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                                                                    EXHIBIT 10.4


                             TRIAD HOSPITALS, INC.

                         1999 LONG-TERM INCENTIVE PLAN
                        As amended through May 29, 2001

1.   Purpose of the Plan

     The purpose of the Triad Hospitals, Inc. 1999 Long-Term Incentive Plan is
to promote the interests of the Corporation and its stockholders by
strengthening the Corporation's ability to attract, motivate, and retain
personnel upon whose judgment, initiative, and efforts the financial success and
growth of the business of the Corporation largely depend, to offer such
personnel additional incentives to put forth maximum efforts for the success of
the business, and to afford them an opportunity to acquire a proprietary
interest in the Corporation through stock ownership and other rights.

2.   Definitions

     Wherever the following capitalized terms are used in this Plan, they shall
have the meanings specified below:

     (a) "Award" means an award of an Option, Restricted Stock Award, Stock
Appreciation Right, Performance Award, Phantom Stock Award or Dividend
Equivalent Award granted under the Plan.

     (b) "Award Agreement" means an agreement entered into between the
Corporation and a Participant setting forth the terms and conditions of an Award
granted to a Participant.

     (c) "Board" means the Board of Directors of the Corporation.

     (d) "Change in Control" shall have the meaning specified in Section 12
hereof.

     (e) "Code" means the Internal Revenue Code of 1986, as amended.

     (f) "Committee" means the committee appointed to administer the Plan and
shall consist of two or more directors of the Corporation (i) none of whom shall
be officers or employees of the Corporation, and (ii) all of whom, to the extent
deemed necessary or appropriate by the Board, shall satisfy the requirements for
an "outside director" under Section 162(m) and a "non-employee director" within
the meaning of Rule 16b-3 of the Securities Exchange Act of 1934.  The members
of the Committee shall be appointed by and serve at the pleasure of the Board.

     (g) "Common Stock" means the common stock of the Corporation.

     (h) "Corporation" means Triad Hospitals, Inc., a Delaware corporation.
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     (i) "Date of Grant" means the date on which an Award under the Plan is made
by the Committee, or such later date as the Committee may specify to be the
effective date of the Award.

     (j) "Dividend Equivalent Award" means an Award under Section 11 hereof
entitling the Participant to receive payments with respect to dividends declared
on the Common Stock.

     (k) "Eligible Person" means any person who is an Employee of the
Corporation or any of its Subsidiaries and, in the case of Awards other than
Incentive Stock Options, any consultant or other independent contractor (not
including any non-employee outside director) providing services to the
Corporation or a Subsidiary.

     (l) "Employee" means any person who is employed as a common-law employee.

     (m) "Fair Market Value" of a share of Common Stock as of a given date shall
mean the closing sales price of the Common Stock on the New York Stock Exchange
on the trading day immediately preceding the date as of which the Fair Market
Value is to be determined, or, in the absence of any reported sales of Shares on
such date, on the first preceding date on which any such sale shall have been
reported (in either case, as reported in the Two Star Edition of The Wall Street
Journal).  If the Common Stock is not listed on the New York Stock Exchange on
the date as of which Fair Market Value is to be determined, the Committee shall
in good faith determine the Fair Market Value in whatever manner it considers
appropriate.

     (n) "Incentive Stock Option" means an option to purchase Common Stock that
is intended to qualify as an incentive stock option under section 422 of the
Code and the Treasury Regulations thereunder.

     (o) "Non-qualified Stock Option" means an option to purchase Common Stock
that is not an Incentive Stock Option.

     (p) "Option" means an Incentive Stock Option or a Non-qualified Stock
Option granted under Section 6 hereof.

     (q) "Participant" means any Eligible Person who holds an outstanding Award
under the Plan.

     (r) "Phantom Stock Award" means an Award under Section 10 hereof entitling
a Participant to a payment at the end of a vesting period of a unit value based
on the Fair Market Value of a share of Common Stock.

     (s) "Plan" means the Triad Hospitals, Inc. 1999 Long-Term Incentive Plan as
set forth herein, as it may be amended from time to time.

     (t) "Performance Award" means an Award under Section 9 hereof entitling a
Participant to a payment based on the Fair Market Value of a share of Common
Stock (a

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"Performance Share") or based on specified dollar units (a "Performance Unit")
at the end of a performance period, if certain conditions established by the
Committee are satisfied.

     (u) "Restricted Stock Award" means an Award under Section 8 hereof
entitling a Participant to shares of Common Stock that are nontransferable and
subject to forfeiture until specific conditions established by the Committee are
satisfied.

     (v) "Section 162(m)" means section 162(m) of the Code and the Treasury
Regulations thereunder.

     (w) "Section 162(m) Award" means any Award that is intended to qualify for
the performance-based compensation exemption under Section 162(m).

     (x) "Stock Appreciation Right" or "SAR" means an Award under Section 7
hereof entitling a Participant to receive an amount representing the difference
between the base price per share of the right and the Fair Market Value of a
share of Common Stock on the date of exercise.

     (y) "Subsidiary" means an entity (whether or not a corporation) that is
wholly or majority owned or controlled, directly or indirectly, by the
Corporation, or any other affiliate of the Corporation that is so designated,
from time to time, by the Committee; provided, however, that with respect to
Incentive Stock Options, the term "Subsidiary" shall include only an entity that
qualifies under section 424(f) of the Code as a "subsidiary corporation" with
respect to the Corporation.

3.   Shares of Common Stock Subject to the Plan

     3.1  Number of Shares. Subject to the following provisions of this Section
3, the aggregate number of shares of Common Stock that may be issued pursuant to
all Awards under the Plan is 14,000,000 shares of Common Stock. Notwithstanding
the foregoing, no more than 375,000 shares of the 7,500,000 shares of Common
Stock authorized for issuance under the Plan by approval of the Corporation's
stockholders on May 29, 2001 shall be issued pursuant to Awards other than
Options. The shares of Common Stock to be delivered under the Plan will be made
available from authorized but unissued shares of Common Stock or issued shares
that have been reacquired by the Corporation. To the extent that any Award
payable in Common Stock is forfeited, cancelled, returned to the Corporation for
failure to satisfy vesting requirements or upon the occurrence of other
forfeiture events, or otherwise terminates without payment being made
thereunder, shares of Common Stock covered thereby will no longer be charged
against the foregoing maximum share limitations and may again be made subject to
Awards under the Plan pursuant to such limitations.

     3.2  Adjustments. If there shall occur any recapitalization,
reclassification, stock dividend, stock split, reverse stock split, or other
distribution with respect to the shares of Common Stock, or other change in
corporate structure affecting the Common Stock, the Committee may, in the manner
and to the extent that it deems appropriate and equitable to the Participants
and consistent with the terms of this Plan, cause an

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adjustment to be made in (i) the maximum number and kind of shares provided in
Section 3.1 hereof, (ii) the maximum number and kind of shares set forth in
Sections 6.1, 7.1, 8.1 and 9.4 hereof, (iii) the number and kind of shares of
Common Stock, share units, or other rights subject to then outstanding Awards,
(iv) the price for each share or unit or other right subject to then outstanding
Awards, (v) the performance targets or goals applicable to any outstanding
Performance Awards (subject to such limitations as are considered appropriate
for Section 162(m) Awards), or (vi) any other terms of an Award that are
affected by the event. Notwithstanding the foregoing, in the case of Incentive
Stock Options, any such adjustments shall be made in a manner consistent with
the requirements of section 424(a) of the Code and, to the extent considered
advisable by the Committee, in a manner consistent with the requirements of
Section 162(m).

4.   Administration of the Plan

     4.1  Committee Members. The Plan shall be administered by the Committee.
The Committee shall have such powers and authority as may be necessary or
appropriate for the Committee to carry out its functions as described in the
Plan. No member of the Committee shall be liable for any action or determination
made in good faith by the Committee with respect to the Plan or any Award
thereunder.

     4.2  Discretionary Authority. Subject to the express limitations of the
Plan, the Committee shall have authority in its discretion to determine the
Eligible Persons to whom, and the time or times at which, Awards may be granted,
the number of shares, units or other rights subject to each Award, the exercise,
base or purchase price of an Award (if any), the time or times at which an Award
will become vested, exercisable or payable, the performance criteria,
performance goals and other conditions of an Award, the duration of the Award,
and all other terms of the Award. The Committee shall also have discretionary
authority to interpret the Plan, to make all factual determinations under the
Plan, and to make all other determinations necessary or advisable for Plan
administration. The Committee may prescribe, amend, and rescind rules and
regulations relating to the Plan. All interpretations, determinations, and
actions by the Committee shall be final, conclusive, and binding upon all
parties.

     4.3  Changes to Awards. The Committee shall have the authority to effect,
at any time and from time to time, (i) the cancellation of any or all
outstanding Awards and the grant in substitution therefor of new Awards covering
the same or different numbers of shares of Common Stock and having an exercise
or base price which may be the same as or different than the exercise or base
price of the cancelled Awards, or (ii) the amendment of the terms of any and all
outstanding Awards provided, however, that (a) no such action by the Committee
may adversely impair the rights of a Participant (or any permitted transferee)
under any outstanding Award without the consent of the Participant (or
transferee) and (b) the Committee shall not have the authority to reduce the
exercise price of an outstanding Option granted on or after May 29, 2001,
whether by amendment or by cancellation and substitution, without the approval
of the Corporation's stockholders. The Committee may in its discretion
accelerate the vesting or exercisability of an Award at any time or on the basis
of any specified event.

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5.   Eligibility and Awards

     All Eligible Persons are eligible to be designated by the Committee to
receive an Award under the Plan.  The Committee has authority, in its sole
discretion, to determine and designate from time to time those Eligible Persons
who are to be granted Awards, the types of Awards to be granted and the number
of shares or units subject to the Awards that are granted under the Plan.  Each
Award will be evidenced by an Award Agreement between the Corporation and the
Participant that shall include such terms and conditions (consistent with the
Plan) as the Committee may determine; provided, however, that failure to issue
an Award Agreement shall not invalidate an Award.

6.   Stock Options

     6.1  Grant of Option. An Option may be granted to any Eligible Person
selected by the Committee; provided, however, that only Employees of the
Corporation or a Subsidiary shall be eligible to receive Incentive Stock
Options. Subject to the applicable provisions of section 422 of the Code, each
Option shall be designated, in the discretion of the Committee, as an Incentive
Stock Option or a Non-qualified Stock Option. The maximum number of shares of
Common Stock that may be granted under Options to any Participant during any
calendar year shall be limited to 700,000 shares (subject to adjustment as
provided in Section 3.2 hereof).

     6.2  Exercise Price. The exercise price under any Option shall be
determined by the Committee; provided, however, that the exercise price per
share under an Option shall not be less than 100 percent of the Fair Market
Value per share of the Common Stock on the Date of Grant.

     6.3  Vesting; Term of Option.  The Committee, in its sole discretion, shall
prescribe the time or times at which, or the conditions upon which, an Option or
portion thereof shall become vested and exercisable, and may accelerate the
exercisability of any Option at any time.  The period during which a vested
Option may be exercised shall be ten years from the Date of Grant, unless a
shorter exercise period is specified by the Committee in an Award, subject to
such limitations as may apply under an Award relating to the termination of a
Participant's employment or other service with the Corporation or any
Subsidiary.

     6.4  Option Exercise; Withholding.  Subject to such terms and conditions as
shall be specified in an Award, an Option may be exercised in whole or in part
at any time during the term thereof by written notice to the Corporation,
together with payment of the aggregate exercise price therefor.  Payment of the
exercise price shall be made (i) in cash or by cash equivalent, (ii) at the
discretion of the Committee, in shares of Common Stock acceptable to the
Committee, valued at the Fair Market Value of such shares on the date of
exercise, (iii) at the discretion of the Committee, by a delivery of a notice
that the Participant has placed a market sell order (or similar instruction)
with a broker with respect to shares of Common Stock then issuable upon exercise
of the Option, and that the broker has been directed to pay a sufficient portion
of the net proceeds of the sale to the Corporation in satisfaction of the Option
exercise price

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(conditioned upon the payment of such net proceeds), (iv) at the discretion of
the Committee, by a combination of the methods described above, or (v) by such
other method as may be approved by the Committee and set forth in the Award. In
addition to and at the time of payment of the exercise price, the Participant
shall pay to the Corporation the full amount of any and all applicable income
tax and employment tax amounts required to be withheld in connection with such
exercise, payable under such of the methods described above for the payment of
the exercise price of the Options as may be approved by the Committee.

     6.5  Limited Transferability of Non-qualified Options. All Options shall be
nontransferable except (i) upon the Participant's death, by the Participant's
will or the laws of descent and distribution or (ii) in the case Non-qualified
Stock Options only, on a case-by-case basis as may be approved by the Committee
in its discretion, in accordance with the terms provided below. An Award
Agreement for a Non-qualified Stock Option may provide that the Participant
shall be permitted to, during his or her lifetime and subject to the prior
approval of the Committee at the time of proposed transfer, transfer all or part
of the Option to the Participant's family member (as defined in the Award
Agreement in a manner consistent with the requirements for the Form S-8
registration statement, if applicable). Any such transfer shall be subject to
the condition that it is made by the Participant for estate planning, tax
planning, donative purposes or pursuant to a domestic relations order, and no
consideration (other than nominal consideration) is received by the Participant
therefor. The transfer of a Non-qualified Stock Option may be subject to such
other terms and conditions as the Committee may in its discretion impose from
time to time, including a condition that the portion of the Option to be
transferred be vested and exercisable by the Participant at the time of the
transfer. Subsequent transfers of an Option shall be prohibited other than by
will or the laws of descent and distribution upon the death of the transferee.

     6.6  Additional Rules for Incentive Stock Options.

     (a)  Annual Limits. No Incentive Stock Option shall be granted to a
Participant as a result of which the aggregate Fair Market Value (determined as
of the Date of Grant) of the stock with respect to which Incentive Stock Options
are exercisable for the first time in any calendar year under the Plan and any
other stock option plans of the Corporation, any Subsidiary, or any parent
corporation, would exceed the maximum amount permitted under section 422(d) of
the Code. This limitation shall be applied by taking Options into account in the
order in which granted.

     (b)  Termination of Employment. An Award of an Incentive Stock Option may
provide that such Option may be exercised not later than 3 months following
termination of employment of the Participant with the Corporation and all
Subsidiaries, subject to special rules relating to death and disability, as and
to the extent determined by the Committee to be appropriate with regard to the
requirements of section 422 of the Code and Treasury Regulations thereunder.

     (c)  Other Terms and Conditions; Nontransferability. Any Incentive Stock
Option granted hereunder shall contain such additional terms and conditions, not

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inconsistent with the terms of this Plan, as are deemed necessary or desirable
by the Committee, which terms, together with the terms of this Plan, shall be
intended and interpreted to cause such Incentive Stock Option to qualify as an
"incentive stock option" under section 422 of the Code. Such terms shall
include, if applicable, limitations on Incentive Stock Options granted to ten-
percent owners of the Corporation. An Award Agreement for an Incentive Stock
Option may provide that such Option shall be treated as a Non-qualified Stock
Option to the extent that certain requirements applicable to "incentive stock
options" under the Code shall not be satisfied. An Incentive Stock Option shall
by its terms be nontransferable otherwise than by will or by the laws of descent
and distribution, and shall be exercisable during the lifetime of a Participant
only by such Participant.

     (d)  Disqualifying Dispositions. If shares of Common Stock acquired by
exercise of an Incentive Stock Option are disposed of within two years following
the Date of Grant or one year following the transfer of such shares to the
Participant upon exercise, the Participant shall, promptly following such
disposition, notify the Corporation in writing of the date and terms of such
disposition and provide such other information regarding the disposition as the
Committee may reasonably require.

     6.7  Restrictions on Transfer of Stock. The Committee may, in its sole
discretion, impose in any Award of an Option restrictions on the transferability
of the shares of Common Stock issued upon exercise of such Option. If any such
restrictions are imposed, the Committee may require the Participant to enter
into an escrow agreement providing that the certificates representing the shares
subject to such transfer restrictions will remain in the physical custody of an
escrow holder until such restrictions are removed or have expired. The Committee
may require that certificates representing the shares subject to such
restrictions bear a legend making appropriate reference to the restrictions
imposed. Subject to any restrictions imposed in accordance with this Section
6.7, the Participant will have all rights of a stockholder with respect to any
such shares acquired upon an Option exercise, including the right to vote the
shares and receive all dividends and other distributions paid or made with
respect thereto.

7.   Stock Appreciation Rights

     7.1  Grant of SARs. A Stock Appreciation Right granted to a Participant is
an Award in the form of a right to receive, upon surrender of the right but
without other payment, an amount based on appreciation in the Fair Market Value
of the Common Stock over a base price established for the Award, exercisable at
such time or times and upon conditions as may be approved by the Committee. The
maximum number of shares of Common Stock that may be subject to SARs granted to
any Participant during any calendar year shall be limited to 700,000 shares
(subject to adjustment as provided in Section 3.2 hereof).

     7.2  Tandem SARs. A Stock Appreciation Right may be granted in connection
with an Option, either at the time of grant or at any time thereafter during the
term of the Option. An SAR granted in connection with an Option will entitle the
holder, upon exercise, to surrender such Option or any portion thereof to the
extent unexercised, with

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respect to the number of shares as to which such SAR is exercised, and to
receive payment of an amount computed as described in Section 7.4 hereof. Such
Option will, to the extent and when surrendered, cease to be exercisable. An SAR
granted in connection with an Option hereunder will have a base price per share
equal to the per share exercise price of the Option, will be exercisable at such
time or times, and only to the extent, that a related Option is exercisable, and
will expire no later than the related Option expires.

     7.3  Freestanding SARs. A Stock Appreciation Right may be granted without
any related Option, and in such case, will be exercisable as determined by the
Committee, but in no event after 10 years from the Date of Grant. The base price
of an SAR granted without any related Option shall be determined by the
Committee in its sole discretion; provided, however, that the base price per
share of any such freestanding SAR shall not be less than 100 percent of the
Fair Market Value of the Common Stock on the Date of Grant.

     7.4  Payment of SARs. An SAR will entitle the holder, upon exercise of the
SAR, to receive payment of an amount determined by multiplying: (i) the excess
of the Fair Market Value of a share of Common Stock on the date of exercise of
the SAR over the base price of such SAR, by (ii) the number of shares as to
which such SAR is exercised. Payment of the amount determined under the
foregoing may be made, in the discretion of the Committee, in cash, in shares of
Common Stock valued at their Fair Market Value on the date of exercise, or in a
combination of cash and shares of Common Stock.

8.   Restricted Stock Award

     8.1  Grant of Restricted Stock Awards.  An Award of Restricted Stock to a
Participant represents shares of Common Stock that are issued subject to such
restrictions on transfer and other incidents of ownership and such forfeiture
conditions as the Committee may determine.  The Committee may, in connection
with any Restricted Stock Award, require the payment of a specified purchase
price.  The Committee may grant a Restricted Stock Award that is a Section
162(m) Award (as described in Section 8.2 below), as well as Restricted Stock
Awards that are not Section 162(m) Awards; provided, however, that the maximum
number of shares of Common Stock that may be subject to a Restricted Stock Award
granted to a Participant during any one calendar year shall be separately
limited to 280,000 shares (subject to adjustment as provided in Section 3.2
hereof).

     8.2  Vesting Requirements. The restrictions imposed on shares granted under
a Restricted Stock Award shall lapse in accordance with the vesting requirements
specified by the Committee in the Award Agreement. Such vesting requirements may
be based on the continued employment of the Participant with the Corporation or
its Subsidiaries for a specified time period or periods, provided that any such
restriction shall not be scheduled to lapse in its entirety earlier than the
first anniversary of the Date of Grant. Such vesting requirements may also be
based on the attainment of specified business goals or measures established by
the Committee in its sole discretion. In the case of any Restricted Stock Award
that is a Section 162(m) Award, any such

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performance-based vesting requirements shall be based upon the performance
criteria identified in Section 9.3 below, and the terms of the Award shall
otherwise comply with the Section 162(m) requirements described in Section 9.4
hereof.

     8.3  Restrictions. Shares granted under any Restricted Stock Award may not
be transferred, assigned or subject to any encumbrance, pledge, or charge until
all applicable restrictions are removed or have expired, unless otherwise
allowed by the Committee. The Committee may require the Participant to enter
into an escrow agreement providing that the certificates representing the shares
granted or sold under a Restricted Stock Award will remain in the physical
custody of an escrow holder until all restrictions are removed or have expired.
Failure to satisfy any applicable restrictions shall result in the subject
shares of the Restricted Stock Award being forfeited and returned to the
Corporation, with any purchase price paid by the Participant to be refunded,
unless otherwise provided by the Committee. The Committee may require that
certificates representing the shares granted under a Restricted Stock Award bear
a legend making appropriate reference to the restrictions imposed.

     8.4  Rights as Stockholder. Subject to the foregoing provisions of this
Section 8 and the applicable Award Agreement, the Participant will have all
rights of a stockholder with respect to the shares granted to him under a
Restricted Stock Award, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto, unless the
Committee determines otherwise at the time the Restricted Stock Award is
granted.

     8.5  Section 83(b) Election. The Committee may provide in an Award
Agreement that the Restricted Stock Award is conditioned upon the Participant's
refraining from making an election with respect to the Award under section 83(b)
of the Code. Irrespective of whether an Award is so conditioned, if a
Participant makes an election pursuant to section 83(b) of the Code with respect
to a Restricted Stock Award, the Participant shall be required to promptly file
a copy of such election with the Corporation.

9.   Performance Awards

     9.1  Grant of Performance Awards. The Committee may grant Performance
Awards under the Plan, which shall be represented by units denominated on the
Date of Grant either in shares of Common Stock (Performance Shares) or in
dollars (Performance Units). The Committee may grant Performance Awards that are
Section 162(m) Awards, as well as Performance Awards that are not Section 162(m)
Awards. At the time a Performance Award is granted, the Committee shall
determine, in its sole discretion, one or more performance periods and
performance goals to be achieved during the applicable performance periods, as
well as such other restrictions and conditions as the Committee deems
appropriate. In the case of Performance Units, the Committee shall also
determine a target unit value or a range of unit values for each Award. No
performance period shall exceed ten years from the Date of Grant. The
performance goals applicable to a Performance Award grant may be subject to such
later revisions as the Committee shall deem appropriate to reflect significant
unforeseen events, such as changes in law,

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accounting practices or unusual or nonrecurring items or occurrences. The
Committee's authority to make such adjustments shall be subject to such
limitations as the Committee deems appropriate in the case of a Performance
Award that is a Section 162(m) Award.

     9.2  Payment of Performance Awards. At the end of the performance period,
the Committee shall determine the extent to which performance goals have been
attained, or a degree of achievement between minimum and maximum levels, in
order to establish the level of payment to be made, if any, and shall determine
if payment is to be made in the form of cash or shares of Common Stock (valued
at their Fair Market Value at the time of payment) or a combination of cash and
shares of Common Stock. Payments of Performance Awards shall generally be made
as soon as practicable following the end of the performance period.

     9.3  Performance Criteria. The performance criteria upon which the payment
or vesting of a Performance Award that is a Section 162(m) Award may be based
shall be limited to one or more of the following business measures, which may be
applied with respect to the Corporation, any Subsidiary or any business unit,
and which may be measured on an absolute or relative to peer-group basis: (i)
total stockholder return, (ii) stock price increase, (iii) return on equity,
(iv) return on capital, (v) earnings per share, (vi) EBIT (earnings before
interest and taxes), and (vii) cash flow (including operating cash flow, free
cash flow, discounted cash flow return on investment, and cash flow in excess of
costs of capital). In the case of Performance Awards that are not Section 162(m)
Awards, the Committee shall designate performance criteria from among the
foregoing or such other business criteria as it shall determine in its sole
discretion.

     9.4  Section 162(m) Requirements. In the case of a Performance Award that
is a Section 162(m) Award, the Committee shall make all determinations necessary
to establish the terms of the Award within 90 days of the beginning of the
performance period (or such other time period as is required under Section
162(m)), including, without limitation, the designation of the Participant to
whom the Performance Award is to be made, the performance criteria or criterion
applicable to the Award and the performance goals that relate to such criteria,
and the dollar amounts or number of shares of Common Stock payable upon
achieving the applicable performance goals. As and to the extent required by
Section 162(m), the terms of a Performance Award that is a Section 162(m) Award
must state, in terms of an objective formula or standard, the method of
computing the amount of compensation payable under the Award, and must preclude
discretion to increase the amount of compensation payable under the terms of the
Award (but may give the Committee discretion to decrease the amount of
compensation payable). The maximum amount of compensation that may be payable to
a Participant during any one calendar year under a Performance Unit Award shall
be $4.2 million. The maximum number of Common Stock units that may be subject to
a Performance Share Award granted to a Participant during any one calendar year
shall be 280,000 share units (subject to adjustment as provided in Section 3.2
hereof).

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10.  Phantom Stock Award

     10.1  Grant of Phantom Stock Awards. A Phantom Stock Award is an Award to a
Participant of a number of hypothetical share units with respect to shares of
Common Stock, with an initial value based on the Fair Market Value of the Common
Stock on the Date of Grant. A Phantom Stock Award shall be subject to such
restrictions and conditions as the Committee shall determine. On the Date of
Grant, the Committee shall determine, in its sole discretion, the installment or
other vesting period of the Phantom Stock Award and the maximum value of the
Phantom Stock Award, if any. No vesting period shall exceed 10 years from the
Date of Grant. A Phantom Stock Award may be granted, at the discretion of the
Committee, together with a Dividend Equivalent Award covering the same number of
shares.

     10.2  Payment of a Phantom Stock Awards. Upon the vesting date or dates
applicable to the Phantom Stock Award granted to a Participant, an amount equal
to the Fair Market Value of one share of Common Stock upon such vesting dates
(subject to any applicable maximum value) shall be paid with respect to each
Phantom Stock Award unit granted to the Participant. Payment may be made, at the
discretion of the Committee, in cash or in shares of Common Stock valued at
their Fair Market Value on the applicable vesting dates, or in a combination
thereof.

11.  Dividend Equivalent Award

     11.1  Grant of a Dividend Equivalent Awards. A Dividend Equivalent Award
granted to a Participant is an Award in the form of a right to receive cash
payments determined by reference to dividends declared on the Common Stock from
time to time during the term of the Award, which shall not exceed 10 years from
the Date of Grant. Dividend Equivalent Awards may be granted on a stand-alone
basis or in tandem with other Awards. Dividend Equivalent Awards granted on a
tandem basis shall expire at the time the underlying Award is exercised or
otherwise becomes payable to the Participant, or expires.

     11.2  Payment of Dividend Equivalent Awards. Dividend Equivalent Awards
shall be payable in cash or in shares of Common Stock, valued at their Fair
Market Value on either the date the related dividends are declared or the date
the Dividend Equivalent Awards are paid to a Participant, as determined by the
Committee. Dividend Equivalent Awards shall be payable to a Participant as soon
as practicable following the time dividends are declared and paid with respect
to the Common Stock, or at such later date as the Committee shall specify in the
Award Agreement. Dividend Equivalent Awards granted with respect to Options
intended to qualify as a Section 162(m) Award shall be payable regardless of
whether the Option is exercised.

12.  Change in Control

     12.1  Effect of Change in Control. The Committee may, in an Award
Agreement, provide for the effect of a Change in Control on an Award. Such
provisions may include any one or more of the following: (i) the acceleration or
extension of time

                                       11
<PAGE>

periods for purposes of exercising, vesting in, or realizing gain from any
Award, (ii) the elimination or modification of performance or other conditions
related to the payment or other rights under an Award, (iii) provision for the
cash settlement of an Award for an equivalent cash value, as determined by the
Committee, or (iv) such other modification or adjustment to an Award as the
Committee deems appropriate to maintain and protect the rights and interests of
Participants upon or following a Change in Control.

     12.2  Definition of Change in Control.  For purposes hereof, a "Change in
Control" shall be deemed to have occurred upon the occurrence of any of the
following:

           (i)      An acquisition (other than directly from the Corporation)
     of any voting securities of the Corporation (the "Voting Securities") by
     any "Person" (as the term Person is used for purposes of Section 13(d) or
     14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act"))
     immediately after which such Person has "Beneficial Ownership" (within the
     meaning of Rule 13d-3 promulgated under the 1934 Act) of twenty percent
     (20%) or more of the combined voting power of the then outstanding Voting
     Securities; provided, however, that in determining whether a Change in
     Control has occurred, Voting Securities which are acquired in a "Non-
     Control Acquisition" (as hereinafter defined) shall not constitute an
     acquisition which would cause a Change in Control. A "Non-Control
     Acquisition" shall mean an acquisition by (i) an employee benefit plan (or
     a trust forming a part thereof) maintained by (A) the Corporation or (B)
     any corporation or other Person of which a majority of the voting power or
     the equity securities or equity interests is owned directly or indirectly
     by the Corporation (a "Control Subsidiary"), or (ii) the Corporation or any
     Control Subsidiary.

           (ii)     The individuals who, as of the date the Corporation issues
     any class of equity securities required to be registered under Section 12
     of the 1934 Act, are members of the Board (the "Incumbent Board"), cease
     for any reason to constitute at least two-thirds of the Board; provided,
     however, that if the election or nomination for election by the
     Corporation's stockholders of any new director was approved by a vote of at
     least two-thirds of the Incumbent Board, such new director shall, for
     purposes of this Agreement, be considered as a member of the Incumbent
     Board; provided, further, however, that no individual shall be considered a
     member of the Incumbent Board if (1) such individual initially assumed
     office as a result of either an actual or threatened "Election Contest" (as
     described in Rule 14a-11 promulgated under the 1934 Act) or other actual or
     threatened solicitation of proxies or consents by or on behalf of a Person
     other than the Board (a "Proxy Contest") including by reason of any
     agreement intended to avoid or settle any Election Contest or Proxy Contest
     or (2) such individual was designated by a Person who has entered into an
     agreement with the Corporation to effect a transaction described in clause
     (i) or (iii) of this Section 12.2; or

          (iii)     Consummation, after approval by stockholders of the
     Corporation, of:

                                       12
<PAGE>

                    (1)  A merger, consolidation or reorganization involving the
          Corporation, unless,

                         (A) The stockholders of the Corporation, immediately
                    before such merger, consolidation or reorganization, own,
                    directly or indirectly immediately following such merger,
                    consolidation or reorganization, at least seventy-five
                    percent (75%) of the combined voting power of the
                    outstanding Voting Securities of the corporation resulting
                    from such merger or consolidation or reorganization or its
                    parent corporation (the "Surviving Corporation") in
                    substantially the same proportion as their ownership of the
                    Voting Securities immediately before such merger,
                    consolidation or reorganization;

                         (B) The individuals who were members of the Incumbent
                    Board immediately prior to the execution of the agreement
                    providing for such merger, consolidation or reorganization
                    constitute at least two-thirds of the members of the board
                    of directors of the Surviving Corporation; and

                         (C) No Person (other than the Corporation, any Control
                    Subsidiary, any employee benefit plan (or any trust forming
                    a part thereof) maintained by the Corporation, the Surviving
                    Corporation or any Control Subsidiary, or any Person who,
                    immediately prior to such merger, consolidation or
                    reorganization, had Beneficial Ownership of twenty percent
                    (20%) or more of the then outstanding Voting Securities) has
                    Beneficial Ownership of twenty percent (20%) or more of the
                    combined voting power of the Surviving Corporation's then
                    outstanding Voting Securities.

                    (2)  A complete liquidation or dissolution of the
          Corporation; or

                    (3)  The sale or other disposition of all or substantially
          all of the assets of the Corporation to any Person (other than a
          transfer to a Control Subsidiary).

     Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting Securities
as a result of the acquisition of Voting Securities by the Corporation which, by
reducing the number of Voting Securities outstanding, increased the proportional
number of shares Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Corporation, and after
such share acquisition by the Corporation, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.

                                       13
<PAGE>

13.  Award Agreements

     13.1  Form of Agreement. Each Award under this Plan shall be evidenced by
an Award Agreement in a form approved by the Committee setting forth the number
of shares of Common Stock, units or other rights (as applicable) subject to the
Award, the exercise, base, or purchase price (if any) of the Award, the time or
times at which an Award will become vested, exercisable or payable, the duration
of the Award, and in the case of Performance Awards, the applicable performance
criteria and goals. The Award Agreement shall also set forth other material
terms and conditions applicable to the Award as determined by the Committee
consistent with the limitations of this Plan. Award Agreements evidencing Awards
that are Section 162(m) Awards shall contain such terms and conditions as may be
necessary to meet the applicable requirements of Section 162(m). Award
Agreements evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions of section 422
of the Code.

     13.2  Forfeiture Events. The Committee may specify in an Award that the
Participant's rights, payments and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture or recoupment upon the occurrence
of certain specified events, in addition to any otherwise applicable vesting or
performance conditions of an Award. Such events shall include, but shall not be
limited to, termination of employment for cause, violation of material
Corporation or Subsidiary policies, breach of noncompetition, confidentiality or
other restrictive covenants that may apply to the Participant, or other conduct
by the Participant that is detrimental to the business or reputation of the
Corporation or any Subsidiary.

14.  General Provisions

     14.1  No Assignment or Transfer; Beneficiaries. Except as provided in
Section 6.5 hereof, Awards under the Plan shall not be assignable or
transferable, except by will or by the laws of descent and distribution, and
during the lifetime of a Participant, the Award shall be exercised only by such
Participant or by his guardian or legal representative. Notwithstanding the
foregoing, the Committee may provide in the terms of an Award Agreement that the
Participant shall have the right to designate a beneficiary or beneficiaries who
shall be entitled to any rights, payments or other specified under an Award
following the Participant's death.

     14.2  Deferrals of Payment. Notwithstanding any other provisions of the
Plan, the Committee may permit a Participant to defer the receipt of payment of
cash or delivery of shares of Common Stock that would otherwise be due to the
Participant by virtue of the exercise of a right or the satisfaction of vesting
or other conditions with respect to an Award. If any such deferral is to be
permitted by the Committee, the Committee shall establish the rules and
procedures relating to such deferral, including, without limitation, the period
of time in advance of payment when an election to defer may be made, the time
period of the deferral and the events that would result in payment of the
deferred amount, the interest or other earnings attributable to the deferral and
the method of funding, if any, attributable to the deferred amount.

                                       14
<PAGE>

     14.3  Rights as Stockholder. A Participant shall have no rights as a holder
of Common Stock with respect to any unissued securities covered by an Award
until the date the Participant becomes the holder of record of such securities.
Except as provided in Section 3.2 hereof, no adjustment or other provision shall
be made for dividends or other stockholder rights, except to the extent that the
Award Agreement is a Dividend Equivalent Award, or otherwise provides for
dividend payments or similar economic benefits.

     14.4  Employment or Service. Nothing in the Plan, in the grant of any Award
or in any Award Agreement shall confer upon any Eligible Person the right to
continue in the capacity in which he is employed by, or otherwise serves, the
Corporation or any Subsidiary.

     14.5  Securities Laws. No shares of Common Stock will be issued or
transferred pursuant to an Award unless and until all then applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any stock
exchanges upon which the Common Stock may be listed, have been fully met. As a
condition precedent to the issuance of shares pursuant to the grant or exercise
of an Award, the Corporation may require the Participant to take any reasonable
action to meet such requirements. The Committee may impose such conditions on
any shares of Common Stock issuable under the Plan as it may deem advisable,
including, without limitation, restrictions under the Securities Act of 1933, as
amended, under the requirements of any stock exchange upon which such shares of
the same class are then listed, and under any blue sky or other securities laws
applicable to such shares.

     14.6  Tax Withholding. The Participant shall be responsible for payment of
any taxes or similar charges required by law to be withheld from an Award or an
amount paid in satisfaction of an Award, which shall be paid by the Participant
on or prior to the payment or other event that results in taxable income in
respect of an Award. The Award Agreement shall specify the manner in which the
withholding obligation shall be satisfied with respect to the particular type of
Award.

     14.7  Unfunded Plan. The adoption of this Plan and any setting aside of
cash amounts or shares of Common Stock by the Corporation with which to
discharge its obligations hereunder shall not be deemed to create a trust or
other funded arrangement. The benefits provided under this Plan shall be a
general, unsecured obligation of the Corporation payable solely from the general
assets of the Corporation, and neither a Participant nor the Participant's
permitted transferees or estate shall have any interest in any assets of the
Corporation by virtue of this Plan, except as a general unsecured creditor of
the Corporation. Notwithstanding the foregoing, the Corporation shall have the
right to implement or set aside funds in a grantor trust, subject to the claims
of the Corporation's creditors, to discharge its obligations under the Plan.

     14.8  Other Compensation and Benefit Plans. The adoption of the Plan shall
not affect any other stock incentive or other compensation plans in effect for
the Corporation or any Subsidiary, nor shall the Plan preclude the Corporation
from

                                       15
<PAGE>

establishing any other forms of stock incentive or other compensation for
employees of the Corporation or any Subsidiary. The amount of any compensation
deemed to be received by a Participant pursuant to an Award shall not constitute
compensation with respect to which any other employee benefits of such
Participant are determined, including, without limitation, benefits under any
bonus, pension, profit sharing, life insurance or salary continuation plan,
except as otherwise specifically provided by the terms of such plan.

     14.9   Plan Binding on Transferees.  The Plan shall be binding upon the
Corporation, its transferees and assigns, and the Participant, his executor,
administrator and permitted transferees and beneficiaries.

     14.10  Construction and Interpretation.  Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.  Headings of Articles and Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.

     14.11  Severability. If any provision of the Plan or any Award Agreement
shall be determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.

     14.12  Governing Law. The validity and construction of this Plan and of the
Award Agreements shall be governed by the laws of the State of Texas.

15.  Effective Date, Termination and Amendment

     15.1   Effective Date; Stockholder Approval.  The Plan originally became
effective on May 11, 1999, and was approved by the stockholders of the
Corporation on May 23, 2000.  The Plan has been amended and restated effective
on March 13, 2001, and was approved by the stockholders of the Corporation on
April 26, 2001.  The Plan has been further amended and restated effective on May
29, 2001.  At the sole discretion of the Board, in order to comply with the
requirements of Section 162(m) for certain types of Awards under the Plan, the
performance criteria set forth in Section 9.3 shall be reapproved by the
stockholders of the Corporation no later than the first stockholder meeting that
occurs in the fifth calendar year following the calendar year of the initial
stockholder approval of such performance criteria.

     15.2   Termination. The Plan shall terminate on the date immediately
preceding the tenth anniversary of the date the Plan is adopted by the Board.
The Board may, in its sole discretion and at any earlier date, terminate the
Plan. Notwithstanding the foregoing, no termination of the Plan shall adversely
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.

     15.3   Amendment. The Board may at any time and from time to time and in
any respect, amend or modify the Plan; provided, however, that no amendment or
modification of the Plan shall be effective without the consent of the
Corporation's stockholders that would (i) change the class of Eligible Persons
under the Plan, (ii)

                                       16
<PAGE>

increase the number of shares of Common Stock reserved for issuance under the
Plan or for particular types of Awards under the Plan in accordance with Section
3.1 hereof, (iii) allow the grant of Options at an exercise price below Fair
Market Value or (iv) change the provisions of Section 4.3 hereof relating to
stockholder approval of reductions in the exercise price of outstanding Options.
In addition, the Board may seek the approval of any amendment or modification by
the Corporation's stockholders to the extent it deems necessary or advisable in
its sole discretion for purposes of compliance with Section 162(m) or section
422 of the Code, the listing requirements of the New York Stock Exchange or for
any other purpose. No amendment or modification of the Plan shall adversely
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.

                                       17
<PAGE>

                                   APPENDIX A

     Notwithstanding anything elsewhere in the Plan to the contrary, the
following rules shall apply in connection with the distribution of Common Stock
to Columbia/HCA Healthcare Corporation (Columbia/HCA) stockholders (the "Spin-
off").

     (i)    In the case of each Columbia/HCA Non-Qualified Option that is a
vested option and covers more than 1000 shares, the Committee may grant an
option which covers a number of shares of Common Stock equal to the Original
Number of Shares multiplied by the Triad Share Multiple and which has a per
share exercise price equal to the per share exercise price of the original
Columbia/HCA Non-Qualified Option multiplied by the Triad Ratio.

     (ii)   In the case of each Columbia/HCA ISO that is held by a Triad
Employee or Triad Terminee (or his estate), the Committee may grant an option
which covers a number of shares of Common Stock equal to the Original Number of
Shares divided by the Triad Ratio and (2) has a per share exercise price equal
to the original per share exercise price multiplied by the Triad Ratio.

     (iii)  In the case of any options granted by the Committee pursuant to this
Appendix, any resulting per share exercise price which is not equal to a whole
multiple of a cent shall be rounded up to the next whole cent and any resulting
number of shares covered by an option which is not equal to a whole multiple of
a share shall be rounded down to the next whole share.

     (iv)   The Committee may provide that the terms of any option granted under
this Appendix are to be substantially the same as those of the related
Columbia/HCA Option, subject to such exceptions as the Committee may provide.
Any such option may, in the discretion of the Committee, also provide that (a)
any period of prior employment or service with Columbia/HCA or any related
entity is to be credited as covered employment or service for purposes of
determining the vesting and exercisability of such option (to the same extent as
such period was credited for such purposes under the related original
Columbia/HCA Option), and (b) in the case of any Columbia/HCA Non-Qualified
Option, the optionee is to be considered to be employed by or providing services
to the Corporation so long as he is employed by or providing services to
Columbia/HCA or LifePoint Hospitals, Inc. ("LifePoint") (or any Subsidiary
thereof), for purposes of determining when the option will cease to be
exercisable on account of termination of employment or service, and at such time
as the optionee ceases to be employed by or provide services to Columbia/HCA or
LifePoint (or any Subsidiary thereof), such cessation of employment or service
shall be treated as though it were a cessation of employment or service with the
Corporation under comparable circumstances.

     (v)    For purposes hereof, the following definitions shall apply:
<PAGE>

          (a) "Affiliate" shall mean any entity required to be aggregated with
     Columbia/HCA, LifePoint or Triad as appropriate, pursuant to Code sections
     414(b), 414(c), 414(m) or 414(o).

          (b) "Columbia/HCA ISO" shall mean any option outstanding under a
     Columbia/HCA Option Plan on the date of the Spin-off that is intended to
     qualify as an "Incentive Stock Option" under section 422 of the Code.

          (c) "Columbia/HCA Non-Qualified Option" shall mean any stock option
     outstanding under a Columbia/HCA Option Plan on the date of the Spin-off
     that is not a Columbia/HCA ISO.  Any such option shall be considered a
     "vested option" to the extent that it is exercisable on the date in
     question and shall be considered a "non-vested option" to the extent that
     it is not yet exercisable on such date.

          (d) "Columbia/HCA Option" shall mean a Columbia/HCA ISO or
     Columbia/HCA Non-Qualified Option, as the context shall indicate.

          (e) "Columbia/HCA Option Plan" shall mean any plan maintained by
     Columbia/HCA under which there are stock options outstanding on the date of
     the Spin-off.

          (f) "Ex-Dividend Date" shall mean the first trading date on which the
     Columbia/HCA stock shall trade on an ex-dividend basis with respect to the
     distribution of the Corporation's Common Stock and LifePoint's stock.

          (g) "Original Number of Shares" shall mean, as to any Columbia/HCA
     Option, the number of shares of Columbia/HCA stock covered by such option
     immediately prior to the Spin-off.

          (h) "Triad Business" shall mean any business conducted by Triad, or
     its Subsidiaries, on the date of the Spin-off.

          (i) "Triad Employee" shall mean an employee of the Corporation, or any
     direct or indirect Subsidiary of the Corporation that is an Affiliate
     thereof, on the date of the Spin-off.

          (j) "Triad Ratio" shall mean a fraction whose numerator is the closing
     price of the Common Stock on the trading date immediately preceding the Ex-
     Dividend Date and whose denominator is the closing price of the
     Columbia/HCA stock on such trading date immediately preceding the Ex-
     Dividend Date.

          (k) "Triad Share Multiple" shall mean the number of shares of Common
     Stock to be distributed per share of Columbia/HCA stock on the date of the
     Spin-off.

          (l) "Triad Terminee" shall mean any individual who is no longer
     employed by Columbia/HCA or any Affiliate thereof immediately prior to the

                                   Annex A-2
<PAGE>

     Spin-off but was employed by a Triad Business immediately prior to his
     termination of employment from Columbia/HCA and its Affiliates.

     Notwithstanding anything elsewhere in the Plan to the contrary, the
Committee may grant Non-qualified Stock Options, effective as of the twenty-
first trading date for the Common Stock, at an exercise price equal to the Fair
Market Value of the Common Stock on such date, in accordance with the attached
Schedule and in accordance with such other terms as shall be established by the
Committee.


                                   Annex A-3