
or the Executive’s dependents or beneficiaries; and
| 2 | Change to 24 months for VPs. | |
| 3 | Change to 12 months for VPs. | |
| 4 | Severance for CEO, EVP and SVPs. For VPs, severance shall be 24 months (or 2 times base and bonus). | |
| 5 | Change to 24 months for VPs. |
- 2-
(v) the Employer shall reimburse the Executive for the costs, fees and expenses of
outplacement assistance services (not to exceed twenty-five thousand dollars ($25,000)) provided by
any bona fide outplacement agency selected by the Executive.
(b) If the Executive’s employment with the Employer and with all Affiliates of the Corporation
shall be terminated by the Employer without Cause (other than by reason of the Executive’s
Disability) at any time prior to the date of a Change in Control and such termination (A) occurred
after the Corporation or the Employer entered into a definitive agreement, the consummation of
which would constitute a Change in Control or (B) the Executive reasonably demonstrates that such
termination was at the request of a third party who has indicated an intention or has taken steps
reasonably calculated to effect a Change in Control (a “Third Party”), such termination
shall be deemed to have occurred after a Change in Control.
(c) If the Executive’s employment with the Employer and with all Affiliates of the Corporation
shall be terminated for Cause, the Employer shall pay to the Executive any unpaid portion of the
Executive’s base salary through the Termination Date at the rate in effect at the time Notice of
Termination is given and shall pay any amounts required to be paid to the Executive pursuant to any
other compensation plans, programs or arrangements then in effect, or which are required to be paid
under applicable law, and the Employer shall have no further obligations to the Executive under
this Agreement.
(d) The amounts provided for in Sections 2(a) and 2(b)shall be subject to the Executive’s
execution, delivery and non-revocation of a Waiver and Release of Claims substantially the form
attached hereto as Exhibit A (the “Release”) within forty five (45) days after the
Executive’s Termination Date and the amounts provided for in Sections 2(a)(ii), 2(b)(i), 2(b)(ii)
and 2(b)(iii) shall be paid in a single lump sum cash payment on the forty fifth (45th)
after the Executive’s Termination Date; provided, however, that, notwithstanding
the foregoing, if the Executive is a “specified employee” for purposes of Section 409A of Code and
the regulations issued thereunder (a “Specified Employee”), any payments required to be
made pursuant to Section 2(a)(ii), 2(b)(ii) and 2(b)(iii) shall not commence until one (1) day
after the day which is six (6) months after the Executives separation from service (the “Delay
Period”). In addition, if the Executive is a Specified Employee, to the extent that benefits
to be provided to the Executive pursuant to Sections 2(b)(iv) and 2(b)(v) of this Agreement are not
“disability pay,” “death benefit” plans or non-taxable medical benefits within the meaning of
Treasury Regulation Section 1.409A-1(a)(5) or other benefits not considered nonqualified deferred
compensation within the meaning of that regulation, such provision of benefits shall be delayed
until the end of the Delay Period, unless the Executive’s termination occurs by reason of his
death. Notwithstanding the foregoing, to the extent that the previous sentence applies to the
provision of any ongoing benefits that would not be required to be delayed if the premiums were
paid by the Executive, the Executive shall pay the full cost of the premiums for such benefits
during the Delay Period and the Corporation shall pay the Executive an amount equal to the amount
of such premiums paid by the Executive during the Delay Period within ten (10) days after the end
of the Delay Period. To the extent that any benefits to be provided to the Executive pursuant to
this Agreement are considered nonqualified deferred compensation and are reimbursements subject to
Treasury Regulation Section 1.409A-3(i)(1)(iv), then (i) the reimbursement of eligible expenses
related to such benefits
shall be made on or before the last day of the Executive
- 3-
taxable year following the Executive
taxable year in which the expense was incurred and (ii) notwithstanding anything to the contrary in
this Agreement or any plan providing for such benefits, the amount of expenses eligible for
reimbursements during any taxable year of the Executive shall not affect the expenses eligible for
reimbursements in any other taxable year.
(e) The Executive shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking other employment or otherwise and no such payment or
benefit shall be offset or reduced by the amount of any compensation or benefits provided to the
Executive in any subsequent employment.
(f) The severance pay and benefits provided for in this Section 2 shall be in lieu of any
other severance pay to which the Executive may be entitled under the Employer’s severance policy or
any other plan, agreement or arrangement of the Employer or any other Affiliate of the Corporation.
(g) The Executive’s entitlement to other compensation or benefits pursuant to the Employer’s
employee benefit plans and other applicable programs and practices shall be determined in
accordance with the terms of those plans, programs and practices as in effect from time to time.
(h) The Employer’s and the Corporation’s obligations pursuant to this Section 2 shall be
conditioned upon the Executive’s execution, delivery and non-revocation of the Release.
3. Gross-Up Payment.
(a) In the event that it shall be determined that any payment or distribution of any type to
or for the benefit of the Executive, by the Employer, the Corporation, any Affiliate, any Person
(as defined in Section 17.6(a) hereof) who acquires ownership or effective control of the
Corporation or ownership of a substantial portion of the Corporation’s assets (within the meaning
of Section 280G of the Code and the regulations thereunder) or any affiliate of such Person,
whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
under any other plan, program, policy or arrangement of the Corporation, the Employer or any of
their Affiliates (the “Total Payments”), is or will be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties, are collectively referred to as the “Excise
Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Total Payments. Payments and reimbursements to which the Executive is
entitled under this Section 3(a) shall be made not later than April 15 of the taxable year of the
Executive next following the taxable year of the Executive in which the Executive receives amounts
subject to Section 4999.
Notwithstanding the immediately preceding paragraph, in the event that a reduction to the
Total Payments in respect of the Executive of 10% or less would cause no
- 4-
Excise Tax to be
payable, the Executive will not be entitled to a Gross-Up Payment and the Total Payments shall be
reduced to the extent necessary so that the Total Payments shall not be subject to the Excise
Tax. Unless the Executive shall have given prior written notice to the Employer specifying a
different order by which to effectuate the foregoing, the Employer shall reduce or eliminate the
Total Payments (x) by first reducing or eliminating the portion of the Total Payments which are
not payable in cash (other than that portion of the Total Payments subject to clause (z) hereof),
(y) then by reducing or eliminating cash payments (other than that portion of the Total Payments
subject to clause (z) hereof) and (z) then by reducing or eliminating the portion of the Total
Payments (whether payable in cash or not payable in cash) to which Treasury Regulation Section
1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with
payments or benefits which are to be paid the farthest in time from the date of the Change in
Control. Any notice given by the Executive pursuant to the preceding sentence shall take
precedence over the provisions of any other plan, arrangement or agreement governing the
Executive’s rights and entitlements to any benefits or compensation.
(b) Determination by Accountant. All mathematical determinations, and all
determinations as to whether any of the Total Payments are “parachute payments” (within the meaning
of Section 280G of the Code), that are required to be made under this Section 3, including
determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment
and amounts relevant to the last sentence of this Section 3(b), shall be made by an independent
accounting firm selected by the Executive from among the nationally recognized accounting firms in
the United States (the “Accounting Firm”), which shall provide its determination (the
“Determination”), together with detailed supporting calculations regarding the amount of
any Gross-Up Payment and any other relevant matter, both to the Employer and the Executive by no
later than ten (10) days following the Termination Date, if applicable, or such earlier time as is
requested by the Employer or the Executive (if the Executive reasonably believes that any of the
Total Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise
Tax is payable by the Executive, it shall furnish the Executive and the Employer with a written
statement that such Accounting Firm has concluded that no Excise Tax is payable (including the
reasons therefor) and that the Executive has substantial authority not to report any Excise Tax on
the Executive’s federal income tax return. If a Gross-Up Payment is determined to be payable, it
shall be paid to the Executive within twenty (20) days after the Determination (and all
accompanying calculations and other material supporting the Determination) is delivered to the
Employer by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon
the Employer and the Executive, absent manifest error. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the initial determination by the Accounting
Firm hereunder, it may be the case that Gross-Up Payments not made by the Employer should have been
made (“Underpayment”) or that Gross-Up Payments will have been made by the Employer which
should not have been made (“Overpayments”). In either such event, the Accounting Firm
shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment shall be promptly paid by the Employer to or for the
benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and
expense of the Employer, take such steps as
are reasonably necessary (including the filing of returns and claims for refund), follow
reasonable instructions from, and procedures established by, the Employer, and otherwise
- 5-
reasonably
cooperate with the Employer to correct such Overpayment, provided, however, that (i) the Executive
shall not in any event be obligated to return to the Employer an amount greater than the net
after-tax portion of the Overpayment that the Executive has retained or has recovered as a refund
from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner
consistent with the intent of Section 3(a), which is to make the Executive whole, on an after-tax
basis, from the application of the Excise Tax, it being understood that the correction of an
Overpayment may result in the Executive repaying to the Employer an amount which is less than the
Overpayment.
(c) Access; Binding Effect. The Corporation, the Employer and the Executive shall
each provide the Accounting Firm access to and copies of any books, records and documents in the
possession of the Employer or the Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the
preparation and issuance of the determinations and calculations contemplated by this Section 3.
Any determination by the Accounting Firm as to the amount of any Gross-Up Payment or Underpayment
shall be binding upon the Employer, its Affiliates and the Executive; provided that if the
Executive is ultimately required to pay an Excise Tax by the Internal Revenue Service despite the
opinion of such Accounting Firm, then the Employer shall make the appropriate Gross-Up Payment
contemplated herein.
(d) Income Tax Returns. The federal income returns filed by the Executive shall be
prepared and filed on a basis consistent with the determination of the Accounting Firm with respect
to the Excise Tax payable by the Executive. The Executive shall make proper payment of the amount
of any Excise Tax that has not been withheld by the Employer, and at the request of the Employer,
provide to the Employer true and correct copies (with any amendments) of the Executive’s federal
income tax return as filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such other documents
reasonably requested by the Employer, evidencing the proper reporting of the Gross-Up Payment and
any Excise Tax due. If prior to the filing of the Executive’s federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm determines that the
amount of the Gross-Up Payment should be reduced, the Executive shall within five (5) business days
of such determination pay to the Employer the amount of such reduction.
(e) Fees and Expenses. The fees and expenses of the Accounting Firm for its services
in connection with the determinations and calculations contemplated by this Section 3 shall be
borne by the Employer. If such fees and expenses are initially paid by the Executive, the Employer
shall reimburse the Executive the full amount of such fees and expenses within five (5) business
days after receipt from the Executive of a statement therefor and reasonable evidence of the
Executive’s payment thereof.
(f) Indemnification. The Executive shall notify the Employer in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment by the
Employer of a Gross-Up Payment. Such notification shall be given as promptly as practicable
but no later than ten (10) business days after the Executive actually receives notice of such claim
and the Executive shall further apprise the Employer of the nature of such claim and the date on
which
- 6-
such claim is requested to be paid (in each case, to the extent known by the Executive). The
Executive shall not pay such claim prior to the earlier of (i) the expiration of the thirty
(30)-day period following the date on which the Executive gives such notice to the Employer and
(ii) the date that any payment of the amount with respect to such claim is due. If the Employer
notifies the Executive in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) provide the Employer with any written records or documents in the Executive’s possession
relating to such claim reasonably requested by the Employer;
(ii) take such action in connection with contesting such claim as the Employer shall
reasonably request in writing from time to time, including without limitation accepting legal
representation with respect to such claim by an attorney competent in respect of the subject matter
and reasonably selected by the Employer;
(iii) cooperate with the Employer in good faith in order effectively to contest such claim;
and
(iv) permit the Employer to participate in any proceedings relating to such claim; provided,
however, that the Employer shall bear and pay directly all costs in a court of initial jurisdiction
and in one or more appellate courts, as the Employer shall determine; and provided, further,
however, that if the Employer directs the Executive to pay the tax claimed and xxx for a refund,
the Employer shall make such payment to the Executive on an interest-free basis and shall indemnify
and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income or other tax,
including interest or penalties with respect thereto, imposed with respect to such payment; and
provided, further, however, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive with respect to
which the contested amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Employer’s control of any such contested claim shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service.
(g) Refunds. If, after the receipt by the Executive of an amount paid by the Employer
pursuant to Section 3(f), the Executive receives any refund with respect to such claim, the
Executive shall (subject to the Employer’s complying with the requirements of Section 3(f) promptly
pay to the Employer the amount of such refund (together with any interest paid or credited thereon
after any taxes applicable thereto). If, after the receipt by the Executive of an amount paid by
the Employer pursuant to Section 3(f) a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Employer does not notify the Executive in
writing of its intent to contest such denial or refund prior to the expiration of thirty (30) days
after such determination, then such amount shall not be required to be repaid and shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by the
Employer to the Executive pursuant to this Section 3.
(h) Confidentiality. Any information provided by the Executive to the Employer under
this Section 3 shall be treated confidentially by the Employer and, except as
- 7-
required by law, will
not be provided by the Employer to any other person, other than the Employer’s professional
advisors, without Executive’s prior written consent.
4. Notice of Termination. Following a Change in Control, (i) any intended termination
of the Executive’s employment by the Employer shall be communicated by a Notice of Termination from
the Employer to the Executive, and (ii) any intended termination of the Executive’s employment by
the Executive for Good Reason shall be communicated by a Notice of Termination from the Executive
to the Employer within six (6) months of the Executive becoming aware of the event or action
constituting Good Reason or, if later, within six (6) months after the date of the Change in
Control.
5. Fees and Expenses. The Employer shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred in good faith by the Executive as
they become due over the lifetime of the Executive as a result of (a) the termination of the
Executive’s employment by the Employer or by the Executive for Good Reason (including all such fees
and expenses, if any, incurred in contesting, defending or disputing the basis for any such
termination of employment), (b) the Executive’s hearing before the Board of Directors of the
Corporation as contemplated in Section 17.5 of this Agreement or (c) the Executive seeking to
obtain or enforce any right or benefit provided by this Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be entitled to receive
benefits. Payments and reimbursements to which the Executive is entitled under this Section 5
shall be made not later than April 15 of the taxable year of the Employee next following the
taxable year in which the expense was incurred.
6. Transfer of Employment. Notwithstanding any other provision herein to the
contrary, the Employer shall cease to have any further obligation or liability to the Executive
under this Agreement if (a) the Executive’s employment with the Employer terminates as a result of
the transfer of the Executive’s employment to any other Affiliate of the Corporation, (b) this
Agreement is assigned to such other Affiliate, and (c) such other Affiliate expressly assumes and
agrees to perform this Agreement in the same manner and to the same extent that the Employer would
be required to perform it if no assignment had taken place. Any Affiliate to which this Agreement
is so assigned shall be treated as the “Employer” for all purposes of this Agreement on or after
the date as of which such assignment to the Affiliate, and the Affiliate’s assumption and agreement
to so perform this Agreement, becomes effective.
7. Corporation’s Obligation. The Corporation agrees that it will take such steps as
may be necessary to cause the Employer (or any Affiliate that has become the “Employer” pursuant to
Section 6 hereof) to meet each of its obligations to the Executive under this Agreement.
8. Notice. For the purposes of this Agreement, notices and all other communications
provided for in this Agreement (including any Notice of Termination) shall be in writing, shall be
signed by the Executive if to the Employer or by a duly authorized officer of the Employer if to
the Executive, and shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid. Notices to the Employer or the
Corporation shall be delivered to the attention of the General Counsel at the corporate
- 8-
headquarters of the Corporation. Notices to the Executive shall be delivered to the address
reflected in the payroll records of the Employer. All notices and communications shall be deemed
to have been received on the date of delivery thereof or on the third business day after the
mailing thereof, except that notice of change of address shall be effective only upon receipt.
9. Nature of Rights. The Executive shall have the status of a mere unsecured creditor
of the Employer and the Corporation with respect to the Executive’s right to receive any payment
under this Agreement. This Agreement shall constitute a mere promise by the Employer and the
Corporation to make payments in the future of the benefits provided for herein. It is the
intention of the parties hereto that the arrangements reflected in this Agreement shall be treated
as unfunded for tax purposes and, if it should be determined that Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), is applicable to this
Agreement, for purposes of Title I of ERISA. Except as provided in Section 2(g), nothing in this
Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Employer, the Corporation or any other
Affiliate of the Corporation and for which the Executive may qualify, nor shall anything herein
limit or reduce such rights as the Executive may have under any other agreements with the Employer,
the Corporation or any other Affiliate of the Corporation. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan or program of the Employer, the
Corporation or any other Affiliate of the Corporation shall be payable in accordance with such plan
or program, except as explicitly modified by this Agreement.
10. Settlement of Claims. The Employer’s obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim, defense, recoupment, or
other right which the Employer may have against the Executive or others.
11. Alternative Dispute Resolution. The parties hereto agree that any controversy or
claim arising out of or relating to this Agreement or the breach thereof, shall be settled by
binding arbitration by an arbitration panel selected in accordance with the then-current arbitrator
selection procedures of the American Arbitration Association. Such arbitration shall be conducted
in the Middle District of Tennessee (absent mutual agreement by the parties to do otherwise)
pursuant to the national rules for the resolution of employment disputes of the American
Arbitration Association then in effect. The decision or award in any such arbitration will be
final and binding upon the parties and judgment upon such decision or award may be entered in any
court of competent jurisdiction or application may be made to any such court for judicial
acceptance of such decision or award and an order of enforcement. In the event that any procedural
matter is not covered by the aforesaid rules, the procedural law of Delaware will govern. The
Employer shall
bear all costs and expenses incurred by the Executive in the arbitration, as well as its own
costs and expenses and the costs and expenses of any of its Affiliates.
12. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by the
Executive, the Corporation and the Employer. No waiver by any party hereto at any time of any
breach by any other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar
- 9-
provisions or conditions at the same or at any prior or subsequent time. No agreement or
representation, oral or otherwise, express or implied, with respect to the subject matter hereof
has been made by any party which is not expressly set forth in this Agreement.
13. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and shall inure to the benefit of the Employer, the
Corporation and their respective Successors and Assigns. The Employer and the Corporation shall
require their respective Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Employer and/or the Corporation would
be required to perform it if no such succession or assignment had taken place.
(b) Neither this Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive or the Executive’s beneficiaries or legal representatives, except by
will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s legal personal representative.
14. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the substantive laws of the State of Delaware without giving effect to the conflict
of laws principles thereof.
15. Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.
16. Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto, and supersedes all prior agreements, if any, understandings and arrangements, oral
or written, between the parties hereto.
17. Definitions.
17.1 Accrued Compensation. For purposes of this Agreement, “Accrued
Compensation” shall mean all amounts of compensation for services rendered to the Employer
or any other Affiliate that have been earned or accrued through the Termination Date but that have
not been paid as of the Termination Date including (a) base salary, (b) reimbursement for
reasonable and necessary business expenses incurred by the Executive on behalf of the Employer
during the period ending on the Termination Date and (c) vacation pay; provided, however, that
Accrued Compensation shall not include any amounts described in clause (a) or clause (d) that
have been deferred pursuant to any salary reduction or deferred compensation elections made by
the Executive.
17.2 Affiliate. For purposes of this Agreement, “Affiliate” means any entity
directly or indirectly controlled by, controlling or under common control with the Corporation or
any corporation or other entity acquiring, directly or indirectly, all or substantially all the
assets and business of the Corporation, whether by operation of law or otherwise.
- 10-
17.3 Base Amount. For purposes of this Agreement, “Base Amount” shall mean
the Executive’s annual base salary at the rate in effect as of the date of a Change in Control or,
if greater, at any time thereafter, determined without regard to any salary reduction or deferred
compensation elections made by the Executive.
17.4 Bonus Amount. For purposes of this Agreement, “Bonus Amount” shall mean
the greater of (a) the target annual bonus that would be payable to the Executive under the
Incentive Plan in respect of the fiscal year during which the Termination Date occurs assuming that
both the Corporation and the Executive satisfy 100% (but not in excess of 100%) of the performance
objective(s) specified in or pursuant to the applicable agreement, policy, plan, program or
arrangement and communicated to the Executive, and (b) the highest annual bonus paid or payable
under the Incentive Plan in respect of any of the three full fiscal years ended prior to the
Termination Date or, if greater, the three (3) full fiscal years ended prior to the Change in
Control.
17.5 Cause. For purposes of this Agreement, a termination of employment is for
“Cause” if the Executive has been convicted of a felony or the termination is evidenced by
a resolution adopted in good faith by two-thirds of the Board of Directors of the Corporation that
the Executive:
(a) intentionally and continually failed substantially to perform the Executive’s reasonably
assigned duties with the Employer or the Corporation (other than a failure resulting from the
Executive’s incapacity due to physical or mental illness or from the assignment to the Executive of
duties that would constitute Good Reason) which failure continued for a period of at least thirty
(30) days after a written notice of demand for substantial performance, signed by a duly authorized
officer of the Employer or the Corporation, has been delivered to the Executive specifying the
manner in which the Executive has failed substantially to perform, or
(b) intentionally engaged in conduct which is demonstrably and materially injurious to the
Corporation or the Employer; provided, however, that no termination of the Executive’s employment
shall be for Cause as set forth in this Section 17.5(b) until (1) there shall have been delivered
to the Executive a copy of a written notice, signed by a duly authorized officer of the Employer or
the Corporation, setting forth that the Executive was guilty of the conduct set forth in this
Section 17.5(b) and specifying the particulars thereof in detail, and (2) the Executive shall have
been provided an opportunity to be heard in person by the Board of Directors of the Corporation
(with the assistance of the Executive’s counsel if the Executive so desires).
No act, nor failure to act, on the Executive’s part, shall be considered “intentional”
unless the Executive has acted, or failed to act, with a lack of good faith and with a lack of
reasonable belief that the Executive’s action or failure to act was in the best interest of the
Corporation and the Employer. Notwithstanding anything contained in this Agreement to the
contrary, no failure to perform by the Executive after a Notice of Termination is given to the
Employer by the Executive shall constitute Cause for purposes of this Agreement.
17.6 Change in Control. A “Change in Control” shall mean the occurrence of any of
the following:
- 11-
(a) An acquisition (other than directly from the Corporation) of any voting securities of
the Corporation (the “Voting Securities”) by any “Person” (as the term “person” is
used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), immediately after which such Person has “Beneficial Ownership” (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more than twenty-five percent (25%) of
(1) the then-outstanding shares of common stock of the Corporation (or any other securities into
which such shares of common stock are changed or for which such shares of common stock are
exchanged) (the “Shares”) or (2) the combined voting power of the Corporation’s then-outstanding
Voting Securities; provided, however, that in determining whether a Change in Control has occurred
pursuant to this paragraph (a), the acquisition of Shares or Voting Securities in a “Non-Control
Acquisition” (as hereinafter defined) shall not constitute 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 Corporation or (B) any corporation or other Person the majority
of the voting power, voting equity securities or equity interest of which is owned, directly or
indirectly, by the Corporation (for purposes of this definition, a “Related Entity”), (ii)
the Corporation or any Related Entity, or (iii) any Person in connection with a “Non-Control
Transaction” (as hereinafter defined); or
(b) The individuals who, as of the date hereof, are members of the board of directors of the
Corporation (the “Incumbent Board”), cease for any reason to constitute at least a majority
of the members of the board of directors of the Corporation or, following a Merger (as hereinafter
defined), the board of directors 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 is one or more than one Parent
Corporation, the ultimate Parent Corporation; provided, however, that, if the election, or
nomination for election by the Corporation’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
the Plan, be considered a member of the Incumbent Board; and 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 an actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the board of directors of the Corporation (a “Proxy Contest”),
including by reason of any agreement intended to avoid or settle any Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization (1) with or into the Corporation or (2) in
which securities of the Corporation are issued (a “Merger”), unless such Merger is a
“Non-Control Transaction.” A “Non-Control Transaction” shall mean a Merger in which:
(A) the stockholders of the Corporation 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 Surviving Corporation, if there is no
Parent Corporation or (y) if there is one or more than one Parent Corporation, the ultimate
Parent Corporation;
- 12-
(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 is one or more than one Parent Corporation, the ultimate Parent
Corporation; and
(C) no Person other than (1) the Corporation, (2) any Related Entity, or (3) any employee
benefit plan (or any trust forming a part thereof) that, immediately prior to the Merger, was
maintained by the Corporation or any Related Entity, or (4) any Person who, immediately prior to
the Merger had Beneficial Ownership of twenty-five percent (25%) or more of the then outstanding
Shares or Voting Securities, has Beneficial Ownership, directly or indirectly, of twenty-five
percent (25%) or more of the combined voting power of the outstanding voting securities or common
stock of (x) 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 a Parent Corporation, or (y) if there is one or more than one
Parent Corporation, the ultimate Parent Corporation; provided, however, that any Person described
in clause (4) of this subsection (C) may not, immediately following the Merger, Beneficially Own
more than forty percent (40%) of the combined voting power of the outstanding voting securities
of the Surviving Corporation or the Parent Corporation, as applicable, for the Merger to
constitute a Non-Control Transaction; or
(ii) A complete liquidation or dissolution of the Corporation; or
(iii) A Major Asset Disposition.
For purposes of the foregoing definition, the term “Major Asset Disposition” means
the sale or other disposition in one transaction or a series of related transactions (other than
a transfer to a Related Entity or a transfer under conditions that would constitute a Non-Control
Transaction, with the disposition of assets being regarded as a Merger) of 50% or more of the
assets of the Corporation and its subsidiaries on a consolidated basis; and any specified
percentage or portion of the assets of the Corporation shall be based on the total gross fair
market value, as determined by a majority of the members of the Incumbent Board without regard to
any associated liabilities. For the avoidance of doubt, the distribution to the Corporation’s
stockholders of the stock of a Related Entity or any other assets that constitute 50% or more of
the assets of the Corporation and its subsidiaries on a consolidated basis (determined as
aforesaid) shall constitute a Major Asset Disposition (whether or not such distribution
constitutes a Non-Control Transaction).
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
- 13-
Securities by the Corporation 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 Corporation and, after such share acquisition by the Corporation, the Subject Person
becomes the Beneficial Owner of any additional Shares or Voting Securities and such Beneficial
Ownership increases the percentage of the then outstanding Shares or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.
17.7. Employer and Corporation. For purposes of this Agreement, all references to
the Employer and the Corporation shall include their respective Successors and Assigns.
17.8. Disability. For purposes of this Agreement, “Disability” shall mean a
physical or mental infirmity which impairs the Executive’s ability to substantially perform the
Executive’s duties with the Employer for six (6) consecutive months, and within the time period
set forth in a Notice of Termination given to the Executive (which time period shall not be less
than thirty (30) days), the Executive shall not have returned to full-time performance of the
Executive’s duties; provided, however, that if the Employer’s Long Term Disability Plan, or any
successor plan (the “Disability Plan”), is then in effect, the Executive shall not be deemed
disabled for purposes of this Agreement unless the Executive is also eligible for “Total
Disability” (as defined in the Disability Plan) benefits (or similar benefits in the event of a
successor plan) under the Disability Plan.
17.9. Good Reason.
(a) For purposes of this Agreement, “Good Reason” shall mean the occurrence after a
Change in Control of any of the following events or conditions:
(1) a change in the Executive’s status, title, position or responsibilities (including
reporting responsibilities) which, in the Executive’s reasonable judgment, represents an adverse
change from the Executive’s status, title, position or responsibilities as in effect immediately
prior thereto; the assignment to the Executive of any duties or responsibilities which, in the
Executive’s reasonable judgment, are inconsistent with the Executive’s status, title, position or
responsibilities; or any removal of the Executive from or failure to reappoint or reelect the
Executive to any of such offices or positions, except in connection with the termination of the
Executive’s employment for Disability, Cause, as a result of the Executive’s death or by the
Executive other than for Good Reason;
(2) a reduction in the Executive’s annual base salary below the Base Amount;
(3) the relocation of the offices of the Employer to a location more than twenty-five (25)
miles from the location of such offices immediately prior to such Change in Control, or the
Employer’s or the Corporation’s requiring the Executive to be based anywhere other than such
offices, except to the extent the Executive was not previously assigned to a principal location
and except for required travel on the Employer’s or the Corporation’s business to an extent
substantially consistent with the Executive’s business travel obligations at the time of the
Change in Control;
- 14-
(4) the failure by the Employer or the Corporation to pay to the Executive any portion of
the Executive’s current compensation or to pay to the Executive any portion of an installment of
deferred compensation under any deferred compensation program of the Employer or the Corporation
in which the Executive participated, within seven (7) days of the date such compensation is due;
(5) the failure by the Employer or the Corporation to (A) continue in effect (without
reduction in benefit level, and/or reward opportunities) any material compensation or employee
benefit plan in which the Executive was participating immediately prior to the Change in Control,
unless a substitute or replacement plan has been implemented which provides substantially
identical compensation or benefits to the Executive or (B) provide the Executive with
compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under each other compensation or employee benefit
plan, program and practice in which the Executive was participating immediately prior to the
Change in Control;
(6) the failure of the Employer or the Corporation to obtain from its Successors or Assigns
the express assumption and agreements required under Section 13 hereof; or
(7) any purported termination of the Executive’s employment by the Employer which is not
effected pursuant to a Notice of Termination satisfying the terms set forth in the definition of
Notice of Termination (and, if applicable, the terms set forth in the definition of Cause).
(b) Any event or condition (1) described in Section 17.9(a)(1), (2), (3), (4), (6) or (7)
which occurs at any time prior to the date of a Change in Control and (A) which occurred after
the Employer entered into a definitive agreement, the consummation of which would constitute a
Change in Control or (B) which the Executive reasonably demonstrates was at the request of a
Third Party who has indicated an intention or has taken steps reasonably calculated to effect a
Change in Control, shall constitute Good Reason for purposes of this Agreement, notwithstanding
that it occurred prior to a Change in Control.
17.10. Incentive Plan. For purposes of this Agreement, “Incentive Plan”
shall mean the 2004 Cash Incentive Plan, or any successor annual incentive plan, maintained by
the Employer or any other Affiliate.
17.11. Notice of Termination. For purposes of this Agreement, following a Change in
Control, “Notice of Termination” shall mean a written notice of termination of the
Executive’s employment, signed by the Executive if to the Employer or by a duly authorized
officer of the Employer if to the Executive, which indicates the specific termination provision
in this Agreement, if any, relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment under the
provision so indicated.
- 15-
17.12. Interest Rate. Without limiting the rights of the Executive at law or in
equity, if the Employer fails to make any payment or provide any benefit required to be made or
provided hereunder on a timely basis, the Employer will pay interest on the amount or value
thereof at an annualized rate of interest equal to the so-called composite “prime rate” as quoted
from time to time during the relevant period in the Southwest Edition of The Wall Street
Journal. Such interest will be payable as it accrues on demand. Any change in such prime
rate will be effective on and as of the date of such change.
17.13. Successors and Assigns. For purposes of this Agreement, “Successors and
Assigns” shall mean, with respect to the Employer or the Corporation, a corporation or other
entity acquiring all or substantially all the assets and business of the Employer or the
Corporation, as the case may be (including this Agreement) whether by operation of law or
otherwise.
17.14. Termination Date.
(a) For purposes of this Agreement, “Termination Date” shall mean (i) in the case of
the Executive’s death, the date of death, (ii) if the Executive’s employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided that the Executive
shall not have returned to the performance of the Executive’s duties on a full-time basis during
such thirty (30) day period) and (iii) if the Executive’s employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of a termination for
Cause, shall not be less than thirty (30) days and, in the case of a termination for Good Reason,
shall not be more than sixty (60) days, from the date such Notice of Termination is given);
provided, however, that if within thirty (30) days after a Notice of Termination by the Employer
for Cause or a Notice of Termination by the Executive for Good Reason is given, the party
receiving such Notice of Termination in good faith notifies the other party that a dispute exists
concerning the basis for the termination, the provisions of paragraph (b) shall apply.
(b) (i) If the Executive gives the Employer Notice of Termination for Good Reason and the
Employer disputes the basis for the termination, the Termination Date shall be the date on which
the dispute is finally determined, either by mutual written agreement of the parties, or by
arbitration as provided in Section 11, and the Employer shall continue to pay the Executive the
Executive’s Base Amount and continue the Executive as a participant in all
compensation, incentive, bonus, pension, profit sharing, medical, hospitalization, dental,
life insurance and disability benefit plans in which the Executive was participating when the
notice giving rise to the dispute was given, until such Termination Date, provided that if the
Executive continues to perform the Executive’s duties with the Employer during the pendency of
such dispute, the Executive shall not be obligated to repay to the Employer any amounts paid or
benefits provided pursuant to this Section 17.14(b), and provided, further, that if the Executive
ceased performing the Executive’s duties with the Employer during the pendency of such dispute,
and the dispute is resolved in favor of the Executive, any amount owed to the Executive pursuant
to Sections 2 and 3 of this Agreement shall be reduced to the extent of any amount the Executive
received pursuant to this Section 17.14(b) during the pendency of such dispute; and (ii) if the
Employer gives the Executive Notice of Termination for Cause and the Executive disputes the basis
for the termination, the Termination Date shall be as determined pursuant to
- 16-
Section 17.14(a) and
during the pendency of such dispute the Executive shall not be entitled to payment of the
Executive’s Base Amount from the Employer and, except as required by law, the Executive’s
participation in the Employer’s benefit plans and programs shall be discontinued.
[signature page follows]
- 17-
IN WITNESS WHEREOF, the Corporation and the Employer have caused this Agreement to be
executed by their duly authorized officers and the Executive has executed this Agreement as of
the day and year first above written.
| Corporation: | ||||||
| COMMUNITY HEALTH SYSTEMS, INC. | ||||||
| By: | ||||||
| and Chief Executive Officer | ||||||
| Employer: | ||||||
| COMMUNITY HEALTH SYSTEMS PROFESSIONAL SERVICES CORPORATION |
||||||
| By: | ||||||
| Secretary and General Counsel | ||||||
| Executive: | ||||||
| By: | ||||||
- 18-
Exhibit A
WAIVER AND RELEASE OF CLAIMS
1. General Release. In consideration of the payments and benefits to be made under the
Change in Control Severance Agreement, dated as of , 2008, to which Community Health
Systems, Inc. (the “Corporation”), Community Health Systems Professional Services
Corporation (the “Employer”), and (the “Executive”) are parties
(the “Agreement”), the Executive, with the intention of binding the Executive and the
Executive’s heirs, executors, administrators and assigns, does hereby release, remise, acquit and
forever discharge the Corporation, the Employer and the parents, subsidiaries and affiliates of
each of them (collectively, the “Corporation Affiliated Group”), their present and former
officers, directors, executives, agents, shareholders, attorneys, employees and employee benefits
plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each of the
foregoing (collectively, the “Corporation Released Parties”), of and from any and all
claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of
money, accounts, financial obligations, suits, expenses, attorneys’ fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent,
unliquidated or otherwise and whether now known, unknown, suspected or unsuspected which the
Executive, individually or as a member of a class, now has, owns or holds, or has at any time
heretofore had, owned or held, against any Corporation Released Party (an “Action”) arising
out of or in connection with the Executive’s service as an employee, officer and/or director to any
member of the Corporation Affiliated Group (or the predecessors thereof), including (i) the
termination of such service in any such capacity, (ii) for severance or vacation benefits, unpaid
wages, salary or incentive payments, (iii) for breach of contract, wrongful discharge, impairment
of economic opportunity, defamation, intentional infliction of emotional harm or other tort and
(iv) for any violation of applicable state and local labor and employment laws (including, without
limitation, all laws concerning harassment, discrimination, retaliation and other unlawful or
unfair labor and employment practices), any and all Actions based on the Employee Retirement Income
Security Act of 1974 (“ERISA”), and any and all Actions arising under the civil rights laws
of any federal, state or local jurisdiction, including, without limitation, Title VII of the Civil
Rights Act of 1964 (“Title VII”), the Americans with Disabilities Act (“ADA”),
Sections 503 and 504 of the Rehabilitation Act, the Family and Medical Leave Act and the Age
Discrimination in Employment Act (“ADEA”), excepting only:
(a) rights of the Executive under this Waiver and Release of Claims and under the
Agreement;
(b) rights of the Executive relating to equity awards held by the Executive as of the
Executive’s date of termination;
(c) the right of the Executive to receive benefits required to be paid in accordance
with applicable law;
(d) rights to indemnification the Executive may have (i) under applicable corporate
law, (ii) under the by-laws or certificate of incorporation of any Corporation Released
Party or (iii) as an insured under any director’s and officer’s liability insurance policy
now or previously in force;
- 19-
(e) claims (i) for benefits under any health, disability, retirement, supplemental
retirement, deferred compensation, life insurance or other, similar employee benefit plan
or arrangement of the Corporation Affiliated Group and (ii) for earned but unused vacation
pay through the date of termination in accordance with applicable policy of the
Corporation Affiliated Group; and
(f) claims for the reimbursement of unreimbursed business expenses incurred prior to
the date of termination pursuant to applicable policy of the Corporation Affiliated Group.
2. No Admissions, Complaints or Other Claims. The Executive acknowledges and agrees that
this Waiver and Release of Claims is not to be construed in any way as an admission of any
liability whatsoever by any Corporation Released Party, any such liability being expressly denied.
The Executive also acknowledges and agrees that the Executive has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any Actions against any
Corporation Released Party with any governmental agency, court or tribunal.
3. Application to all Forms of Relief. This Waiver and Release of Claims applies to any
relief no matter how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages for pain or suffering, costs and
attorney’s fees and expenses.
4. Specific Waiver. The Executive specifically acknowledges that the Executive’s
acceptance of the terms of this Waiver and Release of Claims is, among other things, a specific
waiver of any and all Actions under Title VII, ADEA, ADA and any state or local law or regulation
in respect of discrimination of any kind; provided, however, that nothing herein
shall be deemed, nor does anything herein purport, to be a waiver of any right or Action which by
law the Executive is not permitted to waive.
5. Voluntariness. The Executive acknowledges and agrees that the Executive is relying
solely upon the Executive’s own judgment; that the Executive is over eighteen years of age and is
legally competent to sign this Waiver and Release of Claims; that the Executive is signing this
Waiver and Release of Claims of the Executive’s own free will; that the Executive has read and
understood the Waiver and Release of Claims before signing it; and that the Executive is signing
this Waiver and Release of Claims in exchange for consideration that the Executive believes is
satisfactory and adequate. The Executive also acknowledges and agrees that the Executive has been
informed of the right to consult with legal counsel and has been encouraged to do so.
6. Complete Agreement/Severability. This Waiver and Release of Claims constitutes the
complete and final agreement between the parties and supersedes and replaces all prior or
contemporaneous agreements, negotiations, or discussions relating to the subject matter of this
Waiver and Release of Claims. All provisions and portions of this Waiver and Release of Claims are
severable. If any provision or portion of this Waiver and Release of Claims or the application of
any provision or portion of the Waiver and Release of Claims shall be determined to be invalid or
unenforceable to any extent or for any reason, all other provisions and portions of this Waiver
- 20-
and Release of Claims shall remain in full force and shall continue to be enforceable to the
fullest and greatest extent permitted by law.
7. Acceptance and Revocability. The Executive acknowledges that the Executive has been
given a period of 21 days within which to consider this Waiver and Release of Claims, unless
applicable law requires a longer period, in which case the Executive shall be advised of such
longer period and such longer period shall apply. The Executive may accept this Waiver and Release
of Claims at any time within this period of time by signing the Waiver and Release of Claims and
returning it to the Employer. This Waiver and Release of Claims shall not become effective or
enforceable until seven calendar days after the Executive signs it. The Executive may revoke the
Executive’s acceptance of this Waiver and Release of Claims at any time within that seven calendar
day period by sending written notice to the Employer. Such notice must be received by the Employer
within the seven calendar day period in order to be effective and, if so received, would void this
Waiver and Release of Claims for all purposes.
8. Governing Law. Except for issues or matters as to which federal law is applicable, this
Waiver and Release of Claims shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware without giving effect to the conflicts of law principles thereof.
| Executive: | ||||
- 21-
