Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Appointment of Chief Financial Officer; Compensation Arrangements in Connection Therewith
On January 2, 2020, Community Health Systems, Inc. (the Company), announced that the Companys
Board of Directors (the Board) has appointed Kevin J. Hammons as Executive Vice President and Chief Financial Officer of the Company, effective January 1, 2020, replacing Thomas J. Aaron, the Companys Executive Vice President
and Chief Financial Officer, who retired on December 31, 2019. The contemplated appointment of Mr. Hammons and retirement of Mr. Aaron were previously announced in a Current Report on Form 8-K
filed by the Company on December 12, 2019, which is incorporated herein by reference. A copy of the press release making this announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K
and is incorporated herein by reference into this Item 5.02.
On December 31, 2019, the Board, upon recommendation of the
Compensation Committee of the Board (the Compensation Committee), approved an annual base salary for Mr. Hammons for 2020 of $575,000 in connection with his promotion to Executive Vice President and Chief Financial Officer. It is
contemplated that the Board, at its February 2020 meeting, will approve cash incentive compensation and long-term incentive compensation for Mr. Hammons commensurate with his new position with the Company and generally consistent with the
Companys existing practices for its retiring Chief Financial Officer.
(ii) Consultancy Agreement with Thomas J. Aaron,
Former Chief Financial Officer
On December 31, 2019, CHSPSC, LLC, a wholly-owned subsidiary of the Company, entered into a
consultancy agreement (the Consultancy Agreement) with Thomas J. Aaron, the Companys retiring Executive Vice President and Chief Financial Officer, who retired on such date. Pursuant to the Consultancy Agreement, Mr. Aaron
will provide certain consulting services related to margin improvement programs and other assignments as requested by Wayne T. Smith, Chairman and Chief Executive Officer, and/or his designee. The term of the Consultancy Agreement will be from
January 1, 2020 to December 31, 2021. From January 1, 2020 through the duration of the Consultancy Agreement, Mr. Aaron will be entitled to receive consulting fees of $25,000 per month. In addition, during the term
of the Consultancy Agreement, Mr. Aaron will be subject to restrictions on competing with CHSPSC, LLC or its affiliates. He will also continue to vest in any previously granted stock options and restricted stock of Community Health Systems,
Inc. in accordance with the applicable vesting schedule.
The foregoing summary of the Consultancy Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of the Consultancy Agreement, which is filed as Exhibit 10.1 hereto and incorporated into this report by reference.
(iii) Designation of Principal Accounting Officer
The Board determined on December 31, 2019, that Jason K. Johnson, the Companys Senior Vice President and Chief Accounting Officer,
will serve as the Companys principal accounting officer following the promotion of Mr. Hammons as set forth above, effective January 1, 2020. Mr. Hammons formerly served as the Companys principal accounting officer.
Mr. Johnson, age 45, is responsible for the Companys Securities and Exchange Commission reporting matters, as well as overseeing
various other accounting and financial reporting matters, including accounting policies and procedures, consolidations and accounting for acquisitions and divestitures. Mr. Johnson joined the Company in 2012 as Vice President, Assistant
Corporate Controller, and in 2018 he was promoted to Vice President, Corporate Controller. In 2019, he was promoted to Vice President and Chief Accounting Officer. Prior to joining the Company, Mr. Johnson held various positions in the
assurance and advisory services practice at Deloitte and Touche, LLP. He also previously served as controller of an alternative energy marketing and distribution company. Mr. Johnson holds a masters degree in accounting from the
University of Kentucky. He is a member of the American Institute for Certified Public Accountants and Tennessee Society of Certified Public Accountants.
Following this designation, Mr. Johnson is eligible to participate in the same executive compensation programs of the Company that are
available to other executive officers of the Company. Mr. Johnson is not a party to any material plan, contract or arrangement with the Company in connection with this designation.