Exhibit
10(b)





TENET


EXECUTIVE SEVERANCE PLAN















 


TABLE
OF CONTENTS


 


TENET EXECUTIVE SEVERANCE PLAN


	
  ARTICLE I PREAMBLE AND
  PURPOSE

  	
  1

  
	
  1.1

  	
  Preamble

  	
  1

  
	
  1.2

  	
  Purpose

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  DEFINITIONS AND CONSTRUCTION

  	
  3

  
	
  2.1

  	
  Definitions

  	
  3

  
	
  2.2

  	
  Construction

  	
  11

  
	
  2.3

  	
  409A Compliance

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  SEVERANCE BENEFITS

  	
  12

  
	
  3.1

  	
  Severance
  Benefits not related to a Change of Control

  	
  12

  
	
  3.2

  	
  Severance
  Benefits on and after a Change of Control

  	
  14

  
	
  3.3

  	
  Termination
  Distributions to Key Employees

  	
  17

  
	
  3.4

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

  	
  17

  
	
  3.5

  	
  Section 409A
  Gross-Up Payment

  	
  18

  
	
  3.6

  	
  Alternate Plan
  Terms

  	
  18

  
	
  3.7

  	
  Conditions to
  Payment of Severance Benefits

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  ADMINISTRATION

  	
  21

  
	
  4.1

  	
  The PAC

  	
  21

  
	
  4.2

  	
  Powers of PAC

  	
  21

  
	
  4.3

  	
  Appointment of Plan
  Administrator

  	
  21

  
	
  4.4

  	
  Duties of Plan
  Administrator

  	
  21

  
	
  4.5

  	
  Indemnification
  of PAC and Plan Administrator

  	
  23

  
	
  4.6

  	
  Claims for
  Benefits

  	
  23

  
	
  4.7

  	
  Arbitration

  	
  24

  
	
  4.8

  	
  Receipt and
  Release of Necessary Information

  	
  25

  
	
  4.9

  	
  Overpayment and
  Underpayment of Benefits

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE V OTHER
  BENEFIT PLANS OF THE COMPANY

  	
  26

  
	
  5.1

  	
  Other Plans

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  AMENDMENT AND TERMINATION OF THE ESP

  	
  27

  
	
  6.1

  	
  Continuation

  	
  27

  
	
  6.2

  	
  Amendment of ESP

  	
  27

  
	
  6.3

  	
  Termination of
  ESP

  	
  27

  
	
  6.4

  	
  Termination of
  Affiliate’s Participation

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  MISCELLANEOUS

  	
  29

  
	
  7.1

  	
  No Reduction of
  Employer Rights

  	
  29

  
	
  7.2

  	
  Successor to the
  Company

  	
  29

  
	
  7.3

  	
  Provisions
  Binding

  	
  29

  



 



 i














 


TENET
EXECUTIVE SEVERANCE PLAN


 


ARTICLE I

PREAMBLE AND PURPOSE


1.1                               Preamble. In January 2003, Tenet Healthcare
Corporation (the “Company”) adopted the Tenet Executive Severance Protection
Plan (the “TESPP”) to provide Covered Executives of the Company and its
affiliates with certain cash severance payments and/or other benefits in the
event of a termination of the executive’s employment as a result of a “qualifying
termination,” as defined in the TESPP, or under certain other circumstances
following a “change of control,” as defined in the TESPP. By this instrument
the Company desires to amend and restate the TESPP to:


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


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


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


(d)                                 revise
the definition of change of control,


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


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


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


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


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


1.2                               Purpose. Through the ESP, the Company intends to
permit the deferral of compensation and to provide additional benefits to a
select group of management or highly compensated employees of the Company and
its affiliates. Accordingly, it is intended that the ESP will not constitute a “qualified
plan” subject to the limitations of section 401(a) of the Code, nor will it
constitute a “funded plan,” for purposes of such requirements. It also is
intended that the ESP will qualify as a pension plan within the meaning of
section 3(2) of the Employee Retirement Income Security Act of 1974, as 



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


 


End of Article I



 2
 






 



ARTICLE
II


DEFINITIONS AND CONSTRUCTION


2.1                               Definitions. When a word or phrase appears in this ESP
with the initial letter capitalized, and the word or phrase does not commence a
sentence, the word or phrase will generally be a term defined in this Section
2.1. The following words and phrases with the initial letter capitalized will
have the meaning set forth in this Section 2.1, unless a different meaning is
required by the context in which the word or phrase is used.


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


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


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


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


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


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


(i)                                     dishonesty,


(ii)                                  fraud,


(iii)                               willful misconduct,


(iv)                              breach of fiduciary duty,


(v)                                 conflict of interest,


(vi)                              commission of a felony,


(vii)                           material failure or refusal to perform his
job duties in accordance with Company policies,



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(viii)                        a material violation of Company
policy that causes harm to the Company or an Affiliate, or


(ix)                                other wrongful conduct of a similar nature
and degree.


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


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


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


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



 4
 






 



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


 


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


(A)                              any one person, or more than one person
acting as a group within the meaning of section 409A of the Code, acquires (or
has acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons) ownership of stock of the Company
possessing thirty five percent (35%) or more of the total voting power of the
stock of the Company (not considering stock owned by such person or group prior
to such twelve (12) month period)(i.e., such person or group must acquire within a
twelve (12) month period stock possessing thirty-five percent (35%) of the
total voting power of the stock of the Company) except for (1) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or an Affiliate, (2) any acquisition directly from the Company or (3)
any acquisition by the Company; or


(B)                                a majority of the members of the Board are
replaced during any twelve (12) month period by directors whose appointment or
election is not endorsed by a majority of the members of the Board prior to the
date of the appointment or election.


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


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



 5
 






 



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


 


(ii)                                  A liquidation or dissolution of the Company
that is approved by a majority of the Company’s stockholders.


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


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


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


(j)                                     “Company” means Tenet Healthcare
Corporation.


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


(l)                                     “Covered Executive” means:


(i)                                     the Chief Executive Officer (“CEO”) of the
Company,


(ii)                                  the Chief Operating Officer (“COO”) of the
Company,


(iii)                               the Chief Financial Officer (“CFO”) of the
Company,


(iv)                              the General Counsel (“GC”) of the Company,


(v)                                 an Executive Vice President (“EVP”) of the
Company,


(vi)                              a Senior Vice President or the equivalent
thereof (collectively “SVP”) of the Company,


(vii)                           a Vice President (“VP”) of the Company, or


(viii)                        a Hospital Chief Executive Officer (“Hospital
CEO”).


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



 6
 






 



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


 


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


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


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


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


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


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


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


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


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



 7
 






 



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


 


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


(w)                               “Good Reason” means:


(i)                                     a material reduction in the Covered Executive’s
job duties;


(ii)                                  not related to a Change of Control, a
reduction of ten percent (10%) or more in the Covered Executive’s combined Base
Salary and Target Bonus;


(iii)                               not related to a Change of Control, a
material reduction in the Covered Executive’s retirement or supplemental
retirement plan benefits;


(iv)                              an involuntary relocation of the Executive’s
primary workplace by fifty (50) miles or more; or


(v)                                 a failure of a successor entity to assume the
obligations under the ESP.


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


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



 8
 






 



 


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


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


(i)                                     an officer of the Company or an Affiliate
having compensation within the meaning of section 415(c) of the Code of greater
than one hundred thirty thousand dollars ($130,000) (as adjusted under section
416(i)(1) of the Code for Plan Years beginning after December 31, 2002) (such
limit is $140,000 for 2006);


(ii)                                  a Five Percent Owner; or


(iii)                               a One Percent Owner having compensation
within the meaning of section 415(c) of the Code of more than one hundred fifty
thousand dollars ($150,000).


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


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


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



 9
 






 



 


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


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


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


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


(i)                                     the Company enters into an agreement the
consummation of which, or the approval by the stockholders of which, would
constitute a Change of Control,


(ii)                                  proxies for the election of members of the
Board are solicited by any person other than the Company;


(iii)                               any person publicly announces an intention to
take or to consider taking actions which, if consummated would constitute a
Change of Control, or


(iv)                              any other event occurs which is deemed to be
a potential change of control by the Board and the Board adopts a resolution to
the effect that a Potential Change of Control has occurred.


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


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


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


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


(i)                                     the period specified in Section 3.1(a) with
respect to Severance Pay payable on account of a Qualifying Termination not
related to a Change of control, and


(ii)                                  the period specified in Section 3.2(a) on
account of a Qualifying Termination in connection with a Change of Control.


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



 10
 






 



 


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


(jj)                                  “Qualifying Termination” means:


(i)                                     the involuntary termination of a Covered
Executive’s employment by the Employer without Cause, or


(ii)                                  the Covered Executive’s resignation from the
employment of the Employer for Good Reason;


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


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


2.2                               Construction. If any provision of the ESP is determined
to be for any reason invalid or unenforceable, the remaining provisions of the
ESP will continue in full force and effect. All of the provisions of the ESP
will be construed and enforced in accordance with the laws of the State of
Texas and will be administered according to the laws of such state, except as
otherwise required by ERISA, the Code or other applicable federal law.
When  delivery to the PAC, Plan
Administrator or the Covered Executive is required under this ESP, such
delivery requirement will be satisfied by delivery to a person or persons
designated by the PAC, Plan Administrator or the Covered Executive, as
applicable. Delivery will be deemed to have occurred only when the form or
other communication is actually received. Headings and subheadings are for the
purpose of reference only and are not to be considered in the construction of
the ESP. The pronouns “he,” “him” and “his” used in the ESP will also refer to
similar pronouns of the female gender unless otherwise qualified by the
context.


2.3                               409A Compliance. The ESP is intended to comply with the
requirements of section 409A of the Code. The provisions of the ESP will be
construed and administered in a manner that enables the ESP to comply with the
provisions of section 409A of the Code.


End of Article II



 11














 


ARTICLE III

SEVERANCE BENEFITS


3.1                               Severance
Benefits not related to a Change of Control. Except as
provided otherwise in a Covered Executive’s ESP Agreement, a Covered Executive
who incurs a Qualifying Termination not related to a Change of Control will, subject
to the limitations contained in the ESP, receive the following severance
benefits.


(a)                                  Severance
Period. The Covered Executive will be entitled to the
payment of Severance Pay over the Severance Period set forth below:


	
  COVERED EXECUTIVE

  	
   

  	
  SEVERANCE PERIOD

  
	
  CEO

  	
   

  	
  Three (3) years

  
	
  COO, CFO and GC

  	
   

  	
  Two and one-half (2.5) years

  
	
  SVPs and EVPs

  	
   

  	
  One and one-half (1.5) years

  
	
  VPs and Hospital CEOs

  	
   

  	
  One (1) year

  



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


(b)                                  Other Accrued
Obligations. The Covered Executive will be entitled to
payment of all accrued Base Salary, accrued time off and any other accrued and
unpaid obligations as of the date of the Qualifying Termination. Such accrued
obligations will be included and paid as part of the Covered Executive’s final
paycheck from the Employer.


(c)                                  Bonus.
The Covered Executive will be entitled to payment of the Bonus earned in
accordance with the terms of the AIP as acted on by the Compensation Committee
during the calendar year of the Qualifying Termination. Such Bonus will be pro
rated as a fraction of twelve (12) for full months worked by the Covered
Executive for the Employer or an Affiliate during such calendar year and will
be paid to the Covered Executive, at the time and in the same manner specified
in the AIP.


(d)                                  Continued
Welfare Benefits. During the Severance Period, the
Covered Executive and his dependents will be entitled to continue to
participate in any medical, dental, vision, life and long-term care benefit
programs maintained by the Employer in which such persons were participating
immediately prior to the date of the Qualifying Termination; provided, that,
the continued participation of such persons is possible under the general terms
and provisions of such benefit programs. If such continued participation is
barred, then the Employer will arrange to provide such persons with
substantially similar coverage to that which such persons would have otherwise
been entitled to receive under such benefit 



 12
 






 



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


 


The pre-tax or after-tax
payroll deductions for the continued medical, dental, vision life and long-term
care benefits described above will be taken from the Covered Executive’s
Severance Pay pursuant to the Employer’s normal payroll practices;  provided, however, that effective as of
January 1, 2005, if the commencement of the Covered Executive’s Severance Pay
is delayed for six (6) months as described in Section 3.3, the Covered
Executive will not be required to pay the cost of the continued benefits during
such period and instead the Employer will include the cost of such coverage in
the Covered Executive’s income and report it as wages on Form W-2. Any
continued medical, dental or vision benefits provided to the Covered Executive
and his dependents pursuant to this

Section 3.1(d) is in addition to any rights the Covered Executive and such
dependents may have to continue such coverages under COBRA. The provisions of
this Section 3.1(d) will not prohibit the Company from changing the terms of
such medical, dental, life vision or long-term care benefit programs provided
that any such changes apply to all executives of the Company and its Affiliates
(e.g., the Company may switch insurance carriers or preferred provider
organizations).


(e)                                  Outplacement
Services. During the Severance Period, the Covered
Executive will be entitled to receive outplacement services in an amount equal
to the lesser of ten percent (10%) of his Base Salary or twenty five thousand
dollars ($25,000). Effective as of January 1, 2005, in order to comply with
section 409A of the Code, the expenses for such outplacement services and the
ESP’s reimbursement of such expenses pursuant to this

Section 3.1(e) must be made by the last day of the second calendar year in
which the Covered Executive incurs a Qualifying Termination.


(f)                                    Car Allowance.
During the Severance Period, the Covered Executive will receive a car allowance
in the same amount as was provided the Executive at the time of the Qualifying
Termination. Such car allowance will be paid as part of the Covered Executive’s
Severance Pay, subject to the six (6) month rule in Section 3.3 applicable to
Key Employees.


(g)                                 Payment of
Legal Expenses. The Covered Executive will be entitled
to reimbursement of any legal expenses reasonably incurred by him in order to
obtain the benefits provided pursuant to the ESP. Effective as of January 1,
2005 in order to comply with section 409A of the Code, the reimbursement of
such legal fees pursuant to this Section 3.1(g) must be made by the last day of




 13
 






 



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


 


(h)                                 Equity
Compensation Adjustments. Except as provided otherwise
in the Covered Executive’s ESP Agreement, upon a Qualifying Termination, any
equity-based compensation awards granted to the Covered Executive by the
Employer under the SIP or an Equity Plan prior to such termination that are
outstanding and vested as of the date of the Qualifying Termination will be
exercisable or settled pursuant to the terms of the SIP or the Equity Plan, as
applicable. All unvested equity-based compensation awards held by the Covered
Executive as of the date of the Qualifying Termination will expire and be of no
effect. No Covered Executive will be entitled to any new-equity based
compensation awards following the date of his Qualifying Termination or during
the Severance Period.


(i)                                    SERP.
Except as provided otherwise in the Covered Executive’s ESP Agreement, a
Covered Executive who is also a participant in the SERP will be entitled to age
and service credit for the duration of the Severance Period under the SERP. Benefits
under the SERP will be payable to the Covered Executive pursuant to the terms
of the SERP; provided, however, that if the Covered Executive is entitled to
commence SERP benefits during the Severance Period pursuant to the terms of the
SERP; the amount of Severance Pay payable to Executive pursuant to the ESP will
be offset (i.e., reduced) by the
amount of the SERP benefits payable during the Severance Period. For purposes
of determining the amount of the Covered Executive’s SERP benefits, any
actuarial reduction that would otherwise apply under the SERP due to the
commencement of SERP benefits during the Severance Period will be disregarded (i.e., the SERP benefits will only be actuarially reduced for
early commencement beginning with the last day of the Severance Period). Further,
at the end of the Severance Period, the Covered Executive’s SERP benefits will
be recalculated to take into account the additional age and service credit
provided under the ESP during the Severance Period. A Covered Executive’s
Severance Pay will not be considered in calculating the Covered Executive’s “Final
Average Earnings” under the SERP.


(j)                                    DCP.
The Covered Executive will incur a termination of employment for purposes of
the DCP at the time of a Qualifying Termination and accordingly will not be
entitled to defer any portion of his Severance Pay to the DCP during the
Severance Period. The Covered Executive’s DCP benefits will be paid to him
pursuant to the terms of the DCP and the Covered Executive’s distribution
election under the DCP in a manner that complies with section 409A of the Code.


(k)                                401(k).
The Covered Executive will incur a severance from employment for purposes of
the 401(k) Plan on the date of the Qualifying Termination and accordingly will
not be entitled to defer any portion of his Severance Pay to the 401(k) Plan
during the Severance Period. The Covered Executive’s 401(k) Plan benefits will
be payable to him under the 401(k) Plan pursuant to the terms of the 401(k)
Plan.


3.2                               Severance
Benefits on and after a Change of Control. Except as
provided otherwise in a Covered Executive’s ESP Agreement, a Covered Executive
who incurs a Qualifying 



 14
 






 



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

Section 2.1(g)(i), Section 2.1(g)(ii) or Section 2.1(g)(iii), such
Severance Pay, in the amount determined pursuant to Section 3.2(a), will be
paid to the Covered Executive in a lump sum cash payment, subject to the six (6)
month delay set forth in Section 3.3.


(a)                                  Severance
Period. The Severance Period following a Qualifying
Termination that occurs during the Protection Period will be as follows: 




	
  COVERED EXECUTIVE

  	
   

  	
  SEVERANCE PERIOD

  
	
  CEO

  	
   

  	
  Three (3) years

  
	
  COO, CFO and GC

  	
   

  	
  Three (3) years

  
	
  SVPs and EVPs

  	
   

  	
  Two (2) years

  
	
  VPs and Hospital
  CEOs

  	
   

  	
  One and one-half (1.5) years

  






(b)                                  Equity
Compensation Adjustments. Except as provided otherwise
in the Covered Executive’s ESP Agreement, in the event of a Change of Control,
if the successor to the Company does not assume the SIP or the applicable
Equity Plan or grant comparable awards in substitution of the outstanding
awards under the SIP or applicable Equity Plan as of the date of the Change of
Control, then any equity-based compensation awards granted to the Covered
Executive by the Employer under the SIP or Equity Plan and outstanding as of
the date of the Change of Control will become immediately fully vested and/or
exercisable and will no longer be subject to a substantial risk of forfeiture
or restrictions on transferability, other than those imposed by applicable
legislative or regulatory requirements. Conversely, except as provided
otherwise in the Covered Executive’s ESP Agreement, if the successor to the
Company assumes the SIP or the applicable Equity Plan or substitutes the awards
under the SIP or applicable Equity Plan with comparable awards; then any
equity-based compensation awards granted to the Covered Executive by the
Employer under the SIP or Equity Plan prior to such termination and outstanding
as of the date of the Change of Control or any substituted awards given with
respect to such outstanding awards will continue to be maintained pursuant to
their terms; provided, however, that upon a Covered Executive’s Qualifying
Termination in connection with such Change of Control, any such equity
compensation awards outstanding as of the date of the Qualifying Termination
will become immediately fully vested and/or exercisable and will no longer be
subject to a substantial risk 



 15
 






 



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


(c)                                  280G Gross Up.
In the event that payments to a Covered Executive pursuant to the ESP (when
considered with all other payments made to the Covered Executive as a result of
the termination of the Executive’s employment with the Employer that are
subject to section 280G of the Code) (the amount of all such payments,
collectively, the “Parachute Payment”) results in the Covered Executive
becoming liable for the payment of any excise taxes pursuant to section 4999 of
the Code (“280G Excise Tax”) and reduces on an after-tax basis the value of
benefits payable to the Covered Executive under the ESP by more than ten
percent (10%), the Covered Executive will be entitled to an additional payment
equal to the amount of any 280G Excise Tax payable by the Covered Executive
pursuant to section 4999 of the Code as a result of such payments plus all
federal, state and local taxes applicable to the Employer’s payment of such
280G Excise Tax, including any additional taxes due under section 4999 of the
Code with respect to payments made pursuant to this provision. Calculations for
these purposes will assume the highest marginal rate applicable at the time of
calculation. The intent of this Section 3.2(c) is to provide that the Employer
will pay the Covered Executive an additional amount (the “280G Gross-Up Payment”)
such that the net amount retained by the Covered Executive after deduction (i)
of any 280G Excise Tax imposed on the Parachute Payment, and (ii) of any 280G
Excise Tax, federal, state or local income, payroll, and/or other taxes imposed
on the Gross-Up Payment will equal the Parachute Payment.


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


(A)                              notify the Covered
Executive, in writing, that the Plan Administrator agrees with the Covered
Executive’s determination of 280G Excise Tax liability, in which case the
Employer will become obligated to immediately pay to the Covered Executive the
280G Gross-Up Payment, or


(B)                                submit to the Covered
Executive an opinion, prepared by counsel of the Plan Administrator’s choice
which counsel is reasonably satisfactory to the Covered Executive, that the
Covered Executive is not liable for the 280G Excise Tax (the “Tax Opinion”).


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


(1)                                  not contest the
assessment, in which case the Employer will be relieved of its obligation to
make the 280G Gross-Up Payment specified in this Section 3.2(c), or



 16
 






 



(2)                                  contest the
assessment, with counsel of the Covered Executive’s choice that is reasonably
satisfactory to the Employer.


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


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


3.3                               Termination
Distributions to Key Employees. Distributions under
the ESP that are payable to a Covered Executive who is a Key Employee on and
after January 1, 2005, on account of a Qualifying Termination will be delayed
for a period of six (6) months following such Covered Executive’s Qualifying
Termination. Upon the expiration of such six (6) month period, amounts that
would have been paid to the Covered Executive during such six (6) month period,
will be paid to him in the form of a lump sum payment and the remaining amounts
payable to the Covered Executive under the ESP will be paid with respect to the
remainder of the Severance Period pursuant to the terms of this Article III (i.e., in the case of Severance Pay pursuant to Section
3.1(a), such Severance Pay will be paid on a bi-weekly basis for the remainder
of the Severance Period). This six (6) month restriction will not apply, or
will cease to apply, with respect to distributions by reason of the death of
the Covered Executive pursuant to Section 3.4.


3.4                               Distributions
on Account of Death of the Covered Executive During the Severance Period.
Except as provided otherwise in the Covered Executive’s ESP Agreement, if a
Covered Executive dies during the Severance Period specified in

Section 3.1(a) or Section 3.2(a), the following benefits will be payable:


(a)                                  Severance Pay.
Any remaining Severance Pay payable to the Covered Executive as of the date of
his death will continue to be paid to the Covered Executive’s estate pursuant
to Section 3.1(a) or 3.2(a), as applicable.


(b)                                  Other Accrued
Obligations. Any unpaid Base Salary, time off and any
other accrued and unpaid obligations that remain outstanding as of the date of
the Covered Executive’s death will be paid to the Covered Executive’s estate
pursuant to Section 3.1(b).


(c)                                  Bonus.
Any unpaid Bonus described under Section 3.1(c) that remains outstanding as of
the date of the Covered Executive’s death will be paid to his estate pursuant
to Section 3.1(c).



 17
 






 



(d)                                  Continued
Welfare Benefits. The Covered Executive’s dependents
will be entitled to continue to participate in any medical, dental, vision,
life and long-term care benefit programs maintained by the Employer in which
such persons were participating immediately prior to the date of the Covered
Executive’s death for the remainder of the Severance Period, subject to the
provisions of Section 3.1(d). At the end of the Severance Period such
dependents will be eligible to elect to continue their medical, dental or
vision coverage pursuant to COBRA.


(e)                                  Outplacement
Services. Any outplacement service benefits payable to
the Covered Executive pursuant to Section 3.1(e) will cease as of the date of
the Covered Executive’s death; provided, that any eligible outplacement
expenses incurred prior to the Covered Executive’s death will be reimbursable
to the Covered Executive’s estate pursuant to Section 3.1(e).


(f)                                    Car Allowance.
The car allowance payable to the Covered Executive pursuant to Section 3.1(f)
will cease as of the date of the Covered Executive’s death; provided, that the
amount of such car allowance payable for the period prior to the Covered
Executive’s death will be paid to the Covered Executive’s estate pursuant to
Section 3.1(f).


(g)                                 Payment of
Legal Expenses or 280G Excise Tax Amount. The
obligation to reimburse the Covered Executive for any legal fees or the 280G
Excise Tax  pursuant to Section 3.2(c)
will continue pursuant to the terms of the ESP following his death, except that
such legal fees or excise tax reimbursement will be payable to the Covered
Executive’s estate.


(h)                                 Equity
Compensation Adjustments. Any outstanding equity-based
compensation awards granted to the Covered Executive that are outstanding as of
the date of his death will be exercisable or settled pursuant to the terms of
the SIP or the Equity Plan, as applicable.


3.5                               Section 409A
Gross-Up Payment. In the event that a Covered Executive
(or his estate) becomes liable for the payment of any excise taxes pursuant to
section 409A of the Code (“409A Excise Tax”) with respect to the benefits
payable under the ESP, the Covered Executive (or his estate) will be entitled
to an additional payment equal to the amount of any 409A Excise Tax payable by
the Covered Executive (or his estate) pursuant to section 409A of the Code plus
all federal, state and local taxes applicable to the Employer’s payment of such
409A Excise Tax, including any additional taxes due under section 409A of the
Code with respect to payments made pursuant to this provision.


3.6                               Alternate Plan Terms. The Compensation Committee reserves
the right to modify the terms of this ESP with respect to any Covered Executive
(e.g., to provide different benefits than
those set forth herein). Such modified terms will be set forth in the Covered
Executive’s ESP Agreement or in such other form as may be determined by the
Compensation Committee, in its sole and absolute discretion.


3.7                               Conditions to
Payment of Severance Benefits. As a condition of
obtaining benefits under the ESP, the Covered Executive will be required to
execute a Severance Agreement and General Release. Such Severance Agreement and
General Release will contain the restrictive covenants set forth below
regarding non-competition, 



 18
 






 



confidentiality, non-disparagement and non-solicitation as well as a
general release of claims against the Company and its Affiliates.


(a)                                  Non-Competition.
Payment of any and all severance benefits provided under the ESP will cease if,
at any time during the Severance Period described in Section 3.1(a), the
Covered Executive directly or indirectly, carries on or conducts, in
competition with the Company and its Affiliates, any business of the nature in
which the Company or its Affiliates are then engaged in any geographical area
in which the Company or its Affiliates engage in business at the time of the
Covered Executive’s Qualifying Termination or in which any of them, prior to
such Qualifying Termination, evidenced in writing, at any time during the six
(6) month period prior to such termination, an intention to engage in such
business. This prohibition extends to the Covered Executive’s conducting or
engaging in any such business either as an individual on his own account or as
a partner or joint venturer or as an executive, agent, consultant or salesman
for any other person or entity, or as an officer or director of a corporation
or as a shareholder in a corporation of which he will then own ten percent
(10%) or more of any class of stock. The provisions of this Section 3.7(a) will
not apply during the Severance Period described in Section 3.2(a).


(b)                                  Confidential
Information. Payment of any and all severance benefits
will cease if, at any time during the Severance Period described in either
Section 3.1(a) of 3.2(a), the Covered Executive directly or indirectly reveals,
divulges or makes known to any person or entity, or uses for the Covered
Executive’s personal benefit (including without limitation for the purpose of
soliciting business, whether or not competitive with any business of the
Company or any of its Affiliates), any information acquired during the Covered
Executive’s employment with the Company or its Affiliates with regard to the
financial, business or other affairs of the Company or any of its Affiliates
(including without limitation any list or record of persons or entities with
which the Company or any of its Affiliates has any dealings), other than:


(i)                                     information
already in the public domain,


(ii)                                  information of a type
not considered confidential by persons engaged in the same business or a
business similar to that conducted by the Company or its Affiliates, or


(iii)                               information that the
Covered Executive is required to disclose under the following circumstances:


(A)                              at the express direction
of any authorized governmental entity;


(B)                                pursuant to a subpoena
or other court process;


(C)                                as otherwise required
by law or the rules, regulations, or orders of any applicable regulatory body;
or


(D)                               as otherwise necessary,
in the opinion of counsel for the Covered Executive, to be disclosed by the
Covered Executive in connection with any legal action or proceeding involving
the Covered 



 19
 






 



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


 


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


(c)                                  Agreement Not
To Solicit Employees. Payment of any and all severance
benefits will cease if, at any time during the Severance Period described in
either Section 3.1(a) of 3.2(a), the Covered Executive directly or indirectly
solicits or induces, or in any manner attempts to solicit or induce, any person
employed by, or any agent of, the Company or any of its Affiliates to terminate
such employee’s employment or agency, as the case may be, with the Company or
any Affiliate.


(d)                                  Nondisparagement.
Payment of any and all severance benefits will cease if, at any time during the
Severance Period described in either Section 3.1(a) of 3.2(a), the Covered
Executive disparages the Company or its Affiliates and their respective boards
of directors or other governing body, executives, employees and products or
services. The Company will not disparage the Covered Executive during the
Covered Executive’s period of employment with the Company and its Affiliates or
thereafter. For purposes of this Section 3.7(d), disparagement does not
include:


(i)                                     compliance with legal
process or subpoenas to the extent only truthful statements are rendered in
such compliance attempt,


(ii)                                  statements in
response to an inquiry from a court or regulatory body, or


(iii)                               statements or comments
in rebuttal of media stories or alleged media stories.


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

Section 3.7(d) by the Company will entitle the Covered Executive to
complete relief from such violation including, but not limited to, injunctive
relief and damages as determined by an arbitrator.


End of Article III



 20














 


ARTICLE IV

ADMINISTRATION


4.1                               The PAC.
The overall administration of the ESP will be the responsibility of the PAC.


4.2                               Powers of PAC.
The PAC will have sole and absolute discretion regarding the exercise of its
powers and duties under the ESP. In order to effectuate the purposes of the
ESP, the PAC will have the following powers and duties:


(a)                                  To
appoint the Plan Administrator;


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


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


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


(i)                                     when differences
of opinion arise between the Company, an Affiliate, the Plan Administrator, the
trustee, a Covered Executive, or any of them, and


(ii)                                  whenever it is deemed
advisable to determine such questions in order to promote the uniform and
nondiscriminatory administration of the ESP for the greatest benefit of all
parties concerned.


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


4.3                               Appointment of
Plan Administrator. The PAC will appoint the Plan
Administrator, who will have the responsibility and duty to administer the ESP
on a daily basis. The PAC may remove the Plan Administrator with or without
cause at any time. The Plan Administrator may resign upon written notice to the
PAC.


4.4                               Duties of Plan
Administrator. The Plan Administrator will have sole
and absolute discretion regarding the exercise of its powers and duties under
the ESP. The Plan Administrator will have the following powers and duties:


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


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


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



 21
 






 



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


 


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


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


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


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


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


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


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


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


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


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


(i)                                     making
distribution payments, giving the names of the payees, specifying the amounts
to be paid and the time or times when payments will be made; and


(ii)                                  making any other
payments which the trustee is not by the terms of the trust agreement
authorized to make without a direction in writing by the Plan Administrator;


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


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


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



 22
 






 



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


 


4.5                               Indemnification
of PAC and Plan Administrator. To the extent not
covered by insurance, or if there is a failure to provide full insurance
coverage for any reason, and to the extent permissible under corporate by-laws
and other applicable laws and regulations, the Employer agrees to hold harmless
and indemnify the PAC and Plan Administrator against any and all claims and
causes of action by or on behalf of any and all parties whomsoever, and all
losses therefrom, including, without limitation, costs of defense and reasonable
attorneys’ fees, based upon or arising out of any act or omission relating to
or in connection with the ESP other than losses resulting from the PAC’s, or
any such person’s commission of fraud or willful misconduct.


4.6                               Claims for
Benefits.


(a)                                  Initial Claim.
In the event that a Covered Executive or his estate claims (a “claimant”) to be
eligible for benefits, or claims any rights under the ESP or seeks to challenge
the validity or terms of the Severance Agreement and General Release described
in Section 3.5, such claimant must complete and submit such claim forms and
supporting documentation as will be required by the Plan Administrator, in its
sole and absolute discretion. Likewise, any claimant who feels unfairly treated
as a result of the administration of the ESP, must file a written claim,
setting forth the basis of the claim, with the Plan Administrator. In
connection with the determination of a claim, or in connection with review of a
denied claim, the claimant may examine the ESP, and any other pertinent
documents generally available to Covered Executives that are specifically
related to the claim.


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


(b)                                  Request for
Review. Within ninety (90) days after receiving
written notice of the Plan Administrator’s disposition of the claim, the claimant
may file with the PAC a written request for review of his claim. In connection
with the request for review, the claimant will be entitled to be represented by
counsel and will be given, upon request and free of charge, reasonable access
to all pertinent documents for the preparation of his claim. If the claimant
does not file a written request for review within ninety (90) days after
receiving written notice of the Plan Administrator’s 



 23
 






 



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


 


(c)                                  Decision on
Review. After receipt by the PAC of a written
application for review of his claim, the PAC will review the claim taking into
account all comments, documents, records and other information submitted by the
claimant regarding the claim without regard to whether such information was
considered in the initial benefit determination. The PAC will notify the
claimant of its decision by delivery or by certified or registered mail to his
last known address.


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


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


4.7                               Arbitration.
In the event the claims review procedure described in Section 4.6 of the ESP
does not result in an outcome thought by the claimant to be in accordance with
the ESP document, he may appeal to a third party neutral arbitrator. The
claimant must appeal to an arbitrator within sixty (60) days after receiving
the PAC’s denial or deemed denial of his request for review and before bringing
suit in court. The arbitration will be conducted pursuant to the American
Arbitration Association (“AAA”) Rules on Employee Benefit Claims.


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



 24
 






 



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


 


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


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


4.8                               Receipt and
Release of Necessary Information. In implementing the
terms of the ESP, the PAC and Plan Administrator, as applicable, may, without
the consent of or notice to any person, release to or obtain from any other
insuring entity or other organization or person any information, with respect
to any person, which the PAC or Plan Administrator deems to be necessary for
such purposes. Any Covered Executive or estate claiming benefits under the ESP
will furnish to the PAC or Plan Administrator, as applicable, such information
as may be necessary to determine eligibility for and amount of benefit, as a
condition of claiming and receiving such benefit.


4.9                               Overpayment and
Underpayment of Benefits. The Plan Administrator may
adopt, in its sole and absolute discretion, whatever rules, procedures and
accounting practices are appropriate in providing for the collection of any overpayment
of benefits. If a Covered Executive or his estate receives an underpayment of
benefits, the Plan Administrator will direct that payment be made as soon as
practicable to make up for the underpayment. If an overpayment is made to a
Covered Executive or his estate, for whatever reason, the Plan Administrator
may, in its sole and absolute discretion, withhold payment of any further
benefits under the ESP until the overpayment has been collected or may require
repayment of benefits paid under the ESP without regard to further benefits to
which the Covered Executive or his estate may be entitled.


End of Article IV



 25
 






 



ARTICLE V


OTHER BENEFIT PLANS OF THE COMPANY


5.1                               Other Plans.
Nothing contained in the ESP will prevent a Covered Executive prior to his death,
or a Covered Executive’s spouse or other beneficiary after such Covered
Executive’s death, from receiving, in addition to any payments provided for
under the ESP, any payments provided for under any other plan or benefit
program of the Employer, or which would otherwise be payable or distributable
to him, his surviving spouse or beneficiary under any plan or policy of the
Employer or otherwise. Nothing in the ESP will be construed as preventing the
Company or any of its Affiliates from establishing any other or different plans
providing for current or deferred compensation for employees and/or members of
the Board.


End of Article V



 26
 






 



ARTICLE VI


AMENDMENT AND TERMINATION OF THE ESP


6.1                               Continuation.
The Company intends to continue the ESP indefinitely, but nevertheless assumes
no contractual obligation beyond the promise to pay the benefits described in
the ESP.


6.2                               Amendment of
ESP. The Company, through an action of the
Compensation Committee, reserves the right in its sole and absolute discretion
to amend the ESP in any respect at any time; provided, however, that except as
required to comply with section 409A of the Code or other applicable law, no
amendment to the ESP will be made that reduces or diminishes the rights of any
Covered Executive to the benefits described herein for the five (5) year period
following the Effective Date of this ESP. Following the expiration of the five
(5) year period described in this Section 6.2, the Company may amend the ESP in
its sole and absolute discretion, in any respect and at any time; provided,
that no amendment may be made that reduces or diminishes the rights of any
Covered Executive to the benefits described herein unless the affected Covered
Executive receives at least one (1) year’s advance notice of such amendment. Further,
such advance notice to the Covered Executive will not be effective to enable
the amendment of the ESP in either of the following two scenarios (a) if a
Potential Change of Control occurs during the one (1) year notice period, or
(b) within twenty four (24) months following a Change of Control.


6.3                               Termination of
ESP. Following the expiration of the five (5) year
period described in Section 6.2, the Company, through an action of the
Compensation Committee, may terminate or suspend the ESP in whole or in part at
any time subject to the rules regarding the amendment of the ESP in Section 6.2
(i.e., that one (1) year’s
advance notice is required and no such notice will be effective to enable the
termination of the ESP if a Potential Change of Control occurs during the one
(1) year notice period or within twenty four (24) months following a Change of
Control). Notwithstanding any provision of the ESP to the contrary, upon the
complete termination of the ESP pursuant to the provisions of this Section 6.3,
the Compensation Committee, in its sole and absolute discretion, may direct
that the Plan Administrator treat each Eligible Executive as having incurred a
Qualifying Termination and to commence the distribution of the benefits
described in Article III to each such Eligible Executive or his estate, as
applicable, to the extent that the commencement of such distribution comports
with the requirements of section 409A of the Code.


6.4                               Termination of
Affiliate’s Participation. Subject to the five (5)
year period described in Section 6.2, the Company may terminate an Affiliate’s
participation in the ESP at any time by an action of the Compensation Committee
and providing written notice to the Affiliate. The effective date of any such
termination will be the later of the date specified in the notice of the
termination of participation or the date on which the Plan Administrator can
administratively implement such termination. If an Affiliate is disposed of by
the Company pursuant to a stock or asset sale and a Covered Executive employed
by such Affiliate is offered a comparable position with the purchaser of such
stock or assets and refuses such position, the Covered Executive will not have
incurred a Qualifying Termination for purposes of the ESP. Similarly, if an
Affiliate is disposed of by the Company pursuant to a stock or asset sale and a
Covered Executive employed by such Affiliate is offered a comparable position
with the purchaser of such stock or assets 



 27
 






 



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


 


End of Article VI



 28
 






 



ARTICLE VII


MISCELLANEOUS


 


7.1                               No Reduction of
Employer Rights. Nothing contained in the ESP will be
construed as a contract of employment between the Employer and a Covered
Executive, or as a right of any Covered Executive to continue in the employment
of the Employer, or as a limitation of the right of the Employer to discharge
any of its Covered Executives, with or without cause.


7.2                               Successor to
the Company. The Company will require any successor or
assign (whether direct or indirect, by purchase, exchange, lease, merger,
consolidation, or otherwise) to all or substantially all of the property and
assets of the Company and its Affiliates taken as a whole, to expressly assume
the ESP and to agree to perform under this ESP in the same manner and to the
same extent that the Company and its Affiliates would be required to perform it
if no such succession had taken place. This Section 7.2 will not require any
successor or assign of an Affiliate (whether direct or indirect, by purchase,
exchange, lease, merger, consolidation or otherwise) to all or substantially
all of the property and assets of such Affiliate to continue the ESP.


7.3                               Provisions
Binding. All of the provisions of the ESP will be
binding upon the Company and its Affiliates and any successor to the Company or
any such Affiliate. Likewise, the provisions of the ESP will be binding upon
all persons who will be entitled to any benefit hereunder, their heirs and
personal representatives.


End of Article VII



 29
 






 



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


	
   

  	
   

  
	
   

  	
  TENET HEALTHCARE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ A.P. King IV

  	
   

  
	
   

  	
   

  	
     A.P.
  King IV

  
	
   

  	
   

  	
     Director,
  Executive Compensation

  



 



 30














 


APPENDIX A(1)


COVERED EXECUTIVES


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


 


 


 


 


 


 


 


 


 


 


 


 






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



 A-1














 


APPENDIX B


ESP AGREEMENTS


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



 B-1
 






 



TENET EXECUTIVE SEVERANCE PLAN
AGREEMENT


 


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


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


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


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


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


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


 


 


	
  COVERED EXECUTIVE

  	
  EMPLOYER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Plan
  Administrator

  
							



 



 B-2