EXHIBIT 10.3



 





EXHIBIT 10.3



PROVINCE HEALTHCARE COMPANY RETENTION PLAN




ARTICLE ONE

INTRODUCTION




     1.1     Purpose. The Board of Directors of Province Healthcare Company
(“Province”) has determined that it is in the best interests of Province and
its stockholders to assure that Province will have the continued dedication of
its officers and employees, notwithstanding the possibility or occurrence of a
change in control of Province. The Board believes that it is imperative to
diminish the inevitable distraction of such officers and employees by virtue of
the personal uncertainties and risks created by such possibility and to
encourage the officers’ and employees’ full attention and dedication to
Province and its affiliates. Therefore, in order to accomplish these
objectives, the Company has approved and adopted this Province Healthcare
Company Retention Plan (the “Plan”) to induce certain officers and employees of
Province to remain in their current employment and to devote their time and
energies to the successful performance of their duties by providing such
persons a measure of security. It is the express intent of the Board to
structure any transaction constituting a Change in Control of Province in a
manner that will allow for the adoption of this Plan by any successor thereto.



     1.2     Effective Date. The Plan was approved by the Board of Directors of
Province (the “Committee”) on August 15, 2004 and shall be effective as of
August 15, 2004 (the “Effective Date”).



ARTICLE TWO

ELIGIBILITY




     2.1     Officers and Employees Eligible to Participate in Plan. Only officers
and employees of Province or its subsidiaries who have been designated by the
Committee are eligible to participate in the Plan. Schedule A attached hereto
contains a list of such officers and employees as of the Effective Date.
Prior to a Change in Control, the Committee may add new Participants to the
Plan from time to time in its discretion.



ARTICLE THREE

DEFINITIONS




     3.1     Definitions. The following capitalized terms used in the Plan shall
have the meanings assigned to them below:



     “Annual Salary” shall mean a Participant’s base salary as in effect
immediately prior to a Change in Control. Each Participant’s Annual Salary as
of the Effective Date is reflected on Schedule A.



     “Board” means the Board of Directors of the Company.



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     “Cause” shall mean the occurrence of any of the following: (i) conviction
of the Participant for a crime involving fraud, dishonesty or theft, or of any
felony which, in the reasonable judgment of the Board, materially affects the
Participant’s ability to perform his duties; (ii) commission by the Participant
of an act of fraud, embezzlement, or material dishonesty against the Company;
or (iii) intentional neglect of or material inattention to the Participant’s
duties, which neglect or inattention remains uncorrected for more than thirty
(30) days following written notice from the Chief Executive Officer of the
Company detailing the Company’s concern.



     “Change in Control” means a transaction or circumstance in which any of
the following have occurred:



     (a) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than
Province or a wholly-owned subsidiary thereof, or any Province employee benefit
plan, becomes the “beneficial owner,” as such term is defined in Rule 13d-3
under the Exchange Act, directly or indirectly, of securities of Province
representing more than 50% of the total voting power represented by Province’
then-outstanding Voting Securities (as defined below), or



     (b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by Province’ stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period of whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or



     (c) any merger or consolidation of Province with any other corporation or
other entity, other than a merger or consolidation which would result in the
Voting Securities (i.e., any securities of the entity which vote generally in
the election of its directors) of Province outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) more than 50% of the
total voting power represented by the Voting Securities of Province or such
surviving entity outstanding immediately after such merger or consolidation, or



     (d) the stockholders of Province approve a plan of complete liquidation
of Province, or



     (e) any sale or disposition by Province of all or substantially all of
its assets.



     “Company” means Province. Following consummation of transaction or series
of transactions which constitutes a Change in Control as described in
subsection (a), (c) or (e) of the definition thereof, the term “Company” shall
mean the entity resulting from such transaction or purchasing or controlling Province and/or its assets as a
result of such transaction.



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     “Committee” means the Compensation Committee of the Board.



     “Disability” means a Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve (12)
months.



     “Good Reason” shall include any of the following: (i) a material adverse
alteration in the Participant’s position, responsibilities or status as in
effect immediately prior to a Change in Control; (ii) a reduction in the
Participant’s Annual Salary; (iii) relocation of the Participant by the Company
to a location that is more than thirty-five (35) miles from the Participant’s
then-current workplace as of the date immediately prior to a Change in Control;
(iv) the material breach by the Company of any obligation under this Plan,
including the failure to make any Retention Payment or Severance Payment in the
amount and at the time(s) required under Article Four, or (vi) any failure by
the Company to comply with and satisfy Section 7.11.



     “Participant” means an officer or employee who has been selected by the
Committee to receive a Retention Payment.



     "Plan” means this Pacers Retention Plan.



     "Plan Administrator” shall be the person designated in Section 5.1 or his
or her successors.



     “Qualifying Termination” shall mean termination of the Participant’s
employment (i) due to death or Disability, (ii) by the Company without Cause,
or (iii) by the Participant for Good Reason.



     “Retention Payment” shall have the meaning set forth in Section 4.1.



     “Retention Date” shall mean ninety (90) days after the occurrence of a
Change in Control.



     “Severance Payment” shall have the meaning set forth in Section 4.2.



ARTICLE FOUR

RETENTION PAYMENT




     4.1     Retention
Payment. Following the occurrence of a Change in Control,
the Company will pay to each qualifying Participant a lump sum cash amount
equal to his or her Annual Salary (the “Retention Payment”), on the earlier of
(a) the Retention Date, or (b) the termination of his or her employment
pursuant to a Qualifying Termination following a Change in Control. No Retention Payment will be made to any
Participant



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whose employment is terminated prior to the Retention Date unless
such termination is a Qualifying Termination.



     4.2   Severance Payment. In addition to the Retention Payment, in the event
that a Participant’s employment is terminated pursuant to a Qualifying
Termination following a Change in Control and prior to the first anniversary
of such Change in Control, the Company will pay to the Participant a cash
amount equal to that amount which would have been required, on the day prior to
the Change in Control, to retain the Participant’s then-current coverage levels
(including coverage of family and eligible dependents, if applicable) under the
continuation provisions of any welfare benefit plan maintained by Province and
subject to Section 4980B of the Internal Revenue Code of 1986, as amended, for
a period of twelve (12) months. Such current estimated payments for each
Participant are reflected on Schedule A. In addition, following the occurrence
of a Change in Control, the Company will pay to certain officers and employees
(including all Assistant Vice Presidents of Province as of the Effective Date),
as designated on Schedule A attached hereto, an additional cash amount equal to
six (6) months’ Annual Salary (or, with respect to one employee designated on
Schedule A, twelve (12) months’ Annual Salary), in the event that such
Participant’s employment is terminated pursuant to a Qualifying Termination
following a Change in Control and prior to the first anniversary of such Change
in Control. The aggregate payments payable to each qualifying Participant
pursuant to this Section 4.2 are referred to herein as the “Severance Payment.”
Each qualifying Participant will receive the Severance Payment in a lump sum
on such termination of his or her employment and conditioned upon his or her
execution of a release of claims in favor of the Company in the standard form
specified by the Company for terminating employees. No Severance Payment will
be made to any Participant whose employment is terminated following the first
anniversary of a Change in Control or other than pursuant to a Qualifying
Termination.



ARTICLE FIVE

ADMINISTRATION




     5.1   Plan Administration. The Plan is administered and interpreted by the
Committee, which may delegate day-to-day management to a Plan Administrator who
shall be appointed by the Committee and may be removed by the Committee at any
time. The Committee and, to the extent delegated, the Plan Administrator,
shall interpret the Plan and shall have complete control of the administration
thereof. Any decision by the Committee or such Plan Administrator reached in
accordance with the provisions contained herein shall be final.



     5.2   Consistency of Determination. In rendering its determination on any
matter within its discretion under any section of this Plan, the Committee
shall not be bound by past interpretations and is not required to be consistent
regarding its determinations.



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ARTICLE SIX

CLAIMS PROCEDURE




     6.1   Right
to File a Claim. Any former employee who believes that he or
she is entitled to a Retention Payment or a Severance Payment hereunder which
has not been received or which is different than that which has been officially
communicated may file a claim in writing with the Plan Administrator.



     6.2   Denial
of a Claim. The Plan Administrator shall make an initial
determination of eligibility or shall delegate the responsibility for such
initial determination to any other party. Any claimant whose claim to any
benefit hereunder has been denied in whole or in part shall normally receive a
notice of the determination within 90 days of the date the claim is submitted.
If, however, the Plan Administrator, or its delegate, determines that an
extension of time is required, the claimant will be notified in writing of the
need for the extension within 90 days after receipt of the claim. The
extension notice will also include the date by which the Plan Administrator
expects to make the benefit determination. Any notice of the denial of the
claim will set forth the specific reasons for such denial, specific references
to the Plan provisions on which the denial was based, what information or
materials would be required in order to reverse the denial and an explanation
of the procedure for review of the denial.



     6.3   Claim
Review Procedure. A claimant may appeal the denial of his or
her initial claim by written request for review to be made within 60 days after
receiving the initial notice of the denial. The request for review shall set
forth all grounds on which it is based, together with supporting facts and
evidence which the claimant deems pertinent, and the Plan Administrator shall
give the claimant the opportunity to review pertinent Plan documents in
preparing the request. The Plan Administrator may require the claimant to
submit such additional facts, documents or other material as it deems necessary
or advisable in making its review. The Plan Administrator will provide the
claimant a written or electronic notice of the decision within 60 days after
receipt of the request for review, except that, if there are special
circumstances requiring an extension of time for processing, the 60-day period
may be extended for an additional 60 days. If the Plan Administrator
determines that an extension of time is required, the claimant will be notified
in writing of the extension within 60 days after the Plan Administrator’s
receipt of the request for review. The extension notice will also include the
date by which the Plan Administrator expects to complete the review. The Plan
Administrator shall communicate to the claimant in writing its decision, and if
the Plan Administrator confirms the denial, in whole or in part, the
communication shall set forth the reasons for the decision and specific
references to the Plan provisions on which the decision is based. Any suit for
benefits must be brought within one year after the date the Plan Administrator
(or his or her designee) has made a final denial (or deemed denial) of the
claim.



     6.4   Requirement
to Follow Claims Procedure. Utilization of the claims
procedures set forth in this Article Six is a condition of payment of benefits
under the Plan. Failure to follow the
claims procedure here described will result in the denial of a



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Participant’s claim, and may result in the Participant’s disqualification for
payment of benefits under the Plan.



ARTICLE SEVEN

MISCELLANEOUS




     7.1   Rights
Not Exclusive. A Participant’s right to receive a Retention
Payment or Severance Payment under the Plan shall be in addition to and not
exclusive of his rights under any other agreement or plan of the Company or its
subsidiaries or affiliates, including without limitation any short- or
long-term bonus or other remuneration payable pursuant to any employment
agreement between the Participant and the Company or any subsidiary or
affiliate.



     7.2   No Contract for Employment. Nothing in the Plan shall be deemed to
give any Participant the right to be retained in the service of the Company or
its subsidiaries or affiliates, or to deny the Company or any subsidiary or
affiliate any right it may have to discharge or demote any Participant at any
time.



     7.3   Withholding. All amounts payable by the Company hereunder shall be
subject to withholding of such amounts related to taxes as the Company may be
legally obligated so to do.



     7.4   Unfunded Status of Plan. The Plan is intended to be an “unfunded”
plan for incentive compensation. With respect to any payments not yet made to
a Participant pursuant to the Plan, nothing contained in the Plan shall give
the Participant any rights that are greater than those of a general creditor of
the Company.



     7.5   Arbitration. To the extent not controlled by federal law, any dispute
or controversy arising under or in connection with the Plan shall be settled
exclusively by arbitration in Nashville, Tennessee accordance with the rules of
the American Arbitration Association then in effect. Each party agrees to
comply with any award made in any such proceeding, which shall be final, and to
the entry of judgment in accordance with applicable law in any jurisdiction
upon any such award.



     7.6   Costs of Enforcement. In the event that, following a Change in
Control, a Participant collects or attempts to collect any part or all of the
Retention Payment or otherwise enforces the terms of the Plan following a
dispute with the Company regarding the interpretation of the Plan by or through
a lawyer or lawyers, the Company will pay all costs of such collection or
enforcement, including legal fees and other out of pocket expenses reasonably
incurred by the Participant unless it is finally determined in any enforcement
action that Participant acted in bad faith.



     7.7   Notices. Notices will be considered effective upon receipt and shall
be sent by hand delivery or certified mail addressed as follows:



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If to Province:




105 Westwood Place, Suite 400

Brentwood, Tennessee 37027

Facsimile Number: (615) 376-4856




If to a Participant, at his or her last known address.



     7.8
 
Severability. The invalidity and unenforceability of any particular
provision of the Plan shall not affect any other provision of the Plan, and the
Plan shall be construed in all respects as if such invalid or unenforceable
provision were omitted.



     7.9
 
No Assignment or Alienation of Benefits by Participants.
A
Participant shall not have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify or otherwise encumber in advance any of
the benefits payable under the Plan, nor shall these benefits be subject to
seizure for the payment of debt, judgment, alimony or separate maintenance owed
by the Participant, or any person claiming through the Participant, or be
transferable by operation of law in the event of bankruptcy, insolvency or
otherwise. Any attempted assignment, anticipation, hypothecation, transfer, or
other disposal of the benefits hereunder, shall be void.



     7.10
 
Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Tennessee without regard to the
conflict of laws provision thereof and to the extent not preempted by federal
law.



     7.11
 
Successors and Assigns. The Plan shall be binding upon the Company
and its successors and assigns. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Plan in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.



     7.12
 
Amendment; Termination; Lapse. The Board reserves the right to
adopt, terminate or amend the provisions of the Plan to any extent and in any
manner it desires prior to a Change in Control by execution of a written
document describing the intended amendment(s). Following a Change in Control,
the Plan may be amended or terminated by the Board at any time; provided,
however, that no such amendment or termination shall have an adverse effect on
any rights of a Participant without his or her written consent. In the event
that a Change in Control of Province does not occur within two (2) years
following the Effective Date, this Plan automatically shall terminate and be of
no further effect, and all rights of the Participants shall terminate without
consideration. Nothing in this Plan or any document describing, interpreting
or relating to the Plan shall be construed to provide, prior to a Change in
Control, any vested, nonforfeitable, nonterminable, or nonchangeable benefits
or rights thereto.



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     7.13
Headings.   The headings of the sections herein are for convenience
only and shall have no significance in the interpretation of the Plan.



     The foregoing is hereby acknowledged as being the Plan, as adopted by the
Company’s Board of Directors as of the date set forth herein.


	 	 	 	 	 
	 	PROVINCE HEALTHCARE COMPANY

 	 
	 	By:  	/s/ Martin S. Rash	 
	 	Name:  	Martin S. Rash	 
	 	Title:  	Chairman
& CEO	 
	 




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