-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MxqAiKOYTG9UzFQfyRg2cxkFNtvPSkt1jputQFIGTxESZkyGUQK1qBYkITxXri+5 4egjQLFodMa+pc1czyk/kg== 0000950123-10-062391.txt : 20100629 0000950123-10-062391.hdr.sgml : 20100629 20100629172213 ACCESSION NUMBER: 0000950123-10-062391 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100629 DATE AS OF CHANGE: 20100629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMUNITY HEALTH SYSTEMS INC CENTRAL INDEX KEY: 0001108109 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-GENERAL MEDICAL & SURGICAL HOSPITALS, NEC [8062] IRS NUMBER: 133893191 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15925 FILM NUMBER: 10924812 BUSINESS ADDRESS: STREET 1: 4000 MERIDIAN BOULEVARD CITY: FRANKLIN STATE: TN ZIP: 37067 BUSINESS PHONE: 615-465-7000 MAIL ADDRESS: STREET 1: 4000 MERIDIAN BOULEVARD CITY: FRANKLIN STATE: TN ZIP: 37067 FORMER COMPANY: FORMER CONFORMED NAME: COMMUNITY HEALTH SYSTEMS INC/ DATE OF NAME CHANGE: 20000229 11-K 1 g23916e11vk.htm FORM 11-K e11vk
FORM 11-K — For Annual Reports of Employee Stock Purchase, Savings and Similar Plans
Pursuant to Section 15(d) of the Securities Exchange Act of 1934
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
     
þ   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the year ended December 31, 2009
OR
     
o   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from                      to                     
Commission file number 001-15925
CHS/COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
(Formerly known as the Community Health Systems, Inc. 401(k) Plan)
CHS/COMMUNITY HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
 
     
Delaware   13-3893191
(State or other jurisdiction of incorporation or   (I.R.S. Employer
organization)   Identification Number)
     
4000 Meridian Boulevard    
Franklin, Tennessee   37067
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (615) 465-7000
 
 

 


 

CHS/COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
TABLE OF CONTENTS
         
    Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACOUNTING FIRM
    1  
 
       
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008:
       
 
       
Statements of Net Assets Available for Benefits
    2  
 
       
Statements of Changes in Net Assets Available for Benefits
    3  
 
       
Notes to Financial Statements
    4  
 
       
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2009
       
 
       
Form 5500, Schedule H, Part IV, Line 4i Schedule of Assets (Held at End of Year)
    16  
 
       
SIGNATURES
    18  
 
       
EXHIBIT INDEX
    19  
Schedules other than that listed above have been omitted due to the absence of the conditions under which they are required.

 


 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and the Retirement Committee of
CHS/Community Health Systems, Inc. 401(k) Plan
(formerly known as the Community Health Systems, Inc. 401(k) Plan)
Franklin, Tennessee
We have audited the accompanying statements of net assets available for benefits of the CHS/Community Health Systems, Inc. 401(k) Plan (the “Plan”) (formerly known as the Community Health Systems, Inc. 401(k) Plan) as of December 31, 2009 and 2008, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2009 and 2008, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2009 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This schedule is the responsibility of the Plan’s management. Such schedule has been subjected to the auditing procedures applied in our audit of the basic 2009 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
Nashville, Tennessee
June 29, 2010

 


 

CHS/COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2009 AND 2008
                 
    2009     2008  
ASSETS
               
Investments at fair value:
               
Participant-directed investments
  $ 28,762,098     $ 249,281,311  
Participant notes receivable
    501,418       10,235,468  
 
           
Total investments
    29,263,516       259,516,779  
 
           
 
               
Receivables:
               
Participant contributions
    120,044       2,050,965  
Employer matching contribution
    1,022,857       15,238,572  
 
           
Total receivables
    1,142,901       17,289,537  
 
           
 
               
TOTAL ASSETS
    30,406,417       276,806,316  
 
           
 
               
LIABILITIES
               
Forfeitures in suspense
          275,160  
Administrative fees
          13,173  
 
           
 
               
TOTAL LIABILITIES
          288,333  
 
           
 
               
NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE
    30,406,417       276,517,983  
 
               
Adjustments from fair value to contract value for fully benefit - responsive stable value funds
    (125,374 )     3,120,168  
 
           
 
               
NET ASSETS AVAILABLE FOR BENEFITS
  $ 30,281,043     $ 279,638,151  
 
           
See notes to financial statements

- 2 -


 

CHS/COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2009 AND 2008
                 
    2009     2008  
Additions to net assets attributed to:
               
Investment income (loss):
               
Appreciation (depreciation) in fair value of investments
  $ 6,142,415     $ (131,106,228 )
Interest
    39,246       626,708  
Dividends
    713,662       6,087,143  
 
           
Net investment income (loss)
    6,895,323       (124,392,377 )
 
           
 
               
Contributions:
               
Participant
    3,965,497       56,600,728  
Rollover
    2,473,178       12,525,439  
Employer matching
    2,386,025       15,378,395  
 
           
Total contributions
    8,824,700       84,504,562  
 
           
 
               
Transfers in to plan
    437,491,304        
 
           
 
               
Net additions
    453,211,327       (39,887,815 )
 
           
 
               
Deductions from net assets attributed to:
               
Benefits paid to participants
    3,849,612       33,425,751  
Transfers out of plan
    698,266,321       9,933,060  
Forfeitures in suspense
          277,617  
Participant paid administrative fees
    452,502       237,107  
 
           
 
               
Total deductions
    702,568,435       43,873,535  
 
           
 
               
Net decrease
    (249,357,108 )     (83,761,350 )
 
               
Net assets available for benefits:
               
Beginning of year
    279,638,151       363,399,501  
 
           
End of year
  $ 30,281,043     $ 279,638,151  
 
           
See notes to financial statements

- 3 -


 

CHS/COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
1. DESCRIPTION OF THE PLAN
General. CHS/Community Health Systems, Inc., a Delaware corporation (the “Company”) is the sponsor of the “CHS/Community Health Systems, Inc. 401(k) Plan” (the “Plan”). The Plan, formerly named the Community Health Systems, Inc. 401(k) Plan, was initially adopted in 1987, and operates pursuant to an amended and restated Plan document dated as of January 1, 2009, and subsequent amendments. The Company is a wholly-owned subsidiary of Community Health Systems, Inc., a Delaware corporation whose stock is publicly traded on the NYSE under the trading symbol “CYH” (hereinafter, the “Parent”). The Plan has been adopted by the Company, as well as certain wholly-owned and majority-owned subsidiaries that have employees. The Plan and related trust are maintained for the exclusive benefit of the Plan participants, and no part of the trust may ever revert to the Company, except that forfeitures of any unvested portion of a Participant’s Matching Contribution Account may offset future Company contributions or pay for Plan expenses. Participants should refer to the Plan for a complete description of the Plan.
Effective July 25, 2007, the Company acquired Triad Hospitals, Inc. (“Triad”). Through December 31, 2008, the Company maintained certain defined contribution plans established by Triad for its employees, and those employees were not eligible to participate in this Plan. Effective January 1, 2009, the Company (a) amended and restated the Plan, and (b) merged the Triad Hospitals, Inc. Retirement Savings Plan (“Triad RSP”), the Abilene Physicians Group 401(k) Plan and Trust, and the Regional Employee Assistance Program 401(k) Plan with and into the Plan. Approximately $437.5 million of participant accounts were transferred to the Plan in connection with such merger. Also effective January 1, 2009, the Company established the CHS Retirement Savings Plan (“CHS RSP”), and approximately $698.3 million of the accounts of the participants in the Plan who are participants in the new CHS RSP were transferred to the CHS RSP. As a result of the aforementioned plan amendments and mergers, beginning as of January 1, 2009, former Triad employees became eligible to participate in the CHS RSP.
The Plan continues as a 401(k) plan. However, since the January 1, 2009 creation of the CHS RSP, the eligibility for the Plan is limited to employees of certain subsidiaries of the Company, including primarily certain employees whose employment is governed by a collective bargaining agreement or who are otherwise represented by a union bargaining unit. The employer contributions to the Plan vary by facility. The Plan is essentially designed to be an “umbrella” plan that will accommodate various plan designs, including those with no matching contributions, those with matching contributions, and those with nonelective profit-sharing contributions.
Participation in the Plan is generally available to employees after completion of six months of eligible service, as defined in the Plan document, provided the employee has reached his or her 21st birthday. Eligible service generally includes all previous service with an employer of an acquired facility. Additionally, any employee who was a participant in the Plan prior to the January 1, 2009 amendment and restatement shall continue to be eligible to participate in the Plan.
Russell County Medical Center was divested on February 1, 2008 and ceased participation in the Plan on that date.
Mineral Area Regional Medical Center, Parkway Medical Center, Hartselle Medical Center, Woodland Community Hospital and White County Community Hospital were divested on March 1, 2008 and ceased participation in the Plan on that date.

- 4 -


 

Deaconess Medical Center and Valley Hospital and Medical Center (collectively, “Spokane”) were acquired by a subsidiary of the Company on October 1, 2008 and commenced participation in the Plan on that date. Effective as of January 1, 2009, the Company established the CHS Spokane 401(k) Plan (the “Spokane Plan”) for the exclusive benefit of certain Spokane employees covered by a collective bargaining contract and their beneficiaries. The accounts of participants in the Plan who are participants in the Spokane Plan were transferred to the Spokane Plan in 2009.
Wilkes-Barre General Hospital was acquired by a subsidiary of the Company on April 30, 2009 and commenced participation in the Plan on May 1, 2009.
All capitalized terms not defined herein have the definition as set forth in the Plan document.
Administration. The Plan is administered by the Company’s Retirement Committee of not less than three persons, all appointed by the Company’s Board of Directors. The Retirement Committee is responsible for carrying out the provisions of the Plan. Principal Trust Company was appointed by the Company as the Trustee for the Plan effective as of January 1, 2009. For periods prior to January 1, 2009, the appointed Trustee was Scudder Trust Company (“Scudder”). The Trustee holds, invests and administers the trust assets and contributions of the Plan.
Contributions. Eligible employees electing to participate in the Plan may make contributions by payroll deductions up to 50% of their Compensation to the extent contributions do not exceed Internal Revenue Code (“Code”) imposed limitations on contributions ($16,500 for 2009 Plan year and $15,500 for 2008 Plan year). Participants who attained age 50 by the close of the calendar year were eligible to make catch-up contributions up to $5,500 for 2009 and $5,000 for 2008. Employee contributions beyond specific Plan thresholds are returned to the participants. The employer may make an Employer Matching Contribution to the Plan; however, any salary deferrals that are catch-up contributions will not be matched. In the year of a participant’s death or disability, the participant or designated beneficiary will share in any Employer Matching Contribution for the year regardless of the amount of service completed during the Plan Year. Employer Matching Contribution percentages are determined by each employer and vary by location within the Plan. In addition to the standard Employer Matching Contribution, an additional contribution is made on behalf of certain participants at McKenzie-Willamette (Springfield, OR) based upon each of those participants’ years of service and dates of employment. The Employer Matching Contributions and discretionary contributions (which are made in cash) deposited into the participants’ accounts were of $2,386,025 for 2009 and $15,238,572 for 2008.
Participant Accounts. Individual accounts are maintained for each Plan participant. A participant’s account balance generally represents the sum of all accounts being maintained for the participant, which represents the participant’s total interest in the Plan. To the extent applicable, a participant may have any or all of the following notational accounts:
     
“After-Tax Voluntary Contribution Account”
  The value of any after-tax employee contributions voluntarily made to the Plan by the participant.
 
   
“Elective Deferral Account”
  The value of the employee’s total interest in the Plan resulting from elective deferrals. Unless specifically stated otherwise, a participant’s Elective Deferral Account will refer to both the Pre-Tax Elective Deferral Account and the Roth Elective Deferral Account.

- 5 -


 

     
“Matching Contribution Account”
  The value of the employee’s total interest in the Plan resulting from any employer contributions to the Plan on account of a Participant’s elective deferrals.
 
   
“Nonelective Contribution Account”
  The value of the employee’s total interest in the Plan resulting from any employer contribution to the Plan other than a participant’s elective deferrals, Employer Matching Contributions, Qualified Matching Contributions, and Qualified Nonelective Contributions.
 
   
“Qualified Matching Contribution Account”
  The value of the employee’s total interest in the Plan resulting from Qualified Matching Contributions.
 
   
“Qualified Nonelective Contribution Account”
  The value of the employee’s total interest in the Plan resulting from Qualified Nonelective Contributions.
 
   
“Rollover Account”
  The value of the employee’s total interest in the Plan resulting from amounts that are rolled over from another plan or an Individual Retirement Account.
 
   
“Transfer Account”
  The value of the employee’s total interest in the Plan resulting from amounts that are transferred to this Plan from another plan pursuant to a direct plan-to-plan transfer.
A participant’s account balance may also consist of any other account, including an overlapping account or sub-account, necessary for the administration of the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Amendments. The First Amendment to the Plan was effective principally on January 1, 2009 to change the name of the plan from Community Health Systems, Inc. 401(k) Plan to CHS/Community Health Systems, Inc. 401(k) Plan. Additionally, the Plan was amended to reflect the eligibility schedule for collective bargaining unit employees at McKenzie-Willamette Medical Center, to clarify the timing of the Employer Matching Contribution to be at the employer’s discretion, and to provide for a variety of legislative updates including delaying the Required Minimum Distributions for 2009.
The Second Amendment to the Plan was effective principally on May 1, 2009 to modify the definition of "Eligible Employees" to include employees of Wilkes-Barre Hospital Company, LLC whose employment is governed by a collective bargaining agreement. The Plan was also amended to provide for the inclusion of an Employer Matching Contribution on behalf of those participants who are employed by Wilkes-Barre Hospital Company, LLC; Pottstown Hospital Company, LLC and Pottstown Imaging Company, LLC. Furthermore, the Second Amendment provided for the termination of the discretionary Employer Matching Contribution as of December 31, 2009 for each physician employee of Pottstown Hospital Company, LLC, who is neither a hospital-based physician nor a highly compensated employee. Finally, the Second Amendment modified the definition of the Nonelective Contribution for employees of McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC whose employment is governed by a collective bargaining agreement.

- 6 -


 

Vesting. The balance in the participants’ After-Tax Voluntary Contribution and Rollover Accounts is at all times fully vested and non-forfeitable. A participant becomes 20% vested in the Matching Contributions and Nonelective Contributions Accounts after one year of service and an additional 20% for each year of service thereafter until fully vested. A participant is credited generally with one year of service if the participant works 500 or more hours during the Plan Year. Termination of participation in the Plan prior to the scheduled vesting period results in forfeiture of the unvested portion of a participant’s account balance. These forfeitures are applied to pay Plan expenses or reduce the Employer Matching Contributions made to the Plan in future periods. Forfeitures of $167,329 and $275,160 were applied against the Employer Matching Contributions for the years ended December 31, 2009 and 2008, respectively.
Payment of Benefits. A participant or designated beneficiary is entitled to a distribution of the total value of the participant’s account balance upon retirement at age 65, becoming disabled or death. Upon termination of employment before the participant’s 65th birthday for reasons other than death or disability, the participant is entitled to receive only the vested portion of his or her account balance. While employed, participants may borrow from their accounts in the form of a loan or can withdraw from their accounts in the event of financial hardship. Such hardship withdrawals are limited to the value of the Pre-Tax Elective Deferral and Roth Elective Deferral Accounts. The Administrator requires a participant requesting a hardship withdrawal to demonstrate an immediate and heavy financial need which cannot be reasonably satisfied from other resources available to the participant. In addition, participants may make certain other withdrawals while employed in accordance with the Plan.
Funding. The Company generally transfers some or all of the Employer Matching Contribution to the Trustee after the close of the Plan Year and prior to the time it files its tax return (with extensions).
Investments Options. Contributions to the Plan are invested by the Trustee according to the participant’s instruction in one or a combination of several fund options. Participants may change their investment election or initiate transfers between funds by giving notice to the Trustee.
Plan Termination. Although it has not expressed any intent to do so, the Company’s Board of Directors has the right to discontinue its contributions at any time and to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974. In the event of Plan termination, participants will become 100% vested in their respective accounts.
Participant Notes Receivable. Participants may borrow from their accounts up to the lesser of $50,000 or 50% of their account balance. All loans must be adequately secured, generally by the participant’s vested interest in the Plan, and will bear a reasonable rate of fixed interest as determined by the Administrator at the time of loan origination. Loan terms may not exceed five years; however, if the loan is for the purchase of a participant’s primary residence, the Administrator may permit a longer repayment term. Principal and interest is paid ratably over the term of the loan through payroll deductions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting. The Plan’s financial statements are prepared in accordance with accounting standards generally accepted in the United States of America.
Use of Estimates and Risks and Uncertainties. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein and disclosures of contingent assets and liabilities. Actual results could differ from these estimates. The Plan utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is

- 7 -


 

reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
Valuation of Investments and Income Recognition. The Plan’s investments are stated at fair value. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Securities traded on the national securities exchange are valued at the last reported sales price on the last business day of the Plan year. Money market funds are stated at amortized cost, which approximates fair value. Mutual funds can be held as individual plan assets or as part of a pooled separate account. Mutual funds have publicly available prices that are quoted daily. In addition, underlying asset information is publicly available for each fund. Pooled Separate Accounts (PSA) are made up of a wide variety of underlying investments such as equities, bonds, and mutual funds. The Net Asset Value (NAV) of a PSA is based on the market value of its underlying investments. The PSA NAV is not a publicly-quoted price in an active market. Participant loans are valued at their outstanding balance, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Dividends are recorded on the ex-dividend date.
The CHS Stable Value Fund and Scudder Stable Value Fund contain contracts which are fully benefit-responsive. The statements of net assets available for benefits present investment contracts at fair value, which is the NAV of the contracts’ underlying investments. The fair value of the investment contracts is based on the NAV of its underlying investments, while contract value is principal balance plus accrued interest. The statements of net assets available for benefits additionally include a line item showing an adjustment for fully benefit-responsive contracts from fair value to contract value. Activity of the CHS Stable Value Fund and Scudder Stable Value Fund in the statements of changes in net assets available for benefits is presented on a contract value basis.
Prior to the January 1, 2009 Plan amendment and restatement, participant investments in the Company’s stock fund were held in a unitized stock portfolio. Effective with the Plan amendment and restatement, participant investments in the Company’s stock fund are valued on a per-share basis. Such stock is reported at fair value.
Expenses. The plan permits the payment of Plan expenses to be made from the Plan’s assets. If expenses are paid using the Plan’s assets, then the expenses will generally be allocated among the accounts of all participants in the Plan. These expenses will be allocated either proportionately based on the value of the account balances or as an equal dollar amount based on the number of participants in the Plan. The method of allocating the expenses depends on the nature of the expense itself. Certain administrative or recordkeeping expenses would typically be allocated proportionately to each Participant. There are certain other expenses that may be paid from an individual participant’s account. These are expenses that are specifically incurred by, or attributable to a particular participant. Participants paid an aggregate of $452,502 and $316,415 in administrative costs to the Trustee in 2009 and 2008, respectively. All other expenses incurred in the administration of the Plan are borne by the Company. The Company paid $110,870 and $298,135 for Plan expenses in 2009 and 2008, respectively.
Payment of Benefits. Benefits are recorded when paid.
New Accounting Pronouncement. In May 2009, the FASB issued ASC 855 (originally issued as FASB Statement No. 165, Subsequent Events) to establish general standards of accounting for and disclosing events that occur after the balance sheet date, but prior to the issues of financial statements. ASC 855 provides guidance on when financial statements should be adjusted for subsequent events and requires companies to disclose subsequent events; it requires certain companies to disclose the date through which subsequent events have been evaluated. ASC 855 is effective for reporting periods ending after June 15, 2009.

- 8 -


 

The FASB’s Accounting Standards Codification (ASC) became effective July 1, 2009. At that date, the ASC became FASB’s official source of authoritative U.S. generally accepted accounting principles applicable to all public and nonpublic nongovernmental entities, superseding existing guidance issued by the FASB, the American Institute of Certified Public Accountants, the Emerging Issues Task Force and other related literature.
In 2009, FASB Staff Position 157-4, Disclosures Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP), was issued and later codified into ASC 820, which expanded disclosures and required that major category for debt and equity securities in the fair value hierarchy table be determined on the basis of nature and risks of the investments. See Note 3 for the Plan’s disclosures related to this standard.
In September 2009, the FASB issued ASU No. 2009-12, Fair Value Measurements and Disclosures: Investments in Certain Entities That Calculate Net Asset per Share (or Its Equivalent) (“ASU No. 2009-12”), which amended ASC Subtopic 820-10, Fair Value Measurements and Disclosures — Overall. ASU No. 2009-12 is effective for the first reporting period ending after December 15, 2009. ASU No. 2009-12 expands the required disclosures for certain investments with a reported net asset value (NAV). ASU No. 2009-12 permits, as a practical expedient, an entity holding investments in certain entities that calculate net asset value per share or its equivalent for which the fair value is not readily determinable, to measure the fair value of such investments on the basis of that net asset value per share or its equivalent without adjustment. The ASU requires enhanced disclosures about the nature and risks of investments within its scope. Such disclosures include the nature of any restrictions on an investor’s ability to redeem its investments at the measurement date, any unfunded commitments, and the investment strategies of the investee. The Plan has adopted ASU No. 2009-12 on a prospective basis for the year ended December 31, 2009. Adoption of the ASU had no impact on the statements of net assets available for benefits and statement of changes in net assets available for benefits. See also Note 5.
New Accounting Standards to Be Adopted. In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (ASU No. 2010-06), which amends ASC 820, adding new disclosure requirements for Levels 1 and 2, separate disclosures of purchases, sales, issuances and settlements relating to Level 3 measurements and clarification of existing fair value disclosures. ASU No. 2010-06 is effective for periods beginning after December 15, 2009, except for the requirement to provide Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010. The Plan is currently evaluating the impact ASU No. 2010-06 will have on the financial statements and disclosures.
3. FAIR VALUE MEASUREMENTS
ASC 820, Fair Value Measurements and Disclosures, established a single authoritative definition of fair value, set a framework for measuring fair value, and requires additional disclosures about fair value measurements. In accordance with ASC 820, the Plan classifies its investments into Level 1, which refers to securities valued using quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on the lowest level of input that is significant to the fair value measurement. The following tables set forth by level within the fair value hierarchy a summary of the Plan’s investments measured at fair value on a recurring basis at December 31, 2009 and 2008.
In accordance with the update to ASC 820 (originally issued as FSP 157-4), the table below includes the major categorization for debt and equity securities on the basis of the nature and risk of the investments at December 31, 2009.

- 9 -


 

                                 
    Level 1     Level 2     Level 3     Total  
Common stock:
                               
Health care
  $ 494,938     $     $     $ 494,938  
 
                       
Total common stocks
    494,938                   494,938  
 
                               
Money market funds
    959,195                   959,195  
 
                               
Mutual funds:
                             
Domestic stock funds
    2,361,494       469,732             2,831,226  
Balanced funds
    14,398,001                   14,398,001  
International stock funds
    1,113,810                   1,113,810  
Fixed income funds
    1,766,444                   1,766,444  
 
                       
Total mutual funds
    19,639,749       469,732             20,109,481  
 
                               
Stable value funds
          7,198,484             7,198,484  
 
                               
Participant notes
          501,418             501,418  
 
                       
Total
  $ 21,093,882     $ 8,169,634     $     $ 29,263,516  
 
                       
                                 
    Fair Value Measurements at December 31, 2008  
    Level 1     Level 2     Level 3     Total  
Common stock
  $ 20,063,048     $     $     $ 20,063,048  
Mutual funds
    170,493,986                   170,493,986  
Common collective trusts
          58,724,277             58,724,277  
Participant notes
          10,235,468              10,235,468  
 
                       
 
                               
Total
  $ 190,557,034     $ 68,959,745     $     $ 259,516,779  
 
                       
Although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement.
4. INVESTMENTS
The Plan’s investments that represent five percent or more of the Plan’s net assets available for benefits as of December 31, 2009 and 2008 are as follows:

- 10 -


 

         
Investment   Fair Value
As of December 31, 2009:
       
CHS Stable Value Fund
  $ 7,198,484  
Principal LifeTime 2015 Institutional Fund
    2,892,004  
Principal LifeTime 2020 Institutional Fund
    2,821,870  
Principal LifeTime 2025 Institutional Fund
    2,464,828  
Principal LifeTime 2030 Institutional Fund
    1,854,089  
Principal LifeTime 2035 Institutional Fund
    1,624,618  
 
       
As of December 31, 2008:
       
Scudder Stable Value Fund
  $ 42,827,661  
American Century Strategic Allocation Moderate Fund — ADV
    32,990,523  
The Growth Fund of America — A
    25,161,628  
Scudder — Dreman High Return Equity Fund — A
    22,994,342  
CHS Unitized Stock Portfolio
    20,063,048  
Scudder Core Fixed Income Fund — A
    17,140,116  
Scudder Stock Index Trust
    15,896,616  
During the years ended December 31, 2009 and 2008, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:
                 
Investment   2009     2008  
Community Health Systems, Inc. (Common Stock)
  $ 5,520,246     $ (27,562,376 )
Principal Diversified International Institutional Fund
    1,652,953        
Principal LifeTime 2020 Institutional Fund
    1,627,285        
Jennison 20/20 Focus Z Fund
    1,085,884        
LargeCap S&P 500 Index Separate Account
    1,058,342        
Principal LifeTime 2050 Institutional Fund
    906,331        
Allianz NFJ Small Cap Value Administrative Fund
    886,853        
American Funds Growth Fund of America R4 Fund
    640,831        
Principal LifeTime 2015 Institutional Fund
    628,789        
Principal LifeTime 2025 Institutional Fund
    550,108        
Principal LifeTime 2030 Institutional Fund
    394,544        
CHS Stable Value Fund
    365,025        
Principal LifeTime 2035 Institutional Fund
    346,174        
Principal LifeTime 2010 Institutional Fund
    310,829        

- 11 -


 

                 
Investment   2009     2008  
Principal LifeTime 2040 Institutional Fund
    234,486        
PIMCO Total Return Administrative Fund
    121,842        
Principal LifeTime 2045 Institutional Fund
    110,122        
JP Morgan Small Cap Equity A Fund
    108,712        
Blackrock Equity Dividend I Fund
    96,689        
Blackrock U.S. Opportunities Institutional Fund
    78,036        
Blackrock International Opportunities Institutional Fund
    71,959        
RS Emerging Markets A Fund
    60,462        
Oppenheimer International Growth Y Fund
    60,264        
Oppenheimer Strategic Income Y Fund
    57,726        
Columbia MidCap Value Z Fund
    40,440        
Mutual Global Discovery A Fund
    34,752        
Allianz NFJ International Value A Fund
    29,540        
JP Morgan International Equity Index A Fund
    24,119        
AIM Mid Cap Core Equity A Fund
    22,410        
MidCap S&P 400 Index Separate Account
    20,974        
DWS Core Fixed Income Fund—A
    17,883       (3,757,034 )
SmallCap S&P 600 Idex Separate Account
    11,433        
AIM Global Small & Mid Cap Growth A Fund
    6,762        
Principal LifeTime Strategic Income Institutional Fund
    6,690        
Principal LifeTime 2055 Institutional Fund
    2,800        
Principal Money Market Institutional Fund
    2,792        
Templeton Growth Fund, Inc.—A
          (469,713 )
DWS Value Builder Fund — A
          (2,310,333 )
DWS Dreman High Return Equity — A
          (20,438,832 )
Franklin Mutual DIS Fund—A
    (60,225 )     (1,858,334 )
DWS Mid Cap Growth A Fund
    (82,206 )     (5,757,527 )
American Century Strategic Allocation Conservative Fund—A
    (318,875 )     (1,326,964 )
DWS Global Opportunities Fund
    (440,732 )     (7,116,337 )
Goldman Sachs Mid Cap Value Fund—A
    (450,486 )     (3,616,136 )
American Century Strategic Allocation Aggressive Fund—A
    (486,415 )     (3,859,988 )
Credit Suisse Small Cap Value Fund—A
    (523,929 )     (2,327,449 )
Hartford Small Company HLS IB Fund
    (608,054 )     (6,802,809 )
Thornburg International Value Fund—R4
    (1,187,588 )     (9,123,257 )
DWS Stock Index Fund
    (1,335,648 )     (9,342,489 )
American Funds The Growth Fund of America—A
    (1,382,598 )     (15,244,814 )
American Century Strategic Allocation Moderate Fund—A
    (1,480,241 )     (10,191,835 )
DWS Strategic Value A Fund
    (2,695,676 )      
 
           
 
  $ 6,142,415     $ (131,106,228 )
 
           

- 12 -


 

5. STABLE VALUE FUND
The CHS Stable Value Fund (the “Fund”) is a collective trust fund sponsored by the Trustee. The beneficial interest of each participant is represented by units. Units may be issued daily at the Fund’s current net asset value. Distribution to the Fund’s unit holders is declared daily from the net investment income and automatically reinvested in the Fund. The investment seeks current income by investing primarily in insurance contracts issued by insurance companies, and investments from other financial institutions which offer stability of principal. It is the policy of the Fund to use its best efforts to maintain a stable net asset value; although there is no guarantee that the Fund will be able to maintain this value. Withdrawals from the Fund for benefit payments and participant transfers to noncompeting options to be paid to plan participants are made within 30 days after written notification has been received. Withdrawals, other than for benefit payments and participant transfers to noncompeting options, are made one year after notification is received.
Participants ordinarily may direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents contributions made to the Fund, plus earnings, less participant withdrawals and administrative expenses. The Fund imposes certain restrictions on the Plan. The fund itself may be subject to circumstances that impact its ability to transact at contract value. Plan management believes that the occurrence of events that would cause the Fund to transact at less than contract value is not probable.
Circumstances that would affect the ability of the Fund to transact at contract value include the following:
Restrictions on the Plan — Participant-initiated transactions are those transactions allowed by the Plan, including withdrawals for benefits, loans, or transfers to noncompeting funds within a plan, but excluding withdrawals that are deemed to be caused by the actions of the Company. The following employer-initiated events may limit the ability of the Fund to transact at contract value:
    A failure of the Plan or its trust to qualify for exemption from federal income taxes or any required prohibited transaction under ERISA
 
    Any communication given to Plan participants designed to influence a participant not to invest in the Fund or to transfer assets out of the Fund
 
    Any transfer of assets from the Fund directly into a competing investment option
 
    The establishment of a defined contribution plan that competes with the Plan for employee contributions
 
    Complete or partial termination of the Plan or its merger with another plan
Circumstances That Impact the Fund — The Fund invests in assets, typically fixed income securities or bond funds, and enters into “wrapper” contracts issued by third parties. A wrap contract is an agreement by another party, such as a bank or insurance company to make payments to the Fund in certain circumstances. Wrap contracts are designed to allow a stable value portfolio to maintain constant NAV and protect a portfolio in extreme circumstances. In a typical wrap contract, the wrap issuer agrees to pay a portfolio the difference between the contract value and the market value of the underlying assets once the market value has been totally exhausted.
The wrap contracts generally contain provisions that limit the ability of the Fund to transact at contract value upon the occurrence of certain events. These events include:
    Any substantive modification of the Fund or the administration of the Fund that is not permitted by the wrap issuer.

- 13 -


 

    Any change in law, regulation, or administrative ruling applicable to a plan that could have a material adverse effect on the Fund’s cash flow
 
    Employer-initiated transactions by participating plans as described above
In the event that wrap contracts fail to perform as intended, the Fund’s NAV may decline if the market value of its assets declines. The Fund’s ability to receive amounts due pursuant to these wrap contracts is dependent on the third-party issuer’s ability to meet their financial obligations. The wrap issuer’s ability to meet its contractual obligations under the wrap contracts may be affected by future economic and regulatory developments.
The Fund is unlikely to maintain a stable NAV if, for any reason, it cannot obtain or maintain wrap contracts covering all of its underlying assets. This could result from the Fund’s inability to promptly find a replacement wrap contract following termination of a wrap contract. Wrap contracts are not transferable and have no trading market. There are a limited number of wrap issuers. The Fund may lose the benefit of wrap contracts on any portion of its assets in default in excess of a certain percentage of portfolio assets.
6. EXEMPT PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Principal Trust Company (in 2009) and Scudder (in 2008). Principal Trust Company (in 2009) and Scudder Trust Company (in 2008) is the Trustee as defined by the Plan and these transactions qualify as exempt party-in-interest transactions. Fees paid by the Plan for the investment management services were included as a reduction of the return earned on each fund.
At December 31, 2009 and 2008, the Plan held investments in the common stock of the Company. The cost basis of the stock was $494,938 and $20,063,048 at December 31, 2009 and 2008, respectively. Because the Company is the Plan Sponsor, transactions involving the Company’s common stock qualify as party-in-interest transactions for the periods presented. No dividends were declared or paid on the stock. All of these transactions are exempt from the prohibited transaction rules.
7. FEDERAL INCOME TAX STATUS
The Plan received a determination letter dated June 16, 2004, in which the IRS stated that the Plan was in compliance with the applicable requirements of Section 401(a) and Section 501(c) of the Code. The Plan has been amended since receiving the determination letter. However, the Administrator and the Plan’s tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code and the Plan and related trust continue to be tax exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31, 2009 and 2008 and a reconciliation of the increase in net assets per the financial statements to the net income per the Form 5500 for the years ended December 31, 2009 and 2008.

- 14 -


 

                 
    2009     2008  
Net assets available for benefits per the financial statements
  $ 30,281,043     $ 279,638,151  
Adjustment from contract value to fair value for fully benefit-responsive stable value funds
    125,374       (3,120,168 )
Adjustments to participant loans due to deemed distributions
    (20,392 )      
 
           
Net assets per Form 5500
  $ 30,386,025     $ 276,517,983  
 
           
 
               
Decrease in net assets per the financial statements
  $ (249,357,108 )   $ (83,761,350 )
Adjustment from contract value to fair value for fully benefit-responsive stable value funds
    3,245,542       (2,442,139 )
Adjustments to participant loans due to deemed distributions
    (20,392 )      
Transfers in to plan
    (437,491,304 )      
Transfers out of plan
    698,266,321       9,933,060  
 
           
Net (loss) income per Form 5500
  $ 14,643,059     $ (76,270,429 )
 
           
9. SUBSEQUENT EVENTS
A Third Amendment to the Plan became effective as of March 1, 2010 to revise the calculation of the Employer Matching Contribution on behalf of participants who are employed by McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC and whose employment is covered by a collective bargaining agreement between (i) McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC and (ii) the Oregon Nurses Association.

- 15 -


 

COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2009
                     
    (b) Identity of Issue, Borrower,   (c) Description of Investment Including Maturity Date,       (e) Current  
(a)   Lessor or Similar Party   Rate of Interest, Collateral, Par or Maturity Value   (d) Cost **   Value  
    Union Bond & Trust Company  
Principal Stable Value Fund
      $ 4,902,895  
    Invesco  
Invesco Stable Value Fund
        2,295,589  
*   Principal Life Insurance Company  
LargeCap S&P 500 Index Separate Account
        377,440  
*   Principal Life Insurance Company  
MidCap S&P 400 Index Separate Account
        60,373  
*   Principal Life Insurance Company  
SmallCap S&P 600 Index Separate Account
        31,919  
*   Princor Financial Services  
Principal Money Market Institutional Fund
        959,195  
    Oppenheimer Funds, Inc.  
Oppenheimer Strategic Income Y Fund
        450,079  
    PIMCO Funds  
PIMCO Total Return Administrative Fund
        1,316,366  
*   Princor Financial Services  
Principal LifeTime Strategic Income Institutional Fund
        141,428  
*   Princor Financial Services  
Principal LifeTime 2010 Institutional Fund
        868,104  
*   Princor Financial Services  
Principal LifeTime 2015 Institutional Fund
        2,892,004  
*   Princor Financial Services  
Principal LifeTime 2020 Institutional Fund
        2,821,870  
*   Princor Financial Services  
Principal LifeTime 2025 Institutional Fund
        2,464,828  
*   Princor Financial Services  
Principal LifeTime 2030 Institutional Fund
        1,854,089  
*   Princor Financial Services  
Principal LifeTime 2035 Institutional Fund
        1,624,618  
*   Princor Financial Services  
Principal LifeTime 2040 Institutional Fund
        1,043,584  
*   Princor Financial Services  
Principal LifeTime 2045 Institutional Fund
        495,407  
*   Princor Financial Services  
Principal LifeTime 2050 Institutional Fund
        176,242  
*   Princor Financial Services  
Principal LifeTime 2055 Institutional Fund
        15,826  
    BlackRock  
Blackrock Equity Dividend I Fund
        476,278  
    The American Funds  
American Funds Growth Fund of America R4 Fund
        760,464  
    Prudential Investement Management Services  
Jennison 20/20 Focus Z Fund
        276,123  
    Allianz  
Allianz NFJ Small Cap Value Administrative Fund
        124,314  

16


 

COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2009
                     
    (b) Identity of Issue, Borrower,   (c) Description of Investment Including Maturity Date,       (e) Current  
(a)   Lessor or Similar Party   Rate of Interest, Collateral, Par or Maturity Value   (d) Cost **   Value  
    BlackRock  
Blackrock U.S. Opportunities Institutional Fund
        271,171  
    Columbia Funds  
Columbia MidCap Value Z Fund
        112,555  
    Hartford Mutual Funds  
Hartford Small Company HLS IB Fund
        82,869  
    AIM Investments  
AIM Mid Cap Core Equity A Fund
        93,372  
    JP Morgan Funds  
JP Morgan Small Cap Equity A Fund
        164,348  
    Allianz Global Investors Fund Management  
Allianz NFJ International Value A Fund
        92,362  
    BlackRock  
Blackrock International Opportunities Institutional Fund
        257,921  
    Franklin Templeton Investments  
Mutual Global Discovery A Fund
        234,183  
    AIM Investments  
AIM Global Small & Mid Cap Growth A Fund
        20,713  
    JP Morgan Funds  
JP Morgan International Equity Index A Fund
        75,264  
    Oppenheimer  
Oppenheimer International Growth Y Fund
        207,805  
*   Princor Financial Services  
Principal Diversified International Institutional Fund
        82,541  
    RS Funds  
RS Emerging Markets A Fund
        143,021  
*   Community Health Systems, Inc.  
Community Health Systems, Inc. (Common Stock)
        494,938  
*   Various Participants  
Participant notes receivable with interest rates ranging from 3.25% to 8.25% and maturity dates of 2010 through 2020
        501,418  
       
 
         
       
 
      $ 29,263,516  
       
 
         
 
*   Identified party-in-interest.
 
**   Cost information is not required for participant-directed investments and therefore is not included.

17


 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
         
 
COMMUNITY HEALTH SYSTEMS, INC. 401(k) PLAN
 
 
Date: June 29, 2010  By:   /s/ Wayne T. Smith    
    Wayne T. Smith   
    Chairman of the Board
President and Chief Executive Officer 
 
 
     
Date: June 29, 2010  By:   /s/ W. Larry Cash    
    W. Larry Cash   
    Executive Vice President,
Chief Financial Officer and Director 
 
 
     
Date: June 29, 2010  By:   /s/ T. Mark Buford    
    T. Mark Buford   
    Vice President and
Chief Accounting Officer 
 
 

18


 

EXHIBIT INDEX
     
Exhibit    
Number   Description
10.1
  First Amendment to the CHS/Community Health Systems, Inc. 401(k) Plan dated September 14, 2009
 
   
10.2
  Second Amendment to the CHS/Community Health Systems, Inc. 401(k) Plan dated December 17, 2009
 
   
10.3
  Third Amendment to the CHS/Community Health Systems, Inc. 401(k) Plan dated February 22, 2010
 
   
23
  Consent of Independent Registered Public Accounting Firm

19

EX-10.1 2 g23916exv10w1.htm EX-10.1 exv10w1
EXHIBIT 10.1
FIRST AMENDMENT TO THE
CHS/COMMUNITY HEALTH SYSTEMS, INC. 401(K) PLAN
          WHEREAS, CHS/Community Health Systems, Inc. (the “Company”) has previously established and currently maintains the Community Health Systems, Inc. 401(k) Plan (the “Plan”); and
          WHEREAS, the Company has retained the right to amend the Plan in Section 8.1 of the Plan; and
          WHEREAS, the Company desires to amend the Plan to change the name of the Plan to the “CHS/Community Health Systems, Inc. 401(k) Plan,” effective as of January 1, 2009; and
          WHEREAS, the Company desires to amend, for the 2009 Plan Year, the Plan to provide for a waiver of the required minimum distributions requirement as permitted under the Worker, Retiree, and Employer Recovery Act of 2008, effective as of January 1, 2009; and
          WHEREAS, the Company desires to amend the terms of each of the Plans to comply with certain changes made under the Pension Protection Act of 2006, Heroes Earnings Assistance and Relief Tax Act of 2008, and (3) Worker, Retiree, and Employer Recovery Act of 2008 (other than the waiver of required minimum distributions), effective as of January 1, 2006, or as otherwise provided for herein;
          NOW, THEREFORE, the Plan is hereby amended in the following respects:
     1. Effective as of January 1, 2009, the Plan name shall be changed to the “CHS/Community Health Systems, Inc. 401(k) Plan.”
     2. Effective as of January 1, 2007, the following shall be added to the end of Section 1.24:
An individual receiving a differential wage payment, as defined by Code §3401(h)(2), is treated as an Employee of the Employer making the payment. The differential wage payment is treated as Compensation, and the Plan is not treated as failing to meet the requirements of any provision described in Code Section 414(u)(l)(C) by reason of any contribution or benefit that is based on the differential wage payment.
     3. Effective as of January 1, 2008, Section 1.49(f) shall be revised to read as follows:
With respect to Excess Contributions and Excess Aggregate Contributions, Income for the period between the end of the Plan Year and the date of the distribution (the “gap period”) is not required to be distributed. The Plan Administrator will not calculate and distribute allocable Income for the gap period.

- 1 -


 

     4. Effective as of January 1, 2009, Section 3.1(a) shall be revised to read as follows:
(a) Eligibility. For all Plan purposes, any Eligible Employee who has completed 6 months of service and has attained age twenty-one shall be eligible to participate hereunder as of the date such Eligible Employee has satisfied such requirements. Notwithstanding the foregoing, any Eligible Employee employed by McKenzie-Willamette Medical Center Associates, LLC, McKenzie-Willamette Physicians Services, LLC, or Willamette Community Medical Group, LLC who has completed 2 months of service shall be eligible to participate hereunder as of the date such Eligible Employee has satisfied such requirements. However, any Employee who was a Participant in the Plan prior to the effective date of this amendment and restatement shall continue to participate in the Plan.
     5. Effective as of January 1, 2009, Section 3.1(b) shall be revised to read as follows:
(b) Months of service. For purposes of this Section, an Eligible Employee will be deemed to have completed the required number of months of service if such Employee has been in the continuous employ of the Employer as of the date 6 months (or 2 months, as applicable) after his employment commencement date. For purposes of this Section, “employment commencement date” shall be the first day that an Eligible Employee is entitled to be credited with an Hour of Service for the performance of duty; for any Eligible Employee who terminates his initial employment prior to satisfaction of this 6 months (or 2 months, as applicable) of service requirement, and becomes reemployed by the Employer, his “employment commencement date” shall be the date of such reemployment
     6. Effective as of January 1, 2009, the following shall be added to the end of Section 4.2(d):
An individual is treated as having been severed from employment during any period the individual is performing service in the uniformed services described in Code Section 3401(h)(2)(A). If an individual elects to receive a distribution by reason of severance from employment, death or disability, the individual may not make an elective deferral or employee contribution during the 6-month period beginning on the date of the distribution.
     7. Effective as of January 1, 2006, the following shall be added to the end of Section 4.2(g):

- 2 -


 

With respect to 401(k) plan excess deferrals made in taxable year 2007, the Administrator must calculate allocable Income for the taxable year and also for the gap period (i.e., the period after the close of the taxable year in which the excess deferral occurred and prior to the distribution); provided that the Administrator will calculate and distribute the gap period allocable income only if the Plan administrator in accordance with the Plan terms otherwise would allocate the gap period allocable income to the Participant’s account. With respect to 401(k) plan excess deferrals made in taxable years after 2007, gap period income may not be distributed.
     8. Effective as of January 1, 2009, Section 4.3 shall be revised to read as follows:
Unless otherwise provided by contract or law, the Employer may make its contribution(s) to the Plan for a particular Plan Year at such time(s) as the Employer, in its sole discretion, determines. However, any Matching Contributions made pursuant to Section 4.1(b) shall be made within 12 months of the end of the Plan Year, except that any periodic Matching Contributions made pursuant to Section 4.1(b) with respect to a Participant’s Elective Deferrals separately with respect to each payroll period (or with respect to all payroll periods ending with or within each month or quarter of a plan year) shall be contributed to the Plan by the last day of the immediately following Plan Year quarter. If the Employer makes a contribution for a particular Plan Year after the close of that Plan Year, then the Employer will designate to the Administrator the Plan Year for which the Employer is making its contribution.
     9. Effective as of January 1, 2007, the following provisions shall be added before the last sentence in Section 4.11(d), at the end of Section 4.12(c), before the second to the last sentence of Section 4.13(c), after the second paragraph of Section 6.4(a), at the end of Section 6.10(b)(3), after the end of the Section 6.13, and after the end of Section 6.14(d), as follows:
For any distribution notice issued in Plan Years beginning after December 31, 2006, the description of a Participant’s right, if any, to defer receipt of a distribution also will describe the consequences of failing to defer receipt of the distribution. For notices issued before the 90th day after the issuance of Treasury regulations (unless future Revenue Service guidance otherwise requires), the notice will include: (i) a description indicating the investment options available under the Plan (including fees) that will be available if the Participant defers distribution; and (ii) the portion of the summary plan description that contains any special rules that might affect materially a Participant’s decision to defer.

- 3 -


 

     10. Effective as of January 1, 2007, the following shall be added to the end of Section 4.15:
In the case of a death occurring on or after January 1, 2007, if a Participant dies while performing qualified military service (as defined in Code Section 414(u)), the survivors of the Participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan as if the Participant had resumed and then terminated employment on account of death.
     11. Effective as of January 1, 2009, Section 6.10(h) shall be added to the Plan as follows:
(h) Temporary Suspension of Required Minimum Distributions for 2009
The required minimum distributions provided for in Section 6.10(b)(1) of the Plan or otherwise shall be suspended for calendar year 2009, provided that a Participant may nevertheless elect to receive a required minimum distribution for calendar year 2009. For the purposes of Section 6.10(3)(5), the required beginning date shall be determined without regarding to this subsection for the purposes of applying this subsection for calendar years after 2009. For the purposes of Section 6.10(b)(2)(i) and 6.10(d)(2)(ii), the 5-year period described therein shall be determined without regard to calendar year 2009.
     12. Effective as of April 6, 2007, the following shall be added to the end of Section 6.15:
A domestic relations order that otherwise satisfies the requirements for a qualified domestic relations order (“QDRO”) will not fail to be a QDRO: (i) solely because the order is issued after, or revises, another domestic relations order or QDRO; or (ii) solely because of the time at which the order is issued, including issuance after the annuity starting date or after the Participant’s death.
     13. Effective as of January 1, 2009, Section 6.12 shall be amended to read as follows:
In the event that all, or any portion, of the distribution payable to a Participant or Beneficiary hereunder shall, at the later of the Participant’s attainment of age 62 or Normal Retirement Age, remain unpaid solely by reason of the inability of the Administrator, after sending a certified or registered letter, return receipt requested, to the last known address, and after further diligent effort, to ascertain the whereabouts of such Participant or Beneficiary, the amount so distributable shall be treated as a

- 4 -


 

Forfeiture pursuant to the Plan. Notwithstanding the foregoing, if the Plan provides for mandatory distributions and the amount to be distributed to a Participant or Beneficiary does not exceed $1,000, then the amount distributable may, in the sole discretion of the Administrator, either be treated as a Forfeiture, or be paid directly to an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) at the time it is determined that the whereabouts of the Participant or the Participant’s Beneficiary cannot be ascertained; provided, however, if an individual retirement account or individual retirement annuity is not reasonably available, the amount may be escheated under applicable state law. In the event a Participant or Beneficiary is located subsequent to the Forfeiture, such benefit shall be restored, first from Forfeitures, if any, and then from an additional Employer contribution if necessary. Upon Plan termination, the portion of the distributable amount that is an eligible rollover distribution as defined in Plan Section 6.16 may be paid directly to an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b). However, regardless of the preceding, a benefit that is lost by reason of escheat under applicable state law is not treated as a Forfeiture for purposes of this Section nor as an impermissible forfeiture under the Code.
     14. Effective as of January 1, 2010, the following shall be added at the end of Section 6.16(b)(3):
A non-spouse Beneficiary who is a “Designated Beneficiary” under Code Section 401(a)(9)(E) and the regulations thereunder, by a direct rollover, may roll over all or any portion of his or her distribution to an individual retirement account the Beneficiary establishes for purposes of receiving the distribution. In order to be able to roll over the distribution, the distribution otherwise must satisfy the definition of an eligible rollover distribution. Although a non-spouse Beneficiary may roll over directly a distribution, any distribution made prior to January 1, 2010, is not subject to the direct rollover requirements of Code Section 401(a)(31) (including Code Section 401(a)(31)(B), the notice requirements of Code Section 402(f) or the mandatory withholding requirements of Code Section 3405(c)). If a non-spouse Beneficiary receives a distribution from the Plan, the distribution is not eligible for a “60-day” rollover. If the Participant’s named Beneficiary is a trust, the Plan may make a direct rollover to an individual retirement account on behalf of the trust, provided the trust satisfies the requirements to be a Designated Beneficiary within the meaning of Code Section 401(a)(9)(E). A non-spouse Beneficiary may not roll

- 5 -


 

over an amount that is a required minimum distribution, as determined under applicable Treasury regulations and other Revenue Service guidance. If the Participant dies before his or her required beginning date and the non-spouse Beneficiary rolls over to an IRA the maximum amount eligible for rollover, the Beneficiary may elect to use either the 5-year rule or the life expectancy rule, pursuant to Treas. Reg. Section 1.401(a)(9)-3, A-4(c), in determining the required minimum distributions from the IRA that receives the non-spouse Beneficiary’s distribution.
     15. Effective as of January 1, 2009, the following paragraph shall be added at the end of Section 6.16(b)(1) as follows:
Distributions, under any method permitted under Section 6.5(a), subject to the waiver provided for under Section 6.10(h) shall be considered “eligible rollover distributions,” to the extent they otherwise satisfy the requirements under the Plan and as permitted by law.
     16. Effective January 1, 2007, the following provision shall be added to the end of Section 6.16(b):
A Participant may elect to transfer Roth elective deferral contributions by means of a direct rollover to a qualified plan or to a 403(b) plan that agrees to account separately for amounts so transferred, including accounting separately for the portion of such distribution which is includible in gross income and the portion of such distribution which is not includible in gross income. A participant may elect to roll over directly an eligible rollover distribution to a Roth IRA described in Code Section 408A(b).
     17. Except as otherwise provided in this First Amendment, the Plan shall remain in full force and effect.
     SIGNED this 14th day of September, 2009, effective as of the dates set forth herein.
         
  CHS/COMMUNITY HEALTH SYSTEMS, INC.
 
 
  By:   /s/ RACHEL A.SEIFERT    
               RACHEL A.SEIFERT   
      Title: SENIOR VICE PRESIDENT   
 

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EX-10.2 3 g23916exv10w2.htm EX-10.2 exv10w2
EXHIBIT 10.2
SECOND AMENDMENT TO THE
CHS/COMMUNITY HEALTH SYSTEMS, INC. 401(K) PLAN
          WHEREAS, CHS/Community Health Systems, Inc. (the “Company”) has previously established and currently maintains the CHS/Community Health Systems, Inc. 401(k) Plan (the “Plan”); and
          WHEREAS, the Company has retained the right to amend the Plan in Section 7.1(a) of the Plan; and
          WHEREAS, the Company desires to amend the terms of the Plan.
          NOW, THEREFORE, the Plan is hereby amended in the following respects:
1. Effective as of the dates provided therein, Exhibit A of the Plan is amended as set forth in the attachment to this Second Amendment.
2. Effective as of the dates provided therein, Exhibit B of the Plan is amended as set forth in the attachment to this Second Amendment.
3. Except as otherwise provided in this Second Amendment, the Plan shall remain in full force and effect.
          SIGNED this 17th day of December, 2009, effective as of the date set forth in the exhibits.
         
  CHS/COMMUNITY HEALTH SYSTEMS, INC.
 
 
  By:   /s/ RACHEL A. SEIFERT    
              RACHEL A. SEIFERT   
    Title: SENIOR VICE PRESIDENT   

 


 

         
EXHIBIT A
Eligibility
          Notwithstanding any provision of the Plan to the contrary, the following classes of Employees shall be eligible to participate in the Plan after meeting the eligibility requirements under Section 3.1 of the Plan:
  1.   Employees of Northampton Hospital Corporation (d/b/a Easton Hospital) whose employment is governed by a collective bargaining agreement;
 
  2.   Employees of Pottstown Hospital Company, LLC and Pottstown Imaging Company, LLC who are not Highly Compensated Employees;
 
  3.   Employees of McKenzie-Willamette Regional Medical Center Associates, LLC (d/b/a McKenzie-Willamette Medical Center), McKenzie-Willamette Physician Services, LLC, and Willamette Community Medical Group, LLC whose employment is governed by a collective bargaining agreement;
 
  4.   Employees of Jackson Hospital Corporation (d/b/a Kentucky River Medical Center); and
 
  5.   Effective as of May 1, 2009, Employees of Wilkes-Barre Hospital Company, LLC (d/b/a Wilkes-Barre General Hospital and Wyoming Valley Health Care System) whose employment is governed by a collective bargaining agreement.

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EXHIBIT B
Employer Contributions
1.   Effective as of January 1, 2002, the Employer will not make any Employer Contributions for Eligible Employees of Northampton Hospital Corporation whose employment is governed by a collective bargaining agreement.
 
2.   Effective as of January 1, 2003, a Matching Contribution shall be made on behalf of those Participants who are employed by Northampton Hospital Corporation and whose employment is not governed by a collective bargaining agreement equal to 50% of such Participant’s Elective Deferral for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year. For the period beginning on July 1, 2002, and ending on December 31, 2002, the discretionary Matching Contribution was 50% of such Participant’s Elective Deferral for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year
 
3.   Effective for the Plan Year beginning January 1, 2004, and ending on December 31, 2009, each physician Employee of Pottstown Hospital Company, LLC who is a Participant in the Plan and (i) is not a hospital-based physician, (ii) is a Non-Highly Compensated Employee, and (iii) is otherwise eligible to share in Matching Contributions shall receive a discretionary Matching Contribution in an amount equal to 50% of such Participant’s Elective Contribution for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year. For purposes of the foregoing, “hospital-based physician” means a physician Employee of Pottstown Hospital Company, LLC whose primary place of employment is Pottstown Memorial Medical Center.
 
4.   Effective as of January 1, 2009, on behalf of those Participants who are employed by McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC whose employment is governed by a collective bargaining agreement, a Matching Contribution in an amount equal to one-half (1/2) of such Participant’s Elective Deferral for such Plan Year that does not exceed 3% of the Participant’s Compensation for the Plan Year shall be made. In addition, effective as of January 1, 2009, on behalf of those Participants who (1) are employed by McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC, (2) whose employment is governed by a collective bargaining agreement, (3) who complete 1,000 Hours of Service, a Nonelective Contribution as follows:

- 3 -


 

     
Year of Service Credited under the Plan   Amount of Basic Contribution
At least 1 but less than 5
  2% of the Participant’s Compensation for such Plan Year
 
   
At least 5 but less than 10
  3% of the Participant’s Compensation for such Plan Year
 
   
10 or more
  5% of the Participant’s Compensation
5.   Effective as of January 1, 2009, on behalf of those Participants who are (1) employed by Jackson Hospital Company, LLC and (2) employed at the beginning of the last day of the Plan Year, a discretionary Matching Contribution in an amount equal to one-third (1/3) of such Participant’s Elective Deferral for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year shall be made.
 
6.   Effective as of May 1, 2009, on behalf of those Participants who are employed by Wilkes-Barre Hospital Company, LLC, a Matching Contribution in an amount equal to the sum of 100% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that are not in excess of 1% of the Participant’s Compensation, plus 50% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that exceed 1% of the Participant’s Compensation but not in excess of 6% of the Participant’s Compensation for the Plan Year shall be made.
 
7.   Effective as of January 1, 2010, on behalf of those Participants who are employed by Pottstown Hospital Company, LLC or Pottstown Imaging Company, LLC, a Matching Contribution in an amount equal to the sum of 100% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that are not in excess of 1% of the Participant’s Compensation, plus 50% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that exceed 1% of the Participant’s Compensation but not in excess of 6% of the Participant’s Compensation for the Plan Year shall be made.

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EX-10.3 4 g23916exv10w3.htm EX-10.3 exv10w3
EXHIBIT 10.3
THIRD AMENDMENT TO THE
CHS/COMMUNITY HEALTH SYSTEMS, INC. 401(K) PLAN
     WHEREAS, CHS/Community Health Systems, Inc. (the “Company”) has previously established and currently maintains the CHS/Community Health Systems, Inc. 401(k) Plan (the “Plan”); and
     WHEREAS, the Company has retained the right to amend the Plan in Section 7.1(a) of the Plan; and
     WHEREAS, the Company desires to amend the terms of the Plan.
     NOW, THEREFORE, the Plan is hereby amended in the following respects:
1. Effective as of the dates provided therein, Exhibit B of the Plan is amended as set forth in the attachment to this Third Amendment.
2. Except as otherwise provided in this Third Amendment, the Plan shall remain in full force and effect.
     SIGNED this 22nd day of February, 2010, effective as of the date set forth in the exhibits.
         
  CHS/COMMUNITY HEALTH SYSTEMS, INC.
 
 
  By:   /s/ Rachel A. Seifert    
    Title: SVP & GC    
       


 

EXHIBIT B
Employer Contributions
1.   Effective as of January 1, 2002, the Employer will not make any Employer Contributions for Eligible Employees of Northampton Hospital Corporation whose employment is governed by a collective bargaining agreement.
 
2.   Effective as of January 1, 2003, a Matching Contribution shall be made on behalf of those Participants who are employed by Northampton Hospital Corporation and whose employment is not governed by a collective bargaining agreement equal to 50% of such Participant’s Elective Deferral for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year. For the period beginning on July 1, 2002, and ending on December 31, 2002, the discretionary Matching Contribution was 50% of such Participant’s Elective Deferral for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year
 
3.   Effective for the Plan Year beginning January 1, 2004, and ending on December 31, 2009, each physician Employee of Pottstown Hospital Company, LLC who is a Participant in the Plan and (i) is not a hospital-based physician, (ii) is a Non-Highly Compensated Employee, and (iii) is otherwise eligible to share in Matching Contributions shall receive a discretionary Matching Contribution in an amount equal to 50% of such Participant’s Elective Contribution for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year. For purposes of the foregoing, “hospital-based physician” means a physician Employee of Pottstown Hospital Company, LLC whose primary place of employment is Pottstown Memorial Medical Center.
 
4.   Effective as of January 1, 2009, on behalf of those Participants who are employed by McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC whose employment is governed by a collective bargaining agreement, a Matching Contribution in an amount equal to one-half (1/2) of such Participant’s Elective Deferral for such Plan Year that does not exceed 3% of the Participant’s Compensation for the Plan Year shall be made. In addition, effective as of January 1, 2009, on behalf of those Participants who (1) are employed by McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC, (2) whose employment is governed by a collective bargaining agreement, and (3) who complete 1,000 Hours of Service, a Nonelective Contribution as follows:
     
Years of Service Credited under the Plan   Amount of Basic Contribution
At least 1 but less than 5
  2% of the Participant’s Compensation for such Plan Year
 
   
At least 5 but less than 10
  3% of the Participant’s Compensation for such Plan Year
 
   
10 or more
  5% of the Participant’s Compensation

- B-1 -


 

    Notwithstanding the foregoing, the Employer contributions in this paragraph 4 of Exhibit B shall end on February 28, 2010, with respect to those Participants whose employment is governed by a collective bargaining agreement between (i) McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC and (ii) the Oregon Nurses Association.
 
5.   Effective as of January 1, 2009, on behalf of those Participants who are (1) employed by Jackson Hospital Company, LLC and (2) employed at the beginning of the last day of the Plan Year, a discretionary Matching Contribution in an amount equal to one-third (1/3) of such Participant’s Elective Deferral for such Plan Year that does not exceed 6% of the Participant’s Compensation for the Plan Year shall be made.
 
6.   Effective as of May 1, 2009, on behalf of those Participants who are employed by Wilkes-Barre Hospital Company, LLC, a Matching Contribution in an amount equal to the sum of 100% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that are not in excess of 1% of the Participant’s Compensation, plus 50% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that exceed 1% of the Participant’s Compensation but not in excess of 6% of the Participant’s Compensation for the Plan Year shall be made.
 
7.   Effective as of January 1, 2010, on behalf of those Participants who are employed by Pottstown Hospital Company, LLC or Pottstown Imaging Company, LLC, a Matching Contribution in an amount equal to the sum of 100% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that are not in excess of 1% of the Participant’s Compensation, plus 50% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that exceed 1% of the Participant’s Compensation but not in excess of 6% of the Participant’s Compensation for the Plan Year shall be made.
 
8.   Effective as of March 1, 2010, on behalf of those Participants who are employed by McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC and whose employment is governed by a collective bargaining agreement between (i) McKenzie-Willamette Medical Center Associates, LLC or Willamette Valley Medical Center, LLC and (ii) the Oregon Nurses Association, a Matching Contribution in an amount equal to the sum of 100% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that are not in excess of 1% of the Participant’s Compensation, plus 50% of the amount of the Participant’s Elective Deferrals (including Catch-Up Contributions made pursuant to Section 4.2(b)) that exceed 1% of the Participant’s Compensation but not in excess of 6% of the Participant’s Compensation for the Plan Year shall be made.
Note: Revised March 1, 2010.

- B-2 -

EX-23 5 g23916exv23.htm EX-23 exv23
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-156405 on Form S-3 and Registration Statement Nos. 333-100349, 333-61614, 333-44870, 333-107810, 333-121282, 333-121283, 333-144525, 333-163688, 333-163689, 333-163690 and 333-163691 on Form S-8 of our report dated June 29, 2010, relating to the financial statements and supplemental schedule of CHS/Community Health Systems, Inc. 401(k) Plan (formerly known as the Community Health Systems, Inc. 401(k) Plan) appearing in this Annual Report on Form 11-K of CHS/Community Health Systems, Inc. 401(k) Plan (formerly known as the Community Health Systems, Inc. 401(k) Plan) for the year ended December 31, 2009.
/s/ Deloitte & Touche LLP
Nashville, Tennessee
June 29, 2010

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