SEVERANCE PROTECTION PLAN
FOR EXECUTIVE OFFICERS
TERMINATION BENEFITS
Upon the occurrence of a Change of Control (as defined below) of Tenet
Healthcare Corporation (the "Company"), all then unvested stock options held by
each Participant (as defined below) in the Severance Protection Plan (the
"Plan") will become vested as of the date of such Change of Control. In
addition, if a Participant is terminated for other than Cause (as defined below)
or the Participant terminates for Good Reason (as defined below) within two
years of the date of the occurrence of a Change of Control, the Participant
will be entitled to a lump-sum payment equal to two times the Participant's
then-current base salary plus the Participant's target bonus for the then-
current fiscal year under the Company's Annual Incentive Plan ("AIP"); provided
that such payment shall be less any salary continuation amounts payable under
any other severance agreement or severance policy of the Company. The
Participant also will receive an additional pro-rated award (the "Pro-Rata
Bonus") under the AIP for the then-current fiscal year calculated by multiplying
(x) the number of months or partial months elapsed for that fiscal year divided
by 12 by (y) an amount equal to not less than the Participant's target award for
the then-current fiscal year. Furthermore, the Participant will be permitted to
continue to receive benefits under the Company's (or its successor's) health
care plan until the Participant reaches age 65 or is employed by another
employer offering health care coverage to the Participant for the same cost to
the Participant as the Participant was paying while employed by the Company
(subject to adjustment based on the consumer price index). The total payments
that are deemed to be contingent upon a Change of Control in accordance with the
rules set forth in Section 280g of the Internal Revenue Code of 1986, as amended
(the "Code"), when added to the present value of all other payments that are
payable to the Participant and are contingent upon a Change of Control, may not
exceed an amount equal to two hundred and ninety-nine percent (299%) of the
Participant's "base amount" as that term is defined in Section 280g of the Code
and applicable regulations. The Pro Rata Bonus is not subject to this limit.
Participants also are entitled to reimbursement for reasonable legal fees, if
any, necessary to enforce payment of benefits under the Plan.
"PARTICIPANT" DEFINED
A "Participant" is any individual designated as a participant in the Plan
by the Compensation and Stock Option Committee of the Board of Directors of the
Company.
"CAUSE" DEFINED
"Cause" shall mean the willful, substantial, continued and unjustified
refusal of the Participant to perform the duties of his or her office to the
extent of his or her ability to do so; any conduct on the part of the
Participant which constitutes a breach of any statutory or common law duty of
loyalty to the Company; or any illegal or publicly immoral act by the
Participant which materially and adversely affects the business of the Company.
"CHANGE OF CONTROL" DEFINED
(A) A "Change in Control" of the Company shall be deemed to have occurred
if: (i) any Person is or becomes the beneficial owner directly or indirectly of
securities of the Company representing 20% or more of the combined Voting Stock
of the Company or; (ii) individuals who, as of April 1, 1994, constitute the
Board of Directors of the Company (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors; provided, however,
that (a) any individual who becomes a director of the Company subsequent to
April 1, 1994, whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be deemed to have been a member of the
Incumbent Board and (b) no individual who was elected initially (after April 1,
1994) as a director as a result of an actual or threatened election contest, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any other
actual or threatened solicitations of proxies or consents by or on behalf of any
person other than the Incumbent Board shall be deemed to have been a member of
the Incumbent Board.
(B) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
(C) "Person" shall mean an individual, firm, corporation or other entity
or any successor to such entity, together with all Affiliates and Associates of
such Person, but "Person" shall not include the Company, any subsidiary of the
Company, any employee benefit plan or employee stock plan of the Company or any
subsidiary of the Company, or any Person organized, appointed, established or
holding Voting Stock by, for or pursuant to the terms of such a plan.
(D) "Voting Stock" with respect to a corporation shall mean shares of that
corporation's capital stock having general voting power, with "voting power"
meaning the power under ordinary circumstances (and not merely upon the
happening of a contingency) to vote in the election of directors.
TERMINATION FOR "GOOD REASON" DEFINED
A voluntary termination for "Good Reason" shall mean a voluntary
termination following: (i) material downward change in the functions, duties,
or responsibilities which reduce the rank or position of the Participant; (ii) a
reduction in the Participant's annual base salary; (iii) a material reduction in
the Participant's annual incentive plan bonus payment other than for financial
performance as it broadly applies to all similarly situated Participants in the
same plan; (iv) a material reduction in the Participant's retirement or
supplemental retirement benefits that does not broadly apply to all Participants
in the same plan; or (v) transfer of the Participant's office to a location that
is more than fifty (50) miles from the Participant's current principal office
location.