Exhibit 10(b)

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TENET

EXECUTIVE SEVERANCE PLAN

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TABLE OF CONTENTS

 

TENET EXECUTIVE SEVERANCE PLAN

ARTICLE I PREAMBLE AND PURPOSE

1

1.1

Preamble

1

1.2

Purpose

1

 

 

 

ARTICLE II DEFINITIONS AND CONSTRUCTION

3

2.1

Definitions

3

2.2

Construction

11

2.3

409A Compliance

11

 

 

 

ARTICLE III SEVERANCE BENEFITS

12

3.1

Severance Benefits not related to a Change of Control

12

3.2

Severance Benefits on and after a Change of Control

14

3.3

Termination Distributions to Key Employees

17

3.4

Distributions on Account of Death of the Covered Executive During the Severance
Period

17

3.5

Section 409A Gross-Up Payment

18

3.6

Alternate Plan Terms

18

3.7

Conditions to Payment of Severance Benefits

18

 

 

 

ARTICLE IV ADMINISTRATION

21

4.1

The PAC

21

4.2

Powers of PAC

21

4.3

Appointment of Plan Administrator

21

4.4

Duties of Plan Administrator

21

4.5

Indemnification of PAC and Plan Administrator

23

4.6

Claims for Benefits

23

4.7

Arbitration

24

4.8

Receipt and Release of Necessary Information

25

4.9

Overpayment and Underpayment of Benefits

25

 

 

 

ARTICLE V OTHER BENEFIT PLANS OF THE COMPANY

26

5.1

Other Plans

26

 

 

 

ARTICLE VI AMENDMENT AND TERMINATION OF THE ESP

27

6.1

Continuation

27

6.2

Amendment of ESP

27

6.3

Termination of ESP

27

6.4

Termination of Affiliate’s Participation

27

 

 

 

ARTICLE VII MISCELLANEOUS

29

7.1

No Reduction of Employer Rights

29

7.2

Successor to the Company

29

7.3

Provisions Binding

29

 

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TENET EXECUTIVE SEVERANCE PLAN

 

ARTICLE I
PREAMBLE AND PURPOSE

1.1                               PREAMBLE. IN JANUARY 2003, TENET HEALTHCARE
CORPORATION (THE “COMPANY”) ADOPTED THE TENET EXECUTIVE SEVERANCE PROTECTION
PLAN (THE “TESPP”) TO PROVIDE COVERED EXECUTIVES OF THE COMPANY AND ITS
AFFILIATES WITH CERTAIN CASH SEVERANCE PAYMENTS AND/OR OTHER BENEFITS IN THE
EVENT OF A TERMINATION OF THE EXECUTIVE’S EMPLOYMENT AS A RESULT OF A
“QUALIFYING TERMINATION,” AS DEFINED IN THE TESPP, OR UNDER CERTAIN OTHER
CIRCUMSTANCES FOLLOWING A “CHANGE OF CONTROL,” AS DEFINED IN THE TESPP. BY THIS
INSTRUMENT THE COMPANY DESIRES TO AMEND AND RESTATE THE TESPP TO:

(a)                                  expand the classification of employees
eligible to participate in such plan;

(b)                                 modify (and in the case of a change of
control expand) the severance payments and other benefits payable under such
plan on account of a qualifying termination;

(c)                                  amend, restate and replace the associated
individual TESPP agreements, the change of control agreements, and the severance
provisions of any employment agreements that cover eligible executives with a
severance plan agreement, a copy of which is attached hereto as Appendix B,

(d)                                 revise the definition of change of control,

(e)                                  modify the administration and claims review
procedures under the plan,

(f)                                    comply with the requirements of section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), and

(g)                                 change the name of the plan to the “Tenet
Executive Severance Plan (the “ESP”).

The Company intends that the ESP and Tenet Executive Severance Plan Agreement
attached hereto as Appendix B serve as an amendment and restatement of the
TESPP, the associated individual TESPP agreements, the change of control
agreements and the severance provisions of any employment agreement that covers
an eligible executive, as applicable, to comply with the requirements of section
409A of the Code, effective as of January 1, 2005, or, in the case of an
individual TESPP agreement, change of control agreement or employment agreement,
the effective date of such agreement, if later.

The Company may adopt one or more trusts to serve as a possible source of funds
for the payment of benefits under the ESP.

1.2                               PURPOSE. THROUGH THE ESP, THE COMPANY INTENDS
TO PERMIT THE DEFERRAL OF COMPENSATION AND TO PROVIDE ADDITIONAL BENEFITS TO A
SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES OF THE COMPANY AND
ITS AFFILIATES. ACCORDINGLY, IT IS INTENDED THAT THE ESP WILL NOT CONSTITUTE A
“QUALIFIED PLAN” SUBJECT TO THE LIMITATIONS OF SECTION 401(A) OF THE CODE, NOR
WILL IT CONSTITUTE A “FUNDED PLAN,” FOR PURPOSES OF SUCH REQUIREMENTS. IT ALSO
IS INTENDED THAT THE ESP WILL QUALIFY AS A PENSION PLAN WITHIN THE MEANING OF
SECTION 3(2) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS

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amended (“ERISA”) that is  exempt from the participation and vesting
requirements of Part 2 of Title I of ERISA, the funding requirements of Part 3
of Title I of ERISA, and the fiduciary requirements of Part 4 of Title I of
ERISA by reason of the exclusions afforded plans that are unfunded and
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees.

 

End of Article I

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ARTICLE II

DEFINITIONS AND CONSTRUCTION

2.1                               DEFINITIONS. WHEN A WORD OR PHRASE APPEARS IN
THIS ESP WITH THE INITIAL LETTER CAPITALIZED, AND THE WORD OR PHRASE DOES NOT
COMMENCE A SENTENCE, THE WORD OR PHRASE WILL GENERALLY BE A TERM DEFINED IN THIS
SECTION 2.1. THE FOLLOWING WORDS AND PHRASES WITH THE INITIAL LETTER CAPITALIZED
WILL HAVE THE MEANING SET FORTH IN THIS SECTION 2.1, UNLESS A DIFFERENT MEANING
IS REQUIRED BY THE CONTEXT IN WHICH THE WORD OR PHRASE IS USED.

(a)                                  “Affiliate” means a corporation that is a
member of a controlled group of corporations (as defined in section 414(b) of
the Code) that includes the Company, any trade or business (whether or not
incorporated) that is in common control (as defined in section 414(c) of the
Code) with the Company, or any entity that is a member of the same affiliated
service group (as defined in section 414(m) of the Code) as the Company.

(b)                                 “AIP” means the Company’s Annual Incentive
Plan, as the same may be amended, restated, modified, renewed or replaced from
time to time.

(c)                                  “Base Salary” means the Covered Executive’s
annual gross rate of pay including amounts reduced from the Employee’s
compensation and contributed on the Employee’s behalf as deferrals under any
qualified or non-qualified employee benefit plans sponsored by the Employer in
effect immediately prior to a Qualifying Termination. Base Salary excludes
bonuses, hardship withdrawal allowances, Annual Incentive Plan Awards,
automobile allowances, housing allowances, relocation payments, deemed income,
income payable under the SIP or other stock incentive plans, Christmas gifts,
insurance premiums and other imputed income, pensions, and retirement benefits.

(d)                                 “Board” means the Board of Directors of the
Company.

(e)                                  “Bonus” means the amount payable to a
Covered Executive, if any, under the AIP.

(f)                                    “Cause” means a Covered Executive’s:

(I)                                     DISHONESTY,

(II)                                  FRAUD,

(III)                               WILLFUL MISCONDUCT,

(IV)                              BREACH OF FIDUCIARY DUTY,

(V)                                 CONFLICT OF INTEREST,

(VI)                              COMMISSION OF A FELONY,

(VII)                           MATERIAL FAILURE OR REFUSAL TO PERFORM HIS JOB
DUTIES IN ACCORDANCE WITH COMPANY POLICIES,

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(VIII)                        A MATERIAL VIOLATION OF COMPANY POLICY THAT CAUSES
HARM TO THE COMPANY OR AN AFFILIATE, OR

(IX)                                OTHER WRONGFUL CONDUCT OF A SIMILAR NATURE
AND DEGREE.

A failure to meet or achieve business objectives, as defined by the Company,
will not be considered Cause so long as the Covered Executive has devoted his
best efforts and attention to the achievement of those objectives.

A Covered Executive will not be deemed to have been terminated for Cause unless
and until there has been delivered to the Covered Executive written notice that
the Covered Executive has engaged in conduct constituting Cause. The
determination of Cause will be made by the Compensation Committee with respect
to any Covered Executive who is employed as the Chief Executive Officer of Tenet
(“CEO”), by the CEO (or an individual acting in such capacity or possessing such
authority on an interim basis) with respect to any Covered Executive who is
employed as the Chief Operating Officer of the Company (the “COO”), the Chief
Financial Officer of the Company (the “CFO”), the General Counsel of the Company
(“GC”), an Executive Vice President (“EVP”) of the Company, a Senior Vice
President or the equivalent thereof of the Company (collectively “SVP”) or a
Vice President of the Company (“VP”) and by the COO (or an individual acting in
such capacity or possessing such authority on an interim basis) with respect to
any Covered Executive who is employed as a Hospital Chief Executive Officer
(“Hospital CEO”). A Covered Executive who receives written notice that he has
engaged in conduct constituting Cause, will be given the opportunity to be heard
(either in person or in writing as mutually agreed to by the Covered Executive
and the Compensation Committee, CEO or COO, as applicable) for the purpose of
considering whether Cause exists. If it is determined either at or following
such hearing that Cause exists, the Covered Executive will be notified in
writing of such determination within five (5) business days. If the Covered
Executive disagrees with such determination, the Covered Executive may file a
claim contesting such determination pursuant to Article IV within thirty (30)
days after his receipt of such written determination finding that Cause exists.

(g)           “Change of Control” means the occurrence of one of the following:

(i)                                     A “change in the ownership of the
Company” which will occur on the date that any one person, or more than one
person acting as a group within the meaning of section 409A of the Code,
acquires ownership of stock in the Company that, together with stock held by
such person or group, constitutes more than fifty percent (50%) of the total
fair market value or total voting power of the stock of the Company. However, if
any one person or more than one person acting as a group, is considered to own
more than fifty percent (50%) of the total fair market value or total voting
power of the stock of the Company, the acquisition of additional stock by the
same person or persons will not be considered a “change in the ownership of the
Company” (or to cause a “change in the effective control of the Company” within
the meaning of Section 2.1(g)(ii) below). Further, an increase of the effective
percentage of stock owned by any one person, or persons acting as a group, as a
result of a transaction in which

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the Company acquires its stock in exchange for property will be treated as an
acquisition of stock for purposes of this paragraph; provided, that for purposes
of this Section 2.1(g)(i), the following acquisitions of Company stock will not
constitute a Change of Control:  (A) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or an Affiliate,
(B) any acquisition  directly from the Company or (C) any acquisition by the
Company. This Section 2.1(g)(i) applies only when there is a transfer of the
stock of the Company (or issuance of stock) and stock in the Company remains
outstanding after the transaction.

 

(ii)                                  A “change in the effective control of the
Company” which will occur on the date that either:

(A)                              ANY ONE PERSON, OR MORE THAN ONE PERSON ACTING
AS A GROUP WITHIN THE MEANING OF SECTION 409A OF THE CODE, ACQUIRES (OR HAS
ACQUIRED DURING THE TWELVE (12) MONTH PERIOD ENDING ON THE DATE OF THE MOST
RECENT ACQUISITION BY SUCH PERSON OR PERSONS) OWNERSHIP OF STOCK OF THE COMPANY
POSSESSING THIRTY FIVE PERCENT (35%) OR MORE OF THE TOTAL VOTING POWER OF THE
STOCK OF THE COMPANY (NOT CONSIDERING STOCK OWNED BY SUCH PERSON OR GROUP PRIOR
TO SUCH TWELVE (12) MONTH PERIOD)(I.E., SUCH PERSON OR GROUP MUST ACQUIRE WITHIN
A TWELVE (12) MONTH PERIOD STOCK POSSESSING THIRTY-FIVE PERCENT (35%) OF THE
TOTAL VOTING POWER OF THE STOCK OF THE COMPANY) EXCEPT FOR (1) ANY ACQUISITION
BY ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR MAINTAINED BY THE
COMPANY OR AN AFFILIATE, (2) ANY ACQUISITION DIRECTLY FROM THE COMPANY OR (3)
ANY ACQUISITION BY THE COMPANY; OR

(B)                                A MAJORITY OF THE MEMBERS OF THE BOARD ARE
REPLACED DURING ANY TWELVE (12) MONTH PERIOD BY DIRECTORS WHOSE APPOINTMENT OR
ELECTION IS NOT ENDORSED BY A MAJORITY OF THE MEMBERS OF THE BOARD PRIOR TO THE
DATE OF THE APPOINTMENT OR ELECTION.

For purposes of a “change in the effective control of the Company,” if any one
person, or more than one person acting as a group, is considered to effectively
control the Company within the meaning of this Section 2.1(g)(ii), the
acquisition of additional control of the Company by the same person or persons
is not considered a “change in the effective control of the Company,” or to
cause a “change in the ownership of the Company” within the meaning of Section
2.1(g)(i) above.

(iii)                               A “change in the ownership of a substantial
portion of the Company’s assets” which will occur on the date that any one
person, or more than one person acting as a group, acquires (or has acquired
during the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) assets of the Company that have a total
gross fair market value equal to or more than forty percent (40%) of the total
gross fair market value of all the assets of the Company immediately prior to
such acquisition or acquisitions. For this purpose, gross fair market value
means the value of the assets of the Company, or the value of the

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assets being disposed of, determined without regard to any liabilities
associated with such assets. Any transfer of assets to an entity that is
controlled by the shareholders of the Company immediately after the transfer, as
provided in guidance issued pursuant to section 409A of the Code, will not
constitute a Change in Control.

 

(II)                                  A LIQUIDATION OR DISSOLUTION OF THE
COMPANY THAT IS APPROVED BY A MAJORITY OF THE COMPANY’S STOCKHOLDERS.

For purposes of this Section 2.1(g), the provisions of section 318(a) of the
Code regarding the constructive ownership of stock will apply to determine stock
ownership; provided, that, stock underlying unvested options (including options
exercisable for stock that is not substantially vested) will not be treated as
owned by the individual who holds the option.

(h)                                 “COBRA” means the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended.

(i)                                     “Code” means the Internal Revenue Code
of 1986, as amended from time to time.

(j)                                     “Company” means Tenet Healthcare
Corporation.

(k)                                  “Compensation Committee” means the
Compensation Committee of the Board, which has the authority to amend and
terminate the ESP as provided in Article VI.

(l)                                     “Covered Executive” means:

(I)                                     THE CHIEF EXECUTIVE OFFICER (“CEO”) OF
THE COMPANY,

(II)                                  THE CHIEF OPERATING OFFICER (“COO”) OF THE
COMPANY,

(III)                               THE CHIEF FINANCIAL OFFICER (“CFO”) OF THE
COMPANY,

(IV)                              THE GENERAL COUNSEL (“GC”) OF THE COMPANY,

(V)                                 AN EXECUTIVE VICE PRESIDENT (“EVP”) OF THE
COMPANY,

(VI)                              A SENIOR VICE PRESIDENT OR THE EQUIVALENT
THEREOF (COLLECTIVELY “SVP”) OF THE COMPANY,

(VII)                           A VICE PRESIDENT (“VP”) OF THE COMPANY, OR

(VIII)                        A HOSPITAL CHIEF EXECUTIVE OFFICER (“HOSPITAL
CEO”).

The term Covered Executive will also include any Employee who is designated as a
Covered Executive by the Compensation Committee with any such designation being
reflected in an Appendix A attached hereto. Such Appendix A may be modified by
the Compensation Committee from time to time without the need for a formal
amendment to the ESP, in which case an updated Appendix A

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will be attached hereto. To the extent permitted by applicable law, an
individual will cease to be a Covered Executive as of the date he attains age
sixty-five (65).

 

(m)                               “DCP” means the Tenet 2001 Deferred
Compensation Plan, the Tenet 2006 Deferred Compensation Plan and any other
deferred compensation plan maintained by the Employer that covers Covered
Executives.

(n)                                 “Effective Date” means May 11, 2006, except
that those provisions of the ESP and the associated ESP Agreement required by
section 409A of the Code (e.g., the six (6) month delay specified in Section
3.3) will be effective as of January 1, 2005.

(o)                                 “Employee” means each select member of
management or highly compensated employee receiving remuneration, or who is
entitled to remuneration, for services rendered to the Employer, in the legal
relationship of employer and employee. The term “Employee” does not include a
consultant, independent contractor or leased employee even if such consultant,
leased employee or independent contractor is subsequently determined by the
Employer, the Internal Revenue Service, the Department of Labor or a court of
competent jurisdiction to be a common law employee of the Employer. Further, the
term “Employee” does not include a person who is receiving severance pay from
the Employer.

(p)                                 “Employer” means the Company and each
Affiliate that has adopted the ESP as a participating employer. Unless provided
otherwise by the Compensation Committee or the Board, all Affiliates will be
participating employers in the ESP. Each such Affiliate may evidence its
adoption of the ESP either by a formal action of its governing body or taking
administrative actions with respect to the ESP on behalf of its Covered
Executives (e.g., communicating the terms of the ESP, etc.). An entity will
cease to be a participating employer as of the date such entity ceases to be an
Affiliate.

(q)                                 “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time.

(r)                                    “ESP” means the Tenet Executive Severance
Plan as set forth herein and as the same may be amended from time to time. Prior
to the Effective Date, the ESP was known as the TESPP.

(s)                                  “ESP Agreement” means the written agreement
between a Covered Executive and the Plan Administrator, on behalf of the
Employer substantially in the form attached hereto in Appendix B. This form ESP
Agreement may differ with respect to a Covered Executive who was covered by the
TESPP prior to the Effective Date or as determined by the Compensation Committee
in its sole and absolute discretion as provided in Section 3.6. Each ESP
Agreement will form a part of the ESP with respect to the affected Covered
Executive.

(t)                                    “Equity Plan” means any equity plan,
agreement or arrangement maintained or sponsored by the Employer other than the
SIP (e.g., the 1999 broad-based stock option plan and the 1995 stock incentive
plan).

(u)                                 “Five Percent Owner” means any person who
owns (or is considered as owning within the meaning of section 318 of the Code)
more than five percent (5%) of

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the outstanding stock of the Company or an Affiliate or stock possessing more
than five percent (5%) of the total combined voting power of all stock of the
Company or an Affiliate. The rules of sections 414(b), (c) and (m) of the Code
will not apply for purposes of applying these ownership rules. Thus, this
ownership test will be applied separately with respect to the Company and each
Affiliate.

 

(v)                                 “401(k) Plan” means the Tenet Healthcare
Corporation 401(k) Retirement Savings Plan or any other qualified retirement
plan with a cash or deferred arrangement that is maintained or sponsored by the
Employer.

(w)                               “Good Reason” means:

(I)                                     A MATERIAL REDUCTION IN THE COVERED
EXECUTIVE’S JOB DUTIES;

(II)                                  NOT RELATED TO A CHANGE OF CONTROL, A
REDUCTION OF TEN PERCENT (10%) OR MORE IN THE COVERED EXECUTIVE’S COMBINED BASE
SALARY AND TARGET BONUS;

(III)                               NOT RELATED TO A CHANGE OF CONTROL, A
MATERIAL REDUCTION IN THE COVERED EXECUTIVE’S RETIREMENT OR SUPPLEMENTAL
RETIREMENT PLAN BENEFITS;

(IV)                              AN INVOLUNTARY RELOCATION OF THE EXECUTIVE’S
PRIMARY WORKPLACE BY FIFTY (50) MILES OR MORE; OR

(V)                                 A FAILURE OF A SUCCESSOR ENTITY TO ASSUME
THE OBLIGATIONS UNDER THE ESP.

In the case of (ii) and (iii) above, not related to a Change of Control, such
reduction will not constitute good reason if it results from a general
across-the-board reduction for executives at a similar job level within the
Employer. Once a Change of Control has occurred during the two (2) year period
following such Change of Control, no adverse modifications may be made to the
Covered Executive’s Base Salary, Target Bonus or any other benefits provided to
the Covered Executive by the Employer and any such modification to such Base
Salary, Target Bonus or benefits will constitute Good Reason for purposes of the
ESP.

If the Covered Executive believes that an event constituting Good Reason has
occurred, the Covered Executive must notify the Plan Administrator of that
belief, which notice will set forth the basis for that belief. The Plan
Administrator will have ten (10) business days after receipt of such notice in
which to either rectify such event, determine that an event constituting Good
Reason does not exist, or determine that an event constituting Good Reason
exists. If the Plan Administrator does not take any of such actions within such
ten (10)-day period, the Covered Executive may terminate his employment with the
Employer for Good Reason immediately at the end of the ten (10)-day period by
giving written notice to the Employer, which termination will be a Qualifying
Termination effective on the date the event constituting Good Reason occurred.
If the Plan Administrator determines that Good Reason does or does not exist,
then the Plan Administrator will provide written notice of such determination to
the Covered Executive within five (5) business days after the Plan Administrator
determination. If the Plan Administrator determines that Good Reason does not

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exist, then (A) the Covered Executive will not be entitled to rely on or assert
such event as constituting Good Reason, and (B) the Covered Executive may file a
claim pursuant to Article IV within thirty (30) days after the Covered
Executive’s receipt or written notice of the Plan Administrator’s determination.

(x)                                   “Key Employee” means any employee or
former employee of the Employer (including any deceased employee) who at any
time during the Plan Year was:

(I)                                     AN OFFICER OF THE COMPANY OR AN
AFFILIATE HAVING COMPENSATION WITHIN THE MEANING OF SECTION 415(C) OF THE CODE
OF GREATER THAN ONE HUNDRED THIRTY THOUSAND DOLLARS ($130,000) (AS ADJUSTED
UNDER SECTION 416(I)(1) OF THE CODE FOR PLAN YEARS BEGINNING AFTER DECEMBER 31,
2002) (SUCH LIMIT IS $140,000 FOR 2006);

(II)                                  A FIVE PERCENT OWNER; OR

(III)                               A ONE PERCENT OWNER HAVING COMPENSATION
WITHIN THE MEANING OF SECTION 415(C) OF THE CODE OF MORE THAN ONE HUNDRED FIFTY
THOUSAND DOLLARS ($150,000).

The determination of Key Employees will be based upon a twelve (12) month period
ending on December 31 of each year (i.e., the identification date). Employees
that are Key Employees during such twelve (12) month period will be treated as
Key Employees for the twelve (12) month period beginning on the first day of the
fourth month following the end of the twelve (12) month period (i.e., since the
identification date is December 31, then the twelve (12) month period to which
it applies begins on the next following April 1).

The determination of who is a Key Employee will be made in accordance with
section 416(i)(1) of the Code and other guidance of general applicability issued
thereunder. For purposes of determining whether an employee or former employee
is an officer, a Five Percent Owner or a One Percent Owner, the Company and each
Affiliate will be treated as a separate employer (i.e., the controlled group
rules of sections 414(b), (c), (m) and (o) of the Code will not apply).
Conversely, for purposes of determining whether the one hundred thirty thousand
dollar ($130,000) adjusted limit on compensation is met under the officer test
described in Section 2.1(w)(i), compensation from the Company and all Affiliates
will be taken into account (i.e., the controlled group rules of sections 414(b),
(c), (m) and (o) of the Code will apply). Further, in determining who is an
officer under the officer test described in Section 2.1(w)(i), no more than
fifty (50) employees of the Company or its Affiliates (i.e., the controlled
group rules of sections 414(b), (c), (m) and (o) of the Code will apply) will be
treated as officers. If the number of officers exceeds fifty (50), the
determination of which employees or former Employees are officers will be
determined based on who had the largest annual compensation from the Company and
Affiliates for the Plan Year.

(y)                                 “One Percent Owner” means any person who
would be described as a Five Percent Owner if “one percent (1%)” were
substituted for “five percent (5%)” each place where it appears therein.

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(z)                                   “PAC” means the individual or committee
appointed by the Compensation Committee to administer the ESP. If the
Compensation Committee does not appoint a PAC, the Compensation Committee will
serve as the PAC.

(aa)                            “Plan Administrator” means the individual or
committee appointed by the PAC to handle the day-to-day administration of the
ESP. If the PAC does not appoint an individual or committee to serve as the Plan
Administrator, the PAC will be the Plan Administrator.

(bb)                          “Plan Year” means the fiscal year of the ESP,
which will commence on January 1 each year and end on December 31 of such year.

(cc)                            “Potential Change of Control” means the earliest
to occur of:

(I)                                     THE COMPANY ENTERS INTO AN AGREEMENT THE
CONSUMMATION OF WHICH, OR THE APPROVAL BY THE STOCKHOLDERS OF WHICH, WOULD
CONSTITUTE A CHANGE OF CONTROL,

(II)                                  PROXIES FOR THE ELECTION OF MEMBERS OF THE
BOARD ARE SOLICITED BY ANY PERSON OTHER THAN THE COMPANY;

(III)                               ANY PERSON PUBLICLY ANNOUNCES AN INTENTION
TO TAKE OR TO CONSIDER TAKING ACTIONS WHICH, IF CONSUMMATED WOULD CONSTITUTE A
CHANGE OF CONTROL, OR

(IV)                              ANY OTHER EVENT OCCURS WHICH IS DEEMED TO BE A
POTENTIAL CHANGE OF CONTROL BY THE BOARD AND THE BOARD ADOPTS A RESOLUTION TO
THE EFFECT THAT A POTENTIAL CHANGE OF CONTROL HAS OCCURRED.

(dd)                          “Protection Period” means the period beginning on
the date that is six (6) months prior to the occurrence of a Change of Control
and ending twenty-four (24) months following the occurrence of a Change of
Control.

(ee)                            “SERP” means the Tenet Healthcare Corporation
Supplemental Executive Retirement Plan or any other supplemental executive
retirement plan maintained by the Employer in which Covered Executives
participate.

(ff)                                “Severance Pay” means, except as provided
otherwise in the Covered Executive’s ESP Agreement, the sum of the Covered
Executive’s Base Salary and Target Bonus as of the date of a Qualifying
Termination.

(gg)                          “Severance Period” means, except as provided
otherwise in the Covered Executive’s ESP Agreement:

(I)                                     THE PERIOD SPECIFIED IN SECTION 3.1(A)
WITH RESPECT TO SEVERANCE PAY PAYABLE ON ACCOUNT OF A QUALIFYING TERMINATION NOT
RELATED TO A CHANGE OF CONTROL, AND

(II)                                  THE PERIOD SPECIFIED IN SECTION 3.2(A) ON
ACCOUNT OF A QUALIFYING TERMINATION IN CONNECTION WITH A CHANGE OF CONTROL.

(hh)                          “SIP” means the Third Amended and Restated Tenet
Healthcare Corporation 2001 Stock Incentive Plan.

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(ii)                                  “Target Bonus” means the target bonus
percent applicable to the Covered Executive under the AIP multiplied by his Base
Salary at the time of a Qualifying Termination. For example, if the Covered
Executive earns one hundred and fifty thousand dollars ($150,000) and has a
Target Bonus of fifty percent (50%), his Target Bonus equals seventy five
thousand dollars ($75,000).

(jj)                                  “Qualifying Termination” means:

(I)                                     THE INVOLUNTARY TERMINATION OF A COVERED
EXECUTIVE’S EMPLOYMENT BY THE EMPLOYER WITHOUT CAUSE, OR

(II)                                  THE COVERED EXECUTIVE’S RESIGNATION FROM
THE EMPLOYMENT OF THE EMPLOYER FOR GOOD REASON;

provided, however, that a Qualifying Termination will not occur by reason of the
divestiture of an Affiliate with respect to a Covered Executive employed by such
Affiliate who is offered a comparable position with the purchaser and either
declines or accepts such position as provided in Section 6.4.

(kk)                            “TESPP” means the ESP as in effect immediately
prior to the Effective Date

2.2                               CONSTRUCTION. IF ANY PROVISION OF THE ESP IS
DETERMINED TO BE FOR ANY REASON INVALID OR UNENFORCEABLE, THE REMAINING
PROVISIONS OF THE ESP WILL CONTINUE IN FULL FORCE AND EFFECT. ALL OF THE
PROVISIONS OF THE ESP WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS AND WILL BE ADMINISTERED ACCORDING TO THE LAWS OF SUCH
STATE, EXCEPT AS OTHERWISE REQUIRED BY ERISA, THE CODE OR OTHER APPLICABLE
FEDERAL LAW. WHEN  DELIVERY TO THE PAC, PLAN ADMINISTRATOR OR THE COVERED
EXECUTIVE IS REQUIRED UNDER THIS ESP, SUCH DELIVERY REQUIREMENT WILL BE
SATISFIED BY DELIVERY TO A PERSON OR PERSONS DESIGNATED BY THE PAC, PLAN
ADMINISTRATOR OR THE COVERED EXECUTIVE, AS APPLICABLE. DELIVERY WILL BE DEEMED
TO HAVE OCCURRED ONLY WHEN THE FORM OR OTHER COMMUNICATION IS ACTUALLY RECEIVED.
HEADINGS AND SUBHEADINGS ARE FOR THE PURPOSE OF REFERENCE ONLY AND ARE NOT TO BE
CONSIDERED IN THE CONSTRUCTION OF THE ESP. THE PRONOUNS “HE,” “HIM” AND “HIS”
USED IN THE ESP WILL ALSO REFER TO SIMILAR PRONOUNS OF THE FEMALE GENDER UNLESS
OTHERWISE QUALIFIED BY THE CONTEXT.

2.3                               409A COMPLIANCE. THE ESP IS INTENDED TO COMPLY
WITH THE REQUIREMENTS OF SECTION 409A OF THE CODE. THE PROVISIONS OF THE ESP
WILL BE CONSTRUED AND ADMINISTERED IN A MANNER THAT ENABLES THE ESP TO COMPLY
WITH THE PROVISIONS OF SECTION 409A OF THE CODE.

End of Article II

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ARTICLE III
SEVERANCE BENEFITS

3.1                               SEVERANCE BENEFITS NOT RELATED TO A CHANGE OF
CONTROL. EXCEPT AS PROVIDED OTHERWISE IN A COVERED EXECUTIVE’S ESP AGREEMENT, A
COVERED EXECUTIVE WHO INCURS A QUALIFYING TERMINATION NOT RELATED TO A CHANGE OF
CONTROL WILL, SUBJECT TO THE LIMITATIONS CONTAINED IN THE ESP, RECEIVE THE
FOLLOWING SEVERANCE BENEFITS.

(A)                                  SEVERANCE PERIOD. THE COVERED EXECUTIVE
WILL BE ENTITLED TO THE PAYMENT OF SEVERANCE PAY OVER THE SEVERANCE PERIOD SET
FORTH BELOW:

COVERED EXECUTIVE

 

SEVERANCE PERIOD

CEO

 

Three (3) years

COO, CFO and GC

 

Two and one-half (2.5) years

SVPs and EVPs

 

One and one-half (1.5) years

VPs and Hospital CEOs

 

One (1) year

Such Severance Pay will be paid on a bi-weekly basis commencing as of the date
of the Qualifying Termination pursuant to the Employer’s ordinary payroll
schedule for the duration of the Severance Period, subject to the six (6) month
delay applicable to Key Employees described in Section 3.3. All distributions
from the ESP will be taxable as ordinary income when received and subject to
appropriate withholding of income taxes and reported on Form W-2. Except as
otherwise provided herein, a Covered Executive who incurs a Qualifying
Termination will have formally terminated his employment relationship with the
Employer as of the date of such Qualifying Termination and will not be deemed to
be an Employee at any time during the Severance Period or thereafter.

(B)                                  OTHER ACCRUED OBLIGATIONS. THE COVERED
EXECUTIVE WILL BE ENTITLED TO PAYMENT OF ALL ACCRUED BASE SALARY, ACCRUED TIME
OFF AND ANY OTHER ACCRUED AND UNPAID OBLIGATIONS AS OF THE DATE OF THE
QUALIFYING TERMINATION. SUCH ACCRUED OBLIGATIONS WILL BE INCLUDED AND PAID AS
PART OF THE COVERED EXECUTIVE’S FINAL PAYCHECK FROM THE EMPLOYER.

(C)                                  BONUS. THE COVERED EXECUTIVE WILL BE
ENTITLED TO PAYMENT OF THE BONUS EARNED IN ACCORDANCE WITH THE TERMS OF THE AIP
AS ACTED ON BY THE COMPENSATION COMMITTEE DURING THE CALENDAR YEAR OF THE
QUALIFYING TERMINATION. SUCH BONUS WILL BE PRO RATED AS A FRACTION OF TWELVE
(12) FOR FULL MONTHS WORKED BY THE COVERED EXECUTIVE FOR THE EMPLOYER OR AN
AFFILIATE DURING SUCH CALENDAR YEAR AND WILL BE PAID TO THE COVERED EXECUTIVE,
AT THE TIME AND IN THE SAME MANNER SPECIFIED IN THE AIP.

(D)                                  CONTINUED WELFARE BENEFITS. DURING THE
SEVERANCE PERIOD, THE COVERED EXECUTIVE AND HIS DEPENDENTS WILL BE ENTITLED TO
CONTINUE TO PARTICIPATE IN ANY MEDICAL, DENTAL, VISION, LIFE AND LONG-TERM CARE
BENEFIT PROGRAMS MAINTAINED BY THE EMPLOYER IN WHICH SUCH PERSONS WERE
PARTICIPATING IMMEDIATELY PRIOR TO THE DATE OF THE QUALIFYING TERMINATION;
PROVIDED, THAT, THE CONTINUED PARTICIPATION OF SUCH PERSONS IS POSSIBLE UNDER
THE GENERAL TERMS AND PROVISIONS OF SUCH BENEFIT PROGRAMS. IF SUCH CONTINUED
PARTICIPATION IS BARRED, THEN THE EMPLOYER WILL ARRANGE TO PROVIDE SUCH PERSONS
WITH SUBSTANTIALLY SIMILAR COVERAGE TO THAT WHICH SUCH PERSONS WOULD HAVE
OTHERWISE BEEN ENTITLED TO RECEIVE UNDER SUCH BENEFIT

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programs from which such continued participation is barred. In either case,
however, the Covered Executive will be required to continue to pay, on a pre-tax
or after-tax basis, as applicable, his portion of the cost of such coverages as
in effect at the time of the Qualifying Termination, and the Employer will
continue to pay its portion of such costs, as in effect at the time of the
Qualifying Termination. Any coverage provided pursuant to this Section 3.1(d)
will be limited and reduced to the extent equivalent coverage is otherwise
provided by (or available from or under) any other employer of the Covered
Executive. The Covered Executive must advise the Plan Administrator of the
attainment of any such subsequent employer benefit coverages within thirty (30)
days following such attainment.

 

The pre-tax or after-tax payroll deductions for the continued medical, dental,
vision life and long-term care benefits described above will be taken from the
Covered Executive’s Severance Pay pursuant to the Employer’s normal payroll
practices;  provided, however, that effective as of January 1, 2005, if the
commencement of the Covered Executive’s Severance Pay is delayed for six (6)
months as described in Section 3.3, the Covered Executive will not be required
to pay the cost of the continued benefits during such period and instead the
Employer will include the cost of such coverage in the Covered Executive’s
income and report it as wages on Form W-2. Any continued medical, dental or
vision benefits provided to the Covered Executive and his dependents pursuant to
this
Section 3.1(d) is in addition to any rights the Covered Executive and such
dependents may have to continue such coverages under COBRA. The provisions of
this Section 3.1(d) will not prohibit the Company from changing the terms of
such medical, dental, life vision or long-term care benefit programs provided
that any such changes apply to all executives of the Company and its Affiliates
(e.g., the Company may switch insurance carriers or preferred provider
organizations).

(E)                                  OUTPLACEMENT SERVICES. DURING THE SEVERANCE
PERIOD, THE COVERED EXECUTIVE WILL BE ENTITLED TO RECEIVE OUTPLACEMENT SERVICES
IN AN AMOUNT EQUAL TO THE LESSER OF TEN PERCENT (10%) OF HIS BASE SALARY OR
TWENTY FIVE THOUSAND DOLLARS ($25,000). EFFECTIVE AS OF JANUARY 1, 2005, IN
ORDER TO COMPLY WITH SECTION 409A OF THE CODE, THE EXPENSES FOR SUCH
OUTPLACEMENT SERVICES AND THE ESP’S REIMBURSEMENT OF SUCH EXPENSES PURSUANT TO
THIS
SECTION 3.1(E) MUST BE MADE BY THE LAST DAY OF THE SECOND CALENDAR YEAR IN WHICH
THE COVERED EXECUTIVE INCURS A QUALIFYING TERMINATION.

(F)                                    CAR ALLOWANCE. DURING THE SEVERANCE
PERIOD, THE COVERED EXECUTIVE WILL RECEIVE A CAR ALLOWANCE IN THE SAME AMOUNT AS
WAS PROVIDED THE EXECUTIVE AT THE TIME OF THE QUALIFYING TERMINATION. SUCH CAR
ALLOWANCE WILL BE PAID AS PART OF THE COVERED EXECUTIVE’S SEVERANCE PAY, SUBJECT
TO THE SIX (6) MONTH RULE IN SECTION 3.3 APPLICABLE TO KEY EMPLOYEES.

(G)                                 PAYMENT OF LEGAL EXPENSES. THE COVERED
EXECUTIVE WILL BE ENTITLED TO REIMBURSEMENT OF ANY LEGAL EXPENSES REASONABLY
INCURRED BY HIM IN ORDER TO OBTAIN THE BENEFITS PROVIDED PURSUANT TO THE ESP.
EFFECTIVE AS OF JANUARY 1, 2005 IN ORDER TO COMPLY WITH SECTION 409A OF THE
CODE, THE REIMBURSEMENT OF SUCH LEGAL FEES PURSUANT TO THIS SECTION 3.1(G) MUST
BE MADE BY THE LAST DAY OF

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the second calendar year in which the Covered Executive incurs a Qualifying
Termination.

 

(H)                                 EQUITY COMPENSATION ADJUSTMENTS. EXCEPT AS
PROVIDED OTHERWISE IN THE COVERED EXECUTIVE’S ESP AGREEMENT, UPON A QUALIFYING
TERMINATION, ANY EQUITY-BASED COMPENSATION AWARDS GRANTED TO THE COVERED
EXECUTIVE BY THE EMPLOYER UNDER THE SIP OR AN EQUITY PLAN PRIOR TO SUCH
TERMINATION THAT ARE OUTSTANDING AND VESTED AS OF THE DATE OF THE QUALIFYING
TERMINATION WILL BE EXERCISABLE OR SETTLED PURSUANT TO THE TERMS OF THE SIP OR
THE EQUITY PLAN, AS APPLICABLE. ALL UNVESTED EQUITY-BASED COMPENSATION AWARDS
HELD BY THE COVERED EXECUTIVE AS OF THE DATE OF THE QUALIFYING TERMINATION WILL
EXPIRE AND BE OF NO EFFECT. NO COVERED EXECUTIVE WILL BE ENTITLED TO ANY
NEW-EQUITY BASED COMPENSATION AWARDS FOLLOWING THE DATE OF HIS QUALIFYING
TERMINATION OR DURING THE SEVERANCE PERIOD.

(I)                                    SERP. EXCEPT AS PROVIDED OTHERWISE IN THE
COVERED EXECUTIVE’S ESP AGREEMENT, A COVERED EXECUTIVE WHO IS ALSO A PARTICIPANT
IN THE SERP WILL BE ENTITLED TO AGE AND SERVICE CREDIT FOR THE DURATION OF THE
SEVERANCE PERIOD UNDER THE SERP. BENEFITS UNDER THE SERP WILL BE PAYABLE TO THE
COVERED EXECUTIVE PURSUANT TO THE TERMS OF THE SERP; PROVIDED, HOWEVER, THAT IF
THE COVERED EXECUTIVE IS ENTITLED TO COMMENCE SERP BENEFITS DURING THE SEVERANCE
PERIOD PURSUANT TO THE TERMS OF THE SERP; THE AMOUNT OF SEVERANCE PAY PAYABLE TO
EXECUTIVE PURSUANT TO THE ESP WILL BE OFFSET (I.E., REDUCED) BY THE AMOUNT OF
THE SERP BENEFITS PAYABLE DURING THE SEVERANCE PERIOD. FOR PURPOSES OF
DETERMINING THE AMOUNT OF THE COVERED EXECUTIVE’S SERP BENEFITS, ANY ACTUARIAL
REDUCTION THAT WOULD OTHERWISE APPLY UNDER THE SERP DUE TO THE COMMENCEMENT OF
SERP BENEFITS DURING THE SEVERANCE PERIOD WILL BE DISREGARDED (I.E., THE SERP
BENEFITS WILL ONLY BE ACTUARIALLY REDUCED FOR EARLY COMMENCEMENT BEGINNING WITH
THE LAST DAY OF THE SEVERANCE PERIOD). FURTHER, AT THE END OF THE SEVERANCE
PERIOD, THE COVERED EXECUTIVE’S SERP BENEFITS WILL BE RECALCULATED TO TAKE INTO
ACCOUNT THE ADDITIONAL AGE AND SERVICE CREDIT PROVIDED UNDER THE ESP DURING THE
SEVERANCE PERIOD. A COVERED EXECUTIVE’S SEVERANCE PAY WILL NOT BE CONSIDERED IN
CALCULATING THE COVERED EXECUTIVE’S “FINAL AVERAGE EARNINGS” UNDER THE SERP.

(J)                                    DCP. THE COVERED EXECUTIVE WILL INCUR A
TERMINATION OF EMPLOYMENT FOR PURPOSES OF THE DCP AT THE TIME OF A QUALIFYING
TERMINATION AND ACCORDINGLY WILL NOT BE ENTITLED TO DEFER ANY PORTION OF HIS
SEVERANCE PAY TO THE DCP DURING THE SEVERANCE PERIOD. THE COVERED EXECUTIVE’S
DCP BENEFITS WILL BE PAID TO HIM PURSUANT TO THE TERMS OF THE DCP AND THE
COVERED EXECUTIVE’S DISTRIBUTION ELECTION UNDER THE DCP IN A MANNER THAT
COMPLIES WITH SECTION 409A OF THE CODE.

(K)                                401(K). THE COVERED EXECUTIVE WILL INCUR A
SEVERANCE FROM EMPLOYMENT FOR PURPOSES OF THE 401(K) PLAN ON THE DATE OF THE
QUALIFYING TERMINATION AND ACCORDINGLY WILL NOT BE ENTITLED TO DEFER ANY PORTION
OF HIS SEVERANCE PAY TO THE 401(K) PLAN DURING THE SEVERANCE PERIOD. THE COVERED
EXECUTIVE’S 401(K) PLAN BENEFITS WILL BE PAYABLE TO HIM UNDER THE 401(K) PLAN
PURSUANT TO THE TERMS OF THE 401(K) PLAN.

3.2                               SEVERANCE BENEFITS ON AND AFTER A CHANGE OF
CONTROL. EXCEPT AS PROVIDED OTHERWISE IN A COVERED EXECUTIVE’S ESP AGREEMENT, A
COVERED EXECUTIVE WHO INCURS A QUALIFYING

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Termination during the Protection Period with respect to a Change of Control
will, subject to the limitations contained in the ESP, receive the severance
benefits described in Section 3.1, plus the additional severance benefits
provided in this Section 3.2. Such severance benefits will be paid in the time
and manner and subject to the same conditions specified in Section 3.1, except
that such benefits will be paid for the Severance Period specified in Section
3.2(a) instead of the Severance Period provided for in Section 3.1(a). Further,
within five (5) business days following the occurrence of such Change of
Control, the Company must contribute to a rabbi trust an amount sufficient to
fully fund the severance benefits accrued as of the date of the Change of
Control pursuant to this Section 3.2. Such funding obligation will continue for
each calendar quarter during the twenty-four (24) month period following such
Change of Control, with such funding to be made within five (5) business days
following the end of each such calendar quarter. Finally, in the event that the
final regulations issued under section 409A of the Code permit a lump sum
payment of Severance Pay on account of a Qualifying Termination with respect to
a change of control within the meaning of section 409A of the Code, then in the
event of a Change of Control described in
Section 2.1(g)(i), Section 2.1(g)(ii) or Section 2.1(g)(iii), such Severance
Pay, in the amount determined pursuant to Section 3.2(a), will be paid to the
Covered Executive in a lump sum cash payment, subject to the six (6) month delay
set forth in Section 3.3.

(A)                                  SEVERANCE PERIOD. THE SEVERANCE PERIOD
FOLLOWING A QUALIFYING TERMINATION THAT OCCURS DURING THE PROTECTION PERIOD WILL
BE AS FOLLOWS:

COVERED EXECUTIVE

 

SEVERANCE PERIOD

CEO

 

Three (3) years

COO, CFO and GC

 

Three (3) years

SVPs and EVPs

 

Two (2) years

VPs and Hospital CEOs

 

One and one-half (1.5) years

(B)                                  EQUITY COMPENSATION ADJUSTMENTS. EXCEPT AS
PROVIDED OTHERWISE IN THE COVERED EXECUTIVE’S ESP AGREEMENT, IN THE EVENT OF A
CHANGE OF CONTROL, IF THE SUCCESSOR TO THE COMPANY DOES NOT ASSUME THE SIP OR
THE APPLICABLE EQUITY PLAN OR GRANT COMPARABLE AWARDS IN SUBSTITUTION OF THE
OUTSTANDING AWARDS UNDER THE SIP OR APPLICABLE EQUITY PLAN AS OF THE DATE OF THE
CHANGE OF CONTROL, THEN ANY EQUITY-BASED COMPENSATION AWARDS GRANTED TO THE
COVERED EXECUTIVE BY THE EMPLOYER UNDER THE SIP OR EQUITY PLAN AND OUTSTANDING
AS OF THE DATE OF THE CHANGE OF CONTROL WILL BECOME IMMEDIATELY FULLY VESTED
AND/OR EXERCISABLE AND WILL NO LONGER BE SUBJECT TO A SUBSTANTIAL RISK OF
FORFEITURE OR RESTRICTIONS ON TRANSFERABILITY, OTHER THAN THOSE IMPOSED BY
APPLICABLE LEGISLATIVE OR REGULATORY REQUIREMENTS. CONVERSELY, EXCEPT AS
PROVIDED OTHERWISE IN THE COVERED EXECUTIVE’S ESP AGREEMENT, IF THE SUCCESSOR TO
THE COMPANY ASSUMES THE SIP OR THE APPLICABLE EQUITY PLAN OR SUBSTITUTES THE
AWARDS UNDER THE SIP OR APPLICABLE EQUITY PLAN WITH COMPARABLE AWARDS; THEN ANY
EQUITY-BASED COMPENSATION AWARDS GRANTED TO THE COVERED EXECUTIVE BY THE
EMPLOYER UNDER THE SIP OR EQUITY PLAN PRIOR TO SUCH TERMINATION AND OUTSTANDING
AS OF THE DATE OF THE CHANGE OF CONTROL OR ANY SUBSTITUTED AWARDS GIVEN WITH
RESPECT TO SUCH OUTSTANDING AWARDS WILL CONTINUE TO BE MAINTAINED PURSUANT TO
THEIR TERMS; PROVIDED, HOWEVER, THAT UPON A COVERED EXECUTIVE’S QUALIFYING
TERMINATION IN CONNECTION WITH SUCH CHANGE OF CONTROL, ANY SUCH EQUITY
COMPENSATION AWARDS OUTSTANDING AS OF THE DATE OF THE QUALIFYING TERMINATION
WILL BECOME IMMEDIATELY FULLY VESTED AND/OR EXERCISABLE AND WILL NO LONGER BE
SUBJECT TO A SUBSTANTIAL RISK

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of forfeiture or restrictions on transferability, other than those imposed by
applicable legislative or regulatory requirements. No Covered Executive will be
entitled to any new-equity based compensation awards following the date of his
Qualifying Termination or during the Severance Period.

(C)                                  280G GROSS UP. IN THE EVENT THAT PAYMENTS
TO A COVERED EXECUTIVE PURSUANT TO THE ESP (WHEN CONSIDERED WITH ALL OTHER
PAYMENTS MADE TO THE COVERED EXECUTIVE AS A RESULT OF THE TERMINATION OF THE
EXECUTIVE’S EMPLOYMENT WITH THE EMPLOYER THAT ARE SUBJECT TO SECTION 280G OF THE
CODE) (THE AMOUNT OF ALL SUCH PAYMENTS, COLLECTIVELY, THE “PARACHUTE PAYMENT”)
RESULTS IN THE COVERED EXECUTIVE BECOMING LIABLE FOR THE PAYMENT OF ANY EXCISE
TAXES PURSUANT TO SECTION 4999 OF THE CODE (“280G EXCISE TAX”) AND REDUCES ON AN
AFTER-TAX BASIS THE VALUE OF BENEFITS PAYABLE TO THE COVERED EXECUTIVE UNDER THE
ESP BY MORE THAN TEN PERCENT (10%), THE COVERED EXECUTIVE WILL BE ENTITLED TO AN
ADDITIONAL PAYMENT EQUAL TO THE AMOUNT OF ANY 280G EXCISE TAX PAYABLE BY THE
COVERED EXECUTIVE PURSUANT TO SECTION 4999 OF THE CODE AS A RESULT OF SUCH
PAYMENTS PLUS ALL FEDERAL, STATE AND LOCAL TAXES APPLICABLE TO THE EMPLOYER’S
PAYMENT OF SUCH 280G EXCISE TAX, INCLUDING ANY ADDITIONAL TAXES DUE UNDER
SECTION 4999 OF THE CODE WITH RESPECT TO PAYMENTS MADE PURSUANT TO THIS
PROVISION. CALCULATIONS FOR THESE PURPOSES WILL ASSUME THE HIGHEST MARGINAL RATE
APPLICABLE AT THE TIME OF CALCULATION. THE INTENT OF THIS SECTION 3.2(C) IS TO
PROVIDE THAT THE EMPLOYER WILL PAY THE COVERED EXECUTIVE AN ADDITIONAL AMOUNT
(THE “280G GROSS-UP PAYMENT”) SUCH THAT THE NET AMOUNT RETAINED BY THE COVERED
EXECUTIVE AFTER DEDUCTION (I) OF ANY 280G EXCISE TAX IMPOSED ON THE PARACHUTE
PAYMENT, AND (II) OF ANY 280G EXCISE TAX, FEDERAL, STATE OR LOCAL INCOME,
PAYROLL, AND/OR OTHER TAXES IMPOSED ON THE GROSS-UP PAYMENT WILL EQUAL THE
PARACHUTE PAYMENT.

If the Covered Executive determines that the Covered Executive is liable for a
280G Excise Tax with respect to amounts received under the ESP or otherwise in
connection with a Change of Control, the Covered Executive must promptly so
notify the Plan Administrator in writing. Upon receipt of such notice from the
Covered Executive, the Plan Administrator must, within twenty (20) days
thereafter, either:

(A)                              NOTIFY THE COVERED EXECUTIVE, IN WRITING, THAT
THE PLAN ADMINISTRATOR AGREES WITH THE COVERED EXECUTIVE’S DETERMINATION OF 280G
EXCISE TAX LIABILITY, IN WHICH CASE THE EMPLOYER WILL BECOME OBLIGATED TO
IMMEDIATELY PAY TO THE COVERED EXECUTIVE THE 280G GROSS-UP PAYMENT, OR

(B)                                SUBMIT TO THE COVERED EXECUTIVE AN OPINION,
PREPARED BY COUNSEL OF THE PLAN ADMINISTRATOR’S CHOICE WHICH COUNSEL IS
REASONABLY SATISFACTORY TO THE COVERED EXECUTIVE, THAT THE COVERED EXECUTIVE IS
NOT LIABLE FOR THE 280G EXCISE TAX (THE “TAX OPINION”).

If notwithstanding such Tax Opinion, the IRS assesses the 280G Excise Tax
against the Covered Executive, the Covered Executive may choose to either:

(1)                                  NOT CONTEST THE ASSESSMENT, IN WHICH CASE
THE EMPLOYER WILL BE RELIEVED OF ITS OBLIGATION TO MAKE THE 280G GROSS-UP
PAYMENT SPECIFIED IN THIS SECTION 3.2(C), OR

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(2)                                  CONTEST THE ASSESSMENT, WITH COUNSEL OF THE
COVERED EXECUTIVE’S CHOICE THAT IS REASONABLY SATISFACTORY TO THE EMPLOYER.

Regardless of whether the Covered Executive elects option (1) or (2) above, for
the seven (7) year period following the date of the Qualifying Termination, he
will be entitled to a monthly payments equal to the lesser of a) the reasonable
legal fees and expenses incurred by the Covered Executive in contesting the IRS
assessment of the 280G Excise Tax or b) twenty thousand dollars ($20,000). Such
monthly payments will be subject to the six (6) month delay applicable to Key
Employees under Section 3.3.

If the Excise Tax is contested, with counsel reasonably satisfactory to the
Employer, then the Employer will pay to the Covered Executive the 280G Gross-Up
Payment (including any interest or penalties attributable thereto) upon the
earlier of ten (10) days after 1) the entry of a final judgment, decree, or
other order by a court of competent jurisdiction that the Covered Executive is
liable for the 280G Excise Tax, or 2) a mutual determination of the Covered
Executive and the Employer not to proceed further with the contest. If the
Covered Executive is a Key Employee, payment of the 280G Excise Tax will be
subject to a six (6) month delay as provided in Section 3.3.

3.3                               TERMINATION DISTRIBUTIONS TO KEY EMPLOYEES.
DISTRIBUTIONS UNDER THE ESP THAT ARE PAYABLE TO A COVERED EXECUTIVE WHO IS A KEY
EMPLOYEE ON AND AFTER JANUARY 1, 2005, ON ACCOUNT OF A QUALIFYING TERMINATION
WILL BE DELAYED FOR A PERIOD OF SIX (6) MONTHS FOLLOWING SUCH COVERED
EXECUTIVE’S QUALIFYING TERMINATION. UPON THE EXPIRATION OF SUCH SIX (6) MONTH
PERIOD, AMOUNTS THAT WOULD HAVE BEEN PAID TO THE COVERED EXECUTIVE DURING SUCH
SIX (6) MONTH PERIOD, WILL BE PAID TO HIM IN THE FORM OF A LUMP SUM PAYMENT AND
THE REMAINING AMOUNTS PAYABLE TO THE COVERED EXECUTIVE UNDER THE ESP WILL BE
PAID WITH RESPECT TO THE REMAINDER OF THE SEVERANCE PERIOD PURSUANT TO THE TERMS
OF THIS ARTICLE III (I.E., IN THE CASE OF SEVERANCE PAY PURSUANT TO SECTION
3.1(A), SUCH SEVERANCE PAY WILL BE PAID ON A BI-WEEKLY BASIS FOR THE REMAINDER
OF THE SEVERANCE PERIOD). THIS SIX (6) MONTH RESTRICTION WILL NOT APPLY, OR WILL
CEASE TO APPLY, WITH RESPECT TO DISTRIBUTIONS BY REASON OF THE DEATH OF THE
COVERED EXECUTIVE PURSUANT TO SECTION 3.4.

3.4                               DISTRIBUTIONS ON ACCOUNT OF DEATH OF THE
COVERED EXECUTIVE DURING THE SEVERANCE PERIOD. EXCEPT AS PROVIDED OTHERWISE IN
THE COVERED EXECUTIVE’S ESP AGREEMENT, IF A COVERED EXECUTIVE DIES DURING THE
SEVERANCE PERIOD SPECIFIED IN
SECTION 3.1(A) OR SECTION 3.2(A), THE FOLLOWING BENEFITS WILL BE PAYABLE:

(A)                                  SEVERANCE PAY. ANY REMAINING SEVERANCE PAY
PAYABLE TO THE COVERED EXECUTIVE AS OF THE DATE OF HIS DEATH WILL CONTINUE TO BE
PAID TO THE COVERED EXECUTIVE’S ESTATE PURSUANT TO SECTION 3.1(A) OR 3.2(A), AS
APPLICABLE.

(B)                                  OTHER ACCRUED OBLIGATIONS. ANY UNPAID BASE
SALARY, TIME OFF AND ANY OTHER ACCRUED AND UNPAID OBLIGATIONS THAT REMAIN
OUTSTANDING AS OF THE DATE OF THE COVERED EXECUTIVE’S DEATH WILL BE PAID TO THE
COVERED EXECUTIVE’S ESTATE PURSUANT TO SECTION 3.1(B).

(C)                                  BONUS. ANY UNPAID BONUS DESCRIBED UNDER
SECTION 3.1(C) THAT REMAINS OUTSTANDING AS OF THE DATE OF THE COVERED
EXECUTIVE’S DEATH WILL BE PAID TO HIS ESTATE PURSUANT TO SECTION 3.1(C).

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(D)                                  CONTINUED WELFARE BENEFITS. THE COVERED
EXECUTIVE’S DEPENDENTS WILL BE ENTITLED TO CONTINUE TO PARTICIPATE IN ANY
MEDICAL, DENTAL, VISION, LIFE AND LONG-TERM CARE BENEFIT PROGRAMS MAINTAINED BY
THE EMPLOYER IN WHICH SUCH PERSONS WERE PARTICIPATING IMMEDIATELY PRIOR TO THE
DATE OF THE COVERED EXECUTIVE’S DEATH FOR THE REMAINDER OF THE SEVERANCE PERIOD,
SUBJECT TO THE PROVISIONS OF SECTION 3.1(D). AT THE END OF THE SEVERANCE PERIOD
SUCH DEPENDENTS WILL BE ELIGIBLE TO ELECT TO CONTINUE THEIR MEDICAL, DENTAL OR
VISION COVERAGE PURSUANT TO COBRA.

(E)                                  OUTPLACEMENT SERVICES. ANY OUTPLACEMENT
SERVICE BENEFITS PAYABLE TO THE COVERED EXECUTIVE PURSUANT TO SECTION 3.1(E)
WILL CEASE AS OF THE DATE OF THE COVERED EXECUTIVE’S DEATH; PROVIDED, THAT ANY
ELIGIBLE OUTPLACEMENT EXPENSES INCURRED PRIOR TO THE COVERED EXECUTIVE’S DEATH
WILL BE REIMBURSABLE TO THE COVERED EXECUTIVE’S ESTATE PURSUANT TO SECTION
3.1(E).

(F)                                    CAR ALLOWANCE. THE CAR ALLOWANCE PAYABLE
TO THE COVERED EXECUTIVE PURSUANT TO SECTION 3.1(F) WILL CEASE AS OF THE DATE OF
THE COVERED EXECUTIVE’S DEATH; PROVIDED, THAT THE AMOUNT OF SUCH CAR ALLOWANCE
PAYABLE FOR THE PERIOD PRIOR TO THE COVERED EXECUTIVE’S DEATH WILL BE PAID TO
THE COVERED EXECUTIVE’S ESTATE PURSUANT TO SECTION 3.1(F).

(G)                                 PAYMENT OF LEGAL EXPENSES OR 280G EXCISE TAX
AMOUNT. THE OBLIGATION TO REIMBURSE THE COVERED EXECUTIVE FOR ANY LEGAL FEES OR
THE 280G EXCISE TAX  PURSUANT TO SECTION 3.2(C) WILL CONTINUE PURSUANT TO THE
TERMS OF THE ESP FOLLOWING HIS DEATH, EXCEPT THAT SUCH LEGAL FEES OR EXCISE TAX
REIMBURSEMENT WILL BE PAYABLE TO THE COVERED EXECUTIVE’S ESTATE.

(H)                                 EQUITY COMPENSATION ADJUSTMENTS. ANY
OUTSTANDING EQUITY-BASED COMPENSATION AWARDS GRANTED TO THE COVERED EXECUTIVE
THAT ARE OUTSTANDING AS OF THE DATE OF HIS DEATH WILL BE EXERCISABLE OR SETTLED
PURSUANT TO THE TERMS OF THE SIP OR THE EQUITY PLAN, AS APPLICABLE.

3.5                               SECTION 409A GROSS-UP PAYMENT. IN THE EVENT
THAT A COVERED EXECUTIVE (OR HIS ESTATE) BECOMES LIABLE FOR THE PAYMENT OF ANY
EXCISE TAXES PURSUANT TO SECTION 409A OF THE CODE (“409A EXCISE TAX”) WITH
RESPECT TO THE BENEFITS PAYABLE UNDER THE ESP, THE COVERED EXECUTIVE (OR HIS
ESTATE) WILL BE ENTITLED TO AN ADDITIONAL PAYMENT EQUAL TO THE AMOUNT OF ANY
409A EXCISE TAX PAYABLE BY THE COVERED EXECUTIVE (OR HIS ESTATE) PURSUANT TO
SECTION 409A OF THE CODE PLUS ALL FEDERAL, STATE AND LOCAL TAXES APPLICABLE TO
THE EMPLOYER’S PAYMENT OF SUCH 409A EXCISE TAX, INCLUDING ANY ADDITIONAL TAXES
DUE UNDER SECTION 409A OF THE CODE WITH RESPECT TO PAYMENTS MADE PURSUANT TO
THIS PROVISION.

3.6                               ALTERNATE PLAN TERMS. THE COMPENSATION
COMMITTEE RESERVES THE RIGHT TO MODIFY THE TERMS OF THIS ESP WITH RESPECT TO ANY
COVERED EXECUTIVE (E.G., TO PROVIDE DIFFERENT BENEFITS THAN THOSE SET FORTH
HEREIN). SUCH MODIFIED TERMS WILL BE SET FORTH IN THE COVERED EXECUTIVE’S ESP
AGREEMENT OR IN SUCH OTHER FORM AS MAY BE DETERMINED BY THE COMPENSATION
COMMITTEE, IN ITS SOLE AND ABSOLUTE DISCRETION.

3.7                               CONDITIONS TO PAYMENT OF SEVERANCE BENEFITS.
AS A CONDITION OF OBTAINING BENEFITS UNDER THE ESP, THE COVERED EXECUTIVE WILL
BE REQUIRED TO EXECUTE A SEVERANCE AGREEMENT AND GENERAL RELEASE. SUCH SEVERANCE
AGREEMENT AND GENERAL RELEASE WILL CONTAIN THE RESTRICTIVE COVENANTS SET FORTH
BELOW REGARDING NON-COMPETITION,

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CONFIDENTIALITY, NON-DISPARAGEMENT AND NON-SOLICITATION AS WELL AS A GENERAL
RELEASE OF CLAIMS AGAINST THE COMPANY AND ITS AFFILIATES.

(A)                                  NON-COMPETITION. PAYMENT OF ANY AND ALL
SEVERANCE BENEFITS PROVIDED UNDER THE ESP WILL CEASE IF, AT ANY TIME DURING THE
SEVERANCE PERIOD DESCRIBED IN SECTION 3.1(A), THE COVERED EXECUTIVE DIRECTLY OR
INDIRECTLY, CARRIES ON OR CONDUCTS, IN COMPETITION WITH THE COMPANY AND ITS
AFFILIATES, ANY BUSINESS OF THE NATURE IN WHICH THE COMPANY OR ITS AFFILIATES
ARE THEN ENGAGED IN ANY GEOGRAPHICAL AREA IN WHICH THE COMPANY OR ITS AFFILIATES
ENGAGE IN BUSINESS AT THE TIME OF THE COVERED EXECUTIVE’S QUALIFYING TERMINATION
OR IN WHICH ANY OF THEM, PRIOR TO SUCH QUALIFYING TERMINATION, EVIDENCED IN
WRITING, AT ANY TIME DURING THE SIX (6) MONTH PERIOD PRIOR TO SUCH TERMINATION,
AN INTENTION TO ENGAGE IN SUCH BUSINESS. THIS PROHIBITION EXTENDS TO THE COVERED
EXECUTIVE’S CONDUCTING OR ENGAGING IN ANY SUCH BUSINESS EITHER AS AN INDIVIDUAL
ON HIS OWN ACCOUNT OR AS A PARTNER OR JOINT VENTURER OR AS AN EXECUTIVE, AGENT,
CONSULTANT OR SALESMAN FOR ANY OTHER PERSON OR ENTITY, OR AS AN OFFICER OR
DIRECTOR OF A CORPORATION OR AS A SHAREHOLDER IN A CORPORATION OF WHICH HE WILL
THEN OWN TEN PERCENT (10%) OR MORE OF ANY CLASS OF STOCK. THE PROVISIONS OF THIS
SECTION 3.7(A) WILL NOT APPLY DURING THE SEVERANCE PERIOD DESCRIBED IN SECTION
3.2(A).

(B)                                  CONFIDENTIAL INFORMATION. PAYMENT OF ANY
AND ALL SEVERANCE BENEFITS WILL CEASE IF, AT ANY TIME DURING THE SEVERANCE
PERIOD DESCRIBED IN EITHER SECTION 3.1(A) OF 3.2(A), THE COVERED EXECUTIVE
DIRECTLY OR INDIRECTLY REVEALS, DIVULGES OR MAKES KNOWN TO ANY PERSON OR ENTITY,
OR USES FOR THE COVERED EXECUTIVE’S PERSONAL BENEFIT (INCLUDING WITHOUT
LIMITATION FOR THE PURPOSE OF SOLICITING BUSINESS, WHETHER OR NOT COMPETITIVE
WITH ANY BUSINESS OF THE COMPANY OR ANY OF ITS AFFILIATES), ANY INFORMATION
ACQUIRED DURING THE COVERED EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR ITS
AFFILIATES WITH REGARD TO THE FINANCIAL, BUSINESS OR OTHER AFFAIRS OF THE
COMPANY OR ANY OF ITS AFFILIATES (INCLUDING WITHOUT LIMITATION ANY LIST OR
RECORD OF PERSONS OR ENTITIES WITH WHICH THE COMPANY OR ANY OF ITS AFFILIATES
HAS ANY DEALINGS), OTHER THAN:

(I)                                     INFORMATION ALREADY IN THE PUBLIC
DOMAIN,

(II)                                  INFORMATION OF A TYPE NOT CONSIDERED
CONFIDENTIAL BY PERSONS ENGAGED IN THE SAME BUSINESS OR A BUSINESS SIMILAR TO
THAT CONDUCTED BY THE COMPANY OR ITS AFFILIATES, OR

(III)                               INFORMATION THAT THE COVERED EXECUTIVE IS
REQUIRED TO DISCLOSE UNDER THE FOLLOWING CIRCUMSTANCES:

(A)                              AT THE EXPRESS DIRECTION OF ANY AUTHORIZED
GOVERNMENTAL ENTITY;

(B)                                PURSUANT TO A SUBPOENA OR OTHER COURT
PROCESS;

(C)                                AS OTHERWISE REQUIRED BY LAW OR THE RULES,
REGULATIONS, OR ORDERS OF ANY APPLICABLE REGULATORY BODY; OR

(D)                               AS OTHERWISE NECESSARY, IN THE OPINION OF
COUNSEL FOR THE COVERED EXECUTIVE, TO BE DISCLOSED BY THE COVERED EXECUTIVE IN
CONNECTION WITH ANY LEGAL ACTION OR PROCEEDING INVOLVING THE COVERED

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Executive and the Company or any Affiliate in his capacity as an employee,
officer, director, or stockholder of the Company or any Affiliate.

 

Executive will, at any time requested by the Company (either during his
employment with the Company and its Affiliates or during the Severance Period),
promptly deliver to the Company all memoranda, notes, reports, lists and other
documents (and all copies thereof) relating to the business of the Company or
any of its Affiliates which he may then possess or have under his control.

(C)                                  AGREEMENT NOT TO SOLICIT EMPLOYEES. PAYMENT
OF ANY AND ALL SEVERANCE BENEFITS WILL CEASE IF, AT ANY TIME DURING THE
SEVERANCE PERIOD DESCRIBED IN EITHER SECTION 3.1(A) OF 3.2(A), THE COVERED
EXECUTIVE DIRECTLY OR INDIRECTLY SOLICITS OR INDUCES, OR IN ANY MANNER ATTEMPTS
TO SOLICIT OR INDUCE, ANY PERSON EMPLOYED BY, OR ANY AGENT OF, THE COMPANY OR
ANY OF ITS AFFILIATES TO TERMINATE SUCH EMPLOYEE’S EMPLOYMENT OR AGENCY, AS THE
CASE MAY BE, WITH THE COMPANY OR ANY AFFILIATE.

(D)                                  NONDISPARAGEMENT. PAYMENT OF ANY AND ALL
SEVERANCE BENEFITS WILL CEASE IF, AT ANY TIME DURING THE SEVERANCE PERIOD
DESCRIBED IN EITHER SECTION 3.1(A) OF 3.2(A), THE COVERED EXECUTIVE DISPARAGES
THE COMPANY OR ITS AFFILIATES AND THEIR RESPECTIVE BOARDS OF DIRECTORS OR OTHER
GOVERNING BODY, EXECUTIVES, EMPLOYEES AND PRODUCTS OR SERVICES. THE COMPANY WILL
NOT DISPARAGE THE COVERED EXECUTIVE DURING THE COVERED EXECUTIVE’S PERIOD OF
EMPLOYMENT WITH THE COMPANY AND ITS AFFILIATES OR THEREAFTER. FOR PURPOSES OF
THIS SECTION 3.7(D), DISPARAGEMENT DOES NOT INCLUDE:

(I)                                     COMPLIANCE WITH LEGAL PROCESS OR
SUBPOENAS TO THE EXTENT ONLY TRUTHFUL STATEMENTS ARE RENDERED IN SUCH COMPLIANCE
ATTEMPT,

(II)                                  STATEMENTS IN RESPONSE TO AN INQUIRY FROM
A COURT OR REGULATORY BODY, OR

(III)                               STATEMENTS OR COMMENTS IN REBUTTAL OF MEDIA
STORIES OR ALLEGED MEDIA STORIES.

The violation of this Section 3.7 by Covered Executive will entitle the Company
to complete relief from such violation including, but not limited to, injunctive
relief and damages as determined by an arbitrator, the cessation of severance
benefits and a return of all severance benefits paid to the Covered Executive
pursuant to the terms of the ESP. Such relief will apply regardless of whether
such violation is discovered after the expiration of the Severance Period. The
violation of
Section 3.7(d) by the Company will entitle the Covered Executive to complete
relief from such violation including, but not limited to, injunctive relief and
damages as determined by an arbitrator.

End of Article III

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ARTICLE IV
ADMINISTRATION

4.1                               THE PAC. THE OVERALL ADMINISTRATION OF THE ESP
WILL BE THE RESPONSIBILITY OF THE PAC.

4.2                               POWERS OF PAC. THE PAC WILL HAVE SOLE AND
ABSOLUTE DISCRETION REGARDING THE EXERCISE OF ITS POWERS AND DUTIES UNDER THE
ESP. IN ORDER TO EFFECTUATE THE PURPOSES OF THE ESP, THE PAC WILL HAVE THE
FOLLOWING POWERS AND DUTIES:

(a)                                  To appoint the Plan Administrator;

(b)                                 To review and render decisions respecting a
denial of a claim for benefits under the ESP;

(c)                                  To construe the ESP and to make equitable
adjustments for any mistakes or errors made in the administration of the ESP;
and

(d)                                 To determine and resolve, in its sole and
absolute discretion, all questions relating to the administration of the ESP and
any trust established to secure the assets of the ESP:

(I)                                     WHEN DIFFERENCES OF OPINION ARISE
BETWEEN THE COMPANY, AN AFFILIATE, THE PLAN ADMINISTRATOR, THE TRUSTEE, A
COVERED EXECUTIVE, OR ANY OF THEM, AND

(II)                                  WHENEVER IT IS DEEMED ADVISABLE TO
DETERMINE SUCH QUESTIONS IN ORDER TO PROMOTE THE UNIFORM AND NONDISCRIMINATORY
ADMINISTRATION OF THE ESP FOR THE GREATEST BENEFIT OF ALL PARTIES CONCERNED.

The foregoing list of express powers is not intended to be either complete or
conclusive, and the PAC will, in addition, have such powers as it may reasonably
determine to be necessary or appropriate in the performance of its powers and
duties under the ESP.

4.3                               APPOINTMENT OF PLAN ADMINISTRATOR. THE PAC
WILL APPOINT THE PLAN ADMINISTRATOR, WHO WILL HAVE THE RESPONSIBILITY AND DUTY
TO ADMINISTER THE ESP ON A DAILY BASIS. THE PAC MAY REMOVE THE PLAN
ADMINISTRATOR WITH OR WITHOUT CAUSE AT ANY TIME. THE PLAN ADMINISTRATOR MAY
RESIGN UPON WRITTEN NOTICE TO THE PAC.

4.4                               DUTIES OF PLAN ADMINISTRATOR. THE PLAN
ADMINISTRATOR WILL HAVE SOLE AND ABSOLUTE DISCRETION REGARDING THE EXERCISE OF
ITS POWERS AND DUTIES UNDER THE ESP. THE PLAN ADMINISTRATOR WILL HAVE THE
FOLLOWING POWERS AND DUTIES:

(a)                                  To enter into, on behalf of the Employer,
an ESP Agreement with an Employee who is deemed a Covered Executive pursuant to
Section 2.1(l);

(b)                                 To direct the administration of the ESP in
accordance with the provisions herein set forth;

(c)                                  To adopt rules of procedure and regulations
necessary for the administration of the ESP, provided such rules are not in
consistent with the terms of the ESP;

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(d)                                 To determine all questions with regard to
rights of Covered Executives and Beneficiaries under the ESP including, but not
limited to, questions involving eligibility of an Employee to participate in the
ESP and the amount of a Covered Executive’s benefits;

 

(e)                                  to make all final determinations and
computations concerning the benefits to which the Covered Executive or his
estate is entitled under the ESP;

(f)                                    To enforce the terms of the ESP and any
rules and regulations adopted by the PAC;

(g)                                 To review and render decisions respecting a
claim for a benefit under the ESP;

(h)                                 To furnish the Employer with information
that the Employer may require for tax or other purposes;

(i)                                     To engage the service of counsel (who
may, if appropriate, be counsel for the Employer), actuaries, and agents whom it
may deem advisable to assist it with the performance of its duties;

(j)                                     To prescribe procedures to be followed
by Covered Executives in obtaining benefits;

(k)                                  To receive from the Employer and from
Covered Executives such information as is necessary for the proper
administration of the ESP;

(l)                                     To create and maintain such records and
forms as are required for the efficient administration of the ESP;

(m)                               To make all initial determinations and
computations concerning the benefits to which any Covered Executive is entitled
under the ESP;

(n)                                 To give the trustee of any trust established
to serve as a source of funds under the ESP specific directions in writing with
respect to:

(I)                                     MAKING DISTRIBUTION PAYMENTS, GIVING THE
NAMES OF THE PAYEES, SPECIFYING THE AMOUNTS TO BE PAID AND THE TIME OR TIMES
WHEN PAYMENTS WILL BE MADE; AND

(II)                                  MAKING ANY OTHER PAYMENTS WHICH THE
TRUSTEE IS NOT BY THE TERMS OF THE TRUST AGREEMENT AUTHORIZED TO MAKE WITHOUT A
DIRECTION IN WRITING BY THE PLAN ADMINISTRATOR;

(o)                                 To comply with all applicable lawful
reporting and disclosure requirements of ERISA;

(p)                                 To comply (or transfer responsibility for
compliance to the trustee) with all applicable federal income tax withholding
requirements for benefit distributions; and

(q)                                 To construe the ESP, in its sole and
absolute discretion, and make equitable adjustments for any errors made in the
administration of the ESP.

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The foregoing list of express duties is not intended to be either complete or
conclusive, and the Plan Administrator will, in addition, exercise such other
powers and perform such other duties as it may deem necessary, desirable,
advisable or proper for the supervision and administration of the ESP.

 

4.5                               INDEMNIFICATION OF PAC AND PLAN ADMINISTRATOR.
TO THE EXTENT NOT COVERED BY INSURANCE, OR IF THERE IS A FAILURE TO PROVIDE FULL
INSURANCE COVERAGE FOR ANY REASON, AND TO THE EXTENT PERMISSIBLE UNDER CORPORATE
BY-LAWS AND OTHER APPLICABLE LAWS AND REGULATIONS, THE EMPLOYER AGREES TO HOLD
HARMLESS AND INDEMNIFY THE PAC AND PLAN ADMINISTRATOR AGAINST ANY AND ALL CLAIMS
AND CAUSES OF ACTION BY OR ON BEHALF OF ANY AND ALL PARTIES WHOMSOEVER, AND ALL
LOSSES THEREFROM, INCLUDING, WITHOUT LIMITATION, COSTS OF DEFENSE AND REASONABLE
ATTORNEYS’ FEES, BASED UPON OR ARISING OUT OF ANY ACT OR OMISSION RELATING TO OR
IN CONNECTION WITH THE ESP OTHER THAN LOSSES RESULTING FROM THE PAC’S, OR ANY
SUCH PERSON’S COMMISSION OF FRAUD OR WILLFUL MISCONDUCT.

4.6                               CLAIMS FOR BENEFITS.

(A)                                  INITIAL CLAIM. IN THE EVENT THAT A COVERED
EXECUTIVE OR HIS ESTATE CLAIMS (A “CLAIMANT”) TO BE ELIGIBLE FOR BENEFITS, OR
CLAIMS ANY RIGHTS UNDER THE ESP OR SEEKS TO CHALLENGE THE VALIDITY OR TERMS OF
THE SEVERANCE AGREEMENT AND GENERAL RELEASE DESCRIBED IN SECTION 3.5, SUCH
CLAIMANT MUST COMPLETE AND SUBMIT SUCH CLAIM FORMS AND SUPPORTING DOCUMENTATION
AS WILL BE REQUIRED BY THE PLAN ADMINISTRATOR, IN ITS SOLE AND ABSOLUTE
DISCRETION. LIKEWISE, ANY CLAIMANT WHO FEELS UNFAIRLY TREATED AS A RESULT OF THE
ADMINISTRATION OF THE ESP, MUST FILE A WRITTEN CLAIM, SETTING FORTH THE BASIS OF
THE CLAIM, WITH THE PLAN ADMINISTRATOR. IN CONNECTION WITH THE DETERMINATION OF
A CLAIM, OR IN CONNECTION WITH REVIEW OF A DENIED CLAIM, THE CLAIMANT MAY
EXAMINE THE ESP, AND ANY OTHER PERTINENT DOCUMENTS GENERALLY AVAILABLE TO
COVERED EXECUTIVES THAT ARE SPECIFICALLY RELATED TO THE CLAIM.

A written notice of the disposition of any such claim will be furnished to the
claimant within ninety (90) days after the claim is filed with the Plan
Administrator. Such notice will refer, if appropriate, to pertinent provisions
of the ESP, will set forth in writing the reasons for denial of the claim if a
claim is denied (including references to any pertinent provisions of the ESP)
and, where appropriate, will describe any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary. If the claim is denied, in whole or in
part, the claimant will also be notified of the ESP’s claim review procedure and
the time limits applicable to such procedure, including the claimant’s right to
arbitration following an adverse benefit determination on review as provided
below. All benefits provided in the ESP as a result of the disposition of a
claim will be paid as soon as practicable following receipt of proof of
entitlement, if requested.

(B)                                  REQUEST FOR REVIEW. WITHIN NINETY (90) DAYS
AFTER RECEIVING WRITTEN NOTICE OF THE PLAN ADMINISTRATOR’S DISPOSITION OF THE
CLAIM, THE CLAIMANT MAY FILE WITH THE PAC A WRITTEN REQUEST FOR REVIEW OF HIS
CLAIM. IN CONNECTION WITH THE REQUEST FOR REVIEW, THE CLAIMANT WILL BE ENTITLED
TO BE REPRESENTED BY COUNSEL AND WILL BE GIVEN, UPON REQUEST AND FREE OF CHARGE,
REASONABLE ACCESS TO ALL PERTINENT DOCUMENTS FOR THE PREPARATION OF HIS CLAIM.
IF THE CLAIMANT DOES NOT FILE A WRITTEN REQUEST FOR REVIEW WITHIN NINETY (90)
DAYS AFTER RECEIVING WRITTEN NOTICE OF THE PLAN ADMINISTRATOR’S

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disposition of the claim, the claimant will be deemed to have accepted the Plan
Administrator’s written disposition, unless the claimant was physically or
mentally incapacitated so as to be unable to request review within the ninety
(90) day period.

 

(C)                                  DECISION ON REVIEW. AFTER RECEIPT BY THE
PAC OF A WRITTEN APPLICATION FOR REVIEW OF HIS CLAIM, THE PAC WILL REVIEW THE
CLAIM TAKING INTO ACCOUNT ALL COMMENTS, DOCUMENTS, RECORDS AND OTHER INFORMATION
SUBMITTED BY THE CLAIMANT REGARDING THE CLAIM WITHOUT REGARD TO WHETHER SUCH
INFORMATION WAS CONSIDERED IN THE INITIAL BENEFIT DETERMINATION. THE PAC WILL
NOTIFY THE CLAIMANT OF ITS DECISION BY DELIVERY OR BY CERTIFIED OR REGISTERED
MAIL TO HIS LAST KNOWN ADDRESS.

A decision on review of the claim will be made by the PAC at its next meeting
following receipt of the written request for review. If no meeting of the PAC is
scheduled within forty-five (45) days of receipt of the written request for
review, then the PAC will hold a special meeting to review such written request
for review within such forty-five (45) day period. If special circumstances
require an extension of the forty-five (45) day period, the PAC will so notify
the claimant and a decision will be rendered within ninety (90) days of receipt
of the request for review. In any event, if a claim is not determined by the PAC
within ninety (90) days of receipt of written submission for review, it will be
deemed to be denied.

The decision of the PAC will be provided to the claimant as soon as possible but
no later than five (5) days after the benefit determination is made The decision
will be in writing and will include the specific reasons for the decision
presented in a manner calculated to be understood by the claimant and will
contain references to all relevant ESP provisions on which the decision was
based. Such decision will also advise the claimant that he may receive upon
request, and free of charge, reasonable access to and copies of all documents,
records and other information relevant to his claim and will inform the claimant
of his right to arbitration in the case of an adverse decision regarding his
appeal. The decision of the PAC will be final and conclusive.

4.7                               ARBITRATION. IN THE EVENT THE CLAIMS REVIEW
PROCEDURE DESCRIBED IN SECTION 4.6 OF THE ESP DOES NOT RESULT IN AN OUTCOME
THOUGHT BY THE CLAIMANT TO BE IN ACCORDANCE WITH THE ESP DOCUMENT, HE MAY APPEAL
TO A THIRD PARTY NEUTRAL ARBITRATOR. THE CLAIMANT MUST APPEAL TO AN ARBITRATOR
WITHIN SIXTY (60) DAYS AFTER RECEIVING THE PAC’S DENIAL OR DEEMED DENIAL OF HIS
REQUEST FOR REVIEW AND BEFORE BRINGING SUIT IN COURT. THE ARBITRATION WILL BE
CONDUCTED PURSUANT TO THE AMERICAN ARBITRATION ASSOCIATION (“AAA”) RULES ON
EMPLOYEE BENEFIT CLAIMS.

The arbitrator will be mutually selected by the claimant and the PAC from a list
of arbitrators who are experienced in nonqualified deferred compensation plan
benefit matters that is provided by the AAA. If the parties are unable to agree
on the selection of an arbitrator within ten (10) days of receiving the list
from the AAA, the AAA will appoint an arbitrator. The arbitrator’s review will
be limited to interpretation of the ESP document in the context of the
particular facts involved. The claimant, the PAC and the Employer agree to
accept the award of the arbitrator as binding, and all exercises of power by the
arbitrator hereunder will be final, conclusive and binding on all interested
parties, unless found by a court of competent jurisdiction, in a final judgment
that is no longer subject to review or appeal, to be arbitrary and capricious.
The claimant, PAC

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and the Employer agree that the venue for the arbitration will be in Dallas
Texas. The costs of arbitration will be paid by the Employer; the costs of legal
representation for the claimant or witness costs for the claimant will be borne
by the claimant; provided, that, as part of his award, the arbitrator may
require the Employer to reimburse the claimant for all or a portion of such
amounts.

 

The following discovery may be conducted by the parties: interrogatories,
demands to produce documents, requests for admissions and oral depositions. The
arbitrator will resolve any discovery disputes by such pre-hearing conferences
as may be needed. The Employer, PAC and claimant agree that the arbitrator will
have the power of subpoena process as provided by law.  Disagreements concerning
the scope of depositions or document production, its reasonableness and
enforcement of discovery requests will be subject to agreement by the Employer
and the claimant or will be resolved by the arbitrator.  All discovery requests
will be subject to the proprietary rights and rights of privilege and other
protections granted by applicable law to the Employer and the claimant and the
arbitrator will adopt procedures to protect such rights.  With respect to any
dispute, the Employer, PAC and the claimant agree that all discovery activities
will be expressly limited to matters directly relevant to the dispute and the
arbitrator will be required to fully enforce this requirement.

The arbitrator will have no power to add to, subtract from, or modify any of the
terms of the ESP, or to change or add to any benefits provided by the ESP, or to
waive or fail to apply any requirements of eligibility for a benefit under the
ESP. Nonetheless, the arbitrator will have absolute discretion in the exercise
of its powers in the ESP. Arbitration decisions will not establish binding
precedent with respect to the administration or operation of the ESP.

4.8                               RECEIPT AND RELEASE OF NECESSARY INFORMATION.
IN IMPLEMENTING THE TERMS OF THE ESP, THE PAC AND PLAN ADMINISTRATOR, AS
APPLICABLE, MAY, WITHOUT THE CONSENT OF OR NOTICE TO ANY PERSON, RELEASE TO OR
OBTAIN FROM ANY OTHER INSURING ENTITY OR OTHER ORGANIZATION OR PERSON ANY
INFORMATION, WITH RESPECT TO ANY PERSON, WHICH THE PAC OR PLAN ADMINISTRATOR
DEEMS TO BE NECESSARY FOR SUCH PURPOSES. ANY COVERED EXECUTIVE OR ESTATE
CLAIMING BENEFITS UNDER THE ESP WILL FURNISH TO THE PAC OR PLAN ADMINISTRATOR,
AS APPLICABLE, SUCH INFORMATION AS MAY BE NECESSARY TO DETERMINE ELIGIBILITY FOR
AND AMOUNT OF BENEFIT, AS A CONDITION OF CLAIMING AND RECEIVING SUCH BENEFIT.

4.9                               OVERPAYMENT AND UNDERPAYMENT OF BENEFITS. THE
PLAN ADMINISTRATOR MAY ADOPT, IN ITS SOLE AND ABSOLUTE DISCRETION, WHATEVER
RULES, PROCEDURES AND ACCOUNTING PRACTICES ARE APPROPRIATE IN PROVIDING FOR THE
COLLECTION OF ANY OVERPAYMENT OF BENEFITS. IF A COVERED EXECUTIVE OR HIS ESTATE
RECEIVES AN UNDERPAYMENT OF BENEFITS, THE PLAN ADMINISTRATOR WILL DIRECT THAT
PAYMENT BE MADE AS SOON AS PRACTICABLE TO MAKE UP FOR THE UNDERPAYMENT. IF AN
OVERPAYMENT IS MADE TO A COVERED EXECUTIVE OR HIS ESTATE, FOR WHATEVER REASON,
THE PLAN ADMINISTRATOR MAY, IN ITS SOLE AND ABSOLUTE DISCRETION, WITHHOLD
PAYMENT OF ANY FURTHER BENEFITS UNDER THE ESP UNTIL THE OVERPAYMENT HAS BEEN
COLLECTED OR MAY REQUIRE REPAYMENT OF BENEFITS PAID UNDER THE ESP WITHOUT REGARD
TO FURTHER BENEFITS TO WHICH THE COVERED EXECUTIVE OR HIS ESTATE MAY BE
ENTITLED.

End of Article IV

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ARTICLE V

OTHER BENEFIT PLANS OF THE COMPANY

5.1                               OTHER PLANS. NOTHING CONTAINED IN THE ESP WILL
PREVENT A COVERED EXECUTIVE PRIOR TO HIS DEATH, OR A COVERED EXECUTIVE’S SPOUSE
OR OTHER BENEFICIARY AFTER SUCH COVERED EXECUTIVE’S DEATH, FROM RECEIVING, IN
ADDITION TO ANY PAYMENTS PROVIDED FOR UNDER THE ESP, ANY PAYMENTS PROVIDED FOR
UNDER ANY OTHER PLAN OR BENEFIT PROGRAM OF THE EMPLOYER, OR WHICH WOULD
OTHERWISE BE PAYABLE OR DISTRIBUTABLE TO HIM, HIS SURVIVING SPOUSE OR
BENEFICIARY UNDER ANY PLAN OR POLICY OF THE EMPLOYER OR OTHERWISE. NOTHING IN
THE ESP WILL BE CONSTRUED AS PREVENTING THE COMPANY OR ANY OF ITS AFFILIATES
FROM ESTABLISHING ANY OTHER OR DIFFERENT PLANS PROVIDING FOR CURRENT OR DEFERRED
COMPENSATION FOR EMPLOYEES AND/OR MEMBERS OF THE BOARD.

End of Article V

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ARTICLE VI

AMENDMENT AND TERMINATION OF THE ESP

6.1                               CONTINUATION. THE COMPANY INTENDS TO CONTINUE
THE ESP INDEFINITELY, BUT NEVERTHELESS ASSUMES NO CONTRACTUAL OBLIGATION BEYOND
THE PROMISE TO PAY THE BENEFITS DESCRIBED IN THE ESP.

6.2                               AMENDMENT OF ESP. THE COMPANY, THROUGH AN
ACTION OF THE COMPENSATION COMMITTEE, RESERVES THE RIGHT IN ITS SOLE AND
ABSOLUTE DISCRETION TO AMEND THE ESP IN ANY RESPECT AT ANY TIME; PROVIDED,
HOWEVER, THAT EXCEPT AS REQUIRED TO COMPLY WITH SECTION 409A OF THE CODE OR
OTHER APPLICABLE LAW, NO AMENDMENT TO THE ESP WILL BE MADE THAT REDUCES OR
DIMINISHES THE RIGHTS OF ANY COVERED EXECUTIVE TO THE BENEFITS DESCRIBED HEREIN
FOR THE FIVE (5) YEAR PERIOD FOLLOWING THE EFFECTIVE DATE OF THIS ESP. FOLLOWING
THE EXPIRATION OF THE FIVE (5) YEAR PERIOD DESCRIBED IN THIS SECTION 6.2, THE
COMPANY MAY AMEND THE ESP IN ITS SOLE AND ABSOLUTE DISCRETION, IN ANY RESPECT
AND AT ANY TIME; PROVIDED, THAT NO AMENDMENT MAY BE MADE THAT REDUCES OR
DIMINISHES THE RIGHTS OF ANY COVERED EXECUTIVE TO THE BENEFITS DESCRIBED HEREIN
UNLESS THE AFFECTED COVERED EXECUTIVE RECEIVES AT LEAST ONE (1) YEAR’S ADVANCE
NOTICE OF SUCH AMENDMENT. FURTHER, SUCH ADVANCE NOTICE TO THE COVERED EXECUTIVE
WILL NOT BE EFFECTIVE TO ENABLE THE AMENDMENT OF THE ESP IN EITHER OF THE
FOLLOWING TWO SCENARIOS (A) IF A POTENTIAL CHANGE OF CONTROL OCCURS DURING THE
ONE (1) YEAR NOTICE PERIOD, OR (B) WITHIN TWENTY FOUR (24) MONTHS FOLLOWING A
CHANGE OF CONTROL.

6.3                               TERMINATION OF ESP. FOLLOWING THE EXPIRATION
OF THE FIVE (5) YEAR PERIOD DESCRIBED IN SECTION 6.2, THE COMPANY, THROUGH AN
ACTION OF THE COMPENSATION COMMITTEE, MAY TERMINATE OR SUSPEND THE ESP IN WHOLE
OR IN PART AT ANY TIME SUBJECT TO THE RULES REGARDING THE AMENDMENT OF THE ESP
IN SECTION 6.2 (I.E., THAT ONE (1) YEAR’S ADVANCE NOTICE IS REQUIRED AND NO SUCH
NOTICE WILL BE EFFECTIVE TO ENABLE THE TERMINATION OF THE ESP IF A POTENTIAL
CHANGE OF CONTROL OCCURS DURING THE ONE (1) YEAR NOTICE PERIOD OR WITHIN TWENTY
FOUR (24) MONTHS FOLLOWING A CHANGE OF CONTROL). NOTWITHSTANDING ANY PROVISION
OF THE ESP TO THE CONTRARY, UPON THE COMPLETE TERMINATION OF THE ESP PURSUANT TO
THE PROVISIONS OF THIS SECTION 6.3, THE COMPENSATION COMMITTEE, IN ITS SOLE AND
ABSOLUTE DISCRETION, MAY DIRECT THAT THE PLAN ADMINISTRATOR TREAT EACH ELIGIBLE
EXECUTIVE AS HAVING INCURRED A QUALIFYING TERMINATION AND TO COMMENCE THE
DISTRIBUTION OF THE BENEFITS DESCRIBED IN ARTICLE III TO EACH SUCH ELIGIBLE
EXECUTIVE OR HIS ESTATE, AS APPLICABLE, TO THE EXTENT THAT THE COMMENCEMENT OF
SUCH DISTRIBUTION COMPORTS WITH THE REQUIREMENTS OF SECTION 409A OF THE CODE.

6.4                               TERMINATION OF AFFILIATE’S PARTICIPATION.
SUBJECT TO THE FIVE (5) YEAR PERIOD DESCRIBED IN SECTION 6.2, THE COMPANY MAY
TERMINATE AN AFFILIATE’S PARTICIPATION IN THE ESP AT ANY TIME BY AN ACTION OF
THE COMPENSATION COMMITTEE AND PROVIDING WRITTEN NOTICE TO THE AFFILIATE. THE
EFFECTIVE DATE OF ANY SUCH TERMINATION WILL BE THE LATER OF THE DATE SPECIFIED
IN THE NOTICE OF THE TERMINATION OF PARTICIPATION OR THE DATE ON WHICH THE PLAN
ADMINISTRATOR CAN ADMINISTRATIVELY IMPLEMENT SUCH TERMINATION. IF AN AFFILIATE
IS DISPOSED OF BY THE COMPANY PURSUANT TO A STOCK OR ASSET SALE AND A COVERED
EXECUTIVE EMPLOYED BY SUCH AFFILIATE IS OFFERED A COMPARABLE POSITION WITH THE
PURCHASER OF SUCH STOCK OR ASSETS AND REFUSES SUCH POSITION, THE COVERED
EXECUTIVE WILL NOT HAVE INCURRED A QUALIFYING TERMINATION FOR PURPOSES OF THE
ESP. SIMILARLY, IF AN AFFILIATE IS DISPOSED OF BY THE COMPANY PURSUANT TO A
STOCK OR ASSET SALE AND A COVERED EXECUTIVE EMPLOYED BY SUCH AFFILIATE IS
OFFERED A COMPARABLE POSITION WITH THE PURCHASER OF SUCH STOCK OR ASSETS

27

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and accepts such position, the Covered Executive will not have incurred a
Qualifying Termination for purposes of the ESP.

 

End of Article VI

28

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ARTICLE VII

MISCELLANEOUS

 

7.1                               NO REDUCTION OF EMPLOYER RIGHTS. NOTHING
CONTAINED IN THE ESP WILL BE CONSTRUED AS A CONTRACT OF EMPLOYMENT BETWEEN THE
EMPLOYER AND A COVERED EXECUTIVE, OR AS A RIGHT OF ANY COVERED EXECUTIVE TO
CONTINUE IN THE EMPLOYMENT OF THE EMPLOYER, OR AS A LIMITATION OF THE RIGHT OF
THE EMPLOYER TO DISCHARGE ANY OF ITS COVERED EXECUTIVES, WITH OR WITHOUT CAUSE.

7.2                               SUCCESSOR TO THE COMPANY. THE COMPANY WILL
REQUIRE ANY SUCCESSOR OR ASSIGN (WHETHER DIRECT OR INDIRECT, BY PURCHASE,
EXCHANGE, LEASE, MERGER, CONSOLIDATION, OR OTHERWISE) TO ALL OR SUBSTANTIALLY
ALL OF THE PROPERTY AND ASSETS OF THE COMPANY AND ITS AFFILIATES TAKEN AS A
WHOLE, TO EXPRESSLY ASSUME THE ESP AND TO AGREE TO PERFORM UNDER THIS ESP IN THE
SAME MANNER AND TO THE SAME EXTENT THAT THE COMPANY AND ITS AFFILIATES WOULD BE
REQUIRED TO PERFORM IT IF NO SUCH SUCCESSION HAD TAKEN PLACE. THIS SECTION 7.2
WILL NOT REQUIRE ANY SUCCESSOR OR ASSIGN OF AN AFFILIATE (WHETHER DIRECT OR
INDIRECT, BY PURCHASE, EXCHANGE, LEASE, MERGER, CONSOLIDATION OR OTHERWISE) TO
ALL OR SUBSTANTIALLY ALL OF THE PROPERTY AND ASSETS OF SUCH AFFILIATE TO
CONTINUE THE ESP.

7.3                               PROVISIONS BINDING. ALL OF THE PROVISIONS OF
THE ESP WILL BE BINDING UPON THE COMPANY AND ITS AFFILIATES AND ANY SUCCESSOR TO
THE COMPANY OR ANY SUCH AFFILIATE. LIKEWISE, THE PROVISIONS OF THE ESP WILL BE
BINDING UPON ALL PERSONS WHO WILL BE ENTITLED TO ANY BENEFIT HEREUNDER, THEIR
HEIRS AND PERSONAL REPRESENTATIVES.

End of Article VII

29

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IN WITNESS WHEREOF, this amended and restated ESP has been executed on this 20th
day of June 2006, effective as of May 11, 2006, except as specifically provided
otherwise herein.

 

 

 

TENET HEALTHCARE CORPORATION

 

 

 

 

 

By:

/s/ A.P. King IV

 

 

 

   A.P. King IV

 

 

   Director, Executive Compensation

 

30

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APPENDIX A(1)

COVERED EXECUTIVES

Section 2.1(l) of the Tenet Executive Severance Plan (the “ESP”) provides the
Compensation Committee with the authority to designate additional Employees of
Tenet Healthcare Corporation or its participating affiliates (collectively the
“Employer”) as eligible to participate in the ESP at any time and states that
any such designation will be set forth in this Appendix A.  The following
additional Employees of the Employer are eligible to participate in the ESP, as
of the date specified below:

 

 

 

 

 

 

 

 

 

 

 

 

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(1)   This Appendix A may be updated from time to time without the need for a
formal amendment to the ESP.

A-1

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APPENDIX B

ESP AGREEMENTS

Section 2.1(s) of the Tenet Executive Severance Plan (the “ESP”) provides that
each Covered Executive will enter into an ESP Agreement which sets forth the
terms and conditions of his benefits under the ESP and a form copy of such
agreement will be attached to the ESP as Appendix B.

B-1

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TENET EXECUTIVE SEVERANCE PLAN AGREEMENT

 

THIS EXECUTIVE SEVERANCE PLAN AGREEMENT is made as of          , 200   by and
between the Plan Administrator of the Tenet Executive Severance Plan (the “ESP”)
on behalf of
                                                                          (the
“Employer”), and
                                                                    (the
“Covered Executive”). Capitalized terms used in this Agreement that are not
defined herein will have the meaning set forth in the ESP.

1.                                       This Agreement and the ESP amends,
restates, and replaces any prior TESPP Agreement, change of control agreement or
the severance provisions of the Covered Executive’s CEO Employment Agreement, if
any, and serves as an amendment of such agreement to comply with the provisions
of section 409A of the Code, effective as of January 1, 2005, or if later, the
effective date of such agreement. By execution of this Agreement, the Covered
Executive acknowledges and agrees to such amendment, restatement and replacement
of his prior agreement or the severance provisions thereof, as applicable.

2.                                       As a condition of obtaining benefits
under the ESP the Covered Executive agrees to comply with the restrictive
covenants set forth in Section 3.7 of the ESP.

3.                                       Any dispute or claim for benefits under
the ESP must be resolved through the claims procedure set forth in Article IV of
the ESP which procedure culminates in binding arbitration.  By accepting the
benefits provided under the ESP, the Covered Executive hereby agrees to binding
arbitration as the final means of dispute resolution with respect to the ESP.

4.                                       The ESP is hereby incorporated into and
made a part of this Agreement as though set forth in full herein.  The parties
will be bound by and have the benefit of each and every provision of the ESP, as
amended from time to time.

IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
                      , 200    .

 

 

COVERED EXECUTIVE

EMPLOYER

 

 

 

 

 

 

By:

 

 

Title:

 

 

Plan Administrator

 

B-2

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