Exhibit 10.1

UNIVERSAL HEALTH SERVICES, INC.

SECOND AMENDED AND RESTATED 2005 STOCK INCENTIVE PLAN

1. Purpose. The purpose of the Universal Health Services, Inc. Second Amended
and Restated 2005 Stock Incentive Plan (the “Plan”) is to provide a flexible
vehicle through which Universal Health Services, Inc., a Delaware corporation
(the “Company”), may offer equity-based compensation incentives to key personnel
of the Company and its affiliates in order to attract, motivate, reward and
retain such personnel and to further align the interests of such personnel with
those of the stockholders of the Company.

2. Types of Awards. Awards under the Plan may be in the form of (a) options to
purchase shares of the Company’s Class B Common Stock, $.01 par value (the
“Common Stock”) pursuant to Section 6 below, including options intended to
qualify as “incentive stock options” (“ISOs”) within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”), and options which
do not qualify as ISOs, and (b) stock appreciation rights (“SARs”) pursuant to
Section 7 below (collectively, “Awards”).

3. Share Limitations.

(a) Aggregate Share Limitation. Subject to adjustment as provided in Section 9
below, the maximum number of shares of Common Stock which may be issued pursuant
to the Plan shall not exceed 23,000,000 shares (the “Authorized Shares”). In
determining the number of Authorized Shares available for issuance under the
Plan, the following shares shall be deemed not to have been issued (and shall
remain available for issuance) pursuant to the Plan: (i) shares subject to an
Award that is forfeited, canceled, terminated or settled in cash, and
(ii) shares withheld or tendered by the recipient of an Award as payment of the
exercise price under an Award or the tax withholding obligations associated with
an Award.

(b) Individual Award Limitation. Subject to adjustment as provided in Section 9
below, the maximum number of shares of Common Stock with respect to which
options or SARs may be granted hereunder during a calendar year of the Company
to any employee is 1,000,000 shares.

4. Administration.

(a) Committee. The Plan shall be administered by the Compensation Committee of
the Company’s Board of Directors (the “Board”), or such other committee of
directors designated by the Board (the “Committee”), provided that all of said
designated directors qualify as “non-employee directors” (within the meaning of
Rule 16b-3(b)(3) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) and as “outside directors” (within the meaning of Treas. Reg.
Section 1.162-27(e)(3) under Section 162(m) of the Code). Notwithstanding the
foregoing, the Board shall have sole responsibility and authority for matters
relating to the grant and administration of Awards to non-employee directors of
the Company, and reference herein to the Committee with respect to any such
matters shall be deemed to refer to the Board.

(b) Responsibility and Authority of Committee. Subject to the provisions of the
Plan, the Committee, acting in its discretion, shall have responsibility and
full power and authority to (i) select the

 

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persons to whom Awards shall be made, (ii) prescribe the terms and conditions of
each Award and make amendments thereto, (iii) construe, interpret and apply the
provisions of the Plan and of any agreement or other instrument evidencing an
Award made under the Plan, and (iv) make any and all determinations and take any
and all other actions as it deems necessary or desirable in order to carry out
the terms of the Plan. In exercising its responsibilities under the Plan, the
Committee may obtain at the Company’s expense such advice, guidance and other
assistance from outside compensation consultants and other professional advisers
as it deems appropriate.

(c) Delegation of Authority. To the fullest extent authorized under
Section 157(c) and other applicable provisions of the Delaware General
Corporation Law, the Committee may delegate to any person or group or
subcommittee of persons (who may, but need not be, members of the Committee)
such Plan-related functions within the scope of its responsibility, power and
authority as it deems appropriate to the extent that such delegation shall not
cause Awards intended to qualify as “performance-based compensation” under Code
Section 162(m) or intended to qualify for an exemption under Rule 16b-3 under
the Exchange Act to fail to so qualify.

(d) Committee Actions. A majority of the members of the Committee shall
constitute a quorum. The Committee may act by the vote of a majority of its
members present at a meeting at which there is a quorum or by unanimous written
consent. The decision of the Committee as to any disputed question, including
questions of construction, interpretation and administration, shall be final and
conclusive on all persons. The Committee shall keep a record of its proceedings
and acts and shall keep or cause to be kept such books and records as may be
necessary in connection with the proper administration of the Plan.

(e) Indemnification. The Company shall indemnify and hold harmless each member
of the Board, the Committee or any subcommittee appointed by the Committee and
any employee of the Company who provides assistance with the administration of
the Plan from and against any loss, cost, liability (including any sum paid in
settlement of a claim with the approval of the Board), damage and expense
(including reasonable legal fees and other expenses incident thereto and, to the
extent permitted by applicable law, advancement of such fees and expenses)
arising out of or incurred in connection with the Plan, unless and except to the
extent attributable to such person’s fraud or willful misconduct.

5. Eligibility. Awards may be granted under the Plan to present or future
employees of the Company or an affiliate of the Company and to directors of, or
consultants to, the Company or an affiliate who are not employees. For purposes
hereof, “affiliate” of the Company means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company.

6. Stock Options. Stock options granted under the Plan shall have such vesting
and other terms and conditions as the Committee, acting in its discretion in
accordance with the Plan, may determine, either at the time the option is
granted or, if the holder’s rights are not adversely affected, at any subsequent
time. The Committee may impose restrictions on shares of Common Stock acquired
upon the exercise of options granted under the Plan.

(a) Exercise Price. The exercise price per share of Common Stock covered by an
option granted under the Plan may not be less than 100% of the Fair Market Value
(as defined in Section 8 below) of a share of Common Stock on the date the
option is granted (110% in the case of ISOs granted to an employee who is a 10%
stockholder within the meaning of Section 422(b)(6) of the Code).

 

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(b) Option Term. Unless sooner terminated in accordance with its terms, an
option shall automatically expire on the tenth anniversary of the date it is
granted (the fifth anniversary of the date it is granted in the case of an ISO
granted to an employee who is a 10% stockholder).

(c) Manner of Exercise. An outstanding and exercisable option may be exercised
by transmitting to the Secretary of the Company (or other person designated for
this purpose by the Committee) a written notice identifying the option that is
being exercised and specifying the number of shares to be purchased pursuant to
that option, together with payment of the exercise price, and by satisfying the
applicable tax withholding obligations pursuant to Section 10. The Committee may
establish such rules and procedures as it deems appropriate for the exercise of
options under the Plan. The Committee, acting in its sole discretion, may permit
the exercise price to be paid in whole or in part in cash or by check, by means
of a cashless exercise procedure, in the form of unrestricted shares of Common
Stock (to the extent of the Fair Market Value thereof) or, subject to applicable
law, by any other form of consideration deemed appropriate.

(d) Rights as a Stockholder. No shares of Common Stock shall be issued in
respect of the exercise of an option until payment of the exercise price and the
applicable tax withholding obligations have been satisfied or provided for to
the satisfaction of the Company. The holder of an option shall have no rights as
a stockholder with respect to any shares covered by the option until the option
is validly exercised, the exercise price is paid fully and applicable
withholding obligations are satisfied fully.

(e) Nontransferability of Options. No option granted under the Plan may be
assigned or transferred except upon the option holder’s death to a beneficiary
designated by the option holder in a manner prescribed or approved for this
purpose by the Committee or, if no designated beneficiary shall survive the
option holder, pursuant to the option holder’s will or by the laws of descent
and distribution; and each such option may be exercised during the option
holder’s lifetime only by the option holder. Notwithstanding the preceding
sentence, the Committee may, in its sole discretion, permit an option holder to
transfer an option, other than an ISO, in whole or in part, to such persons
and/or entities as are approved by the Committee from time to time and subject
to such terms and conditions as the Committee may determine from time to time.

(f) Termination of Employment or Other Service. Unless otherwise determined by
the Committee in its sole discretion, if an option holder ceases to be employed
by or to perform other services for the Company and its affiliates for any
reason other than death or disability (defined below), then each outstanding
option granted to him or her under the Plan will terminate on the date of
termination of employment or other service or, if earlier, the date specified in
the option agreement. Unless otherwise determined by the Committee in its sole
discretion, if an option holder’s employment or service is terminated by reason
of the option holder’s death or disability (or if the option holder’s employment
or other service is terminated by reason of his or her disability and the option
holder dies within one year after such termination of employment or service),
then each outstanding option granted to the option holder under the Plan will
terminate on the date one year after the date of such termination of employment
or other service (or one year after the later death of a disabled option holder)
or, if earlier, the date specified in the option

 

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agreement. For purposes hereof, unless otherwise determined by the Committee,
the term “disability” means the inability of an Award holder to perform the
customary duties of his or her employment or other service for the Company or
its affiliates by reason of a physical or mental incapacity which is expected to
result in death or be of indefinite duration.

7. Stock Appreciation Rights. A SAR constitutes a conditional right of the
holder to receive, in shares of Common Stock of equivalent value, an amount
equal to the Fair Market Value of a share of Common Stock on the applicable
exercise or designated settlement date minus a specified base price. SARs
granted under the Plan shall have such vesting and other terms and conditions as
the Committee, acting in its discretion in accordance with the Plan, may
determine, either at the time the SAR is granted or, if the holder’s rights are
not adversely affected, at any subsequent time. The Committee may impose
restrictions on shares acquired upon the exercise of SARs granted under the
Plan.

(a) Base Price. The base price per share of Common Stock covered by an SAR
granted under the Plan may not be less than the Fair Market Value of a share of
Common Stock on the date the SAR is granted.

(b) SAR Term. Unless sooner terminated in accordance with its terms, a SAR shall
automatically expire on the tenth anniversary of the date it is granted.

(c) Exercise of SARs. An outstanding and exercisable SAR may be exercised by
transmitting to the Secretary of the Company (or other person designated for
this purpose by the Committee) a written notice identifying the SAR that is
being exercised, specifying the number of shares covered by the exercise and
containing such other information or statements as the Committee may require,
and by satisfying the applicable tax withholding obligations pursuant to
Section 10. The Committee may establish such rules and procedures as it deems
appropriate for the exercise of SARs under the Plan. Upon the exercise of an SAR
(or designated settlement date, if applicable), the holder shall be entitled to
receive an amount in shares of Common Stock equal to the product of (i) the
number of shares of Common Stock with respect to which the SAR is being
exercised (or settled) and (iii) the difference between the Fair Market Value of
a share of Common Stock on the date the SAR is exercised (or settled) and the
base price per share of the SAR.

(d) Nontransferability of SARs. No SARs granted under the Plan may be assigned
or transferred except upon the SAR holder’s death to a beneficiary designated by
the SAR holder in a manner prescribed or approved for this purpose by the
Committee or, if no designated beneficiary shall survive the SAR holder,
pursuant to the SAR holder’s will or by the laws of descent and distribution;
and each such SAR may be exercised during the SAR holder’s lifetime only by the
SAR holder.

(e) Termination of Employment or Other Service. Unless otherwise determined by
the Committee in its sole discretion, if a SAR holder ceases to be employed by
or to perform other services for the Company and its affiliates for any reason
other than death or disability (defined above), then each outstanding SAR
granted to him or her under the Plan will terminate on the date of termination
of employment or other service or, if earlier, the date specified in the SAR
agreement. Unless otherwise determined by the Committee in its sole discretion,
if a SAR holder’s employment or service is terminated by reason of the SAR
holder’s death or disability (or if the SAR holder’s employment or other service
is terminated by reason of his or her disability and the SAR holder dies within
one year after such termination

 

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of employment or service), then each outstanding SAR granted to the SAR holder
under the Plan will terminate on the date one year after the date of such
termination of employment or other service (or one year after the later death of
a disabled SAR holder) or, if earlier, the date specified in the SAR agreement.

8. Fair Market Value. For Plan purposes, unless otherwise required by applicable
law, the “Fair Market Value” means the fair market value of a share of Common
Stock as determined in good faith by the Committee or under procedures
established by the Committee. Unless otherwise determined by the Committee, the
Fair Market Value of a share of Common Stock as of any given date shall be the
closing sale price per share of the Common Stock reported on a consolidated
basis for securities listed on the principal stock exchange or market on which
the Common Stock is traded on the date as of which such value is being
determined or, if there is no sale on that day, then on the next day on which a
sale was reported.

9. Capital Changes; Merger, Consolidation, Asset Sale.

(a) Adjustments upon Changes in Capitalization. The maximum number and class of
shares issuable pursuant to the Plan, the maximum number of shares with respect
to which options or SARs may be granted to any employee in any calendar year,
the number and class of shares and the exercise price per share covered by each
outstanding option and the number and class of shares and the base price per
share covered by each outstanding SAR shall all be adjusted proportionately or
as otherwise appropriate to reflect any increase or decrease in the number of
issued shares of Common Stock resulting from a split-up or consolidation of
shares or any like capital adjustment, or the payment of any stock dividend,
and/or to reflect a change in the character or class of shares covered by the
Plan arising from a readjustment or recapitalization of the Company’s capital
stock.

(b) Effects of Merger, Consolidation or Asset Sale. In the event of a merger or
consolidation of the Company with or into another corporation, or the sale of
all or substantially all of the assets of the Company, each outstanding option
and SAR shall be assumed or an equivalent option or right substituted by the
successor corporation (or a parent of the successor corporation). In the event
that the successor corporation refuses to assume or substitute for options or
SARs, the option holders and SAR holders shall fully vest in and have the right
to exercise their options and SARs as to all of the shares covered thereby,
including shares as to which it would not otherwise be vested or exercisable. If
an option or SAR becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger, consolidation or sale of assets, the
Board shall notify the holder in writing or electronically at least fifteen
(15) days prior to the consummation of such merger, consolidation or sale of
assets that the option and/or SAR shall be fully exercisable for the period
specified in such notice (but in any case not less than fifteen (15) days from
the date of such notice), and the option and/or SAR shall terminate upon the
consummation of such merger, consolidation or asset sale. For the purposes of
this Section, an option or SAR shall be considered assumed if, following the
merger, consolidation or sale of assets, the option or SAR confers the right to
purchase or receive, for each share of stock subject to the option or SAR
immediately prior to the merger, consolidation or sale of assets, the
consideration (whether stock, cash or other securities or property) received in
the merger, consolidation or sale of assets by holders of Common Stock for each
share held on the effective date of the transaction (reduced, in the case of
SARs, by the applicable base price) and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding

 

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shares); provided, however, that if such consideration received in the merger,
consolidation or sale of assets is not solely common stock of the successor
corporation or its parent, the Board may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
the option or SAR, for each share of stock subject to the option or SAR, to be
solely common stock of the successor corporation or its parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger, consolidation or sale of assets (reduced, in the case of SARs, by
the applicable base price).

(c) Change in Control. The Board may in its sole discretion accelerate, in whole
or in part, the vesting of any outstanding Award upon the occurrence of a Change
in Control (as defined below), whether or not the vesting requirements set forth
in the applicable Award agreement have been satisfied. For purposes hereof, a
“Change in Control” of the Company shall be deemed to occur if:

(i) there occurs (1) any consolidation or merger in which the Company is not the
continuing or surviving entity or pursuant to which each class of the Company’s
common stock would be converted into cash, securities or other property, other
than (x) a consolidation or merger of the Company in which the holders of each
class of common stock immediately prior to the consolidation or merger have the
same proportionate ownership and voting power with respect to the common stock
of the surviving corporation immediately after the consolidation or merger, or
(y) a consolidation or merger which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (by being
converted into voting securities of the continuing or surviving entity) more
than 50% of the combined voting power of the voting securities of the surviving
or continuing entity immediately after such consolidation or merger and which
would result in the members of the Board immediately prior to such consolidation
or merger (including, for this purpose, any individuals whose election or
nomination for election was approved by a vote of at least two-thirds of such
members), constituting a majority of the board of directors (or equivalent
governing body) of the surviving or continuing entity immediately after such
consolidation or merger; or (2) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
the Company’s assets;

(ii) the Company’s stockholders approve any plan or proposal for the liquidation
or dissolution of the Company;

(iii) any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act), other than persons or their family members or affiliates which
have such voting power on the date of adoption of the Plan by the Board, shall
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of 35% or more of the combined voting power of the voting securities of the
Company other than pursuant to a plan or arrangement entered into by such person
and the Company; or

(iv) during any period of two consecutive years, individuals who at the
beginning of such period constitute the entire Board shall cease for any reason
to constitute a majority of the Board unless the election or nomination for
election by the Company’s stockholders of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.

 

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(d) Fractional Shares. In the event of any adjustment in the number of shares
covered by any Award pursuant to the provisions hereof, any fractional shares
resulting from such adjustment shall be disregarded and each such Award shall
cover only the number of full shares resulting from the adjustment.

(e) Determination of Board to be Final. All adjustments under this Section shall
be made by the Board, and its determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive.

10. Tax Withholding. As a condition to the exercise of any Award, the delivery
of any shares of Common Stock pursuant to any Award or the settlement of any
Award, or in connection with any other event that gives rise to a federal or
other governmental tax withholding obligation on the part of the Company or an
affiliate relating to an Award, the Company and/or the affiliate may (a) deduct
or withhold (or cause to be deducted or withheld) from any payment or
distribution to an Award recipient whether or not pursuant to the Plan or
(b) require the recipient to remit cash (through payroll deduction or
otherwise), in each case in an amount sufficient in the opinion of the Company
to satisfy such withholding obligation. If the event giving rise to the
withholding obligation involves a transfer of shares of Common Stock, then, at
the sole discretion of the Committee, the recipient may satisfy the withholding
obligation described under this Section by electing to have the Company withhold
shares of Common Stock or by tendering previously-owned shares of Common Stock,
in each case having a Fair Market Value equal to the amount of tax to be
withheld (or by any other mechanism as may be required or appropriate to conform
with local tax and other rules).

11. Amendment and Termination. The Board may amend or terminate the Plan
provided, however, that no such action may adversely affect a holder’s rights
under an outstanding Award without his written consent. Any amendment which
would (a) increase the maximum number of shares of Common Stock issuable under
the Plan or the maximum number of shares with respect to which options or SARs
may be granted to any employee in any calendar year, (b) modify the class of
persons eligible to receive Awards under the Plan or (c) otherwise require
stockholder approval under applicable law or exchange or market requirements,
shall, to the extent required by applicable law or exchange or market
requirements, be subject to the approval of the Company’s stockholders.

12. Limitation on Repricing. Without the approval of the Company’s stockholders,
the Committee shall not amend or replace previously granted options in a
transaction that constitutes a “repricing,” as such term is used in
Section 303A.08 of the Listed Company Manual of the New York Stock Exchange,
Inc.

13. General Provisions.

(a) Documentation of Awards. Each Award made under the Plan shall be evidenced
by a written agreement or other instrument the terms of which shall be
established by the Committee. To the extent not inconsistent with the provisions
of the Plan, the written agreement or other instrument evidencing an Award shall
govern the rights and obligations of the Award recipient (and any person
claiming through the recipient) with respect to the Award.

(b) Shares Issued under Plan. Shares of Common Stock available for issuance
under the Plan may be authorized and unissued, held by the Company in its
treasury or otherwise acquired for purposes of the Plan. No fractional shares of
Common Stock shall be issued under the Plan.

 

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(c) Compliance with Law. The Company shall not be obligated to issue or deliver
shares of Common Stock pursuant to the Plan unless the issuance and delivery of
such shares complies with applicable law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act and the requirements of any
stock exchange or market upon which the Common Stock may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

(d) Transfer Orders; Placement of Legends. All certificates for shares of Common
Stock delivered under the Plan shall be subject to such stock transfer orders
and other restrictions as the Company may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange or market upon which the Common Stock may then be listed, and
any applicable federal or state securities law. The Company may cause a legend
or legends to be placed on any such certificates to make appropriate reference
to such restrictions.

(e) No Employment or other Rights. Nothing contained in the Plan or in any Award
agreement shall confer upon any recipient of an Award any right with respect to
the continuation of his or her employment or other service with the Company or
an affiliate or interfere in any way with the right of the Company and its
affiliates at any time to terminate such employment or other service or to
increase or decrease, or otherwise adjust, the other terms and conditions of the
recipient’s employment or other service.

(f) Decisions and Determinations Final. Except to the extent rights or powers
under the Plan are reserved specifically to the discretion of the Board, the
Committee shall have full power and authority to interpret the Plan and any
Award agreement made under the Plan and to determine all issues which arise
thereunder or in connection therewith, and the decision of the Board or the
Committee, as the case may be, shall be binding and conclusive on all interested
persons.

(g) Nonexclusivity of the Plan. No provision of the Plan, and neither its
adoption Plan by the Board or submission to the stockholders for approval, shall
be construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements, apart from the
Plan, as it may deem desirable, including incentive arrangements and awards
which do not qualify as “performance-based compensation” under Section 162(m) of
the Code.

14. Governing Law. All rights and obligations under the Plan and each Award
agreement or instrument shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to its principles of conflict
of laws.

15. Term of the Plan. The Plan shall become effective on the date it is approved
by the Company’s stockholders (the “Effective Date”). Unless sooner terminated
by the Board, the Plan shall terminate on the tenth anniversary of the Effective
Date. The rights of any person with respect to an Award made under the Plan that
is outstanding at the time of the termination of the Plan shall not be affected
solely by reason of the termination of the Plan and shall continue in accordance
with the terms of the Award and of the Plan, as each is then in effect or is
thereafter amended.

 

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