TENET HEALTHCARE CORP (Form: 10-Q, Received: 11/07/2012 08:08:14)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	for the quarterly period ended September 30, 2012

OR

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	for the transition period from to

Commission File Number 1-7293

TENET HEALTHCARE CORPORATION

(Exact name of Registrant as specified in its charter)

Nevada
(State of Incorporation)

95-2557091
(IRS Employer Identification No.)

1445 Ross Avenue, Suite 1400

Dallas, TX 75202

(Address of principal executive offices, including zip code)

(469) 893-2200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Exchange Act Rule 12b-2).

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No x

As of October 31, 2012, there were 106,475,474 shares of the Registrant’s common stock, $0.05 par value, outstanding.

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TENET HEALTHCARE CORPORATION

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Financial Statements	1

	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54

Item 4.	Controls and Procedures	54

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	55

Item 1A.	Risk Factors	55

Item 6.	Exhibits	56

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TENET HEALTHCARE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Dollars in Millions

(Unaudited)

	September 30,			December 31,
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	83		$	113
Accounts receivable, less allowance for doubtful accounts ($402 at September 30, 2012 and $397 at December 31, 2011)	1,338			1,278
Inventories of supplies, at cost	154			161
Income tax receivable	13			7
Current portion of deferred income taxes	394			418
Assets held for sale	0			2
Other current assets	502			378
Total current assets	2,484			2,357
Investments and other assets	126			156
Deferred income taxes, net of current portion	338			374
Property and equipment, at cost, less accumulated depreciation and amortization ($3,444 at September 30, 2012 and $3,386 at December 31, 2011)	4,173			4,350
Goodwill	771			736
Other intangible assets, at cost, less accumulated amortization ($405 at September 30, 2012 and $360 at December 31, 2011)	578			489
Total assets	$	8,470		$	8,462

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	243		$	66
Accounts payable	629			760
Accrued compensation and benefits	379			376
Professional and general liability reserves	72			75
Accrued interest payable	110			112
Accrued legal settlement costs	7			64
Other current liabilities	389			362
Total current liabilities	1,829			1,815
Long-term debt, net of current portion	4,508			4,294
Professional and general liability reserves	322			337
Accrued legal settlement costs	2			2
Other long-term liabilities	524			506
Total liabilities	7,185			6,954
Commitments and contingencies
Redeemable noncontrolling interests in equity of consolidated subsidiaries	16			16
Equity:
Shareholders’ equity:
Preferred stock, $0.15 par value; authorized 2,500,000 shares; 46,300 of 7% mandatory convertible shares with a liquidation preference of $1,000 per share issued at September 30, 2012 and 345,000 at December 31, 2011	45			334
Common stock, $0.05 par value; authorized 262,500,000 shares; 138,739,064 shares issued at September 30, 2012 and 137,867,138 shares issued at December 31, 2011	7			7
Additional paid-in capital	4,437			4,427
Accumulated other comprehensive loss	(49		)	(52		)
Accumulated deficit	(1,337		)	(1,440		)
Common stock in treasury, at cost, 34,320,438 shares at September 30, 2012 and 34,110,674 shares at December 31, 2011	(1,879		)	(1,853		)
Total shareholders’ equity	1,224			1,423
Noncontrolling interests	45			69
Total equity	1,269			1,492
Total liabilities and equity	$	8,470		$	8,462

See accompanying Notes to Condensed Consolidated Financial Statements.

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TENET HEALTHCARE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Dollars in Millions, Except Per-Share Amounts

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net operating revenues:
Net operating revenues before provision for doubtful accounts	$	2,427		$	2,289		$	7,373		$	7,018
Less: Provision for doubtful accounts	206			189			585			536
Net operating revenues	2,221			2,100			6,788			6,482
Operating expenses:
Salaries, wages and benefits	1,050			1,002			3,166			3,001
Supplies	376			379			1,164			1,167
Other operating expenses, net	539			527			1,604			1,526
Electronic health record incentives	(13		)	0			(13		)	(50		)
Depreciation and amortization	110			100			314			298
Impairment of long-lived assets and goodwill, and restructuring charges, net	6			8			12			18
Litigation and investigation costs	0			5			3			24
Operating income	153			79			538			498
Interest expense	(103		)	(59		)	(303		)	(275		)
Investment earnings	1			1			2			3
Income from continuing operations, before income taxes	51			21			237			226
Income tax expense	(18		)	(4		)	(90		)	(73		)
Income from continuing operations, before discontinued operations	33			17			147			153
Discontinued operations:
Income (loss) from operations	4			(2		)	7			(17		)
Impairment of long-lived assets and goodwill, and restructuring charges, net	0			0			(100		)	0
Net gains (losses) on sales of facilities	(1		)	0			1			0
Income tax benefit (expense)	(4		)	0			24			24
Income (loss) from discontinued operations	(1		)	(2		)	(68		)	7
Net income	32			15			79			160
Less: Preferred stock dividends	1			6			11			18
Less: Net income (loss) attributable to noncontrolling interests	(9		)	3			(24		)	8
Net income attributable to Tenet Healthcare Corporation common shareholders	$	40		$	6		$	92		$	134
Amounts attributable to Tenet Healthcare Corporation common shareholders
Income from continuing operations, net of tax	$	30		$	8		$	129		$	128
Income (loss) from discontinued operations, net of tax	10			(2		)	(37		)	6
Net income attributable to Tenet Healthcare Corporation common shareholders	$	40		$	6		$	92		$	134
Earnings (loss) per share attributable to Tenet Healthcare Corporation common shareholders
Basic
Continuing operations	$	0.29		$	0.07		$	1.25		$	1.06
Discontinued operations	0.09			(0.02		)	(0.36		)	0.05
	$	0.38		$	0.05		$	0.89		$	1.11
Diluted
Continuing operations	$	0.28		$	0.07		$	1.21		$	1.03
Discontinued operations	0.09			(0.02		)	(0.35		)	0.05
	$	0.37		$	0.05		$	0.86		$	1.08
Weighted average shares and dilutive securities outstanding (in thousands):
Basic	104,244			117,188			103,613			120,204
Diluted	107,311			120,908			106,904			124,466

See accompanying Notes to Condensed Consolidated Financial Statements.

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TENET HEALTHCARE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

Dollars in Millions

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012			2011		2012			2011
Net income	$	32		$	15	$	79		$	160
Other comprehensive income:
Adjustments for supplemental executive retirement plans	0			0		3			0
Other comprehensive income before income taxes	0			0		3			0
Income tax expense related to items of other comprehensive income	0			0		0			0
Total other comprehensive income, net of tax	0			0		3			0
Comprehensive income	32			15		82			160
Less: Preferred stock dividends	1			6		11			18
Less: Comprehensive income attributable to noncontrolling interes ts	(9		)	3		(24		)	8
Comprehensive income attributable to Tenet Healthcare Corporation common shareholders	$	40		$	6	$	95		$	134

See accompanying Notes to Condensed Consolidated Financial Statements.

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TENET HEALTHCARE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in Millions

(Unaudited)

	Nine Months Ended September 30,
	2012			2011
Net income	$	79		$	160
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	314			298
Provision for doubtful accounts	585			536
Deferred income tax expense	58			102
Stock-based compensation expense	24			17
Impairment of long-lived assets and goodwill, and restructuring charges, net	12			18
Litigation and investigation costs	3			24
Amortization of debt discount and debt issuance costs	16			23
Pre-tax loss from discontinued operations	92			17
Other items, net	(7		)	(10		)
Changes in cash from operating assets and liabilities:
Accounts receivable	(653		)	(618		)
Inventories and other current assets	(106		)	(32		)
Income taxes	(2		)	(44		)
Accounts payable, accrued expenses and other current liabilities	(23		)	(96		)
Other long-term liabilities	20			(10		)
Payments against reserves for restructuring charges and litigation costs and settlements	(56		)	(27		)
Net cash used in operating activities from discontinued operations, excluding income taxes	(19		)	(34		)
Net cash provided by operating activities	337			324
Cash flows from investing activities:
Purchases of property and equipment — continuing operations	(358		)	(294		)
Purchases of property and equipment — discontinued operations	(2		)	(4		)
Purchases of businesses or joint venture interests	(38		)	(56		)
Proceeds from sales of facilities and other assets — discontinued operations	45			0
Proceeds from sales of marketable securities, long-term investments and other assets	9			31
Other items, net	(2		)	(1		)
Net cash used in investing activities	(346		)	(324		)
Cash flows from financing activities:
Repayments of borrowings under credit facility	(1,458		)	0
Proceeds from borrowings under credit facility	1,553			0
Repayments of other borrowings	(76		)	(4		)
Proceeds from other borrowings	292			0
Repurchases of preferred stock	(292		)	0
Deferred debt issuance costs	(3		)	0
Repurchases of common stock	(26		)	(196		)
Cash dividends on preferred stock	(13		)	(18		)
Distributions paid to noncontrolling interests	(9		)	(8		)
Other items, net	11			6
Net cash used in financing activities	(21		)	(220		)
Net decrease in cash and cash equivalents	(30		)	(220		)
Cash and cash equivalents at beginning of period	113			405
Cash and cash equivalents at end of period	$	83		$	185
Supplemental disclosures:
Interest paid, net of capitalized interest	$	(288	)	$	(255	)
Income tax (payments) refunds, net	$	(9	)	$	9

See accompanying Notes to Condensed Consolidated Financial Statements.

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TENET HEALTHCARE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

Description of Business

Tenet Healthcare Corporation (together with our subsidiaries, referred to as “Tenet,” the “Company,” “we” or “us”) is an investor-owned health care services company whose subsidiaries and affiliates own and operate acute care hospitals and related health care facilities. At September 30, 2012, our subsidiaries operated 49 hospitals with a total of 13,216 licensed beds, primarily serving urban and suburban communities, as well as 112 free-standing and provider-based outpatient centers. In addition to providing health care services, we also offer revenue cycle management, health care information management and patient communications services, and we own a management services business that provides network development, utilization management, claims processing and contract negotiation services to physician organizations and hospitals that assume managed care risk.

Basis of Presentation

This quarterly report supplements our Annual Report on Form 10-K for the year ended December 31, 2011 (“Annual Report”). As permitted by the Securities and Exchange Commission (“SEC”) for interim reporting, we have omitted certain notes and disclosures that substantially duplicate those in our Annual Report. For further information, refer to the audited Consolidated Financial Statements and notes included in our Annual Report. Unless otherwise indicated, all financial and statistical data included in these notes to our Condensed Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). Certain balances in the accompanying Condensed Consolidated Financial Statements and these notes have been reclassified to give retrospective presentation for the discontinued operations described in Note 3. Furthermore, all amounts related to shares, share prices and earnings per share have been restated to give retrospective presentation for the reverse stock split described in Note 8.

Effective December 31, 2011, we adopted Accounting Standards Update (“ASU”) 2011-07, “Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities,” which requires health care entities to present the provision for doubtful accounts relating to patient service revenue as a deduction from patient service revenue in the statement of operations rather than as an operating expense. All periods presented have been reclassified in accordance with the provisions of ASU 2011-07. Also effective December 31, 2011, we reclassified the electronic health record incentives previously recorded as net operating revenues to the operating expenses section of our consolidated statements of operations.

Although the Condensed Consolidated Financial Statements and related notes within this document are unaudited, we believe all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. In preparing our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), we must use estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and these accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable given the particular circumstances in which we operate. Actual results may vary from those estimates. Financial and statistical information we report to other regulatory agencies may be prepared on a basis other than GAAP or using different assumptions or reporting periods and, therefore, may vary from amounts presented herein. Although we make every effort to ensure that the information we report to those agencies is accurate, complete and consistent with applicable reporting guidelines, we cannot be responsible for the accuracy of the information they make available to the public.

Operating results for the three and nine month periods ended September 30, 2012 are not necessarily indicative of the results that may be expected for the full year. Reasons for this include, but are not limited to: overall revenue and cost trends, particularly the timing and magnitude of price changes; fluctuations in contractual allowances and cost report settlements and valuation allowances; managed care contract negotiations, settlements or terminations and payer consolidations; changes in Medicare and Medicaid regulations; Medicaid funding levels set by the states in which we operate; the timing of approval by the Centers for Medicare and Medicaid Services (“CMS”) of Medicaid provider fee revenue programs; trends in patient accounts receivable collectability and associated provisions for doubtful accounts; fluctuations in interest rates; levels of malpractice insurance expense and settlement trends; the timing of when we meet the criteria to recognize electronic health record incentives; impairment of long-lived assets and goodwill; restructuring charges; losses, costs and insurance recoveries related to natural disasters; litigation and investigation costs; acquisitions and dispositions of facilities and other assets; income tax rates and deferred tax asset valuation allowance activity; changes in estimates of accruals for annual incentive compensation; the

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timing and amounts of stock option and restricted stock unit grants to employees and directors; gains or losses from early extinguishment of debt; and changes in occupancy levels and patient volumes. Factors that affect patient volumes and, thereby, the results of operations at our hospitals and related health care facilities include, but are not limited to: the business environment, economic conditions and demographics of local communities; the number of uninsured and underinsured individuals in local communities treated at our hospitals; seasonal cycles of illness; climate and weather conditions; physician recruitment, retention and attrition; advances in technology and treatments that reduce length of stay; local health care competitors; managed care contract negotiations or terminations; any unfavorable publicity about us, which impacts our relationships with physicians and patients; changes in health care regulations; and the timing of elective procedures. These considerations apply to year-to-year comparisons as well.

Net Operating Revenues Before Provision for Doubtful Accounts

We recognize net operating revenues before provision for doubtful accounts in the period in which our services are performed. Net operating revenues before provision for doubtful accounts primarily consist of net patient service revenues that are recorded based on established billing rates (i.e., gross charges), less estimated discounts for contractual and other allowances, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact with Uninsured Patients (“Compact”).

The table below shows the sources of net operating revenues before provision for doubtful accounts:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
General Hospitals:
Medicare	$	505	$	491	$	1,666	$	1,550
Medicaid	176		174		587		609
Managed care	1,348		1,269		4,002		3,830
Indemnity, self-pay and other	261		244		747		732
Acute care hospitals — other revenue	8		27		45		78
Other:
Other operations	129		84		326		219
Net operating revenues before provision for doubtful accounts	$	2,427	$	2,289	$	7,373	$	7,018

Cash and Cash Equivalents

We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were approximately $83 million and $113 million at September 30, 2012 and December 31, 2011, respectively. As of September 30, 2012 and December 31, 2011, our book overdrafts were approximately $190 million and $252 million, respectively, which were classified as accounts payable.

At September 30, 2012 and December 31, 2011, approximately $71 million and $92 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries. During the nine months ended September 30, 2011, we repatriated $21 million of excess cash from our foreign insurance subsidiary to our corporate domestic bank account.

Also at September 30, 2012 and December 31, 2011, we had $48 million and $109 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $43 million and $104 million, respectively, were included in accounts payable.

During the nine months ended September 30, 2012 and 2011, we entered into non-cancellable capital leases of approximately $54 million and $15 million, respectively, primarily for equipment.

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Other Intangible Assets

The following table provides information regarding other intangible assets, which are included in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011:

	Gross Carrying Amount		Accumulated Amortization			Net Book Value
September 30, 2012:
Capitalized software costs	$	887	$	(381	)	$	506
Long-term debt issuance costs	90		(22		)	68
Other	6		(2		)	4
Total	$	983	$	(405	)	$	578

December 31, 2011:
Capitalized software costs	$	756	$	(344	)	$	412
Long-term debt issuance costs	88		(15		)	73
Other	5		(1		)	4
Total	$	849	$	(360	)	$	489

Estimated future amortization of intangibles with finite useful lives as of September 30, 2012 is as follows:

			Years Ending December 31,										Later
	Total		2012		2013		2014		2015		2016		Years
Amortization of intangible assets	$	578	$	26	$	89	$	82	$	72	$	67	$	242

NOTE 2. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

The principal components of accounts receivable are shown in the table below:

	September 30,			December 31,
	2012			2011
Continuing operations:
Patient accounts receivable	$	1,670		$	1,605
Allowance for doubtful accounts	(395		)	(382		)
Estimated future recoveries from accounts assigned to our Conifer subsidiary	83			62
Net cost reports and settlements payable and valuation allowances	(38		)	(39		)
	1,320			1,246
Discontinued operations:
Patient accounts receivable	24			46
Allowance for doubtful accounts	(7		)	(15		)
Estimated future recoveries from accounts assigned to our Conifer subsidiary	2			2
Net cost reports and settlements payable and valuation allowances	(1		)	(1		)
	18			32
Accounts receivable, net	$	1,338		$	1,278

Our self-pay collection rate, which is the blended collection rate for uninsured and balance after insurance accounts receivable, was approximately 28.8% and 27.7% as of September 30, 2012 and December 31, 2011, respectively. These self-pay collection rates include payments made by patients, including co-payments and deductibles paid by patients with insurance. Our estimated collection rate from managed care payers was approximately 97.7% and 98.2% at September 30, 2012 and December 31, 2011, respectively. As of September 30, 2012 and December 31, 2011, our allowance for doubtful accounts for self-pay uninsured accounts was 87.9% and 88.4%, respectively, of our self-pay uninsured patient accounts receivable. As of September 30, 2012 and December 31, 2011, our allowance for doubtful accounts for self-pay balance after insurance accounts was 56.6% and 57.5%, respectively, of our self-pay balance after insurance patient accounts receivable, consisting primarily of co-pays and deductibles owed by patients with insurance. Our self-pay write-offs, including uninsured and balance after insurance accounts, increased approximately $49 million from $182 million in the nine months ended September 30, 2011 to $231 million in the nine months ended September 30, 2012 primarily due to an increase in patient account assignments to our Conifer Health Solutions (“Conifer”) subsidiary. The increase in provision for doubtful accounts primarily related to the increase in uninsured patient volumes in the nine months

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ended September 30, 2012 compared to the nine months ended September 30, 2011 and the favorable impact of various settlements of aged managed care accounts in the 2011 period, partially offset by the impact of a 110 basis point improvement in our collection rate on self-pay accounts. As of September 30, 2012 and December 31, 2011, our allowance for doubtful accounts for managed care accounts was 9.2% and 8.8%, respectively, of our managed care patient accounts receivable.

The estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our self-pay patients for the three months ended September 30, 2012 and 2011 were approximately $109 million and $103 million, respectively, and for the nine months ended September 30, 2012 and 2011 were approximately $331 million and $291 million, respectively. Our estimated costs (based on the selected operating expenses described above) of caring for charity care patients for the three months ended September 30, 2012 and 2011 were approximately $41 million and $31 million, respectively, and for the nine months ended September 30, 2012 and 2011 were approximately $105 million and $90 million, respectively. Most states include an estimate of the cost of charity care in the determination of a hospital’s eligibility for Medicaid disproportionate share hospital (“DSH”) payments. Revenues attributable to DSH payments and other state-funded subsidy payments for the three months ended September 30, 2012 and 2011 were approximately $56 million and $40 million, respectively, and for the nine months ended September 30, 2012 and 2011 were approximately $210 million and $196 million, respectively. These payments are intended to mitigate our cost of uncompensated care, as well as reduced Medicaid funding levels.

NOTE 3. DISCONTINUED OPERATIONS

In the three months ended June 30, 2012, our Creighton University Medical Center hospital (“CUMC”) in Nebraska was reclassified into discontinued operations based on the guidance in the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 360, “Property, Plant and Equipment.” As a result, we recorded an impairment charge in discontinued operations of $100 million, consisting of $98 million for the write-down of long-lived assets to their estimated fair values, less estimated costs to sell, and a $2 million charge for the write-down of goodwill related to CUMC in the three months ended June 30, 2012. We completed the sale of CUMC on August 31, 2012 at a transaction price of $40 million, excluding working capital, and recognized a loss on sale of approximately $1 million in discontinued operations. Because we did not sell the accounts receivable of CUMC, net receivables of approximately $18 million are included in our accounts receivable in the accompanying Condensed Consolidated Balance Sheet at September 30, 2012.

In May 2012, we completed the sale of Diagnostic Imaging Services, Inc. (“DIS”), our former diagnostic imaging center business in Louisiana, for net proceeds of approximately $10 million. As a result of the sale, DIS was reclassified into discontinued operations in the six months ended June 30, 2012, and a gain on sale of approximately $2 million was recognized in discontinued operations.

Net operating revenues and loss before income taxes reported in discontinued operations are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012			2011
Net operating revenues	$	38	$	53		$	150		$	158
Income (loss) before income taxes	3		(2		)	(92		)	(17		)

Included in loss before income taxes from discontinued operations in the nine months ended September 30, 2011 is approximately $10 million of expense related to the settlement of two Hurricane Katrina-related class action lawsuits, which amount is net of approximately $10 million of expected recoveries from our reinsurance carriers in connection with the settlement. We had previously recorded a $5 million reserve for this matter as of December 31, 2010.

Should we dispose of additional hospitals or other assets in the future, we may incur additional asset impairment and restructuring charges in future periods.

NOTE 4. IMPAIRMENT AND RESTRUCTURING CHARGES

During the nine months ended September 30, 2012, we recorded net impairment and restructuring charges in our hospital operations segment of $12 million, consisting of $3 million relating to the impairment of obsolete assets, $4 million of employee severance costs and $5 million of other related costs.

During the nine months ended September 30, 2011, we recorded net impairment and restructuring charges of $18 million in our hospital operation segment. We recorded $4 million for the write-down of buildings and equipment of one of our previously impaired hospitals to their estimated fair values primarily due to a decline in the fair value of real estate in the

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market in which the hospital operates and a decline in the estimated fair value of equipment. We also recorded an impairment charge of $1 million related to a cost basis investment, $7 million of employee severance costs, $3 million of lease termination costs and $3 million of other related costs.

Our impairment tests presume stable, improving or, in some cases, declining results in our hospitals, which are based on programs and initiatives being implemented that are designed to achieve the hospital’s most recent projections. If these projections are not met, or if in the future negative trends occur that impact our future outlook, impairments of long-lived assets and goodwill may occur, and we may incur additional restructuring charges, which could be material.

As of September 30, 2012, our continuing hospital operations were structured as follows:

· Our California region included all of our hospitals in California;

· Our Central region included all of our hospitals in Missouri, Tennessee and Texas;

· Our Florida region included all of our hospitals in Florida; and

· Our Southern States region included all of our hospitals in Alabama, Georgia, North Carolina, Pennsylvania and South Carolina.

These regions are reporting units used to perform our goodwill impairment analysis and are one level below our Hospital Operations reportable business segment level.

The tables below are reconciliations of beginning and ending liability balances in connection with restructuring activities recorded during the nine months ended September 30, 2012 and 2011 in continuing and discontinued operations:

	Balances at Beginning of Period		Restructuring Charges, Net		Cash Payments			Other			Balances at End of Period
Nine Months Ended September 30, 2012
Continuing operations:
Lease and other costs, and employee severance-related costs in connection with hospital cost-control programs and general overhead-reduction plans	$	6	$	8	$	(7	)	$	0		$	7
Discontinued operations:
Employee severance-related costs, and other estimated costs associated with the sale or closure of hospitals and other facilities	5		0		0			0			5
	$	11	$	8	$	(7	)	$	0		$	12
Nine Months Ended September 30, 2011
Continuing operations:
Lease and other costs, and employee severance-related costs in connection with hospital cost-control programs and general overhead-reduction plans	$	4	$	13	$	(6	)	$	(1	)	$	10
Discontinued operations:
Employee severance-related costs, and other estimated costs associated with the sale or closure of hospitals and other facilities	6		0		(1		)	0			5
	$	10	$	13	$	(7	)	$	(1	)	$	15

The above liability balances at September 30, 2012 are included in other current liabilities and other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. Cash payments to be applied against these accruals at September 30, 2012 are expected to be approximately $2 million in 2012 and $10 million thereafter. The column labeled “Other” above represents charges recorded in restructuring expense that are not recorded in the liability account, such as the acceleration of stock-based compensation expense related to severance agreements.

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NOTE 5. LONG-TERM DEBT AND LEASE OBLIGATIONS

The table below shows our long-term debt as of September 30, 2012 and December 31, 2011:

	September 30,			December 31,
	2012			2011
Senior notes:
6 1 ¤ 2 %, due 2012	$	0		$	57
7 3 ¤ 8 %, due 2013	216			216
9 7 ¤ 8 %, due 2014	60			60
9 1 ¤ 4 %, due 2015	474			474
8%, due 2020	750			600
6 7 ¤ 8 %, due 2031	430			430
Senior secured notes:
9%, due 2015	0			1
6 1 ¤ 4 %, due 2018	1,041			900
10%, due 2018	714			714
8 7 / 8 %, due 2019	925			925
Credit facility due 2016	175			80
Capital leases and mortgage notes	85			32
Unamortized note discounts and premium	(119		)	(129		)
Total long-term debt	4,751			4,360
Less current portion	243			66
Long-term debt, net of current portion	$	4,508		$	4,294

Credit Agreement

We have a senior secured revolving credit facility, as amended November 29, 2011 (“Credit Agreement”), that provides, subject to borrowing availability, for revolving loans in an aggregate principal amount of up to $800 million, with a $300 million subfacility for standby letters of credit. The Credit Agreement has a scheduled maturity date of November 29, 2016, subject to our repayment or refinancing on or before December 3, 2014 of approximately $238 million of the aggregate outstanding principal amount of our 9 1 / 4 % senior notes due 2015 (approximately $474 million of which was outstanding at September 30, 2012). If such repayment or refinancing does not occur, borrowings under the Credit Agreement will be due December 3, 2014. The revolving credit facility is collateralized by patient accounts receivable of all of our wholly owned acute care and specialty hospitals. In addition, borrowings under the Credit Agreement are guaranteed by our wholly owned hospital subsidiaries. Outstanding revolving loans accrued interest during a six-month initial period that ended in May 2012 at the rate of either (i) a base rate plus a margin of 1.25% or (ii) the London Interbank Offered Rate (“LIBOR”) plus a margin of 2.25% per annum. Outstanding revolving loans now accrue interest at a base rate plus a margin ranging from 1.00% to 1.50% or LIBOR plus a margin ranging from 2.00% to 2.50% per annum based on available credit. An unused commitment fee was payable on the undrawn portion of the revolving loans at a six-month initial rate that ended in May 2012 of 0.438% per annum. The unused commitment fee now ranges from 0.375% to 0.500% per annum based on available credit. Our borrowing availability is based on a specified percentage of eligible accounts receivable, including self-pay accounts. At September 30, 2012, we had $175 million of cash borrowings outstanding under the revolving credit facility subject to an interest rate of 2.70%, and we had approximately $154 million of standby letters of credit outstanding. Based on our eligible receivables, approximately $430 million was available for borrowing under the revolving credit facility at September 30, 2012.

Senior Notes and Senior Secured Notes

In April 2012, we issued an additional $141 million aggregate principal amount of our 6 1 ¤ 4 % senior secured notes due 2018 at a premium for $142 million of cash proceeds and an additional $150 million aggregate principal amount of our 8% senior notes due 2020 in a private financing related to our repurchase and subsequent retirement of 298,700 shares of our 7% mandatory convertible preferred stock. A description of these notes is set forth in our Annual Report.

Interest Rate Swap and LIBOR Cap Agreements

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2018 from a fixed interest rate paid semi-annually to a variable interest rate paid semi-annually based on the six-month LIBOR plus a floating rate spread of 6.60%. During the term of the interest rate swap agreement, changes in the fair value of the interest rate swap agreement and changes in the fair value of the 10% senior secured notes, which we expected to substantially offset each other, were recorded in interest expense. During the nine months ended September 30, 2011, our interest rate swap agreement generated approximately $8 million of cash interest savings and a $22 million gain on the settlement of the agreement.

The fair value of the LIBOR cap agreement included in investments and other assets in the accompanying Condensed Consolidated Balance Sheets totaled less than $1 million at both September 30, 2012 and December 31, 2011. In addition, see Note 13 for the disclosure of the fair value of the LIBOR cap agreement.

NOTE 6. GUARANTEES

At September 30, 2012, the maximum potential amount of future payments under our income guarantees to certain physicians who agree to relocate and revenue collection guarantees to hospital-based physician groups providing certain services at our hospitals was $128 million. We had a liability of $86 million recorded for these guarantees included in other current liabilities at September 30, 2012.

We have also guaranteed minimum rent revenue to certain landlords who built medical office buildings on or near our hospital campuses. The maximum potential amount of future payments under these guarantees at September 30, 2012 was $5 million. We had a liability of $3 million recorded for these guarantees at September 30, 2012, of which $1 million was included in other current liabilities and $2 million was included in other long-term liabilities.

NOTE 7. EMPLOYEE BENEFIT PLANS

At September 30, 2012, approximately four million shares of common stock were available under our 2008 Stock Incentive Plan for future stock option grants and other incentive awards, including restricted stock units. Options have an exercise price equal to the fair market value of the shares on the date of grant and generally expire 10 years from the date of grant. A restricted stock unit is a contractual right to receive one share of our common stock or the equivalent value in cash in the future. Options and restricted stock units typically vest one-third on each of the first three anniversary dates of the grant; however, from time to time, we grant performance-based options and restricted stock units that vest subject to the achievement of specified performance goals within a specified timeframe.

Our income from continuing operations for the nine months ended September 30, 2012 and 2011 includes $24 million and $17 million, respectively, of pre-tax compensation costs related to our stock-based compensation arrangements.

All amounts related to shares, share prices and earnings per share have been restated to give retrospective presentation for the reverse stock split described in Note 8.

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2012:

	Options		Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Life
					(In Millions)
Outstanding as of December 31, 2011	8,498,393		$	25.04
Granted	477,500		22.79
Exercised	(1,350,222	)	5.95
Forfeited/Expired	(240,797	)	44.17
Outstanding as of September 30, 2012	7,384,874		$	27.76	$	63	4.5 years
Vested and expected to vest at September 30, 2012	7,378,691		$	27.76	$	63	4.5 years
Exercisable as of September 30, 2012	6,911,556		$	28.11	$	62	4.2 years

There were 1,350,222 stock options exercised during the nine months ended September 30, 2012 with a $21 million aggregate intrinsic value, and 616,446 stock options exercised during the same period in 2011 with a $14 million aggregate intrinsic value.

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As of September 30, 2012, there were $4 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 2.3 years.

In the nine months ended September 30, 2012, we granted an aggregate of 477,500 stock options under our 2008 Stock Incentive Plan to certain of our senior officers; 257,500 of these stock options are subject to time-vesting and 220,000 of these stock options were granted subject to performance-based vesting. If all conditions are met, the performance-based options will vest and be settled ratably over a three-year period from the date of the grant. In the nine months ended September 30, 2011, there were no stock options granted.

The weighted average estimated fair value of stock options we granted in the nine months ended September 30, 2012 was $12.05 per share. This fair value was calculated based on the grant date using a binomial lattice model with the following assumptions:

		Nine Months Ended September 30, 2012
Expected volatility		52%
Expected dividend yield		0%
Expected life		6.9 years
Expected forfeiture rate		2%
Risk-free interest rate		1.06%-1.41%
Early exercise threshold		70% gain
Early exercise rate		20% per year

The expected volatility used in the binomial lattice model incorporated historical and implied share-price volatility and was based on an analysis of historical prices of our stock and open-market exchanged options. The expected volatility reflects the historical volatility for a duration consistent with the contractual life of the options, and the volatility implied by the trading of options to purchase our stock on open-market exchanges. The historical share-price volatility excludes the movements in our stock price during the period October 1, 2002 through December 31, 2002 due to unique events occurring during that time, which caused extreme volatility in our stock price, and two dates with unusual volatility due to an unsolicited acquisition proposal. The expected life of options granted is derived from the output of the binomial lattice model and represents the period of time that the options are expected to be outstanding. This model incorporates an early exercise assumption in the event of a significant increase in stock price. The risk-free interest rates are based on zero-coupon United States Treasury yields in effect at the date of grant consistent with the expected exercise timeframes.

The following table summarizes information about our outstanding stock options at September 30, 2012:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Options	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
$0.00 to $4.569	2,736,856	6.4 years	$	4.56	2,736,856	$	4.56
$4.57 to $42.529	2,958,315	4.9 years	28.49		2,484,997	29.63
$42.53 to $55.129	703,097	1.4 years	48.44		703,097	48.44
$55.13 to $70.249	833,606	0.4 years	68.27		833,606	68.27
$70.25 and over	153,000	0.1 years	112.65		153,000	112.65
	7,384,874	4.5 years	$	27.76	6,911,556	$	28.11

Restricted Stock Units

The following table summarizes restricted stock unit activity during the nine months ended September 30, 2012:

	Restricted Stock Units		Weighted Average Grant Date Fair Value Per Unit
Unvested as of December 31, 2011	1,927,307		$	24.52
Granted	1,651,437		22.17
Vested	(985,688	)	23.53
Forfeited	(230,581	)	23.36
Unvested as of September 30, 2012	2,362,475		$	23.39

In the nine months ended September 30, 2012, we granted 1,535,187 restricted stock units subject to time-vesting. In addition, we granted 116,250 performance-based restricted stock units to certain of our senior officers. If all conditions are met, the performance-based restricted stock units will vest and be settled ratably over a three-year period from the date of the grant.

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As of September 30, 2012, there were $39 million of total unrecognized compensation costs related to restricted stock units. These costs are expected to be recognized over a weighted average period of 2.3 years.

NOTE 8. EQUITY

On October 11, 2012, our common stock began trading on the New York Stock Exchange on a split-adjusted basis following a one-for-four reverse stock split we announced on October 1, 2012. Every four shares of our issued and outstanding common stock were exchanged for one issued and outstanding share of common stock, without any change in the par value per share, and our authorized shares of common stock were proportionately decreased from 1,050,000,000 shares to 262,500,000 shares. No fractional shares were issued in connection with the stock split. All current and prior period amounts in the accompanying Condensed Consolidated Financial Statements and these notes related to shares, share prices and earnings per share have been restated to give retrospective presentation for the reverse split.

In April 2012, we repurchased and subsequently retired 298,700 shares of our 7% mandatory convertible preferred stock with a carrying value of $289 million. In a related private financing, we issued an additional $141 million aggregate principal amount of our 6 1 ¤ 4 % senior secured notes due 2018 at a premium for $142 million of cash proceeds and an additional $150 million aggregate principal amount of our 8% senior notes due 2020. We recorded the difference between the carrying value and the amount paid to redeem the preferred stock in April 2012 as preferred stock dividends in the accompanying Condensed Consolidated Statements of Operations. We accrued approximately $6 million, or $17.50 per share, for dividends on the preferred stock in the three months ended March 31, 2012 and $1 million in the three months ended June 30, 2012 and September 30, 2012, and paid the dividends in April, July and October 2012, respectively.

In May 2011, we announced that our board of directors had authorized the repurchase of up to $400 million of our common stock through a share repurchase program. Under the program, shares could be purchased in the open market or through privately negotiated transactions in a manner consistent with applicable securities laws and regulations, including pursuant to a Rule 10b5-1 plan maintained by the Company, at times and in amounts based on market conditions and other factors. The share repurchase program, which was scheduled to expire on May 9, 2012, was completed in January 2012. Pursuant to the program, we repurchased a total of 20,268,466 shares for approximately $400 million.

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Dollar Value of Shares That May Yet Be Purchased Under the Program
	(In Thousands)			(In Thousands)	(In Millions)
May 12, 2011 through December 31, 2011	18,942	$	19.75	18,942	$	26
January 1, 2012 through January 31, 2012	1,327	19.74		1,327	0
Total	20,269	$	19.75	20,269	$	0

Repurchased shares are recorded based on settlement date and are held as treasury stock.

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The following table shows the changes in consolidated equity during the nine months ended September 30, 2012 and 2011 (dollars in millions, share amounts in thousands):

	Tenet Healthcare Corporation Shareholders’ Equity
	Preferred Stock					Common Stock				Additional			Accumulated
	Shares Outstanding		Issued Amount			Shares Outstanding (1)		Issued Par Amount (1)		Paid-in Capital (1)			Other Comprehensive Loss			Accumulated Deficit			Treasury Stock			Noncontrolling Interests			Total Equity
Balances at December 31, 2011	345,000		$	334		103,756		$	7	$	4,427		$	(52	)	$	(1,440	)	$	(1,853	)	$	69		$	1,492
Net income (loss)	0		0			0		0		0			0			103			0			(24		)	79
Distributions paid to noncontrolling interests	0		0			0		0		0			0			0			0			(9		)	(9		)
Contributions from noncontrolling interests	0		0			0		0		0			0			0			0			2			2
Purchase of businesses or joint venture interests	0		0			0		0		0			0			0			0			7			7
Other comprehensive income	0		0			0		0		0			3			0			0			0			3
Preferred stock dividends	0		0			0		0		(11		)	0			0			0			0			(11		)
Repurchase of common stock	0		0			(1,327	)	0		0			0			0			(26		)	0			(26		)
Repurchase of preferred stock	(298,700	)	(289		)	0		0		0			0			0			0			0			(289		)
Stock-based compensation expense, including associated deferred tax asset adjustments, and issuance of common stock	0		0			1,990		0		21			0			0			0			0			21
Balances at September 30, 2012	46,300		$	45		104,419		$	7	$	4,437		$	(49	)	$	(1,337	)	$	(1,879	)	$	45		$	1,269

Balances at December 31, 2010	345,000		$	334		121,446		$	7	$	4,469		$	(43	)	$	(1,522	)	$	(1,479	)	$	53		$	1,819
Net income	0		0			0		0		0			0			152			0			8			160
Distributions paid to noncontrolling interests	0		0			0		0		0			0			0			0			(8		)	(8		)
Purchases of businesses or joint venture interests	0		0			0		0		0			0			0			0			10			10
Preferred stock dividends	0		0			0		0		(18		)	0			0			0			0			(18		)
Repurchase of common stock	0		0			(8,870	)	0		0			0			0			(196		)	0			(196		)
Stock-based compensation expense, including associated deferred tax asset adjustments, and issuance of common stock	0		0			1,174		0		(6		)	0			0			0			0			(6		)
Balances at September 30, 2011	345,000		$	334		113,750		$	7	$	4,445		$	(43	)	$	(1,370	)	$	(1,675	)	$	63		$	1,761

(1) Amounts have been retrospectively adjusted for the one-for-four reverse stock split that became effective on October 11, 2012.

NOTE 9. PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE

Property Insurance

We have property, business interruption and related insurance coverage to mitigate the financial impact of catastrophic events or perils that is subject to deductible provisions based on the terms of the policies. These policies are on an occurrence basis. For the annual policy periods April 1, 2010 through March 31, 2013, we have coverage totaling $600 million per occurrence, after deductibles and exclusions, with annual aggregate sub-limits of $100 million each for floods and earthquakes and a per-occurrence sub-limit of $100 million for windstorms with no annual aggregate. With respect to fires and other perils, excluding floods, earthquakes and windstorms, the total $600 million limit of coverage per occurrence applies. Deductibles are 5% of insured values up to a maximum of $25 million for floods, California earthquakes and wind-related claims, and 2% of

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insured values for New Madrid fault earthquakes, with a maximum per claim deductible of $25 million. Other covered losses, including fires and other perils, have a minimum deductible of $1 million.

Professional and General Liability Insurance

At September 30, 2012 and December 31, 2011, the aggregate current and long-term professional and general liability reserves in our accompanying Condensed Consolidated Balance Sheets were approximately $394 million and $412 million, respectively. These reserves include the reserves recorded by our captive insurance subsidiaries and our self-insured retention reserves recorded based on actuarial estimates for the portion of our professional and general liability risks, including incurred but not reported claims, for which we do not have insurance coverage. We estimated the reserves for losses and related expenses using expected loss-reporting patterns discounted to their present value under a risk-free rate approach using a Federal Reserve seven-year maturity rate of 1.04% and 1.35% at September 30, 2012 and December 31, 2011, respectively.

For the policy period June 1, 2012 through May 31, 2013, our hospitals generally have a self-insurance retention of $5 million per occurrence for all claims incurred. Our captive insurance company, The Healthcare Insurance Corporation (“THINC”), retains $10 million per occurrence coverage above our hospitals’ $5 million self-insurance retention level. The next $10 million of claims in excess of these aggregate self-insurance retentions of $15 million per occurrence are 80% reinsured by THINC with independent reinsurance companies, with THINC retaining 20% or a maximum of $2 million. Claims in excess of $25 million are covered by our excess professional and general liability insurance policies with major independent insurance companies, on a claims-made basis, subject to an aggregate limit of $175 million.

For the policy period June 1, 2011 through May 31, 2012, our hospitals generally have a self-insurance retention of $5 million per occurrence for all claims incurred. THINC retains $10 million per occurrence coverage above our hospitals’ $5 million self-insurance retention level. The next $10 million of claims in excess of these aggregate self-insurance retentions of $15 million per occurrence are 65% reinsured by THINC with independent reinsurance companies, with THINC retaining 35% or a maximum of $3.5 million. Claims in excess of $25 million are covered by our excess professional and general liability insurance policies with major independent insurance companies, on a claims-made basis, subject to an aggregate limit of $175 million.

Included in other operating expenses, net, in the accompanying Condensed Consolidated Statements of Operations is malpractice expense of $81 million and $92 million for the nine months ended September 30, 2012 and 2011, respectively.

NOTE 10. CLAIMS AND LAWSUITS

We operate in a highly regulated and litigious industry. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to continue to be instituted or asserted against us. The resolution of any of these matters could have a material adverse effect on our results of operations, financial condition or cash flows in a given period.

In accordance with ASC 450, “Contingencies,” and related guidance, we record accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated. Where a loss on a material matter is reasonably possible and estimable, we disclose an estimate of the loss or a range of loss. In cases where we have not disclosed an estimate, we have concluded that the loss is either not reasonably possible or the loss, or a range of loss, is not reasonably estimable, based on available information.

1. Governmental Reviews—Health care companies are subject to numerous investigations by various governmental agencies. Further, private parties have the right to bring qui tam or “whistleblower” lawsuits against companies that allegedly submit false claims for payments to, or improperly retain overpayments from, the government and, in some states, private payers. Certain of our individual facilities have received inquiries from government agencies, and our facilities may receive such inquiries in future periods.

Pending Matters. The following is an update of material pending governmental reviews, all of which have been previously reported.

· Review of Billing Practices for Kyphoplasty Procedures. The U.S. Department of Justice (“DOJ”), in coordination with the Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services (“HHS”), has contacted a number of hospitals nationwide requesting information regarding their billing practices in connection with kyphoplasty procedures. More specifically, the government is investigating the appropriateness of Medicare patients receiving kyphoplasty — which is a surgical procedure used to treat pain and related conditions associated with certain vertebrae injuries — on an inpatient as opposed to an outpatient basis. In March 2009, one of our hospitals received an information request from the DOJ

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regarding these procedures and, in July 2010, we were notified that seven additional hospitals were also under review. As previously reported, in May 2012, we reached a verbal financial agreement with the government to settle this matter with respect to the first hospital to receive an information request for approximately $900,000, subject to negotiation of final settlement terms. In September 2012, we reached agreement with the DOJ on the appropriate methodology to review the billing practices of a second hospital. Because we are only in the preliminary stages of our analysis of hospital billing and other data for that hospital and we have not reached agreement with the DOJ on the appropriate methodology to review the billing practices of the remaining five hospitals under review, we are unable to calculate an estimate of loss or range of loss with respect to those six hospitals.

· Review of Billing Practices for ICD Implantation Procedures. The DOJ has contacted a number of hospitals nationwide requesting information regarding their Medicare billing practices in connection with the implantation of cardiac defibrillators. As previously reported, in March 2010, the DOJ issued a civil investigative demand to one of our hospitals pursuant to the federal False Claims Act seeking information to determine if procedures to implant cardiac defibrillators at that hospital from 2002 to 2010 were performed in accordance with Medicare coverage requirements. Also as previously reported, in September 2010, the DOJ notified us that its review may extend to billing procedures at 32 of our other hospitals in addition to the hospital that received the original information request.

Our analysis of these pending reviews is still ongoing, and we are unable to predict with any certainty the progress or final outcome of any discussions with government agencies at this time. Based on currently available information, as of September 30, 2012, we had recorded reserves of approximately $2 million in the aggregate with respect to two hospitals under review in the foregoing governmental proceedings. These reserves have not changed from the amounts reported for the three months ended June 30, 2012; however, changes in the reserves may be required in the future as additional information becomes available. We cannot predict the ultimate resolution of any governmental review, and the final amounts paid in settlement or otherwise, if any, could differ materially from our currently recorded reserves.

Settled Matters. The following is a summary of governmental reviews that we settled in the three months ended June 30, 2012, both of which were previously reported:

· Review of Florida Medical Center’s Partial Hospitalization Program. In the three months ended June 30, 2012, we entered into a voluntary civil settlement with the DOJ and OIG for a cash payment of $3.5 million (which was fully reserved at December 31, 2009 and paid in May 2012). The settlement relates to a previously disclosed matter involving Florida Medical Center’s partial hospitalization program, a now-closed psychiatric treatment program that had the capacity to treat 15 patients on an outpatient basis.

· Inpatient Rehabilitation Facilities Review . Also in the three months ended June 30, 2012, we entered into a voluntary civil settlement with the DOJ and HHS for a cash payment of $42.75 million (which was fully reserved at December 31, 2011 and paid in April 2012). The settlement relates to a previously disclosed matter, which we initially reported to the OIG in October 2007, involving inpatient rehabilitation admissions at 25 active and divested inpatient hospitals and units from 2005 through 2007.

2. Lawsuits Resulting from Hurricane Katrina—In January 2012, we reached an agreement in principle to settle for approximately $12 million a purported class action lawsuit filed in the Civil District Court for the Parish of Orleans on behalf of persons allegedly injured following Hurricane Katrina at Lindy Boggs Medical Center (one of our former New Orleans area hospitals). The parties executed the final settlement agreement in August 2012, subject to court approval. The settlement, which will be covered in full by our excess insurance carrier, will be apportioned among the claimants in the case — which is captioned Dunn, et al. v. Tenet Mid-City Medical, L.L.C. (formerly d/b/a Lindy Boggs Medical Center), et al .

In addition, we are defendants in five individual Hurricane Katrina-related lawsuits filed in Louisiana. As of September 30, 2012, trial dates had not been set in these individual cases. (Other previously pending individual cases have been resolved or abandoned.) In general, the plaintiffs allege that the hospitals were negligent in failing to properly prepare for Hurricane Katrina by, among other things, failing to evacuate patients ahead of the storm and failing to have properly configured emergency generator systems. The plaintiffs seek unspecified damages for the alleged wrongful death of some patients, aggravation of pre-existing illnesses or injuries to other patients, and additional claims. Although we are unable to predict the ultimate resolution of the pending lawsuits, we do not believe the outcome of these matters, either individually or collectively, will have a material adverse effect on our business, financial condition, results of operations or cash flows.

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3. Hospital-Related Tort Claim—As previously reported, in May 2012, the Superior Court in Los Angeles County, California reduced punitive damages awarded in connection with an alleged April 2006 assault at Tarzana Regional Medical Center (a hospital we divested in 2008) from $65 million to $5 million. (The plaintiff was also previously awarded compensatory damages of approximately $2.4 million in the lawsuit — which is captioned Rosenberg v. Encino-Tarzana Regional Medical Center and Tenet Healthcare Corporation .) The plaintiff subsequently filed a motion seeking attorneys’ fees in the amount of $6 million; however, the judge instead awarded attorneys’ fees of $1.5 million. Both parties have filed notices appealing all aspects of the final judgment.

In the three months ended December 31, 2011, the Company recorded a reserve of approximately $6 million in discontinued operations for this matter. For purposes of computing the reserve, management estimated that the probable range of loss would be between approximately $6 million and $25 million (including approximately $1 million in attorneys’ fees) based on our expectation, after analysis of relevant case law, that a California court would apply U.S. Supreme Court opinions that generally limit, as a matter of constitutional law, the amount of a punitive award to be no more than a multiple of nine times the compensatory award and, in the case of a substantial compensatory award, to be no more than a multiple of one times that award. At that time, management concluded that no amount within this range is any more likely than any other; therefore, in accordance with ASC 450, the accrual was recorded at the low end of the estimated range.

Although we are unable to predict the ultimate resolution of this lawsuit at this time, we continue to believe that the current reserve, recorded at the low end of the estimated range, reflects our probable liability. We intend to continue to vigorously defend ourselves in this matter.

4. Ordinary Course Matters—On October 4, 2012, the Court of Appeal of the State of California affirmed the judgment of the Superior Court of Los Angeles County denying class certification in two coordinated proposed class action lawsuits, McDonough, et al. v. Tenet Healthcare Corporation (which was filed in June 2003) and Tien, et al. v. Tenet Healthcare Corporation (which was filed in May 2004). As previously reported, the plaintiffs in both cases alleged that our hospitals violated certain provisions of California’s labor laws and applicable wage and hour regulations. The plaintiffs in both cases were seeking back pay, statutory penalties and attorneys’ fees in unspecified amounts. The plaintiffs may seek further appeals; however, based on available information, we do not believe that the ultimate resolution of these matters will have a material adverse effect on our business, financial condition, results of operations or cash flows.

Also, as previously reported, we are defendants in a class action lawsuit in which the plaintiffs claim that in April 1996 patient identifying records from a psychiatric hospital that we closed in 1995 were temporarily placed in an unsecure location while the hospital was undergoing renovations. The lawsuit, Doe, et al. v. Jo Ellen Smith Medical Foundation , was filed in the Civil District Court for the Parish of Orleans in Louisiana in March 1997 and is currently pending. The plaintiffs’ claims include allegations of tortious invasion of privacy and negligent infliction of emotional distress. The plaintiffs contend that the class consists of approximately 5,000 persons; however, only 8 individuals have been identified to date in the class certification process. The plaintiffs have asserted each member of the class is entitled to common damages under a theory of presumed “common damage” regardless of whether or not any members of the class were actually harmed or even aware of the incident. We believe there is no authority for an award of common damages under Louisiana law. In addition, we believe that there is no basis for the certification of this proceeding as a class action under applicable federal and Louisiana law precedents. However, the trial court has denied our motions for summary judgment and our motion to decertify the class. In March 2012, the Louisiana Supreme Court denied our interlocutory appeal of the trial court’s decision on summary judgment based on procedural grounds, noting that we retain an adequate remedy to appeal any adverse judgment that might be rendered by the trial court. In April 2012, we filed a notice of appeal of the trial court’s denial of our motion to decertify the proceeding as a class action. The notice of appeal was granted, and the trial has been stayed pending the outcome of the appeal. At this time, we are not able to estimate the reasonably possible loss or reasonably possible range of loss given: the small number of class members that have been identified or otherwise responded to the class certification process; the novel theories asserted by plaintiffs, including their assertion that a theory of presumed common damage exists under Louisiana law; uncertainties as to the timing and outcome of the appeals process; and the failure of the plaintiffs to provide any evidence of damages. We intend to vigorously contest the plaintiffs’ claims.

In addition to the matters described above, our hospitals are subject to investigations, claims and legal proceedings in the ordinary course of our business. Most of these matters involve allegations of medical malpractice or other injuries suffered at our hospitals. We are also party in the normal course of business to regulatory proceedings and private litigation concerning the terms of our union agreements and the application of various federal and state labor laws, rules and regulations governing, among other things, a variety of workplace wage and hour issues. Furthermore, our hospitals are routinely subject to sales and use tax audits and personal property tax audits by the state and local government jurisdictions in which they do business. The results of the audits are frequently disputed, and such disputes

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are ordinarily resolved by administrative appeals or litigation. It is management’s opinion that the ultimate resolution of these ordinary course investigations, claims and legal proceedings will not have a material adverse effect on our business, financial condition, results of operations or cash flows.

New claims or inquiries may be initiated against us from time to time. These matters could (1) require us to pay substantial damages or amounts in judgments or settlements, which individually or in the aggregate could exceed amounts, if any, that may be recovered under our insurance policies where coverage applies and is available, (2) cause us to incur substantial expenses, (3) require significant time and attention from our management, and (4) cause us to close or sell hospitals or otherwise modify the way we conduct business.

The table below presents reconciliations of the beginning and ending liability balances in connection with legal settlements and related costs recorded during the nine months ended September 30, 2012 and 2011:

	Balances at Beginning of Period		Litigation and Investigation Costs		Cash Payments			Balances at End of Period
Nine Months Ended September 30, 2012
Continuing operations	$	49	$	3	$	(48	)	$	4
Discontinued operations	17		0		(12		)	5
	$	66	$	3	$	(60	)	$	9

Nine Months Ended September 30, 2011
Continuing operations	$	30	$	24	$	(22	)	$	32
Discontinued operations	0		0		0			0
	$	30	$	24	$	(22	)	$	32

For the nine months ended September 30, 2012 and 2011, we recorded net costs of $3 million and $24 million, respectively. The 2012 amount primarily related to costs associated with the legal proceedings and governmental reviews described above. The 2011 amount primarily related to costs associated with our evaluation of an unsolicited acquisition proposal received in November 2010 (which was subsequently withdrawn), the settlement of a union arbitration claim and costs to defend the Company in various matters.

NOTE 11. INCOME TAXES

Income tax expense in the nine months ended September 30, 2012 included expense of $1 million related to continuing operations attributable to an increase in our estimated liabilities for uncertain tax positions, net of related deferred tax effects. The total amount of unrecognized tax benefits as of September 30, 2012 was $38 million ($37 million related to continuing operations and $1 million related to discontinued operations), which, if recognized, would impact our effective tax rate and income tax expense (benefit) from continuing and discontinued operations.

Our practice is to recognize interest and penalties related to income tax matters in income tax expense in our consolidated statements of operations. Approximately $0.8 million of interest and penalties related to accrued liabilities for uncertain tax positions ($0.7 million related to continuing operations and $0.1 million related to discontinued operations) are included in the accompanying Condensed Consolidated Statement of Operations for the nine months ended September 30, 2012. Total accrued interest and penalties on unrecognized tax benefits as of September 30, 2012 were $10 million ($11 million related to continuing operations, partially offset by a $1 million benefit related to discontinued operations).

As of September 30, 2012, approximately $15 million of unrecognized federal and state tax benefits, as well as reserves for interest and penalties, may decrease in the next 12 months as a result of the settlement of audits, the filing of amended tax returns or the expiration of statutes of limitations.

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NOTE 12. EARNINGS PER COMMON SHARE

The table below is a reconciliation of the numerators and denominators of our basic and diluted earnings per common share calculations for income from continuing operations for the three and nine months ended September 30, 2012 and 2011. All amounts related to shares, share prices and earnings per share have been restated to give retrospective presentation for the reverse stock split described in Note 8. Income is expressed in millions and weighted average shares are expressed in thousands.

	Income (Numerator)		Weighted Average Shares (Denominator)	Per-Share Amount
Three Months Ended September 30, 2012
Income available to Tenet Healthcare Corporation common shareholders for basic earnings per share	$	30	104,244	$	0.29
Effect of dilutive stock options and restricted stock units	0		3,067	(0.01		)
Income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share	$	30	107,311	$	0.28

Three Months Ended September 30, 2011
Income available to Tenet Healthcare Corporation common shareholders for basic earnings per share	$	8	117,188	$	0.07
Effect of dilutive stock options and restricted stock units	0		3,720	0.00
Income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share	$	8	120,908	$	0.07
Nine Months Ended September 30, 2012

Income available to Tenet Healthcare Corporation common shareholders for basic earnings per share	$	129	103,613	$	1.25
Effect of dilutive stock options and restricted stock units	0		3,291	(0.04		)
Income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share	$	129	106,904	$	1.21

Nine Months Ended September 30, 2011
Income available to Tenet Healthcare Corporation common shareholders for basic earnings per share	$	128	120,204	$	1.06
Effect of dilutive stock options and restricted stock units	0		4,262	(0.03		)
Income available to Tenet Healthcare Corporation common shareholders for diluted earnings per share	$	128	124,466	$	1.03

Stock options (in thousands) whose exercise price exceeded the average market price of our common stock and, therefore, were not included in the computation of diluted shares for the three and nine months ended September 30, 2012 were 3,711 shares for both periods and for the three and nine months ended September 30, 2011 were 4,089 and 4,054 shares, respectively.

NOTE 13. FAIR VALUE MEASUREMENTS

Our financial assets and liabilities recorded at fair value on a recurring basis primarily relate to investments in available-for-sale securities held by our captive insurance subsidiaries and our derivative contract. The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2012 and December 31, 2011. The following tables also indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. We consider a security that trades at least weekly to have an active market. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

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	September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments:
Marketable securities — current	$	4	$	4	$	0	$	0
Investments in Reserve Yield Plus Fund	2		0		2		0
Marketable debt securities — noncurrent	15		1		13		1
	$	21	$	5	$	15	$	1
Derivative Contract (see Note 5):
LIBOR cap agreement asset	$	0	$	0	$	0	$	0

	December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments:
Investments in Reserve Yield Plus Fund	$	2	$	0	$	2	$	0
Marketable debt securities — noncurrent	22		6		15		1
	$	24	$	6	$	17	$	1
Derivative Contract (see Note 5):
LIBOR cap agreement asset	$	0	$	0	$	0	$	0

There was no change in the fair value of our auction rate securities valued using significant unobservable inputs during the nine months ended September 30, 2012.

At September 30, 2012, one of our captive insurance subsidiaries held $1 million of preferred stock and other securities that were distributed from auction rate securities whose auctions have failed due to sell orders exceeding buy orders. We were not required to record an other-than-temporary impairment of these securities during the nine months ended September 30, 2012 or 2011.

Our non-financial assets and liabilities not permitted or required to be measured at fair value on a recurring basis typically relate to long-lived assets held and used, long-lived assets held for sale and goodwill. We are required to provide additional disclosures about fair value measurements as part of our financial statements for each major category of assets and liabilities measured at fair value on a non-recurring basis. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows.

The fair value of our long-term debt is based on quoted market prices (Level 1). At September 30, 2012 and December 31, 2011, the estimated fair value of our long-term debt was approximately 108.9% and 104.9%, respectively, of the carrying value of the debt.

NOTE 14. ACQUISITIONS

During the nine months ended September 30, 2012, we acquired a diagnostic imaging center, an oncology center, an urgent care center, a health plan, a cyberknife center in which we previously held a noncontrolling interest, a majority interest in four ambulatory surgery centers (in one of which we had previously held a noncontrolling interest), as well as fifteen physician practice entities. The fair value of the consideration conveyed in the acquisitions (the “purchase price”) was $38 million.

We are required to allocate the purchase prices of the acquired businesses to assets acquired or liabilities assumed and, if applicable, noncontrolling interests based on their fair values. The excess of the purchase price allocation over those fair values is recorded as goodwill. We are in process of finalizing the purchase price allocations, including valuations of the acquired property and equipment, for several recently acquired outpatient centers; therefore, the purchase price allocations for those centers are subject to adjustment once the valuations are completed. During the nine months ended September 30, 2012, we finalized the purchase price allocations for various centers acquired in 2011, which resulted in an increase in goodwill of $1 million with a corresponding decrease in property and equipment.

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Purchase price allocations for the acquisitions made during the nine months ended September 30, 2012 are as follows:

Current assets	$	7
Property and equipment	18
Goodwill	36
Current liabilities	(11		)
Long-term liabilities	(4		)
Noncontrolling interests	(8		)
Net cash paid	$	38

The goodwill generated from these transactions, which we anticipate will be fully deductible for income tax purposes, can be attributed to the benefits that we expect to realize from operating efficiencies and increased reimbursement. Approximately $2 million in acquisition costs related to prospective and closed acquisitions were expensed during the nine months ended September 30, 2012.

NOTE 15. SEGMENT INFORMATION

In the three months ended June 30, 2012, we began reporting Conifer as a separate reportable business segment. Our other segment is Hospital Operations. Historically, our business has consisted of one reportable segment. However, during the three months ended June 30, 2012, our Hospital Operations segment and our Conifer segment entered into formal agreements, effective January 1, 2012, pursuant to which it was agreed that services provided by both parties to each other would be billed based on estimated third-party pricing terms. The factors for determining the reportable segments include the manner in which management evaluates operating performance combined with the nature of the individual business activities.

Our core business is Hospital Operations, which is focused on providing acute care treatment, including inpatient care and outpatient services. We also own various related health care businesses. At September 30, 2012, our subsidiaries operated 49 hospitals with a total of 13,216 licensed beds, primarily serving urban and suburban communities, as well as 112 free-standing and provider-based outpatient centers.

We also operate revenue cycle management, health care information management and patient communications services businesses under our Conifer subsidiary. In addition, Conifer operates a management services business that provides network development, utilization management, claims processing and contract negotiation services to physician organizations and hospitals that assume managed care risk. At September 30, 2012, Conifer provided these services to approximately 400 Tenet and non-Tenet hospitals and other health care organizations.

As mentioned above, in 2012, our Conifer segment and our Hospital Operations segment entered into formal agreements documenting terms and conditions of various services provided by Conifer to Tenet hospitals, as well as certain administrative services provided by our Hospital Operations segment to Conifer. The services provided by both parties under these agreements are charged to the other party based on estimated third-party pricing terms. In 2011, the services provided by both parties were charged to the other party based on an estimate of the internal costs to provide such services. The amounts in the tables directly below reflect the services being charged based on estimated third-party terms in 2012, but not in 2011.

The following table includes amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations:

	September 30,		December 31,
	2012		2011
Assets:
Hospital Operations and other	$	8,381	$	8,389
Conifer	89		73
Total	$	8,470	$	8,462

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Capital expenditures:
Hospital Operations and other Core Services	$	105		$	98		$	352		$	289
Conifer	3			2			8			9
Total	$	108		$	100		$	360		$	298

Net operating revenues:
Hospital Operations and other	$	2,193		$	2,076		$	6,725		$	6,425
Conifer
Tenet	94			68			274			192
Other customers	28			24			63			57
	2,315			2,168			7,062			6,674
Intercompany eliminations	(94		)	(68		)	(274		)	(192		)
Total	$	2,221		$	2,100		$	6,788		$	6,482

Adjusted EBITDA:
Hospital Operations and other Core Services	$	245		$	180		$	793		$	812
Conifer	24			12			74			26
Total	$	269		$	192		$	867		$	838

Depreciation and amortization:
Hospital Operations and other Core Services	$	108		$	98		$	307		$	292
Conifer	2			2			7			6
Total	$	110		$	100		$	314		$	298

Adjusted EBITDA	$	269		$	192		$	867		$	838
Depreciation and amortization	(110		)	(100		)	(314		)	(298		)
Interest expense	(103		)	(59		)	(303		)	(275		)
Litigation and investigation costs	0			(5		)	(3		)	(24		)
Impairment of long-lived assets	(6		)	(8		)	(12		)	(18		)
Investment earnings	1			1			2			3
Income before income taxes	$	51		$	21		$	237		$	226

Due to the fact that Conifer’s revenues from providing services to Tenet’s hospitals are based on estimated third-party billing terms in 2012 but not in 2011, the following supplemental table presents 2012 Adjusted EBITDA on a comparable basis to the 2011 presentation.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Adjusted supplemental EBITDA:
Hospital Operations and other	$	260	$	180	$	840	$	812
Conifer	9		12		27		26
Total	$	269	$	192	$	867	$	838

NOTE 16. SUBSEQUENT EVENTS

Issuance of New Notes; Repurchase of Outstanding Notes

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used a portion of the proceeds from the sale of the notes to purchase $161 million aggregate principal amount outstanding of our 7 3 ¤ 8 % senior notes due 2013 in a tender offer. The remaining net proceeds will be used for purchases of our other outstanding senior notes through public or privately negotiated transactions and for general corporate purposes, including strategic acquisitions and the repayment of indebtedness and drawings under our senior secured revolving credit facility.

Share Repurchase Program

In October 2012, we announced that our board of directors had authorized the repurchase of up to $500 million of our common stock through a share repurchase program. Under the program, shares may be purchased in the open market or through privately negotiated transactions in a manner consistent with applicable securities laws and regulations, including pursuant to a Rule 10b5-1 plan maintained by the Company. Shares will be repurchased at times and in amounts based on market conditions and other factors.

Automatic Conversion of Mandatory Convertible Preferred Stock

On October 1, 2012, our remaining mandatory convertible preferred stock automatically converted to 1,978,633 shares of our common stock.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION TO MANAGEMENT’S DISCUSSION AND ANALYSIS

The purpose of this section, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), is to provide a narrative explanation of our financial statements that enables investors to better understand our business, to enhance our overall financial disclosures, to provide the context within which our financial information may be analyzed, and to provide information about the quality of, and potential variability of, our financial condition, results of operations and cash flows. Unless otherwise indicated, all financial and statistical information included herein relates to our continuing operations, with dollar amounts expressed in millions (except per share, per admission, per adjusted admission, per patient day, per adjusted patient day and per visit amounts). All current and prior period amounts related to shares, share prices and earnings per share have been restated to give retrospective presentation for the reverse stock split described in Note 8 to the accompanying Condensed Consolidated Financial Statements. MD&A, which should be read in conjunction with the Condensed Consolidated Financial Statements, includes the following sections:

· Management Overview

· Forward-Looking Statements

· Sources of Revenue

· Results of Operations

· Liquidity and Capital Resources

· Off-Balance Sheet Arrangements

· Critical Accounting Estimates

MANAGEMENT OVERVIEW

RECENT DEVELOPMENTS

On October 1, 2012, we announced the following strategic and financial initiatives intended to accelerate the growth of our core business and position our balance sheet to enhance shareholder value.

Acquisitions —We continue to focus on opportunities to enhance the Company’s primary business lines and plan to expend approximately $400 million in the near term to acquire acute care hospitals, outpatient facilities and business process services companies. We are presently in exclusive discussions to acquire the Emanuel Medical Center in Turlock, California. In addition, in October 2012, our Conifer Health Solutions (“Conifer”) revenue cycle management subsidiary acquired InforMed Health Care Solutions (“InforMed”), an information management and services company. InforMed’s business includes 230 clients located in the Northeast, Mid-Atlantic and Midwest, more than 300 employees, extensive health care data and proprietary technology. In November 2012, our Conifer subsidiary also acquired a hospital revenue cycle management business.

Share Repurchase Program —Our board of directors has authorized the repurchase of up to $500 million of our common stock through a share repurchase program. Under the program, shares may be purchased in the open market or through privately negotiated transactions in a manner consistent with applicable securities laws and regulations, including pursuant to a Rule 10b5-1 plan maintained by the Company. Shares will be repurchased at times and in amounts based on market conditions and other factors.

Issuance of New Notes; Repurchase of Outstanding Notes —In October 2012, we sold $500 million aggregate principal amount of 4 3 / 4 % senior secured notes due 2020 and $300 million aggregate principal amount of 6 3 / 4 % senior notes due 2020. We used a portion of the proceeds from the sale of the notes to purchase $161 million aggregate principal amount outstanding of our 7 3 / 8 % senior notes due 2013 in a tender offer. The remaining net proceeds will be used for purchases of our other outstanding senior notes through public or privately negotiated transactions and for general corporate purposes, including strategic acquisitions and the repayment of indebtedness and drawings under our senior secured revolving credit facility.

Reverse Stock Split —On October 11, 2012, our common stock began trading on the New York Stock Exchange on a split-adjusted basis following a one-for-four reverse stock split. Every four shares of our issued and outstanding common stock were exchanged for one issued and outstanding share of common stock, without any change in the par value per share.

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STRATEGY AND TRENDS

We are committed to providing the communities our hospitals, outpatient centers and other health care facilities serve with high quality, cost-effective health care while growing our business, increasing our profitability and creating long-term value for our shareholders. We believe that our success in increasing our profitability depends in part on our success in executing the strategies and managing the trends discussed below.

Core Business Strategy — Our core business is focused on our primary business lines of acute care hospitals, outpatient facilities, and business process services. With respect to our acute care hospitals and outpatient facilities, we seek to offer superior quality and patient services, to make capital and other investments in our facilities and technology to remain competitive, to recruit and retain physicians, to expand our outpatient business, and to negotiate favorable contracts with managed care and other commercial payers. With respect to business process services, we provide comprehensive operational management for revenue cycle functions, including patient access, revenue integrity and patient financial services. We also offer patient communications solutions to optimize communication between providers and patients. Our service offerings have expanded to support value-based performance through dynamic payment arrangements, accountable care organization management, population health management, and clinical integration solutions.

Development Strategies — We continue to focus on opportunities to increase our outpatient revenues through organic growth and the acquisition of selected outpatient businesses. During the nine months ended September 30, 2012, we derived approximately 34% of our net patient revenues from outpatient services. Historically, our outpatient business has generated significantly higher margins for us than other business lines. By expanding our outpatient business, we expect to increase our profitability over time. We are also focused on acquiring hospitals, services providers and other health care assets and companies in markets where we believe our operating strategies can improve performance and create shareholder value. We believe that this growth by strategic acquisitions, when and if opportunities are available, can supplement the growth we believe we can generate organically in our existing markets.

Expanding Our Conifer Health Solutions Business — We intend to continue expanding our revenue cycle management, health care information management, management services, and patient communications services businesses under our Conifer subsidiary by marketing these services to non-Tenet hospitals and other health care-related entities. Conifer provides services to approximately 400 Tenet and non-Tenet hospitals and other health care organizations. We believe this business has the potential over time to generate high margins and improve our results of operations. During the three months ended June 30, 2012, Conifer and one of our other subsidiaries entered into formal agreements, effective January 1, 2012, pursuant to which it was agreed that services provided by both parties to each other would be billed based on estimated third-party pricing terms. As a result, beginning in the three months ended June 30, 2012, we are now reporting Conifer as a separate reportable business segment. Also, in May 2012, Conifer entered into a 10-year agreement with Catholic Health Initiatives (“CHI”) to provide revenue cycle services for 56 of CHI’s hospitals. As part of this agreement, CHI received a minority ownership interest in Conifer. In addition, in October and November 2012, Conifer acquired an information management and services company and a hospital revenue cycle management business, respectively.

Commitment to Quality — Through our Commitment to Quality and Medicare Performance Improvement initiatives, we continually work with physicians to implement the most current evidence-based medicine techniques to improve the way we provide care, while using labor management tools and supply chain initiatives to reduce variable costs. We believe the use of these practices will promote the most effective and efficient utilization of resources and result in shorter lengths of stay, as well as reductions in redundant ancillary services and readmissions for hospitalized patients. As a result of our efforts, our hospitals have substantially improved their quality metrics reported to the government and have been recognized by several managed care companies for their quality of care. Leveraging off of these initiatives, we expect to benefit over time from provisions in the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 (“Affordable Care Act”) that tie certain payments to quality measures, establish a value-based purchasing system, and adjust hospital payment rates based on hospital-acquired conditions and hospital readmissions. In general, we believe that quality of care improvements may have the effect of reducing costs, increasing payments from Medicare and certain managed care payers for our services, and increasing physician and patient satisfaction, which may potentially improve our volumes.

Realizing HIT Incentive Payments and Other Benefits — Beginning in the year ended December 31, 2011, we achieved compliance with certain of the health information technology (“HIT”) requirements under the American Recovery and Reinvestment Act of 2009 (“ARRA”); as a result, we recognized approximately $55 million of electronic health record (“EHR”) incentives related to Medicaid ARRA HIT in 2011 in our consolidated statement of operations. In addition, we recognized approximately $13 million of EHR incentives in our consolidated statement of operations in the three months ended September 30, 2012. These incentives partially offset the operating expenses we have incurred and continue to incur to invest in HIT systems. We also anticipate that we will be able to recognize additional EHR HIT incentives of approximately $21 million in the year ending December 31, 2012. Furthermore, we believe that the operational benefits of HIT, including improved clinical outcomes and increased operating efficiencies, will contribute to our long-term ability to grow our business.

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General Economic Conditions — We believe that high unemployment rates and other adverse economic conditions are continuing to have a negative impact on our bad debt expense levels and patient volumes. However, as the economy recovers, we expect to experience improvements in these metrics relative to current levels.

Improving Operating Leverage — We are experiencing a gradual increase in our adjusted patient admissions that we believe is primarily attributable to our focus on physician alignment and satisfaction, targeted capital spending on critical growth opportunities for our hospitals, emphasis on higher demand clinical service lines (including outpatient lines), the implementation of new payer contracting strategies, and improved quality metrics at our hospitals. Increases in patient volumes have been constrained by the slow pace of the current economic recovery, increased competition, utilization pressure by managed care organizations, the effects of higher patient co-pays and deductibles, and demographic trends.

Impact of Affordable Care Act — We anticipate that we will benefit over time from the provisions of the Affordable Care Act that will extend insurance coverage through Medicaid or private insurance to a broader segment of the U.S. population. Although we are unable to predict the precise impact of the Affordable Care Act on our future results of operations, and while there will be some reductions in reimbursement rates, which began in 2010, we anticipate, based on the current timetable for implementing the law, that we could begin to receive reimbursement for caring for uninsured and underinsured patients as early as 2014.

Our ability to execute on these strategies and manage these trends is subject to a number of risks and uncertainties that may cause actual results to be materially different from expectations. For information about these risks and uncertainties, see the Forward-Looking Statements and Risk Factors sections in Part I of our Annual Report on Form 10-K for the year ended December 31, 2011 (“Annual Report”).

RESULTS OF OPERATIONS—OVERVIEW

Our results of operations have been and continue to be influenced by industry-wide and company-specific challenges, including constrained volume growth, lower patient acuity levels for certain patient service lines, and high levels of bad debt, that have affected our revenue growth and operating expenses. We believe our results of operations for our most recent fiscal quarter best reflect recent trends we are experiencing with respect to volumes, revenues and expenses; therefore, we have provided below information about these metrics for the three months ended September 30, 2012 and 2011 for all of our continuing operations hospitals, excluding the results of our Creighton University Medical Center, which was reclassified to discontinued operations in the three months ended June 30, 2012.

	Three Months Ended September 30,
Admissions, Patient Days and Surgeries	2012		2011		Increase (Decrease)
Total admissions	124,869		125,458		(0.5	)%
Adjusted patient admissions(2)	197,778		194,965		1.4	%
Paying admissions (excludes charity and uninsured)	115,607		116,698		(0.9	)%
Charity and uninsured admissions	9,262		8,760		5.7	%
Admissions through emergency department	76,617		74,604		2.7	%
Paying admissions as a percentage of total admissions	92.6	%	93.0	%	(0.4	)%(1)
Charity and uninsured admissions as a percentage of total admissions	7.4	%	7.0	%	0.4	%(1)
Emergency department admissions as a percentage of total admissions	61.4	%	59.5	%	1.9	%(1)
Surgeries — inpatient	35,161		36,976		(4.9	)%
Surgeries — outpatient	59,099		55,598		6.3	%
Total surgeries	94,260		92,574		1.8	%
Patient days — total	580,594		591,948		(1.9	)%
Adjusted patient days(2)	911,233		909,960		0.1	%
Average length of stay (days)	4.65		4.72		(1.5	)%

(1)	The change is the difference between the amounts shown for the three months ended September 30, 2012 compared to the three months ended September 30, 2011.
(2)	Adjusted patient days/admissions represents actual patient days/admissions adjusted to include outpatient services by multiplying actual patient days/admissions by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues.

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Total admissions decreased by 589 or 0.5%, in the three months ended September 30, 2012 compared to the same period in 2011. Total surgeries increased by 1.8% in the three months ended September 30, 2012 compared to the same period in 2011. While our emergency department admissions increased 2.7% in the three months ended September 30, 2012 compared to the same period in the prior year, we believe the current economic conditions continue to have an adverse impact on the level of elective procedures performed at our hospitals, which constrained the overall change in our total admissions. Charity and uninsured admissions increased 5.7% in the three months ended September 30, 2012 compared to the three months ended September 30, 2011.

	Three Months Ended September 30,
Outpatient Visits	2012		2011		Increase (Decrease)
Total visits	1,035,236		987,318		4.9	%
Paying visits (excludes charity and uninsured)	922,700		882,974		4.5	%
Charity visits and uninsured visits	112,536		104,344		7.9	%
Emergency department visits	384,772		365,245		5.3	%
Surgery visits	59,099		55,598		6.3	%
Paying visits as a percentage of total visits	89.1	%	89.4	%	(0.3	)%(1)
Charity visits and uninsured visits as a percentage of total visits	10.9	%	10.6	%	0.3	%(1)

(1) The change is the difference between the amounts shown for the three months ended September 30, 2012 compared to the three months ended September 30, 2011.

Total outpatient visits increased 47,918, or 4.9%, in the three months ended September 30, 2012 compared to the three months ended September 30, 2011. Three of our regions reported increased outpatient visits in the three months ended September 30, 2012, with the strongest growth occurring in our California region.

Outpatient surgery visits increased by 6.3% in the three months ended September 30, 2012 compared to the same period in 2011. Charity and uninsured outpatient visits increased by 7.9% in the three months ended September 30, 2012 compared to the three months ended September 30, 2011.

	Three Months Ended September 30,
Revenues	2012		2011		Increase (Decrease)
Net operating revenues	$	2,221	$	2,100	5.8	%
Revenues from the uninsured	$	164	$	157	4.5	%
Net inpatient revenues(1)	$	1,501	$	1,444	3.9	%
Net outpatient revenues(1)	$	789	$	734	7.5	%

(1) Net inpatient revenues and net outpatient revenues are components of net operating revenues. Net inpatient revenues include self-pay revenues of $70 million and $68 million for the three months ended September 30, 2012 and 2011, respectively. Net outpatient revenues include self-pay revenues of $94 million and $89 million for the three months ended September 30, 2012 and 2011, respectively.

Net operating revenues increased by $121 million, or 5.8%, in the three months ended September 30, 2012 compared to the same period in 2011. Net operating revenues in the three months ended September 30, 2012 included $56 million of Medicaid disproportionate share hospital (“DSH”) and other state-funded subsidy revenues compared to $40 million in the same period in 2011. The 2012 amount included $13 million of revenues related to the California provider fee program.

In addition to certain of the factors discussed above, net patient revenues increased by 5.1% in the three months ended September 30, 2012 compared to the same period in 2011 primarily as a result of managed care pricing improvement and increased outpatient volumes.

	Three Months Ended September 30,
Revenues on a Per Admission, Per Patient Day and Per Visit Basis	2012		2011		Increase (Decrease)
Net inpatient revenue per admission	$	12,021	$	11,510	4.4	%
Net inpatient revenue per patient day	$	2,585	$	2,439	6.0	%
Net outpatient revenue per visit	$	762	$	743	2.6	%
Net patient revenue per adjusted patient admission(1)	$	11,579	$	11,171	3.7	%
Net patient revenue per adjusted patient day(1)	$	2,513	$	2,394	5.0	%

(1) Adjusted patient days/admissions represents actual patient days/admissions adjusted to include outpatient services by multiplying actual patient days/admissions by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues.

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Net inpatient revenue per patient day and per admission increased 6.0% and 4.4%, respectively, in the three months ended September 30, 2012 compared to the same period in 2011. This pricing increase reflects improved terms in our contracts with commercial managed care payers, as well as the increase in DSH and other state-funded subsidy revenues described above, partially offset by an adverse shift in payer mix. The increase in net outpatient revenue per visit was primarily due to the improved terms of our managed care contracts, partially offset by the provision of lower acuity services by outpatient centers we acquired in the past several years, as well as an unfavorable shift in our total outpatient payer mix.

	Three Months Ended September 30,
Provision for Doubtful Accounts	2012			2011			Increase (Decrease)
Provision for doubtful accounts	$	206		$	189		9.0	%
Provision for doubtful accounts as a percentage of net operating revenues before provision for doubtful accounts	8.5		%	8.3		%	0.2	%(1)
Collection rate on self-pay accounts(2)	28.8		%	27.7		%	1.1	%(1)
Collection rate on commercial managed care accounts	97.7		%	98.3		%	(0.6	)%(1)

(1) The change is the difference between the amounts shown for the three months ended September 30, 2012 compared to the three months ended September 30, 2011.

(2) Self-pay accounts receivable are comprised of both uninsured and balance after insurance receivables.

Provision for doubtful accounts increased by $17 million, or 9.0%, in the three months ended September 30, 2012 compared to the same period in 2011. The increase in provision for doubtful accounts primarily related to the increase in uninsured patient volumes in the three months ended September 30, 2012 compared to the three months ended September 30, 2011, partially offset by the impact of a 110 basis point improvement in our collection rate on self-pay accounts. Our self-pay collection rate, which is the blended collection rate for uninsured and balance after insurance accounts receivable, was approximately 28.8% at September 30, 2012 and 27.7% at September 30, 2011.

	Three Months Ended September 30,
Selected Operating Expenses	2012		2011		Increase (Decrease)
Salaries, wages and benefits	$	1,050	$	1,002	4.8	%
Supplies	376		379		(0.8	)%
Other operating expenses	539		527		2.3	%
Total	$	1,965	$	1,908	3.0	%
Rent/lease expense(1)	$	39	$	37	5.4	%
Salaries, wages and benefits per adjusted patient day(2)	$	1,151	$	1,102	4.4	%
Supplies per adjusted patient day(2)	413		417		(1.0	)%
Other operating expenses per adjusted patient day(2)	592		578		2.4	%
Total per adjusted patient day	$	2,156	$	2,097	2.8	%
Salaries, wages and benefits per adjusted patient admission(2)	$	5,309	$	5,139	3.3	%
Supplies per adjusted patient admission(2)	1,901		1,944		(2.2	)%
Other operating expenses per adjusted patient admission(2)	2,725		2,703		0.8	%
Total per adjusted patient admission	$	9,935	$	9,786	1.5	%

(1) Included in other operating expenses.

(2) Adjusted patient days/admissions represents actual patient days/admissions adjusted to include outpatient services by multiplying actual patient days/admissions by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues.

Total selected operating expenses, which is defined as salaries, wages and benefits, supplies and other operating expenses, increased by 2.8% and 1.5% on a per adjusted patient day and per adjusted patient admission basis, respectively, in the three months ended September 30, 2012 compared to the three months ended September 30, 2011. The increase on a per adjusted patient admission basis was lower than the increase on a per adjusted patient day basis due in part to the impact of our focus on reducing average length of stay.

Salaries, wages and benefits per adjusted patient admission increased by 3.3% in the three months ended September 30, 2012 compared to the same period in 2011. This increase is primarily due to an increase in the number of physicians we employ, annual merit and contractual wage increases for our employees, an increase in employee headcount at our Conifer subsidiary, increased health benefits costs and increased employee-related costs associated with our HIT implementation program, partially offset by a decrease in overtime expense.

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Supplies expense per adjusted patient admission decreased by 2.2% in the three months ended September 30, 2012 compared to the three months ended September 30, 2011. Supplies expense was favorably impacted by lower pharmaceutical costs and a decline in orthopedic costs due to renegotiated prices, partially offset by increased costs of implants and surgical supplies.

Other operating expenses per adjusted patient admission increased by 0.8% in the three months ended September 30, 2012 compared to the same period in 2011. This change is primarily due to increased costs of contracted services, increased systems implementation costs primarily related to our HIT implementation program, increased consulting and legal expenses, and increased rent and lease expenses, partially offset by decreased malpractice expense, decreased physician relocation expenses and a favorable adjustment of $2 million in the 2012 period relating to the estimated recovery of the employer portion of certain payroll taxes paid on behalf of medical residents. In the 2011 period, we also recognized a $5 million gain on the sale of the building at the former campus of one of our hospitals. Malpractice expense in the 2012 period includes an unfavorable adjustment of approximately $1 million due to a 7 basis point decrease in the interest rate used to estimate the discounted present value of projected future malpractice liabilities compared to an unfavorable adjustment of $13 million as a result of a 107 basis point decrease in the interest rate in the 2011 period.

The table below shows the pre-tax and after-tax impact on continuing operations for the three and nine months ended September 30, 2012 and 2011 of the following items:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(Expense) Income
Impairment of long-lived assets and goodwill, and restructuring charges, net	$	(6	)	$	(8	)	$	(12	)	$	(18	)
Litigation and investigation costs	—			(5		)	(3		)	(24		)
Pre-tax impact	$	(6	)	$	(13	)	$	(15	)	$	(42	)
Deferred tax asset valuation allowance and other tax adjustments	$	2		$	4		$	2		$	16
Total after-tax impact	$	(3	)	$	(4	)	$	(8	)	$	(10	)
Diluted per-share impact of above items	$	(0.02	)	$	(0.03	)	$	(0.07	)	$	(0.08	)
Diluted earnings per share, including above items	$	0.28		$	0.07		$	1.21		$	1.03

LIQUIDITY AND CAPITAL RESOURCES OVERVIEW

Cash and cash equivalents were $83 million at September 30, 2012, an increase of $1 million from $82 million at June 30, 2012.

Significant cash flow items in the three months ended September 30, 2012 included:

· $35 million of proceeds from the sale of Creighton University Medical Center;

· $25 million of payments to acquire a health plan and various outpatient and physician practice businesses;

· Capital expenditures of $108 million;

· Interest payments of $107 million;

· Payments on reserves for restructuring charges and litigation costs of $6 million; and

· $25 million of net repayments of borrowings under our revolving credit facility.

Net cash provided by operating activities was $337 million in the nine months ended September 30, 2012 compared to $324 million in the nine months ended September 30, 2011. Key positive and negative factors contributing to the change between the 2012 and 2011 periods include the following:

· $81 million of proceeds in the 2012 period related to our continuing operations from the Medicare Rural Floor Budget Neutrality Adjustment settlement described below;

· $50 million less cash received from the California provider fee programs as a result of the timing of the approval

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of the programs by the Centers for Medicare and Medicaid Services;

· Income tax payments of $9 million in the nine months ended September 30, 2012 compared to $9 million of refunds in the nine months ended September 30, 2011;

· Lower aggregate annual 401(k) matching contributions and annual incentive compensation payments of $5 million ($80 million in the nine months ended September 30, 2012 compared to $85 million in the nine months ended September 30, 2011);

· Higher payments on reserves for restructuring charges and litigation costs of $29 million; and

· $15 million less cash used in operating activities from discontinued operations.

FORWARD-LOOKING STATEMENTS

The information in this report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. All statements, other than statements of historical or present facts, that address activities, events, outcomes, business strategies and other matters that we plan, expect, intend, assume, believe, budget, predict, forecast, project, estimate or anticipate (and other similar expressions) will, should or may occur in the future are forward-looking statements. These forward-looking statements represent management’s current belief, based on currently available information, as to the outcome and timing of future events. They involve known and unknown risks, uncertainties and other factors — many of which we are unable to predict or control — that may cause our actual results, performance or achievements, or health care industry results, to be materially different from those expressed or implied by forward-looking statements. Such factors include, but are not limited to, the risks described in the Forward-Looking Statements and Risk Factors sections in Part I of our Annual Report.

When considering forward-looking statements, a reader should keep in mind the risk factors and other cautionary statements in our Annual Report and in this report. Should one or more of the risks and uncertainties described in our Annual Report or this report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. We specifically disclaim any obligation to update any information contained in a forward-looking statement or any forward-looking statement in its entirety and, therefore, disclaim any resulting liability for potentially related damages.

All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

SOURCES OF REVENUE

We receive revenues for patient services from a variety of sources, primarily managed care payers and the federal Medicare program, as well as state Medicaid programs, indemnity-based health insurance companies and self-pay patients (that is, patients who do not have health insurance and are not covered by some other form of third-party arrangement).

The table below shows the sources of net patient revenues before provision for doubtful accounts for our general hospitals, expressed as percentages of net patient revenues before provision for doubtful accounts from all sources:

	Three Months Ended September 30,						Nine Months Ended September 30,
Net Patient Revenues from:	2012		2011		Increase (Decrease)(1)		2012		2011		Increase (Decrease)(1)
Medicare	22.1	%	22.6	%	(0.5	)%	23.8	%	23.1	%	0.7	%
Medicaid	7.7	%	8.0	%	(0.3	)%	8.4	%	9.1	%	(0.7	)%
Managed care	58.9	%	58.2	%	0.7	%	57.2	%	57.0	%	0.2	%
Indemnity, self-pay and other	11.3	%	11.2	%	0.1	%	10.6	%	10.8.	%	(0.2	)%

(1) The increase (decrease) is the difference between the 2012 and 2011 percentages shown.

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Our payer mix on an admissions basis for our general hospitals, expressed as a percentage of total admissions from all sources, is shown below:

	Three Months Ended September 30,						Nine Months Ended September 30,
Admissions from:	2012		2011		Increase (Decrease)(1)		2012		2011		Increase (Decrease)(1)
Medicare	27.7	%	28.5	%	(0.8	)%	28.9	%	29.7	%	(0.8	)%
Medicaid	12.5	%	13.3	%	(0.8	)%	12.1	%	12.9	%	(0.8	)%
Managed care	49.1	%	48.2	%	0.9	%	48.7	%	47.7	%	1.0	%
Indemnity, self-pay and other	10.7	%	10.0	%	0.7	%	10.3	%	9.7	%	0.6	%

(1) The increase (decrease) is the difference between the 2012 and 2011 percentages shown.

GOVERNMENT PROGRAMS

The Medicare program, the nation’s largest health insurance program, is administered by the Centers for Medicare and Medicaid Services (“CMS”) of the U.S. Department of Health and Human Services. Medicare is a health insurance program primarily for individuals 65 years of age and older, certain younger people with disabilities, and people with end-stage renal disease, and is provided without regard to income or assets. Medicaid is a program that pays for medical assistance for certain individuals and families with low incomes and resources, and is jointly funded by the federal government and state governments. Medicaid is the largest source of funding for medical and health-related services for the nation’s poor and most vulnerable individuals.

The Affordable Care Act was enacted to change how health care services in the United States are covered, delivered and reimbursed. One key provision of the Affordable Care Act is the individual mandate, which requires most Americans to maintain “minimum essential” health insurance coverage. For individuals who are not exempt from the individual mandate, and who do not receive health insurance through an employer or government program, the means of satisfying the requirement is to purchase insurance from a private company. Beginning in 2014, those who do not comply with the individual mandate must make a “shared responsibility payment” to the federal government in the form of a tax penalty. Another key provision of the Affordable Care Act is the expansion of Medicaid coverage. The current Medicaid program offers federal funding to states to assist pregnant women, children, needy families, the blind, the elderly and the disabled in obtaining medical care. The Affordable Care Act, as enacted, expanded the scope of the Medicaid program, increased the number of individuals the states must cover and penalized states that refused to comply with Medicaid expansion with the possibility of losing 100% of their federal Medicaid funding. Twenty-six states, several individuals and the National Federation of Independent Business brought suit in federal district court challenging the constitutionality of the individual mandate and Medicaid expansion provisions. The Court of Appeals for the Eleventh Circuit upheld Medicaid expansion as a valid exercise of Congress’s spending power, but concluded that Congress lacked authority to enact the individual mandate. In June 2012, the U.S. Supreme Court upheld the individual mandate and struck down the penalties for states that refused to comply with Medicaid expansion provisions. We anticipate that health care providers will benefit over time from provisions of the Affordable Care Act that will extend insurance coverage through Medicaid, state-sponsored, federally funded, non-Medicaid plans for low-income residents not eligible for Medicaid, and private insurance to a broader segment of the U.S. population. However, the Affordable Care Act also contains a number of provisions designed to significantly reduce Medicare and Medicaid program spending, including: (1) negative adjustments to the annual market basket updates for Medicare inpatient, outpatient, long-term acute and inpatient rehabilitation prospective payment systems, which began in 2010, as well as additional “productivity adjustments” that began in 2011; and (2) reductions to Medicare and Medicaid disproportionate share hospital payments beginning in 2013 as the number of uninsured individuals declines. We are unable to predict with certainty the full impact of the Affordable Care Act on our future revenues and operations at this time due to the law’s complexity, the limited amount of implementing regulations and interpretive guidance, and gradual or potentially delayed implementation. Furthermore, we are unable to predict what action, if any, Congress might take with respect to the Affordable Care Act or the actions individual states might take with respect to expanding Medicaid coverage as originally contemplated by the Affordable Care Act. However, a repeal of the individual mandate provision, of other sections of the Affordable Care Act or of the law in its entirety could have a material impact on our anticipated future financial condition, results of operations or cash flows.

In addition to the changes affected by the Affordable Care Act, the Medicare and Medicaid programs are subject to statutory and regulatory changes, administrative and judicial rulings, interpretations and determinations, requirements for utilization review, and federal and state funding restrictions, all of which could materially increase or decrease payments from these government programs in the future, as well as affect the cost of providing services to our patients and the timing of payments to our facilities. We are unable to predict the effect of future government health care funding policy changes on our operations. If the rates paid by governmental payers are reduced, if the scope of services covered by governmental payers is limited, or if we or one or more of our subsidiaries’ hospitals are excluded from participation in the Medicare or Medicaid

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program or any other government health care program, there could be a material adverse effect on our business, financial condition, results of operations or cash flows.

Medicare

Medicare offers its beneficiaries different ways to obtain their medical benefits. One option, the Original Medicare Plan, is a fee-for-service payment system. The other option, called Medicare Advantage (sometimes called “Part C” or “MA Plans”), includes health maintenance organizations (“HMOs”), preferred provider organizations (“PPOs”), private fee-for-service Medicare special needs plans and Medicare medical savings account plans. The major components of our net patient revenues, including our general hospitals and other operations, for services provided to patients enrolled in the Original Medicare Plan for the three and nine months ended September 30, 2012 and 2011 are set forth in the following table:

	Three Months Ended September 30,					Nine Months Ended September 30,
Revenue Descriptions	2012		2011			2012		2011
Medicare severity-adjusted diagnosis-related group — operating	$	260	$	265		$	833	$	850
Medicare severity-adjusted diagnosis-related group — capital	23		24			74		76
Outliers	11		11			38		33
Outpatient	129		115			391		345
Disproportionate share	52		52			161		159
Direct Graduate and Indirect Medical Education(1)	24		24			73		73
Other(2)	13		15			42		47
Adjustments for prior-year cost reports and related valuation allowances	12		(3		)	106		(1		)
Total Medicare net patient revenues	$	524	$	503		$	1,718	$	1,582

(1) Includes Indirect Medical Education revenue earned by our children’s hospital under the Children’s Hospitals Graduate Medical Education Payment Program administered by the Health Resources and Services Administration of the U.S. Department of Health and Human Services.

(2) The other revenue category includes inpatient psychiatric units, inpatient rehabilitation units, one long-term acute care hospital, other revenue adjustments, and adjustments related to the estimates for current-year cost reports and related valuation allowances.

Medicare Rural Floor Budget Neutrality Adjustment Settlement— In April 2012, we entered into an industry-wide settlement (the “Medicare Budget Neutrality Settlement”) with the U.S. Department of Health and Human Services (“HHS”), the Secretary of HHS and CMS that corrects Medicare payments made to providers for inpatient hospital services for a number of prior periods. The Balanced Budget Act of 1997 created the “rural floor,” which is intended to ensure that the wage-adjusted inpatient prospective payment system (“IPPS”) rates for providers in urban areas in a state are not lower than the wage-adjusted IPPS rates for rural providers in the same state. Congress required that the rural floor adjustment, which would otherwise increase aggregate IPPS payments, be administered in a budget neutral manner. CMS included a rural floor budget neutrality adjustment in annual IPPS updates to the base payment rate; however, it did so in a manner that went beyond what was required to achieve budget neutrality. Our April 2012 settlement with the government resulted in a net favorable adjustment in the three months ended March 31, 2012 of approximately $84 million, of which $75 million related to continuing operations (revenues of $81 million less $6 million of legal fees). Substantially all of the cash proceeds were received during the three months ended June 30, 2012.

Disproportionate Share Hospital Payments— The primary method for a hospital to qualify for DSH payments is based on a complex statutory formula that results in a DSH percentage that is applied to payments based on Medicare severity-adjusted diagnosis-related groups (“MS-DRGs”). The hospital-specific DSH percentage is equal to the sum of the percentage of Medicare inpatient days attributable to patients eligible for both the Traditional Medicare Plan (“Part A”) and Supplemental Security Income (“SSI”) percentage, and the percentage of total inpatient days attributable to patients eligible for Medicaid but not Medicare Part A. Hospitals receive interim DSH payments that are reconciled in the annual cost report. CMS develops and distributes the hospital-specific SSI percentages, typically one year after the close of the federal fiscal year (“FFY”); however, the release of the SSI percentages has been delayed since 2009 as CMS examined and refined the underlying data, in particular the data supporting CMS’ policy of including Medicare Advantage days in the calculation of the SSI ratio. During this time, CMS instructed the Medicare administrative contractors to suspend the settlement of cost reports pending the completion of its review of the SSI data. The FFY 2007 SSI ratios previously issued by CMS generally included the Medicare Advantage days for teaching hospitals only. CMS initiated a data collection effort intended to ensure that the SSI ratios include the Medicare Advantage days for non-teaching hospitals as well. Since 2009, we have estimated the impact of including the Medicare Advantage days of our non-teaching hospitals using internal estimates of the SSI ratios. We accrued approximately $49 million in reserves for potential SSI adjustments in prior reporting periods, including $6 million in 2011. During the three months ended March 31, 2012, CMS released revised SSI ratios for FFYs 2006 and 2007, and SSI ratios for FFYs 2008 and 2009, which, according to CMS, include the Medicare Advantage days; based on

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these ratios, we increased the aforementioned reserves by approximately $2 million related to our hospitals in continuing operations and approximately $4 million related to our hospitals in discontinued operations. During the three months ended September 30, 2012, CMS released the SSI ratios for FFY 2010, which also include the Medicare Advantage days. Based on these ratios, we increased the aforementioned reserves by approximately $3 million related to our hospitals in continuing operations and decreased the reserves by approximately $1 million related to our hospitals in discontinued operations. We expect that the removal of the moratorium on cost report settlements will result in a cash outflow of approximately $57 million. During the three months ended September 30, 2012, the Medicare Administrative Contractors commenced issuing cost report settlements held in abeyance due to the aforementioned moratorium.

The Medicare DSH statutes and regulations have been the subject of various administrative appeals and lawsuits, and our hospitals have been participating in these appeals, including challenges to the inclusion of Medicare Advantage days in the SSI ratios. These types of appeals generally take several years to resolve, particularly for multi-hospital organizations, because of CMS’ administrative appeal rules. We cannot predict the timing or outcome of our DSH appeals; however, a favorable outcome of our appeals could have a material impact on our future revenues and cash flows.

Medicaid

Medicaid programs and the corresponding reimbursement methodologies are administered by the states and vary from state to state and from year to year. Estimated payments under various state Medicaid programs, excluding state-funded managed care Medicaid programs, constituted approximately 8.4% and 9.1% of net patient revenues at our continuing general hospitals for the nine months ended September 30, 2012 and 2011, respectively. We also receive DSH payments under various state Medicaid programs. For the nine months ended September 30, 2012 and 2011, our revenues attributable to DSH payments and other state-funded subsidy payments were approximately $210 million and $196 million, respectively.

Several states in which we operate have recently faced budgetary challenges that resulted in reduced Medicaid funding levels to hospitals and other providers. Because most states must operate with balanced budgets, and the Medicaid program is generally a significant portion of a state’s budget, states can be expected to adopt or consider adopting future legislation designed to reduce their Medicaid expenditures. The economic downturn has increased budget pressures on most states, and these budget pressures have resulted, and likely will continue to result, in decreased spending for Medicaid programs in many states. In addition, some states are implementing delays in issuing Medicaid payments to providers. Increased Medicaid enrollment due to the economic downturn, budget gaps and other factors could result in future reductions to Medicaid payments, payment delays or additional taxes on hospitals.

As an alternative means of funding provider payments, several states in which we operate have adopted or are considering adopting broad-based provider taxes to fund the non-federal share of Medicaid programs. Some states, such as California, North Carolina and Pennsylvania, have introduced provider fee arrangements, which are intended to enhance funding or partially mitigate reduced Medicaid funding levels to hospitals and other providers.

In September 2011, the Governor of California signed legislation that created a hospital fee program to provide supplemental Medi-Cal payments to hospitals retroactive to July 1, 2011 and expiring on December 31, 2013 (the “30-Month Program”). During the three months ended June 30, 2012, the Governor of California signed the state’s 2012/2013 budget, which includes a change to the fee program. This legislative change and approval by CMS of the fee-for-service supplemental payment and assessment portions of the 30-Month Program in June 2012 enabled us to record $60 million of net revenues so far in 2012. We recorded $63 million of net revenues from a similar California hospital fee program during the nine months ended September 30, 2011. State officials in California recently informed the hospital industry that the managed care portion of the 30-Month Program is not likely to be approved until 2013. Based on the most recent California Hospital Association estimates, the 30-Month Program could result in approximately $187 million of net revenues for our California hospitals. At such time as CMS approves the managed care portion of the fee program, we expect to: (1) make a one-time adjustment to record the retroactive impact of the additional revenues net of assessments; and (2) record the remaining net revenues for the program years ratably over the remaining term of the program. We cannot provide any assurances regarding the final approval of the managed care portion of the 30-Month Program by CMS or the timing or amount of the payments we may ultimately receive or be required to make.

The State of Georgia has adopted an amended budget for the state fiscal year ended June 30, 2012 that included additional funding for payments to private hospitals from the Indigent Care Trust Fund (“ICTF”), the state’s disproportionate share program. As a result, we have recognized ICTF revenues of approximately $14 million in 2012. During 2011, we recorded $13 million of ICTF revenues. We cannot provide any assurances regarding the amount, if any, of future ICTF payments we might receive.

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During the three months ended June 30, 2012, we received notification of our net revenues under a North Carolina hospital fee program retroactive to January 1, 2011 through September 30, 2012. As a result, we have recognized $14 million of net revenues from this program in 2012.

Because we cannot predict what actions the federal government or the states may take under existing legislation and future legislation to address budget gaps or deficits, we are unable to assess the effect that any such legislation might have on our business, but the impact on our future financial position, results of operations or cash flows could be material.

Medicaid-related patient revenues recognized by our continuing general hospitals from Medicaid-related programs in the states in which they are located, as well as from Medicaid programs in neighboring states, for the nine months ended September 30, 2012 and 2011 are set forth in the table below:

	Nine Months Ended September 30,
	2012				2011
Hospital Location	Medicaid		Managed Medicaid		Medicaid		Managed Medicaid
California	$	152	$	111	$	159	$	91
Florida	133		46		141		45
Georgia	69		29		70		31
Pennsylvania	58		151		74		138
Missouri	49		4		38		4
Texas	40		89		51		88
North Carolina	31		—		18		—
South Carolina	25		18		28		17
Alabama	23		—		22		—
Tennessee	7		20		8		23
	$	587	$	468	$	609	$	437

Regulatory and Legislative Changes

Material updates to the information set forth in our Annual Report about the Medicare and Medicaid programs are provided below.

Payment and Policy Changes to the Medicare Inpatient Prospective Payment System

Under Medicare law, CMS is required to annually update certain rules governing the IPPS. The updates generally become effective October 1, the beginning of the federal fiscal year. On August 1, 2012, CMS issued the Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and Fiscal Year 2013 Rates (“Final Rule”). The Final Rule includes the following payment and policy changes:

· A market basket increase of 2.6% for MS-DRG operating payments for hospitals reporting specified quality measure data (hospitals that do not report specified quality measure data would receive an increase of 0.6%); CMS is also making certain adjustments to the estimated 2.6% market basket increase that result in a net market basket update of 2.8%, including the following adjustments to the market basket index:

· Market basket index and productivity reductions required by the Affordable Care Act of 0.1% and 0.7%, respectively;

· A reduction of 1.9% to permanently remove the remaining portion of the estimated 3.9% documentation and coding adjustment resulting from the conversion to MS-DRGs based on CMS’ analysis of FFY 2008 and FFY 2009 claims data; and

· Restoration of a 2.9% reduction that was required to complete the recovery in FFY 2012 of the estimated MS-DRG documentation and coding overpayments for FFYs 2008 and 2009;

· A 0.97% net increase in the capital federal MS-DRG rate; and

· A decrease in the cost outlier threshold from $22,385 to $21,821.

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CMS projects that the combined impact of the payment and policy changes in the Final Rule will yield an average 2.6% increase in payments for hospitals in large urban areas (populations over 1 million). Using the impact percentages in the Final Rule as applied to our IPPS payments for the 12 months ended September 30, 2012, the estimated annual impact for all changes in the Final Rule on our hospitals is an increase in our Medicare inpatient revenues of approximately $40 million. Because of the uncertainty regarding other factors that may influence our future IPPS payments by individual hospital, including admission volumes, length of stay and case mix, we cannot provide any assurances regarding our estimate.

Payment and Policy Changes to the Medicare Outpatient Prospective Payment System

On November 1, 2012, CMS released the Final Changes to the Hospital Outpatient Prospective Payment System (“OPPS”) and Calendar Year (“CY”) 2013 Payment Rates (“Final OPPS Rule”). The Final OPPS Rule includes the following payment and policy changes:

· A net update to OPPS payments equal to the estimated market basket of 1.8%, which takes into account a projected hospital IPPS market basket percentage increase of 2.6%, minus an estimated productivity adjustment of 0.7% and a 0.1% adjustment, both of which are necessary to comply with certain provisions of the Affordable Care Act; and

· The continuation of a budget neutral reduction in payments for non-cancer OPPS hospitals to fund an increase in OPPS payments to cancer hospitals mandated under the Affordable Care Act.

CMS projects that the combined impact of the payment and policy changes in the Final OPPS Rule will yield an average 1.9% increase in payments for all hospitals and an average 2.0% increase in payments for hospitals in large urban areas (populations over one million). According to CMS’ estimates, the projected annual impact of the payment and policy changes in the Final OPPS Rule on our hospitals is an $11 million increase in Medicare outpatient revenues. Because of the uncertainty associated with factors that may influence our future OPPS payments by individual hospital, including patient volumes and case mix, we cannot provide any assurances regarding this estimate.

Changes to the Medicare Physician Fee Schedule

On November 1, 2012, CMS issued the CY 2013 Medicare Physician Fee Schedule (“MPFS”) final rule detailing Medicare physician payment policies for 2013. The rule confirms that, unless Congress intervenes, under current law Medicare’s physician payments will decrease in January 2013 by 26.5%. This change could reduce our annual net revenues for services paid to our physicians and freestanding diagnostic imaging centers under the MPFS by approximately $17 million. In addition, a reduction of this magnitude could result in some physicians reducing or eliminating the number of Medicare patients they treat. Historically, Congress has intervened to forestall these statutory reductions to the MPFS; however, mitigating the reduction under the federal budget neutrality rules would require an offset achieved by tax increases or reduced spending in other areas, such as Medicare payments to hospitals. We cannot predict what action, if any, Congress will take with respect to this matter.

Medicare Prepayment Reviews

The Improper Payments Information Act of 2002, amended by the Improper Payments Elimination and Recovery Act of 2010, requires the heads of federal agencies, including HHS, to annually review programs it administers to:

· Identify programs that may be susceptible to significant improper payments;

· Estimate the amount of improper payments in those programs;

· Submit those estimates to Congress; and

· Describe the actions the agency is taking to reduce improper payments in those programs.

CMS has identified the Medicare Fee-For-Service (“FFS”) program as a program at risk for significant erroneous payments. In 2010, the Medicare FFS paid claims error rate was estimated to be 10.5%, or approximately $34 billion in improper payments. As a result, in addition to the Recovery Audit Contractor (“RAC”) program, which currently performs post-payment claims reviews, CMS has recently established initiatives to prevent improper payments before a claim is processed. These initiatives include:

· A significant increase in the number of prepayment claims reviews performed by Medicare Administrative Contractors; and

· A three-year demonstration project that expands the scope of the RAC program to include prepayment reviews in 11 states; these reviews, which commenced in August 2012, are initially focusing on inpatient claims, in particular short stays.

Claims selected for prepayment review are not subject to the normal Medicare FFS payment timeframe. Furthermore, prepayment claims denials are subject to administrative and judicial review. The degree to which our Medicare FFS claims are subjected to prepayment reviews, the extent to which payments are denied, and our success in overturning denials could have a material adverse effect on our cash flows and results of operations.

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MedPAC Report to Congress

On March 15, 2012, the Medicare Payment Advisory Commission (“MedPAC”) issued its annual Report to Congress. As expected, the report includes the following recommendations affecting hospitals:

· Congress should increase payment rates for the inpatient and outpatient prospective payment systems in 2013 by 1.0%; for inpatient services, Congress should also require the Secretary of HHS beginning in 2013 to use the difference between the increase under current law and MedPAC’s recommended update to gradually recover prior-period overpayments due to documentation and coding changes; and

· Congress should direct the Secretary of HHS to reduce payment rates over a three-year phase-in period for evaluation and management office visits provided in hospital outpatient departments so that total payment rates for these visits are the same whether the service is provided in an outpatient department or a physician office.

FFY 2013 Budget Proposal

The President released his FFY 2013 budget proposal on February 13, 2012. The key provisions of the budget proposal affecting Medicare and Medicaid include:

· A reduction in reimbursement from 70% of bad debts resulting from non-payment of deductibles and co-payments by Medicare beneficiaries to 25% over three years starting in 2013;

· A 10% reduction in IME payments beginning in 2014;

· A change to the Federal Matching Assistance Percentage formula in a manner that would result in a net reduction of federal money to the states;

· A phase-down of the cap on state provider taxes, which could require some states to develop alternative sources of Medicaid funding or reduce provider payments; and

· A reduction in DSH allotments to states as the number of uninsured individuals declines following implementation of the Affordable Care Act.

On March 29, 2012, the U.S. House of Representatives approved a FFY 2013 budget resolution that includes a conversion from traditional Medicare to a premium support model, conversion of the Medicaid program to a block grant model, and instructions to various congressional committees to develop budget reconciliation legislation to meet 10-year spending reduction targets, including spending reductions from Medicare, Medicaid and the Affordable Care Act.

We believe the U.S. Senate is unlikely to approve a similar budget resolution this year. Nevertheless, the President’s budget proposal and budget legislation passed by the House provide information as to the specific reductions to federal health care programs that could be included in any deficit reduction agreement that might be reached in 2012 or 2013. We cannot predict what action Congress or the President might take with respect to specific legislation or the impact the resulting legislation might have on our business, financial condition, results of operations or cash flows.

PRIVATE INSURANCE

Managed Care

We currently have thousands of managed care contracts with various HMOs and PPOs. HMOs generally maintain a full-service health care delivery network comprised of physician, hospital, pharmacy and ancillary service providers that HMO members must access through an assigned “primary care” physician. The member’s care is then managed by his or her primary care physician and other network providers in accordance with the HMO’s quality assurance and utilization review guidelines so that appropriate health care can be efficiently delivered in the most cost-effective manner. HMOs typically provide reduced benefits or reimbursement (or none at all) to their members who use non-contracted health care providers for non-emergency care.

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PPOs generally offer limited benefits to members who use non-contracted health care providers. PPO members who use contracted health care providers receive a preferred benefit, typically in the form of lower co-payments, co-insurance or deductibles. As employers and employees have demanded more choice, managed care plans have developed hybrid products that combine elements of both HMO and PPO plans, including high-deductible health care plans that may have limited benefits, but cost the employee less in premiums.

The amount of our managed care net patient revenues during the nine months ended September 30, 2012 and 2011 was $4.0 billion and $3.8 billion, respectively. Approximately 62% of our managed care net patient revenues for the nine months ended September 30, 2012 was derived from our top ten managed care payers. National payers generate approximately 45% of our total net managed care revenues. The remainder comes from regional or local payers. At September 30, 2012 and December 31, 2011, approximately 53% and 56%, respectively, of our net accounts receivable related to continuing operations were due from managed care payers.

Revenues under managed care plans are based primarily on payment terms involving predetermined rates per diagnosis, per-diem rates, discounted fee-for-service rates and other similar contractual arrangements. These revenues are also subject to review and possible audit by the payers. The payers are billed for patient services on an individual patient basis. An individual patient’s bill is subject to adjustment on a patient-by-patient basis in the ordinary course of business by the payers following their review and adjudication of each particular bill. We estimate the discounts for contractual allowances at the individual hospital level utilizing billing data on an individual patient basis. At the end of each month, on an individual hospital basis, we estimate our expected reimbursement for patients of managed care plans based on the applicable contract terms. We believe it is reasonably likely for there to be an approximately 3% increase or decrease in the estimated contractual allowances related to managed care plans. Based on reserves as of September 30, 2012, a 3% increase or decrease in the estimated contractual allowance would impact the estimated reserves by approximately $8 million. Some of the factors that can contribute to changes in the contractual allowance estimates include: (1) changes in reimbursement levels for procedures, supplies and drugs when threshold levels are triggered; (2) changes in reimbursement levels when stop-loss or outlier limits are reached; (3) changes in the admission status of a patient due to physician orders subsequent to initial diagnosis or testing; (4) final coding of in-house and discharged-not-final-billed patients that change reimbursement levels; (5) secondary benefits determined after primary insurance payments; and (6) reclassification of patients among insurance plans with different coverage levels. Contractual allowance estimates are periodically reviewed for accuracy by taking into consideration known contract terms, as well as payment history. Although we do not separately accumulate and disclose the aggregate amount of adjustments to the estimated reimbursement for every patient bill, we believe our estimation and review process enables us to identify instances on a timely basis where such estimates need to be revised. We do not believe there were any adjustments to estimates of individual patient bills that were material to our revenues. In addition, on a corporate-wide basis, we do not record any general provision for adjustments to estimated contractual allowances for managed care plans.

We expect managed care governmental admissions to continue to increase as a percentage of total managed care admissions over the near term. However, the managed Medicare and Medicaid insurance plans typically generate lower yields than commercial managed care plans, which have been experiencing an improved pricing trend. Although we have had improved year-over-year managed care pricing, we expect some moderation in the pricing percentage increases in future years. It is not clear what impact, if any, the increased obligations on managed care and other payers imposed by the Affordable Care Act will have on our commercial managed care volumes and payment rates. In the nine months ended September 30, 2012, our commercial managed care net inpatient revenue per admission from our acute care hospitals was approximately 78% higher than our aggregate yield on a per admission basis from government payers, including managed Medicare and Medicaid insurance plans.

Indemnity

An indemnity-based agreement generally requires the insurer to reimburse an insured patient for health care expenses after those expenses have been incurred by the patient, subject to policy conditions and exclusions. Unlike an HMO member, a patient with indemnity insurance is free to control his or her utilization of health care and selection of health care providers.

SELF-PAY PATIENTS

Self-pay patients are patients who do not qualify for government programs payments, such as Medicare and Medicaid, do not have some form of private insurance and, therefore, are responsible for their own medical bills. A significant portion of our self-pay patients is admitted through our hospitals’ emergency departments and often requires high-acuity treatment that is more costly to provide and, therefore, results in higher billings, which are the least collectible of all accounts. We believe that our level of self-pay patients has been higher in the last several years than previous periods due to a combination of broad economic factors, including increased unemployment rates, reductions in state Medicaid budgets, increasing numbers of

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individuals and employers who choose not to purchase insurance, and an increased burden of co-payments and deductibles to be made by patients instead of insurers.

Self-pay accounts pose significant collectability problems. At both September 30, 2012 and December 31, 2011, approximately 7% of our net accounts receivable related to continuing operations were due from self-pay patients. Further, a significant portion of our provision for doubtful accounts relates to self-pay patients, as well as co-payments and deductibles owed to us by patients with insurance. We provide revenue cycle management services through our Conifer subsidiary, which has performed systematic analyses to focus our attention on the drivers of bad debt for each hospital. While emergency department use is the primary contributor to our provision for doubtful accounts in the aggregate, this is not the case at all hospitals. As a result, we are increasing our focus on targeted initiatives that concentrate on non-emergency department patients as well. These initiatives are intended to promote process efficiencies in working self-pay accounts, as well as co-payment and deductible amounts owed to us by patients with insurance, that we deem highly collectible. We are dedicated to modifying and refining our processes as needed, enhancing our technology and improving staff training throughout the revenue cycle in an effort to increase collections and reduce accounts receivable.

Over the longer term, several other initiatives we have previously announced should also help address this challenge. For example, our Compact with Uninsured Patients (“Compact”) is designed to offer managed care-style discounts to certain uninsured patients, which enables us to offer lower rates to those patients who historically have been charged standard gross charges. A significant portion of those charges had previously been written down in our provision for doubtful accounts. Under the Compact, the discount offered to uninsured patients is recognized as a contractual allowance, which reduces net operating revenues at the time the self-pay accounts are recorded. The uninsured patient accounts, net of contractual allowances recorded, are further reduced to their net realizable value through provision for doubtful accounts based on historical collection trends for self-pay accounts and other factors that affect the estimation process.

In July 2010, the President signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) into law. Under the Dodd-Frank Act, a new Consumer Financial Protection Bureau (“CFPB”) was formed within the U.S. Federal Reserve to promulgate regulations to promote transparency, simplicity, fairness, accountability and equal access in the market for consumer financial products or services, including debt collection services. The legislation gives significant discretion to the CFPB in establishing regulatory requirements and enforcement priorities. At this time, we cannot predict the extent to which the operations of our Conifer subsidiary could be affected by these developments.

Our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our self-pay patients for the three months ended September 30, 2012 and 2011 were approximately $109 million and $103 million, respectively, and for the nine months ended September 30, 2012 and 2011 were approximately $331 million and $291 million, respectively. We also provide charity care to patients who are financially unable to pay for the health care services they receive. Most patients who qualify for charity care are charged a per-diem amount for services received, subject to a cap. Except for the per-diem amounts, our policy is not to pursue collection of amounts determined to qualify as charity care; therefore, we do not report these amounts in net operating revenues. Most states include an estimate of the cost of charity care in the determination of a hospital’s eligibility for Medicaid DSH payments. Revenues attributable to DSH payments and other state-funded subsidy payments for the three months ended September 30, 2012 and 2011 were approximately $56 million and $40 million, respectively, and for the nine months ended September 30, 2012 and 2011 were approximately $210 million and $196 million, respectively. These payments are intended to mitigate our cost of uncompensated care, as well as reduced Medicaid funding levels. Our estimated costs (based on the selected operating expenses described above) of caring for charity care patients for the three months ended September 30, 2012 and 2011 were approximately $41 million and $31 million, respectively, and for the nine months ended September 30, 2012 and 2011 were approximately $105 million and $90 million, respectively. Our method of measuring the estimated costs uses adjusted self-pay/charity patient days multiplied by selected operating expenses per adjusted patient day. The adjusted self-pay/charity patient days represents actual self-pay/charity patient days adjusted to include self-pay/charity outpatient services by multiplying actual self-pay/charity patient days by the sum of gross self-pay/charity inpatient revenues and gross self-pay/charity outpatient revenues and dividing the results by gross self-pay/charity inpatient revenues.

The expansion of health insurance coverage under the Affordable Care Act may result in a material increase in the number of patients using our facilities who have either private or public program coverage. However, because of the many variables involved, we are unable to predict with certainty the net effect on us of the expected increase in revenues and expected decrease in bad debt expense from providing care to previously uninsured and underinsured individuals, and numerous other provisions in the law that may affect us. In addition, even after implementation of the Affordable Care Act, we may continue to experience a high level of bad debt expense and have to provide uninsured discounts and charity care due to the failure of states to expand Medicaid coverage as originally contemplated by the Affordable Care Act and for undocumented aliens who will not be permitted to enroll in a health insurance exchange or government health care program.

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RESULTS OF OPERATIONS

The following two tables summarize our net operating revenues, operating expenses and operating income from continuing operations, both in dollar amounts and as percentages of net operating revenues, for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012			2011		2012			2011
Net operating revenues:
General hospitals	$	2,298		$	2,205	$	7,047		$	6,799
Other operations	129			84		326			219
Net operating revenues before provision for doubtful accounts	2,427			2,289		7,373			7,018
Less provision for doubtful accounts	206			189		585			536
Net operating revenues	2,221			2,100		6,788			6,482
Operating expenses:
Salaries, wages and benefits	1,050			1,002		3,166			3,001
Supplies	376			379		1,164			1,167
Other operating expenses, net	539			527		1,604			1,526
Electronic health record incentives	(13		)	—		(13		)	(50		)
Depreciation and amortization	110			100		314			298
Impairment of long-lived assets and goodwill, and restructuring charges, net	6			8		12			18
Litigation and investigation costs	—			5		3			24
Operating income	$	153		$	79	$	538		$	498

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Net operating revenues	100.0	%	100.0	%	100.0	%	100.0	%
Operating expenses:
Salaries, wages and benefits	47.3	%	47.7	%	46.7	%	46.3	%
Supplies	16.9	%	18.0	%	17.1	%	18.0	%
Other operating expenses, net	24.2	%	25.1	%	23.7	%	23.5	%
Electronic health record incentives	(0.6	)%	—	%	(0.2	)%	(0.8	)%
Depreciation and amortization	5.0	%	4.8	%	4.6	%	4.6	%
Impairment of long-lived assets and goodwill, and restructuring charges, net	0.3	%	0.4	%	0.2	%	0.3	%
Litigation and investigation costs	—	%	0.2	%	—	%	0.4	%
Operating income	6.9	%	3.8	%	7.9	%	7.7	%

Net operating revenues of our general hospitals include inpatient and outpatient revenues, as well as nonpatient revenues (rental income, management fee revenue, and income from services such as cafeterias, gift shops and parking) and other miscellaneous revenue. Net operating revenues of other operations primarily consist of revenues from (1) physician practices, (2) a long-term acute care hospital and (3) services provided by our Conifer subsidiary. Revenues from our general hospitals represented approximately 95% and 96% of our total net operating revenues before provision for doubtful accounts for the three months ended September 30, 2012 and 2011, respectively, and approximately 96% and 97% for the nine months ended September 30, 2012 and 2011, respectively.

Net operating revenues from our other operations were $129 million and $84 million in the three months ended September 30, 2012 and 2011, respectively, and $326 million and $219 million in the nine months ended September 30, 2012 and 2011, respectively. The increase in net operating revenues from other operations during 2012 primarily relates to our additional owned physician practices. Equity earnings for unconsolidated affiliates included in our net operating revenues from other operations were $3 million and $2 million for the three months ended September 30, 2012 and 2011, respectively, and $6 million and $5 million for the nine months ended September 30, 2012 and 2011, respectively.

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The tables below show certain selected historical operating statistics of our continuing hospitals:

	Three Months Ended September 30,						Nine Months Ended September 30,
Admissions, Patient Days and Surgeries	2012		2011		Increase (Decrease)		2012		2011		Increase (Decrease)
Total admissions	124,869		125,458		(0.5	)%	381,195		382,487		(0.3	)%
Adjusted patient admissions(2)	197,778		194,965		1.4	%	597,570		586,395		1.9	%
Paying admissions (excludes charity and uninsured)	115,607		116,698		(0.9	)%	354,145		357,180		(0.8	)%
Charity and uninsured admissions	9,262		8,760		5.7	%	27,050		25,307		6.9	%
Admissions through emergency department	76,617		74,604		2.7	%	235,437		230,273		2.2	%
Paying admissions as a percentage of total admissions	92.6	%	93.0	%	(0.4	)%(1)	92.9	%	93.4	%	(0.5	)%(1)
Charity and uninsured admissions as a percentage of total admissions	7.4	%	7.0	%	0.4	%(1)	7.1	%	6.6	%	0.5	%(1)
Emergency department admissions as a percentage of total admissions	61.4	%	59.5	%	1.9	%(1)	61.8	%	60.2	%	1.6	%(1)
Surgeries — inpatient	35,161		36,976		(4.9	)%	106,777		109,246		(2.3	)%
Surgeries — outpatient	59,099		55,598		6.3	%	176,133		161,840		8.8	%
Total surgeries	94,260		92,574		1.8	%	282,910		271,086		4.4	%
Patient days — total	580,594		591,948		(1.9	)%	1,788,490		1,823,397		(1.9	)%
Adjusted patient days(2)	911,233		909,960		0.1	%	2,778,244		2,770,685		0.3	%
Average length of stay (days)	4.65		4.72		(1.5	)%	4.69		4.77		(1.7	)%
Number of hospitals (at end of period)	49		49		—		49		49		—
Licensed beds (at end of period)	13,216		13,119		0.7	%	13,216		13,119		0.7	%
Average licensed beds	13,216		13,106		0.8	%	13,177		13,113		0.5	%
Utilization of licensed beds(3)	47.8	%	49.1	%	(1.3	)%(1)	49.5	%	50.9	%	(1.4	)%(1)

(1)		The change is the difference between 2012 and 2011 amounts shown.
(2)		Adjusted patient days/admissions represents actual patient days/admissions adjusted to include outpatient services by multiplying actual patient days/admissions by the sum of gross inpatient revenues and outpatient revenues and dividing the results by gross inpatient revenues.
(3)		Utilization of licensed beds represents patient days divided by number of days in the period divided by average licensed beds.

	Three Months Ended September 30,						Nine Months Ended September 30,
Outpatient Visits	2012		2011		Increase (Decrease)		2012		2011		Increase (Decrease)
Total visits	1,035,236		987,318		4.9	%	3,113,615		2,971,933		4.8	%
Paying visits (excludes charity and uninsured)	922,700		882,974		4.5	%	2,786,744		2,669,810		4.4	%
Charity visits and uninsured visits	112,536		104,344		7.9	%	326,871		302,123		8.2	%
Emergency department visits	384,772		365,245		5.3	%	1,155,391		1,094,020		5.6	%
Surgery visits	59,099		55,598		6.3	%	176,133		161,840		8.8	%
Paying visits as a percentage of total visits	89.1	%	89.4	%	(0.3	)%(1)	89.5	%	89.8	%	(0.3	)%(1)
Charity visits and uninsured visits as a percentage of total visits	10.9	%	10.6	%	0.3	%(1)	10.5	%	10.2	%	0.3	%(1)

(1) The change is the difference between 2012 and 2011 amounts shown.

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	Three Months Ended September 30,						Nine Months Ended September 30,
Revenues	2012		2011		Increase (Decrease)		2012		2011		Increase (Decrease)
Net operating revenues	$	2,221	$	2,100	5.8	%	$	6,788	$	6,482	4.7	%
Revenues from the uninsured	$	164	$	157	4.5	%	$	471	$	450	4.7	%
Net inpatient revenues(1)	$	1,501	$	1,444	3.9	%	$	4,656	$	4,529	2.8	%
Net outpatient revenues(1)	$	789	$	734	7.5	%	$	2,346	$	2,192	7.0	%

(1) Net inpatient revenues and net outpatient revenues are components of net operating revenues. Net inpatient revenues include self-pay revenues of $70 million and $68 million for the three months ended September 30, 2012 and 2011, respectively, and $198 million and $199 million for the nine months ended September 30, 2012 and 2011, respectively. Net outpatient revenues include self-pay revenues of $94 million and $89 million for the three months ended September 30, 2012 and 2011, respectively, and $273 million and $251 million for the nine months ended September 30, 2012 and 2011, respectively.

	Three Months Ended September 30,						Nine Months Ended September 30,
Revenues on a Per Admission, Per Patient Day and Per Visit Basis	2012		2011		Increase (Decrease)		2012		2011		Increase (Decrease)
Net inpatient revenue per admission	$	12,021	$	11,510	4.4	%	$	12,214	$	11,841	3.2	%
Net inpatient revenue per patient day	$	2,585	$	2,439	6.0	%	$	2,603	$	2,484	4.8	%
Net outpatient revenue per visit	$	762	$	743	2.6	%	$	753	$	738	2.0	%
Net patient revenue per adjusted patient admission(1)	$	11,579	$	11,171	3.7	%	$	11,717	$	11,462	2.2	%
Net patient revenue per adjusted patient day(1)	$	2,513	$	2,394	5.0	%	$	2,520	$	2,426	3.9	%

	Three Months Ended September 30,								Nine Months Ended September 30,
Provision for Doubtful Accounts	2012			2011			Increase (Decrease)		2012			2011			Increase (Decrease)
Provision for doubtful accounts	$	206		$	189		9.0	%	$	585		$	536		9.1	%
Provision for doubtful accounts as a percentage of net operating revenues before provision for doubtful accounts	8.5		%	8.3		%	0.2	%(1)	7.9		%	7.6		%	0.3	%(1)
Collection rate on self-pay accounts(2)	28.8		%	27.7		%	1.1	%(1)	28.8		%	27.7		%	1.1	%(1)
Collection rate on commercial managed care accounts	97.7		%	98.3		%	(0.6	)%(1)	97.7		%	98.3		%	(0.6	)%(1)

(1) The change is the difference between the 2012 and 2011 amounts shown.

(2) Self-pay accounts receivable are comprised of both uninsured and balance after insurance receivables.

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	Three Months Ended September 30,						Nine Months Ended September 30,
Selected Operating Expenses	2012		2011		Increase (Decrease)		2012		2011		Increase (Decrease)
Salaries, wages and benefits	$	1,050	$	1,002	4.8	%	$	3,166	$	3,001	5.5	%
Supplies	376		379		(0.8	)%	1,164		1,167		(0.3	)%
Other operating expenses	539		527		2.3	%	1,604		1,526		5.1	%
Total	$	1,965	$	1,908	3.0	%	$	5,934	$	5,694	4.2	%
Rent/lease expense(1)	$	39	$	37	5.4	%	$	114	$	106	7.5	%
Salaries, wages and benefits per adjusted patient day(2)	$	1,151	$	1,102	4.4	%	$	1,140	$	1,083	5.3	%
Supplies per adjusted patient day(2)	413		417		(1.0	)%	419		421		(0.5	)%
Other operating expenses per adjusted patient day(2)	592		578		2.4	%	577		551		4.7	%
Total per adjusted patient day	$	2,156	$	2,097	2.8	%	$	2,136	$	2,055	3.9	%
Salaries, wages and benefits per adjusted patient admission(2)	$	5,309	$	5,139	3.3	%	$	5,298	$	5,118	3.5	%
Supplies per adjusted patient admission(2)	1,901		1,944		(2.2	)%	1,948		1,990		(2.1	)%
Other operating expenses per adjusted patient admission(2)	2,725		2,703		0.8	%	2,684		2,602		3.2	%
Total per adjusted patient admission	$	9,935	$	9,786	1.5	%	$	9,930	$	9,710	2.3	%

(1) Included in other operating expenses.

THREE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2011

Revenues

During the three months ended September 30, 2012, net operating revenues before provision for doubtful accounts increased 6.0%, which included a 5.1% increase in net patient revenues, compared to the three months ended September 30, 2011. Increases in pricing were the largest contributing factors, resulting in a 5.0% increase in net patient revenues, while increases in our overall volumes resulted in a 0.1% increase in net patient revenues.

Our net inpatient revenues for the three months ended September 30, 2012 increased by 3.9% compared to the three months ended September 30, 2011. Several factors impacted our net inpatient revenues in the three months ended September 30, 2012 compared to the three months ended September 30, 2011, including:

· Improved managed care pricing as a result of renegotiated contracts;

· Medicaid DSH and other state-funded subsidy revenues of $56 million in the three months ended September 30, 2012 compared to $40 million in the three months ended September 30, 2011 (the 2012 amount included $13 million of revenues related to the California provider fee program);

· An unfavorable shift in our total payer mix; and

· Favorable Medicare adjustments for prior-year cost reports and related valuation allowances of $12 million in the three months ended September 30, 2012 compared to unfavorable adjustments of $3 million in the three months ended September 30, 2011.

Patient days decreased by 1.9% and total admissions decreased by 0.5% during the three months ended September 30, 2012 compared to the three months ended September 30, 2011. We believe the following factors contributed to the changes in our inpatient volume levels: (1) the current weak economic conditions, which we believe have adversely impacted the level of elective procedures performed at our hospitals; (2) loss of patients to competing health care providers; and (3) industry trends reflecting the shift of certain clinical procedures being performed in an outpatient setting rather than in an inpatient setting.

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Net outpatient revenues and total outpatient visits increased 7.5% and 4.9%, respectively, during the three months ended September 30, 2012 compared to the three months ended September 30, 2011. The growth in our outpatient revenues and volumes was substantially related to organic growth. Net outpatient revenue per visit increased 2.6% primarily due to the improved terms of our managed care contracts, partially offset by the provision of lower acuity services by outpatient centers we acquired in the past several years, as well as an unfavorable shift in our total outpatient payer mix.

Our Conifer subsidiary generated net operating revenues of $122 million and $92 million for the three months ended September 30, 2012 and 2011, respectively, a portion of which was eliminated in consolidation as described in Note 15 to the Condensed Consolidated Financial Statements.

Provision for Doubtful Accounts

The provision for doubtful accounts as a percentage of net operating revenues before provision for doubtful accounts was 8.5% for the three months ended September 30, 2012 compared to 8.3% for the three months ended September 30, 2011. The increase in provision for doubtful accounts primarily related to increased uninsured patient volumes, partially offset by the impact of a 110 basis point improvement in our collection rate on self-pay accounts.

The table below shows the net accounts receivable and allowance for doubtful accounts by payer at September 30, 2012 and December 31, 2011:

	September 30, 2012								December 31, 2011
	Accounts Receivable Before Allowance for Doubtful Accounts			Allowance for Doubtful Accounts		Net			Accounts Receivable Before Allowance for Doubtful Accounts			Allowance for Doubtful Accounts		Net

Medicare	$	171		$	—	$	171		$	166		$	—	$	166
Medicaid	116			—		116			118			—		118
Net cost report settlements payable and valuation allowances	(38		)	—		(38		)	(39		)	—		(39		)
Managed care	772			71		701			760			67		693
Self-pay uninsured	199			175		24			215			190		25
Self-pay balance after insurance	143			81		62			134			77		57
Estimated future recoveries from accounts assigned to our Conifer subsidiary	83			—		83			62			—		62
Other payers	269			68		201			212			48		164
Total continuing operations	1,715			395		1,320			1,628			382		1,246
Total discontinued operations	25			7		18			47			15		32
	$	1,740		$	402	$	1,338		$	1,675		$	397	$	1,278

We provide revenue cycle management and patient communications services through our Conifer subsidiary, which has performed systematic analyses to focus our attention on the drivers of bad debt for each hospital. While emergency department use is the primary contributor to our provision for doubtful accounts in the aggregate, this is not the case at all hospitals. As a result, we have increased our focus on targeted initiatives that concentrate on non-emergency department patients as well. These initiatives are intended to promote process efficiencies in working self-pay accounts, as well as co-payment and deductible amounts owed to us by patients with insurance, that we deem highly collectible. We are dedicated to modifying and refining our processes as needed, enhancing our technology and improving staff training throughout the revenue cycle in an effort to increase collections and reduce accounts receivable.

A significant portion of our provision for doubtful accounts relates to self-pay patients, as well as co-payments and deductibles owed to us by patients with insurance. Collection of accounts receivable has been a key area of focus, particularly over the past several years, as we have experienced adverse changes in our business mix. At September 30, 2012, our collection rate on self-pay accounts was approximately 28.8%. We have experienced a relatively stable self-pay collection rate as follows: 27.8% at March 31, 2011; 27.9% at June 30, 2011; 27.7% at both September 30, 2011 and December 31, 2011; 27.9% at March 31, 2012; and 28.5% at June 30, 2012. These self-pay collection rates include payments made by patients, including co-payments and deductibles paid by patients with insurance. Based on our accounts receivable from

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self-pay patients and co-payments and deductibles owed to us by patients with insurance at September 30, 2012, a 10% decrease or increase in our self-pay collection rate, or approximately 3%, which we believe could be a reasonably likely change, would result in an unfavorable or favorable adjustment to provision for doubtful accounts of approximately $6 million.

Payment pressure from managed care payers also affects our provision for doubtful accounts. We typically experience ongoing managed care payment delays and disputes; however, we continue to work with these payers to obtain adequate and timely reimbursement for our services. Our estimated collection rate from managed care payers was approximately 97.7% at September 30, 2012 and 98.2% at December 31, 2011.

We continue to focus on revenue cycle initiatives to improve cash flow. In 2011, we completed the transition of the patient access staff and operations of the majority of our hospitals to Conifer. This initiative is focused on standardizing and improving patient access processes, including pre-registration, registration, verification of eligibility and benefits, liability identification and collection, and financial counseling, while more clearly aligning responsibility for revenue cycle activities with Conifer. The goals of the effort are focused on reducing denials, improving service levels to patients and increasing the quality of accounts that end up in accounts receivable. Although we continue to focus on improving our methodology for evaluating the collectability of our accounts receivable, we may incur future charges if there are unfavorable changes in the trends affecting the net realizable value of our accounts receivable.

We manage our provision for doubtful accounts using hospital-specific goals and benchmarks such as (1) total cash collections, (2) point-of-service cash collections, (3) accounts receivable days outstanding (“AR Days”), and (4) accounts receivable by aging category. The following tables present the approximate aging by payer of our net accounts receivable from continuing operations of $1.358 billion and $1.285 billion at September 30, 2012 and December 31, 2011, respectively, excluding cost report settlements payable and valuation allowances of $38 million and $39 million at September 30, 2012 and December 31, 2011, respectively:

	September 30, 2012
	Medicare		Medicaid		Managed Care		Indemnity, Self-Pay and Other		Total
0-60 days	90	%	61	%	76	%	31	%	67	%
61-120 days	4	%	18	%	12	%	17	%	13	%
121-180 days	2	%	8	%	5	%	8	%	5	%
Over 180 days	4	%	13	%	7	%	44	%	15	%
Total	100	%	100	%	100	%	100	%	100	%

	December 31, 2011
	Medicare		Medicaid		Managed Care		Indemnity, Self-Pay and Other		Total
0-60 days	93	%	63	%	75	%	31	%	68	%
61-120 days	3	%	18	%	12	%	17	%	12	%
121-180 days	2	%	9	%	5	%	10	%	6	%
Over 180 days	2	%	10	%	8	%	42	%	14	%
Total	100	%	100	%	100	%	100	%	100	%

Our AR Days from continuing operations were 54.7 days at September 30, 2012 and 52.8 days at December 31, 2011, within our target of less than 55 days. AR Days are calculated as our accounts receivable from continuing operations on the last date in the quarter divided by our net operating revenues from continuing operations for the quarter ended on that date divided by the number of days in the quarter.

As of September 30, 2012, we had a cumulative total of patient account assignments to our Conifer subsidiary dating back at least three years or older of approximately $3.3 billion related to our continuing operations. These accounts have already been written off and are not included in our receivables or in the allowance for doubtful accounts; however, an estimate of future recoveries from all the accounts assigned to our Conifer subsidiary is determined based on our historical experience and recorded in accounts receivable.

Patient advocates from our Medical Eligibility Program (“MEP”) screen patients in the hospital to determine whether those patients meet eligibility requirements for financial assistance programs. They also expedite the process of applying for

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these government programs. Receivables from patients who are potentially eligible for Medicaid are classified as Medicaid pending, under our MEP, with appropriate contractual allowances recorded. Based on recent trends, approximately 90% of all accounts in our MEP are ultimately approved for benefits under a government program, such as Medicaid. The following table shows the approximate amount of accounts receivable in our MEP still awaiting determination of eligibility under a government program at September 30, 2012 and December 31, 2011 by aging category:

	September 30,		December 31,
	2012		2011
0-60 days	$	96	$	82
61-120 days	18		18
121-180 days	9		7
Over 180 days	17		15
Total	$	140	$	122

Salaries, Wages and Benefits

Salaries, wages and benefits expense as a percentage of net operating revenues decreased 0.4% for the three months ended September 30, 2012 compared to the three months ended September 30, 2011. Salaries, wages and benefits per adjusted patient admission increased 3.3% in the three months ended September 30, 2012 compared to the same period in 2011. This increase is primarily due to an increase in the number of physicians we employ, annual merit and contractual wage increases for our employees, an increase in employee headcount at our Conifer subsidiary, increased health benefits costs and increased employee-related costs associated with our HIT implementation program, partially offset by decreased overtime expense. Salaries, wages and benefits expense in the 2012 period included minimal impact from the 7 basis point decrease in the interest rate used to estimate the discounted present value of projected future workers’ compensation liabilities, compared to a $3 million unfavorable adjustment as a result of a 107 basis point decrease in the interest rate in the three months ended September 30, 2011. Salaries, wages and benefits expense for the three months ended September 30, 2012 and 2011 included stock-based compensation expense of $7 million and $5 million, respectively.

As of September 30, 2012, approximately 28% of our employees were represented by various labor unions. These employees — primarily registered nurses and service and maintenance workers — were located at 24 of our hospitals, the majority of which are in California and Florida. We have no expired contracts at this time; however, we are in the process of negotiating new contracts where employees have recently chosen union representation. At this time, we are unable to predict the outcome of the negotiations, but increases in salaries, wages and benefits could result from these agreements. Furthermore, there is a possibility that strikes could occur during the negotiation process, which could increase our labor costs and have an adverse effect on our patient admissions and net operating revenues.

Supplies

Supplies expense as a percentage of net operating revenues decreased 1.1% for the three months ended September 30, 2012 compared to the three months ended September 30, 2011. Supplies expense per adjusted patient admission decreased 2.2% in the three months ended September 30, 2012 compared to the same period in 2011. Supplies expense was favorably impacted by lower pharmaceutical costs and a decline in orthopedic costs due to renegotiated prices, partially offset by increased costs of implants and surgical supplies.

We strive to control supplies expense through product standardization, contract compliance, improved utilization, bulk purchases and operational improvements. The items of current cost reduction focus continue to be cardiac stents and pacemakers, orthopedics and implants, and high-cost pharmaceuticals. We also utilize the group-purchasing strategies and supplies-management services of MedAssets, Inc., a company that offers group-purchasing procurement strategy, outsourcing and e-commerce services to the health care industry.

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Other Operating Expenses, Net

Other operating expenses as a percentage of net operating revenues was 24.2% in the three months ended September 30, 2012 compared to 25.1% in the three months ended September 30, 2011. Other operating expenses per adjusted patient admission increased by 0.8% in the three months ended September 30, 2012 compared to the same period in 2011. The change in other operating expenses consists primarily of:

· increased costs of contracted services ($14 million);

· increased systems implementation costs ($5 million) primarily related to our HIT implementation program;

· increased consulting and legal expenses ($6 million);

· increased rent and lease expenses ($4 million);

· decreased physician relocation expenses ($3 million);

· a favorable adjustment of $2 million in the 2012 period related to the estimated recovery of the employer portion of certain payroll taxes paid on behalf of medical residents; and

· a $5 million gain on the sale of the building at the former campus of one of our hospitals in the 2011 period.

Malpractice expense for the three months ended September 30, 2012 was $24 million compared to $34 million in the same period in 2011. The 2012 expense included an unfavorable adjustment of approximately $1 million due to a 7 basis point decrease in the interest rate used to estimate the discounted present value of projected future malpractice liabilities compared to an unfavorable adjustment of $13 million as a result of a 107 basis point decrease in the interest rate in the three months ended September 30, 2011.

Impairment of Long-Lived Assets and Goodwill and Restructuring Charges, Net

During the three months ended September 30, 2012, we recorded net impairment and restructuring charges of $6 million, consisting of $2 million of employee severance costs and $4 million of other related costs. During the three months ended September 30, 2011, we recorded net impairment and restructuring charges of $8 million, consisting of an impairment charge of $4 million for the write-down of buildings and equipment of one of our previously impaired hospitals to their estimated fair values and $4 million of employee severance and other related costs.

Litigation and Investigation Costs

Litigation and investigation costs for the three months ended September 30, 2012 were less than $1 million compared to $5 million for the three months ended September 30, 2011. The 2012 amount primarily related to costs associated with the legal proceedings and governmental reviews described in Note 10 to the Condensed Consolidated Financial Statements. The 2011 amount primarily related to costs associated with our evaluation of an unsolicited acquisition proposal received in November 2010 (which was subsequently withdrawn), an accrual for a physician privileges case, and costs to defend the Company in various matters.

Interest Expense

Interest expense for the three months ended September 30, 2012 was $103 million compared to $59 million for the three months ended September 30, 2011. The increase primarily related to a $41 million favorable impact from the interest rate swap agreement we terminated in August 2011.

Income Tax Expense

During the three months ended September 30, 2012, we recorded income tax expense of $18 million compared to $4 million during the three months ended September 30, 2011.

NINE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2011

Revenues

During the nine months ended September 30, 2012, net operating revenues before provision for doubtful accounts increased 5.1%, which included a 4.2% increase in net patient revenues, compared to the nine months ended September 30, 2011. Increases in pricing were the largest contributing factors, resulting in a 3.9% increase in net patient revenues, while increases in our overall volumes resulted in a 0.3% increase in net patient revenues.

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Our net inpatient revenues for the nine months ended September 30, 2012 increased by 2.8% compared to the nine months ended September 30, 2011. Several factors impacted our net inpatient revenues in the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011, including:

· Improved managed care pricing as a result of renegotiated contracts;

· Medicaid DSH and other state-funded subsidy revenues of $210 million in the nine months ended September 30, 2012 compared to $196 million in the nine months ended September 30, 2011 (the 2012 amount included $60 million of revenues related to the California provider fee program compared to $63 million in the 2011 period);

· Favorable adjustments of approximately $81 million in the nine months ended September 30, 2012 related to the aforementioned Medicare Budget Neutrality Settlement; and

· An unfavorable shift in our total payer mix.

Patient days decreased by 1.9% and total admissions decreased by 0.3% during the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. We believe the following factors contributed to the changes in our inpatient volume levels: (1) the current weak economic conditions, which we believe have adversely impacted the level of elective procedures performed at our hospitals; (2) loss of patients to competing health care providers; and (3) industry trends reflecting the shift of certain clinical procedures being performed in an outpatient setting rather than in an inpatient setting.

Net outpatient revenues and total outpatient visits increased 7.0% and 4.8%, respectively, during the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. The growth in our outpatient revenues and volumes was substantially related to organic growth. Net outpatient revenue per visit increased 2.8% primarily due to the improved terms of our managed care contracts, partially offset by the provision of lower acuity services by outpatient centers we acquired in the past several years, as well as an unfavorable shift in our total outpatient payer mix.

Our Conifer subsidiary generated net operating revenues of $337 million and $249 million for the nine months ended September 30, 2012 and 2011, respectively, a portion of which was eliminated in consolidation as described in Note 15 to the Condensed Consolidated Financial Statements.

Provision for Doubtful Accounts

The provision for doubtful accounts as a percentage of net operating revenues before provision for doubtful accounts was 7.9% for the nine months ended September 30, 2012 compared to 7.6% for the nine months ended September 30, 2011. The increase in provision for doubtful accounts primarily related to increased uninsured patient volumes and the favorable impact of various settlements of aged managed care accounts in the 2011 period, partially offset by the impact of a 110 basis point improvement in our collection rate on self-pay accounts.

Salaries, Wages and Benefits

Salaries, wages and benefits expense as a percentage of net operating revenues increased 0.4% for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. Salaries, wages and benefits per adjusted patient admission increased 3.5% in the nine months ended September 30, 2012 compared to the same period in 2011. This increase is primarily due an increase in the number of physicians we employ, annual merit and contractual wage increases for our employees, an increase in employee headcount at our Conifer subsidiary, increased health benefits costs and increased workers’ compensation expense, partially offset by a decrease in overtime costs. Salaries, wages and benefits expense in the 2012 period included an unfavorable impact of approximately $1 million due to a 31 basis point decrease in the interest rate used to estimate the discounted present value of projected future workers’ compensation liabilities, compared to an unfavorable adjustment of approximately $4 million as a result of a 128 basis point decrease in the interest rate in the nine months ended September 30, 2011. Salaries, wages and benefits expense for the nine months ended September 30, 2012 and 2011 included stock-based compensation expense of $24 million and $17 million, respectively.

Supplies

Supplies expense as a percentage of net operating revenues decreased 0.9% for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. Supplies expense per adjusted patient admission

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decreased 2.1% in the nine months ended September 30, 2012 compared to the same period in 2011. Supplies expense was favorably impacted by lower pharmaceutical costs and a decline in orthopedic and cardiology-related costs due to renegotiated prices, partially offset by increased costs of implants and surgical supplies.

Other Operating Expenses, Net

Other operating expenses as a percentage of net operating revenues was 23.7% in the nine months ended September 30, 2012 compared to 23.5% in the nine months ended September 30, 2011. Other operating expenses per adjusted patient admission increased by 3.2% in the nine months ended September 30, 2012 compared to the same period in 2011. The increase in other operating expenses is primarily due to:

· increased costs of contracted services ($31 million), primarily due to additional physician practices that we acquired;

· higher consulting and legal costs of $20 million, which includes costs related to the aforementioned Medicare Budget Neutrality Settlement and various managed care payer settlements;

· increased systems implementation costs ($11 million) primarily related to our HIT implementation program;

· increased rent and lease expenses ($10 million);

· decreased physician relocation expenses ($4 million); and

· gains totaling $8 million from the sales of a building at the former campus of one of our hospitals and a medical office building in the 2011 period.

Malpractice expense was $81 million in the 2012 period, which included an unfavorable adjustment of approximately $4 million due to a 31 basis point decrease in the interest rate used to estimate the discounted present value of projected future malpractice liabilities, compared to malpractice expense of $92 million in the nine months ended September 30, 2011, which included an unfavorable adjustment of $16 million as a result of a 128 basis point decrease in the interest rate.

Impairment of Long-Lived Assets and Goodwill and Restructuring Charges, Net

During the nine months ended September 30, 2012, we recorded net impairment and restructuring charges of $12 million, consisting of $3 million relating to the impairment of obsolete assets, $4 million of employee severance costs and $5 million of other related costs.

During the nine months ended September 30, 2011, we recorded net impairment and restructuring charges of $18 million, consisting of a $4 million impairment charge for the write-down of buildings and equipment of one of our previously impaired hospitals to their estimated fair values, an impairment charge of $1 million related to a cost basis investment, $7 million of employee severance costs, $3 million of lease termination costs and $3 million of other related costs.

Litigation and Investigation Costs

Litigation and investigation costs for the nine months ended September 30, 2012 were $3 million compared to $24 million for the nine months ended September 30, 2011. The 2012 amount primarily related to costs associated with the legal proceedings and governmental reviews described in Note 10 to the Condensed Consolidated Financial Statements. The 2011 amount primarily related to costs associated with our evaluation of an unsolicited acquisition proposal received in November 2010 (which was subsequently withdrawn), the settlement of a union arbitration claim, an accrual for a physician privileges case, and costs to defend the Company in various matters.

Interest Expense

Interest expense for the nine months ended September 30, 2012 was $303 million compared to $275 million for the nine months ended September 30, 2011. The increase primarily related to a $30 million favorable impact from the interest rate swap agreement we terminated in August 2011.

Income Tax Expense

During the nine months ended September 30, 2012, we recorded income tax expense of $90 million compared to $73 million during the nine months ended September 30, 2011.

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Discontinued Operations: Impairment of Long-Lived Assets and Goodwill and Restructuring Charges, Net

During the nine months ended September 30, 2012, we recorded an impairment charge in discontinued operations of $100 million related to the sale of Creighton University Medical Center, consisting of $98 million for the write-down of long-lived assets to their estimated fair values and a $2 million charge for the write-down of goodwill.

ADDITIONAL SUPPLEMENTAL NON-GAAP DISCLOSURES

The financial information provided throughout this report, including our Condensed Consolidated Financial Statements and the notes thereto, has been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, we use certain non-GAAP financial measures defined below in communications with investors, analysts, rating agencies, banks and others to assist such parties in understanding the impact of various items on our financial statements, some of which are recurring or involve cash payments. In addition, from time to time we use these measures to define certain performance targets under our compensation programs.

“Adjusted EBITDA” is a non-GAAP measure that we use in our analysis of the performance of our business, which we define as net income (loss) attributable to our common shareholders before: (1) the cumulative effect of changes in accounting principle, net of tax; (2) net loss (income) attributable to noncontrolling interests; (3) preferred stock dividends; (4) income (loss) from discontinued operations, net of tax; (5) income tax benefit (expense); (6) investment earnings (loss); (7) gain (loss) from early extinguishment of debt; (8) net gain (loss) on sales of investments; (9) interest expense; (10) litigation and investigation benefit (costs), net of insurance recoveries; (11) hurricane insurance recoveries, net of costs; (12) impairment of long-lived assets and goodwill, and restructuring charges, net; and (13) depreciation and amortization. As is the case with all non-GAAP measures, investors should consider the limitations associated with this metric, including the potential lack of comparability of this measure from one company to another, and should recognize that Adjusted EBITDA does not provide a complete measure of our operating performance because it excludes many items that are included in our financial statements. Accordingly, investors are encouraged to use GAAP measures when evaluating our financial performance.

The table below shows the reconciliation of Adjusted EBITDA to net income attributable to our common shareholders (the most comparable GAAP term) for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net income attributable to Tenet Healthcare Corporation common shareholders	$	40		$	6		$	92		$	134
Less: Net loss (income) attributable to noncontrolling interests	9			(3		)	24			(8		)
Preferred stock dividends	(1		)	(6		)	(11		)	(18		)
Income (loss) from discontinued operations, net of tax	(1		)	(2		)	(68		)	7
Income from continuing operations	33			17			147			153
Income tax expense	(18		)	(4		)	(90		)	(73		)
Investment earnings	1			1			2			3
Interest expense	(103		)	(59		)	(303		)	(275		)
Operating income	153			79			538			498
Litigation and investigation costs	—			(5		)	(3		)	(24		)
Impairment of long-lived assets and goodwill, and restructuring charges, net	(6		)	(8		)	(12		)	(18		)
Depreciation and amortization	(110		)	(100		)	(314		)	(298		)
Adjusted EBITDA	$	269		$	192		$	867		$	838

Net operating revenues	$	2,221		$	2,100		$	6,788		$	6,482

Adjusted EBITDA as % of net operating revenues (Adjusted EBITDA margin)	12.1		%	9.1		%	12.8		%	12.9		%

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LIQUIDITY AND CAPITAL RESOURCES

CASH REQUIREMENTS

As of September 30, 2012, there were no material changes to our obligations to make future cash payments under contract as disclosed in our Annual Report, except for a $14 million commitment we entered into during the three months ended March 31, 2012 for future professional services to be provided to us and licensed software fees related to our initiative to achieve full compliance with the ARRA HIT requirements.

In October 2012, we sold $500 million aggregate principal amount of 4 3 ¤ 4 % senior secured notes due 2020 and $300 million aggregate principal amount of 6 3 ¤ 4 % senior notes due 2020. The 4 3 ¤ 4 % senior secured notes will mature on June 1, 2020, and the 6 3 ¤ 4 % senior notes will mature on February 1, 2020. We will pay interest on the 4 3 ¤ 4 % senior secured notes semi-annually in arrears on June 1 and December 1 of each year, commencing on June 1, 2013. We will pay interest on the 6 3 ¤ 4 % senior notes semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2013. We used a portion of the proceeds from the sale of the notes to purchase $161 million aggregate principal amount outstanding of our 7 3 ¤ 8 % senior notes due 2013 in a tender offer. The remaining net proceeds will be used for purchases of our other outstanding senior notes through public or privately negotiated transactions and for general corporate purposes, including strategic acquisitions and the repayment of indebtedness and drawings under our senior secured revolving credit facility.

As part of our long-term objective to manage our capital structure, we may from time to time seek to retire, purchase, redeem or refinance some of our outstanding debt or equity securities subject to prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. These actions are part of our strategy to manage our leverage and capital structure over time, which is dependent on our total amount of debt, our cash and our operating results. At September 30, 2012, using the last 12 months of Adjusted EBITDA, our ratio of total long-term debt, net of cash and cash equivalent balances, to Adjusted EBITDA was 4.0x. We anticipate this ratio will fluctuate from quarter to quarter based on earnings performance and other factors. We intend to manage this ratio by following our business plan, managing our cost structure and through other changes in our capital structure, including, if appropriate, the issuance of equity or convertible securities. Our ability to achieve our leverage and capital structure objectives is subject to numerous risks and uncertainties, many of which are described in Item 1A of Part I of our Annual Report.

Our capital expenditures primarily relate to the expansion and renovation of existing facilities (including amounts to comply with applicable laws and regulations), equipment and information systems additions and replacements (including those required to achieve compliance with the HIT requirements under ARRA), introduction of new medical technologies, design and construction of new buildings, and various other capital improvements. Capital expenditures were $360 million and $298 million in the nine months ended September 30, 2012 and 2011, respectively. We anticipate that our capital expenditures for continuing operations for the year ending December 31, 2012 will total approximately $500 million to $550 million, including $109 million that was accrued as a liability at December 31, 2011. Our budgeted 2012 capital expenditures include approximately $13 million to improve disability access at certain of our facilities pursuant to the terms of a negotiated consent decree. We expect to spend approximately $70 million more on such improvements over the next four years.

Interest payments, net of capitalized interest, were $288 million and $255 million in the nine months ended September 30, 2012 and 2011, respectively.

From time to time, we use interest rate swap agreements to manage our exposure to future changes in interest rates. We were party to an interest rate swap agreement for an aggregate notional amount of $600 million from February 14, 2011 through August 2, 2011. The interest rate swap agreement was designated as a fair value hedge. It had the effect of converting our 10% senior secured notes due 2018 from a fixed interest rate paid semi-annually to a variable interest rate paid semi-annually based on the six-month London Interbank Offered Rate (“LIBOR”) plus a floating rate spread of 6.60%. During the term of the interest rate swap agreement, changes in the fair value of the interest rate swap agreement and changes in the fair value of the 10% senior secured notes were recorded in interest expense. During the year ended December 31, 2011, our interest rate swap agreement generated $8 million of cash interest savings and a $22 million gain on the settlement of the agreement.

Income tax payments, net of tax refunds, were approximately $9 million in the nine months ended September 30, 2012 compared to income tax refunds, net of tax payments, of $9 million during the nine months ended September 30, 2011.

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SOURCES AND USES OF CASH

Our liquidity for the nine months ended September 30, 2012 was primarily derived from net cash provided by operating activities, cash on hand and borrowings under our revolving credit facility. We had approximately $83 million of cash and cash equivalents on hand at September 30, 2012 to fund our operations and capital expenditures, and our borrowing availability under our credit facility was $430 million based on our borrowing base calculation as of September 30, 2012.

Our primary source of operating cash is the collection of accounts receivable. As such, our operating cash flow is negatively impacted by lower levels of cash collections and higher levels of bad debt due to unfavorable shifts in payer mix, growth in admissions of uninsured and underinsured patients, and other factors.

· $81 million of proceeds in the 2012 period related to our continuing operations from the aforementioned Medicare Budget Neutrality Settlement;

· $50 million less cash received from the California provider fee programs as a result of the timing of the approval of the programs by CMS;

· Income tax payments of $9 million in the nine months ended September 30, 2012 compared to $9 million of refunds in the nine months ended September 30, 2011;

· Higher payments on reserves for restructuring charges and litigation costs of $29 million; and

· $15 million less cash used in operating activities from discontinued operations.

We continue to seek further initiatives to increase the efficiency of our balance sheet by generating incremental cash. These initiatives include the sale of excess land, buildings or other underutilized or inefficient assets.

Capital expenditures were $360 million and $298 million in the nine months ended September 30, 2012 and 2011, respectively.

On May 9, 2011, we announced that our board of directors had authorized the repurchase of up to $400 million of our common stock through a share repurchase program. Purchases during the three months ended March 31, 2012 totaled 1,327,045 shares for approximately $26 million (or an average of $19.74 per share), which completed that share repurchase program.

We record our investments that are available-for-sale at fair market value. As shown in Note 13 to the accompanying Condensed Consolidated Financial Statements, the majority of our investments are valued based on quoted market prices or other observable inputs. We have no investments that we expect will be negatively affected by the current economic downturn that will materially impact our financial condition, results of operations or cash flows.

DEBT INSTRUMENTS, GUARANTEES AND RELATED COVENANTS

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We were party to an interest rate swap agreement for an aggregate notional amount of $600 million from February 14, 2011 through August 2, 2011. The interest rate swap agreement was designated as a fair value hedge and was being used to manage our exposure to future changes in interest rates. It had the effect of converting our 10% senior secured notes due 2018 from a fixed interest rate paid semi-annually to a variable interest rate paid semi-annually based on the six-month LIBOR plus a floating rate spread of 6.60%. During the term of the interest rate swap agreement, changes in the fair value of the interest rate swap agreement and changes in the fair value of the 10% senior secured notes were recorded in interest expense. During the year ended December 31, 2011, our interest rate swap agreement generated $8 million of cash interest savings and a $22 million gain on the settlement of the agreement.

LIQUIDITY

From time to time, we expect to engage in additional capital markets, bank credit and other financing activities depending on our needs and financing alternatives available at that time. We believe our existing debt agreements provide significant flexibility for future secured or unsecured borrowings.

In October 2012, we sold $500 million aggregate principal amount of 4¾% senior secured notes due 2020 and $300 million aggregate principal amount of 6¾% senior notes due 2020. We used a portion of the proceeds from the sale of the notes to purchase $161 million aggregate principal amount outstanding of our 7 3 / 8 % senior notes due 2013 in a tender offer. The remaining net proceeds will be used for purchases of our other outstanding senior notes through public or privately negotiated transactions and for general corporate purposes, including strategic acquisitions and the repayment of indebtedness and drawings under our senior secured revolving credit facility. We continue to focus on opportunities to enhance the Company’s primary business lines and plan to expend approximately $400 million in the near term to acquire acute care hospitals, outpatient facilities and business process services companies. To date, we have spent or committed to spend over $100 million on acquisitions related to our Conifer subsidiary.

Our cash on hand fluctuates day-to-day throughout the year based on the timing and levels of routine cash receipts and disbursements, including our book overdrafts, and required cash disbursements, such as interest and income tax payments. These fluctuations result in material intra-quarter net operating and investing uses of cash that has caused, and in the future could cause, us to use our senior secured revolving credit facility as a source of liquidity. We will be required to pay the Medicare program approximately $57 million as a result of the SSI matter described under “Disproportionate Share Hospital Payments” under the caption “Sources of Revenue” above unless CMS changes its policy regarding the inclusion of Medicare Advantage days in the calculation of the SSI ratio prior to the settlement of the applicable cost reports. We will be required to make the payments at the time of the cost report settlements pending the final outcome of our appeals related to this matter; the Medicare Administrative Contractors commenced issuing the relevant cost report settlements during the three months ended September 30, 2012. We believe that existing cash and cash equivalents on hand, availability under our revolving credit facility, anticipated future cash provided by operating activities, and our investments in marketable securities of our captive insurance companies classified as noncurrent investments on our balance sheet should be adequate to meet our current cash needs. These sources of liquidity should also be adequate to finance planned capital expenditures, payments on the current portion of our long-term debt and other presently known operating needs.

Long-term liquidity for debt service will be dependent on improved cash provided by operating activities and, given favorable market conditions, future borrowings or refinancings. However, our cash requirements could be materially affected by the use of cash in acquisitions of businesses and repurchases of securities, and also by a deterioration in our results of operations, as well as the various uncertainties discussed in this and other sections of this report, which could require us to pursue any number of financing options, including, but not limited to, additional borrowings, debt refinancings, asset sales or other financing alternatives. The level, if any, of these financing sources cannot be assured.

We do not rely on commercial paper or other short-term financing arrangements nor do we enter into repurchase agreements or other short-term financing arrangements not otherwise reported in our period-end balance sheets. We do not have any significant European sovereign debt exposure.

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We continue to aggressively identify and implement further actions to control costs and enhance our operating performance, including cash flow. Among the areas being addressed are volume growth, including the acquisition of outpatient businesses, physician recruitment and alignment strategies, expansion of our revenue cycle management services business, managed care payer contracting, procurement efficiencies, cost standardization, bad debt expense reduction initiatives, underperforming hospitals, and certain hospital and overhead costs not related to patient care. Although these initiatives may result in improved performance, our performance may remain somewhat below our hospital management peers because of geographic and other differences in hospital portfolios.

OFF-BALANCE SHEET ARRANGEMENTS

Our consolidated operating results for the nine months ended September 30, 2012 and 2011 include $710 million and $680 million, respectively, of net operating revenues and $94 million and $82 million, respectively, of income from operations generated from four general hospitals operated by us under lease arrangements. In accordance with GAAP, the applicable buildings and the future lease obligations under these arrangements are not recorded in our consolidated balance sheet as they are considered operating leases. The current terms of these leases expire between 2014 and 2027, not including lease extensions that we have options to exercise. If these leases expire, we would no longer generate revenue or expenses from these hospitals.

We have no other off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, except for $289 million of standby letters of credit outstanding and guarantees as of September 30, 2012.

CRITICAL ACCOUNTING ESTIMATES

In preparing our Condensed Consolidated Financial Statements in conformity with GAAP, we must use estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable, given the particular circumstances in which we operate. Actual results may vary from those estimates.

We consider our critical accounting estimates to be those that (1) involve significant judgments and uncertainties, (2) require estimates that are more difficult for management to determine, and (3) may produce materially different outcomes under different conditions or when using different assumptions.

Our critical accounting estimates have not changed from the description provided in our Annual Report.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The table below presents information about certain of our market-sensitive financial instruments as of September 30, 2012. The fair values were determined based on quoted market prices for the same or similar instruments. The average effective interest rates presented are based on the rate in effect at the reporting date. The effects of unamortized premiums and discounts are excluded from the table.

	Maturity Date, Years Ending December 31,
	2012			2013			2014			2015			2016			Thereafter			Total			Fair Value
	(Dollars in Millions)
Fixed rate long-term debt	$	9		$	245		$	86		$	484		$	3		$	3,868		$	4,695		$	5,115
Average effective interest rates	4.8		%	7.4		%	8.4		%	9.4		%	7.1		%	8.9		%	8.9		%

Variable rate long-term debt	$	—		$	—		$	—		$	—		$	175		$	—		$	175		$	175
Average effective interest rates	—			—			—			—			2.70		%	—			2.70		%

At September 30, 2012, the potential reduction of annual pre-tax earnings due to a one percentage point (100 basis point) increase in variable interest rates on long-term debt would be approximately $2 million.

At September 30, 2012, we had long-term, market-sensitive investments held by our captive insurance subsidiaries. Our market risk associated with our investments in debt securities classified as non-current assets is substantially mitigated by the long-term nature and type of the investments in the portfolio. At September 30, 2012, the net accumulated unrealized gains related to our captive insurance companies’ investment portfolios were less than $1 million.

We have no affiliation with partnerships, trusts or other entities (sometimes referred to as “special-purpose” or “variable-interest” entities) whose purpose is to facilitate off-balance sheet financial transactions or similar arrangements by us. Thus, we have no exposure to the financing, liquidity, market or credit risks associated with such entities.

We do not hold or issue derivative instruments for trading purposes and are not a party to any instruments with leverage or prepayment features.

ITEM 4. CONTROLS AND PROCEDURES

We carried out an evaluation of the effectiveness of our disclosure controls and procedures as defined by Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. The evaluation was performed under the supervision and with the participation of management, including our chief executive officer and chief financial officer. Based upon that evaluation, the chief executive officer and chief financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Securities Exchange Act reports is recorded, processed, summarized and reported in a timely manner and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

During the third quarter of 2012, there were no changes to our internal control over financial reporting, or in other factors, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information regarding material pending legal proceedings and material developments in these matters, see Note 10 to our Condensed Consolidated Financial Statements, which is incorporated by reference.

ITEM 1A. RISK FACTORS

Except as set forth below, there have been no material changes to the risk factors we previously disclosed under Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2011.

We cannot predict with certainty the effect that the Affordable Care Act may have on our business, financial condition, results of operations or cash flows.

The Affordable Care Act was enacted to change how health care services in the United States are covered, delivered and reimbursed. The expansion of health insurance coverage under the law may result in a material increase in the number of patients using our facilities who have either private or public program coverage. On the other hand, the Affordable Care Act provides for significant reductions in the growth of Medicare spending and reductions in Medicare and Medicaid disproportionate share hospital payments. A significant portion of both our patient volumes and, as result, our revenues is derived from government health care programs, principally Medicare and Medicaid. Reductions to our reimbursement under the Medicare and Medicaid programs by the Affordable Care Act could adversely affect our business and results of operations.

In June 2012, the U.S. Supreme Court upheld the Affordable Care Act’s individual mandate and struck down its penalties for states that refused to comply with Medicaid expansion provisions. We remain unable to predict with certainty the full impact of the Affordable Care Act on our future revenues and operations at this time due to the law’s complexity and the limited amount of implementing regulations and interpretive guidance, as well as our inability to foresee how individuals and businesses will respond to the choices available to them under the law. Furthermore, many of the provisions of the Affordable Care Act that expand insurance coverage will not become effective until 2014 or later. In addition, the Affordable Care Act will result in increased state legislative and regulatory changes in order for states to participate in the Medicaid expansion and grants and other incentive opportunities under the law, and we are unable to predict the actions individual states might take with respect to expanding Medicaid coverage or the timing and impact of such changes at this time. It is also possible that implementation of the Affordable Care Act could be delayed or even blocked due to efforts to repeal or amend the law. We are unable to predict what action, if any, Congress might take with respect to the Affordable Care Act. However, a repeal of the individual mandate provision, of other sections of the Affordable Care Act or of the law in its entirety could have a material impact on our anticipated future financial condition, results of operations or cash flows.

In general, there is significant uncertainty with respect to the positive and negative effects the Affordable Care Act may have on reimbursement, utilization and the future designs of provider networks and insurance plans (including pricing, provider participation, coverage, co-pays and deductibles), and the multiple models that attempt to predict those effects may differ materially from our expectations.

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ITEM 6. EXHIBITS

(3) Articles of Incorporation and Bylaws

(a) Certificate of Change Pursuant to NRS 78.209, filed with the Nevada Secretary of State effective October 10, 2012 (Incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K, dated October 10, 2012 and filed October 11, 2012)

(4) Instruments Defining the Rights of Security Holders, Including Indentures

(a) Fifteenth Supplemental Indenture, dated as of October 16, 2012, by and among the Registrant, The Bank of New York Mellon Trust Company, N.A., as successor trustee to The Bank of New York, and the guarantors party thereto, relating to 4¾% Senior Secured Notes due 2020 (Incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K, dated and filed October 16, 2012)

(b) Sixteenth Supplemental Indenture, dated as of October 16, 2012, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as successor trustee to The Bank of New York, relating to 6¾% Senior Notes due 2020 (Incorporated by reference to Exhibit 4.2 to Registrant’s Current Report on Form 8-K, dated and filed October 16, 2012)

(10) Material Contracts

(a) Exchange and Registration Rights Agreement, dated as of October 16, 2012, by and among the Registrant, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as representatives of the initial purchasers, and the guarantors party thereto (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K, dated and filed October 16, 2012)

(b) Exchange and Registration Rights Agreement, dated as of October 16, 2012, by and among the Registrant, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Goldman, Sachs & Co., Morgan Stanley & Co. LLC and Scotia Capital (USA) Inc. (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K, dated and filed October 16, 2012)

(d) Letter from the Registrant to R. Scott Ramsey, dated September 10, 2012† *

(e) Tenet Second Amended and Restated Executive Severance Plan† *

(f) Tenet Seventh Amended and Restated Supplemental Executive Retirement Plan† *

(g) Ninth Amended and Restated Tenet 2001 Deferred Compensation Plan† *

(h) Second Amended and Restated Tenet 2006 Deferred Compensation Plan† *

(i) Fifth Amended and Restated Tenet Healthcare Corporation 2001 Stock Incentive Plan† *

(j) Third Amended and Restated Tenet Healthcare 2008 Stock Incentive Plan† *

(k) Second Amended Tenet Healthcare Corporation Annual Incentive Plan† *

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(31) Rule 13a-14(a)/15d-14(a) Certifications

(a) Certification of Trevor Fetter, President and Chief Executive Officer *

(b) Certification of Daniel J. Cancelmi, Chief Financial Officer *

(32) Section 1350 Certifications of Trevor Fetter, President and Chief Executive Officer, and Daniel J. Cancelmi, Chief Financial Officer *

(101 INS) XBRL Instance Document*

(101 SCH) XBRL Taxonomy Extension Schema Document*

(101 CAL) XBRL Taxonomy Extension Calculation Linkbase Document*

(101 DEF) XBRL Taxonomy Extension Definition Linkbase Document*

(101 LAB) XBRL Taxonomy Extension Label Linkbase Document*

(101 PRE) XBRL Taxonomy Extension Presentation Linkbase Document*

† Management contract or compensatory plan or arrangement.

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		TENET HEALTHCARE CORPORATION
		(Registrant)

Date: November 6, 2012	By:	/s/ R. SCOTT RAMSEY
		R. Scott Ramsey
		Vice President and Controller
		(Principal Accounting Officer)

Exhibit 10(c)

[TENET HEALTHCARE CORPORATION LETTERHEAD]

September 6, 2012

[Home Address Omitted]

Dear Dan:

I am pleased to offer you the position of Chief Financial Officer with Tenet Healthcare Corporation (herein referred to as “Tenet”) located in Dallas, Texas. This position will be reporting to Trevor Fetter, President and Chief Executive Officer. The following are the terms and conditions.

1. Compensation and Benefits: You will be entitled to compensation and benefits as follows:

A. Base Compensation: With an effective date of September 6, 2012, your base compensation will be increased to an annual exempt rate of $475,000.00, payable bi-weekly.

B. Benefits : You will continue to be eligible to receive all standard employee benefits in accordance with Tenet plans.

C. Annual Incentive Plan : You will continue to be eligible to participate in Tenet’s Annual Incentive Plan (AIP) according to the terms of the Plan. For the period you served as Senior Vice President, Chief Accounting Officer your target AIP was 45% of your base salary. Upon your promotion to Chief Financial Officer your target award will be 85% of your base salary as measured by Tenet’s AIP scorecard. Participation in the AIP does not guarantee that an award will be made.

D. Manager’s Plan: You will continue to be eligible to participate in the company’s paid time off plan (the “MTO Plan”) according to your tenure with the company.

E. Long Term Incentives : You will continue to be eligible for future long-term incentives, as approved annually by the Compensation Committee of the Board of Directors. In conjunction with your promotion, you will be granted 150,000 non-qualified Stock Options and 150,000 Restricted Stock Units which will be issued on September 28, 2012.

F. Supplemental Executive Retirement Plan: You continue to be eligible to participate in the Supplemental Executive Retirement Plan.

G. Executive Severance Plan : This position will continue to be eligible to participate in the Executive Severance Plan which provides you with a cash severance benefit of 2.5x your base salary plus target bonus in the event of an involuntary termination without cause. If the qualifying termination occurs with a change-in-control, the cash severance benefit is 3x base salary plus target bonus.

Except as discussed herein, you and Tenet agree that all other provisions of your initial offer letter with Tenet Healthsystem Medical, Inc. remain in full force and effect.

If you accept this offer, please sign and date the original of this letter and return it me by September 12th. A copy of this letter is enclosed for your records . Thank you.

Sincerely,

/s/ Cathy Fraser

Cathy Fraser
Senior Vice President, Human Resources

Acknowledged and accepted:

/s/ Daniel J. Cancelmi		Date:	9/6/12
Signature

encl.

cc: Trevor Fetter, President and Chief Executive Officer

Paul Slavin, VP Executive and Corporate HR Services

Exhibit 10(d)

[TENET HEALTHCARE CORPORATION LETTERHEAD]

September 10, 2012

[Home Address Omitted]

Dear Scott:

I am pleased to offer you a promotion to the position of Vice President, Chief Accounting Officer/Controller with Tenet Healthcare Corporation (herein referred to as “Tenet”) located in Dallas, Texas. This position will be reporting to Dan Cancelmi, CFO. The following are the terms and conditions of your employment with the company.

1. Compensation and Benefits: You will be entitled to compensation and benefits as follows:

A. Base Compensation: With an effective start date of September 10, 2012, your base compensation will be an annual exempt rate of $290,000.00 payable bi-weekly.

B. Benefits : You will continue to receive all standard employee benefits in accordance with Tenet plans.

C. Annual Incentive Plan : Your position will continue to be eligible to participate in Tenet’s Annual Incentive Plan (AIP) according to the terms of the Plan. Your target award is 25% of your base salary for the period you served as Senior Director, Corporate Accounting/A&D. Upon your promotion, your target award will be 35% of your base salary paid for the period you serve as the Vice President, Chief Accounting Officer/Controller.

D. Manager’s Plan: You will continue to be eligible to participate in the company’s paid time off plan (the “MTO Plan”) according to your tenure with the company.

E. Equity : As a Vice President, you will be eligible for future equity grants, which are typically awarded annually and based on the guidelines established by the Compensation Committee.

F. Executive Retirement Account : Your position is eligible to participate in the Executive Retirement Account. Your account under the plan will receive an annual credit equal to ten percent (10%) of your base salary while you are employed by Tenet in a position eligible for benefits under the plan. Your first credit will occur on the next annual company contribution date. You will receive a formal communication containing more details about the plan following the effective date of your promotion.

G. Executive Severance Plan : Your position is eligible to participate in the Executive Severance Plan which will provide you with certain severance benefits in the event of a Qualifying Termination as defined in the plan. Participation will require execution of a Tenet Executive Severance Plan Agreement. You will receive a separate communication containing more details about the plan, your participation in the plan and an agreement which you will need to sign, from the Executive Compensation Department following the effective date of your promotion.

If you accept this promotion, please sign and date the original of this letter and return it to Kristen McClain in the Corporate Human Resources Department by September 14, 2012. A copy of this letter is enclosed for your records . Thank you.

Sincerely,

/s/ Cathy Fraser

Cathy Fraser
Senior Vice President, Human Resources

Acknowledged and accepted:

/s/ R. Scott Ramsey		Date:	September 11, 2012
Signature

encl.

cc: Dan Cancelmi, Chief Financial Officer

Paul Slavin, VP, Executive and Corporate HR Services

Exhibit 10(e)

TENET

SECOND AMENDED AND RESTATED

EXECUTIVE SEVERANCE PLAN

As Amended and Restated Effective May 9, 2012

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TENET SECOND AMENDED AND RESTATED EXECUTIVE SEVERANCE PLAN

ARTICLE I PREAMBLE AND PURPOSE		1
1.1	Preamble	1
1.2	Purpose	2

ARTICLE II DEFINITIONS AND CONSTRUCTION		3
2.1	Definitions	3
2.2	Construction	14
2.3	409A Compliance	15

ARTICLE III SEVERANCE BENEFITS		16
3.1	Severance Benefits not related to a Change of Control	16
3.2	Severance Benefits on and after a Change of Control	19
3.3	Termination Distributions to Key Employees	24
3.4	Distributions on Account of Death of the Covered Executive During the Severance Period	24
3.5	Section 409A Gross-Up Payment	25
3.6	Alternate Plan Terms	25
3.7	Conditions to Payment of Severance Benefits	25

ARTICLE IV ADMINISTRATION		28
4.1	The PAC	28
4.2	Powers of PAC	28
4.3	Appointment of Plan Administrator	28
4.4	Duties of Plan Administrator	29
4.5	Indemnification of PAC and Plan Administrator	30
4.6	Claims for Benefits	30
4.7	Arbitration	31
4.8	Receipt and Release of Necessary Information	32

ARTICLE V OTHER BENEFIT PLANS OF THE COMPANY		33
5.1	Other Plans	33

ARTICLE VI AMENDMENT AND TERMINATION OF THE ESP		34
6.1	Continuation	34
6.2	Amendment of ESP	34
6.3	Termination of ESP	34
6.4	Termination of Affiliate’s Participation	34

ARTICLE VII MISCELLANEOUS		36
7.1	No Reduction of Employer Rights	36
7.2	Successor to the Company	36
7.3	Provisions Binding	36
APPENDIX A COVERED EXECUTIVES		A-1
APPENDIX B ESP AGREEMENTS		B-1
TENET EXECUTIVE SEVERANCE PLAN AGREEMENT		B-2

TENET SECOND AMENDED AND RESTATED 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. Effective May 11, 2006, the Company amended and restated 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 was attached to as such amended and restated plan 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 intended that the ESP and Tenet Executive Severance Plan Agreement attached thereto 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. To the extent that an executive did not elect to participate in this ESP, such executive’s TESPP agreement, change of control agreement or employment agreement, as applicable, will remain in effect and be amended to comply with the provisions of section 409A of the Code.

Effective December 31, 2008, the Company amended and restated the ESP effective to comply with final regulations issued under section 409A of the Code. By this instrument, the Company amends and restates the ESP effective May 9, 2012 to, among other things, revise certain definitions and modify the benefits provided herein. This amended

and restated ESP will be known as the Tenet Second Amended and Restated Executive Severance Plan.

The Company may adopt one or more domestic 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 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

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, 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

(1) when used in connection with a Qualifying Termination triggering benefits pursuant to Section 3.1, 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,

(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.

(2) when used in connection with a Qualifying Termination triggering benefits pursuant to Section 3.2:

(i) any intentional act or misconduct materially injurious to the Company or any Affiliate, financial or otherwise, but not limited to, misappropriation or fraud, embezzlement or conversion by the Covered Executive of the Company’s or any Affiliate’s property in connection with the Covered Executive’s employment with the Company or an Affiliate,

(ii) Any willful act or omission constituting a material breach by the Covered Executive of a fiduciary duty,

(iii) A final, non-appealable order in a proceeding before a court of competent jurisdiction or a final order in an administrative proceeding finding that the Covered Executive committed any willful misconduct or criminal activity (excluding minor traffic violations or other minor offenses), which commission is materially inimical to the interests of the Company or any Affiliate, whether for his personal benefit or in connection with his duties for the Company or an Affiliate,

(iv) The conviction (or plea of no contest) of the Covered Executive for any felony,

(v) Material failure or refusal to perform his job duties in accordance with Company policies (other than resulting from the Covered Executive’s disability as defined by Company policies), or

(vi) A material violation of Company policy that causes material harm to the Company or an Affiliate.

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 reasonable efforts and attention to the achievement of those objectives. For purposes of this Section, no act or failure to act on the part of the Covered Executive shall be deemed “willful”, “intentional” or “knowing” if it was undertaken in reasonable reliance on the advice of counsel or at the instruction of the Company, including but not limited to the Board, a committee of the Board or the CEO, or was due primarily to an error in judgment or negligence, but shall be deemed “willful”, “intentional” or “knowing” only if done or omitted to be done by

the Covered Executive not in good faith and without reasonable belief that the Covered Executive’s action or omission was in the best interest of the Company.

(3) A Covered Executive will not be deemed to have been terminated for Cause, under either this Section 2.1(f)(1) or 2.1(f)(2) above, as applicable, 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”), 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, directly or indirectly, whether in a single transaction or series of related transactions, 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 (“Ownership Control”). However, if any one person or more than one person acting as a group, has previously acquired ownership of 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 in the effective percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its stock in exchange for cash or 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, whether in a single transaction or series of related transactions, by any employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate which results in such employee benefit plan obtaining “Ownership Control” of the Company or (B) any acquisition, whether in a single transaction or series of related transactions, by the Company which results in the Company acquiring stock of the Company representing “Ownership Control” or (C) any acquisition, whether in a single transaction or series of related transactions, after which those persons who were owners of the Company’s stock immediately prior to such transaction(s) own more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company (or if after the consummation of such transaction(s) the Company (or another entity into which the Company is merged into or otherwise combined, such the Company does not survive such transaction(s)) is a direct or indirect subsidiary of another entity which itself is not a subsidiary of an entity, then the more than fifty percent (50%) ownership test shall be applied to the voting securities of such other entity) in substantially the same percentages as their respective ownership of the Company immediately prior to such transaction(s). This Section 2.1(g)(1) applies either 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 or when there is a transfer of the stock of the Company (including a merger or similar transaction) and stock in the Company does not remain outstanding after the transaction.

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

(A) any one person, or more than one person acting as a group within the meaning of Section 409A of the Code, acquires (taking into consideration any prior acquisitions during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons), directly or indirectly, 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 at least thirty-five percent (35%) of the total voting power of the stock of the Company) (“Effective Control”), except for (i) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate which results in such employee benefit plan obtaining “Effective Control” of the Company or (ii) any acquisition by the Company. The occurrence of “Effective Control” under this Section 2.1(g)(ii)(A) may be nullified by a vote of that number of the members of the Board of Directors of the Company (“Board”), that exceeds two-thirds of the independent members of the Board, which vote must occur prior to the time, if any, that a “change in the effective control of the Company” has occurred under Section 2.1(g)(ii)(B) below. In the event of such a

supermajority vote, such transaction or series of related transactions shall not be treated as an event constituting “Effective Control”. For avoidance of doubt, the ESP provides that in the event of the occurrence of the acquisition of ownership of stock of the Company that reaches or exceeds the 35% ownership threshold described above, if more than two-thirds of the independent members of the Board take action to resolve that such an acquisition is not a “change in the effective control of the Company” and a majority of the members of the Board have not been replaced as provided under Section 2.1(g)(ii)(B) below, then such Board action shall be final and no “Effective Control” shall be deemed to have occurred for any purpose under the ESP.

(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 sale, exchange, lease, disposition or other transfer of all or substantially all of the assets of the Company.

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

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

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

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

(viii) 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 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 9, 2012. The original effective date of the Plan as restated to be the Tenet Executive Severance Plan was 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) were 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. The ESP was formerly 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 May 11, 2006 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 as modified by section 416(i)(1)(B)(iii) of the Code) more than five percent (5%) of 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) “ 409A Exempt Amount ” means that portion of the distributions under the ESP to a Covered Executive that does not exceed two (2) times the lesser of:

(i) the sum of the Covered Executive’s annualized compensation based upon the annual rate of pay for services provided to the Employer for the taxable year of the Covered Executive preceding the taxable year of the Covered Executive in which he has a Qualifying Termination, provided that such termination constitutes a “separation from service” with such Employer within the meaning of section 409A of the Code (adjusted for any increase during that year that was expected to continue indefinitely if the Covered Executive had not separated from service); or

(ii) the maximum amount that may be taken into account under a qualified plan pursuant to section 401(a)(17) of the Code for the year in which the Covered Executive has a Qualifying Termination, provided that such

termination constitutes a “separation from service” within the meaning of section 409A of the Code.

In the event that a Covered Executive is a Key Employee, no distributions in excess of the 409A Exempt Amount will be made during the six (6) month period following the date of the Covered Executive’s Qualifying Termination.

(x) “ Good Reason ” means:

(1) In the case of a voluntary termination of employment by a Covered Executive preceding or more than two years following a Change of Control:

(i) a material diminution in the Covered Executive’s job authority, responsibilities or duties;

(ii) a material diminution of the Covered Executive’s Base Salary;

(iii) an involuntary and material change in the geographic location of the workplace at which the Covered Executive must perform services; or

(iv) any other action or inaction that constitutes a material breach by the Employer or a successor of the agreement under which the Covered Executive provides services.

In the case of (ii) above, 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.

(2) In the case of a voluntary termination of employment by a Covered Executive upon or within two (2) years following a Change of Control:

(i) a material downward change in job functions, duties, or responsibilities which reduces the rank or position of the Covered Executive ;

(ii) a reduction in the Covered Executive’s annual base salary;

(iii) a reduction in the aggregate value of the Covered Executive’s annual base salary and annual incentive plan target bonus opportunity;

(iv) a material reduction in the Covered Executive’s retirement or supplemental retirement benefits;

(v) an involuntary and material change in the geographic location of the workplace at which the Covered Executive must perform services; or

(vi) any other action or inaction that constitutes a material breach by the Employer or a successor of the agreement under which the Covered Executive provides services.

During this period, no adverse change may be made to a Covered Executive’s (1) Base Salary, (2) Base Salary and annual incentive plan target bonus

opportunity in the aggregate, or (3) retirement or supplemental retirement benefits.

For avoidance of doubt, if the Covered Executive holds the title of Chief Executive Officer immediately prior to the occurrence of a Change of Control, in the event of the occurrence of a Change of Control in which the Covered Executive retains the same position with the Company, and any of the following events occur on or within two (2) years after the date of the Change of Control, such new role shall be treated as a “material downward change in job functions, duties or responsibilities” within the meaning of Section 2.1(x)(2)(i) above:

(a) Covered Executive ceases to be a member of the Board of Directors of the Company (or if the Company becomes directly or indirectly controlled by Parent, Covered Executive does not become a member of the Board of Directors of Parent);

(b) the Company either (x) ceases to have a class of equity securities that is actively traded on a national securities exchange or comparable public securities market or (y) becomes directly or indirectly controlled by Parent and the Covered Executive does not serve as the Chief Executive Officer of Parent; or

(c) Covered Executive is directed by the Board of Directors of the Company (or by Parent, if the Company becomes directly or indirectly controlled by Parent) to engage in an act or omission, which if performed would provide the Company with a basis for terminating Covered Executive for Cause.

(3) If the Covered Executive believes that an event constituting Good Reason has occurred, in accordance with this Section 2.1(x)(1) or Section 2.1(x)(2) above, as applicable, the Covered Executive must notify the Plan Administrator of that belief within ninety (90) days of the occurrence of the Good Reason event, which notice will set forth the basis for that belief. The Plan Administrator will have thirty (30) days after receipt of such notice (the “Determination Period”) 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 the Determination Period, the Covered Executive may terminate his employment with the Employer for Good Reason immediately at the end of the Determination Period by giving written notice to the Employer within ninety (90) days after the end of the Determination Period, which termination will be a Qualifying Termination effective on the date that such notice is received by the Employer, provided that such date constitutes the Covered Executive’s “separation from service” within the meaning of section 409A of the Code. If the Plan Administrator determines that Good Reason does not 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. A termination of employment for Good Reason will be treated as an involuntary termination for purposes of the ESP.

(y) “ 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 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 one hundred fifty thousand dollars ($150,000) for 2008);

(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).

For purposes of the preceding paragraphs, the Company has elected to determine the compensation of an officer or One Percent Owner in accordance with section 1.415(c)-2(d)(4) of the Treasury Regulations ( i.e. , W-2 wages plus amounts that would be includible in wages except for an election under section 125(a) of the Code (regarding cafeteria plan elections) under section 132(f) of the Code (regarding qualified transportation fringe benefits) or section 402(e)(3) of the Code (regarding section 401(k) plan deferrals)) without regard to the special timing rules and special rules set forth, respectively, in sections 1.415(c)-2(e) and 2(g) of the Treasury Regulations.

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(y)(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(y)(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.

(z) “ One Percent Owner ” means any person who would be described as a Five Percent Owner in Section 2.1(u) if “one percent (1%)” were substituted for “five percent (5%)” each place where it appears therein.

(aa) “ 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.

(bb) “Parent” means an entity that controls another entity directly, or indirectly through one or more intermediaries, and that itself is not a Subsidiary.

(cc) “ 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.

(dd) “ 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.

(ee) “ 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.

(ff) “ 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.

(gg) “ Qualifying Termination ” means the Covered Executive’s “separation from service” (within the meaning of section 409A of the Code) by reason of:

(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.

(hh) “ Reimbursement Period ” means the period of time commencing as of the date of the Covered Executive’s Qualifying Termination and ending as of the close of the second taxable year of the Covered Executive that follows the taxable year in which such Qualifying Termination occurred.

(ii) “ 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.

(jj) “ 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.

(kk) “ 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.

(ll) “ SIP ” means the Third Amended and Restated Tenet Healthcare Corporation 2001 Stock Incentive Plan or the Tenet Healthcare 2008 Stock Incentive Plan.

(mm) “Subsidiary” means an entity controlled by another entity directly, or indirectly through one or more intermediaries.

(nn) “ 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).

(oo) “ TESPP ” means the ESP as in effect immediately prior to May 11, 2006.

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

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 occurring outside of the Protection Period, 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 and CFO		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 ( i.e ., the payment of Severance Pay in excess of the 409A Exempt Amount that would otherwise be payable to a Key Employee during the six (6) month period following the Qualifying Termination will be delayed). 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 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 if any of such coverages are provided on a self-insured basis, the Covered Executive will be required to pay his portion of the cost of such coverages on an after-tax basis and the remainder of such cost will be included in the Covered Executive’s income and reported 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 . The Covered Executive will be entitled to reimbursement of any expenses reasonably incurred by him for outplacement services in an amount equal to the lesser of ten percent (10%) of his Base Salary or twenty-five thousand dollars ($25,000). In order to comply with the exemption applicable to post-separation reimbursement plans under section 409A of the Code: (i) the reimbursement of such expenses for outplacement services only will be permitted with respect to expenses that are incurred during the shorter of the Severance Period or the Reimbursement Period and (ii) any reimbursement of such expenses that are incurred during a particular taxable year of the Covered Executive must be made by the last day of the Covered Executive’s immediately following taxable year.

(f) Payment of Legal Expenses . The Covered Executive will be entitled to reimbursement of any legal expenses reasonably incurred by him in order to obtain benefits under the ESP; provided, that, the payment of such expenses is subject to an arms-length, bona fide dispute as to the Covered Executive’s right to such benefits. In order to comply with the exemption applicable to post-separation reimbursement plans under section 409A of the Code, in the event such legal expenses are otherwise deductible under section 162 or 167 of the

Code (without regard to any limitation on the Covered Executive’s adjusted gross income): (i) the reimbursement of such legal expenses only will be permitted with respect to expenses that are incurred during the shorter of the Severance Period or the Reimbursement Period; and (ii) any reimbursement of such legal expenses that are incurred during a particular taxable year of the Covered Executive must be made by the last day of the Covered Executive’s immediately following taxable year. In the event that the legal expenses are not otherwise deductible under section 162 or 167 or the Code (without regard to any limitation on the Covered Executive’s adjusted gross income), then in order to comply with the expense reimbursement provisions of section 409A of the Code, the reimbursement of such expenses will be made pursuant to the terms of Section 3.1(f)(i) and Section 3.1(f)(ii) above; provided, that the amount of legal expenses reimbursed or eligible for reimbursement during a taxable year of the Covered Executive that occurs during the Severance Period or Reimbursement Period will not affect the legal expenses that are eligible for reimbursement in any other taxable year of the Covered Executive that occurs during the Severance Period or Reimbursement Period and that such legal expense reimbursement amounts will be subject to the six (6) month delay (when applicable) for distributions in excess of the 409A Exempt Amount as set forth in Section 3.3.

(g) 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, except to the extent that the terms of such awards provide for continued vesting and/or acceleration. With respect to performance cash awards, upon a Qualifying Termination, a Covered Executive will be entitled to “banked” amounts for past plan years and a pro-rated amount for performance in the year in which the Qualifying Termination occurs, in accordance with the terms of such awards. 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.

(h) SERP . A Covered Executive who is also a participant in the SERP and became such a participant before August 3, 2011 will be entitled to age and service credit for the duration of the Severance Period under the SERP. A Covered Executive who is also a participant in the SERP but became such a participant on or after August 3, 2011 will not 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. With respect to a Covered Executive who became a SERP participant before August 3, 2011, 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, while the age credit will accrue throughout the course of the Severance Period, at the end of the Severance Period, the Covered Executive’s SERP benefits will be recalculated to take into account the additional service credit provided under the ESP during the Severance Period. With respect to a Covered Executive who became a SERP participant on or after August 3, 2011, for purposes of determining the amount of the Covered Executive’s SERP benefits, the actuarial reduction will be determined under the terms of the SERP as of the date of the Covered Executive’s Qualifying Termination. A Covered Executive’s Severance Pay will not be considered in calculating the Covered Executive’s “Final Average Earnings” under the SERP. Notwithstanding the foregoing, in no event will any provision in this Section 3.1(h) be construed to permit the distribution of any SERP benefits during the six (6) month restriction period, as described in the SERP, which follows a Key Employee’s Qualifying Termination.

(i) 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.

(j) 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 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, (provided, however, that a Covered Executive will only receive the additional age and service credit as set forth in Section 3.1(h) herein in accordance with the terms and provisions of the SERP), plus the additional severance benefits, if any, provided in this Section 3.2. Further, within five (5) business days following the occurrence of a Change of Control, the Company must contribute to a domestic 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.

(a) Severance Period . The Severance Period set forth below will apply to a Covered Executive who incurs a Qualifying Termination at any time during the Protection Period with respect a Change of Control described in Section 2.1(g)(i), Section 2.1(g)(ii) or Section 2.1(g)(iii) or during that portion of the Protection Period that occurs on or after a Change of Control described in Section 2.1(g)(iv):

COVERED EXECUTIVE		SEVERANCE PERIOD
CEO		Three (3) years
COO and CFO		Three (3) years
SVPs and EVPs		Two (2) years
VPs and Hospital CEOs		One and one-half (1.5) years

The Severance Period specified in Section 3.1(a) will apply to a Covered Executive who incurs a Qualifying Termination during that portion of the Protection Period that precedes a Change of Control described in Section 2.1(g)(iv).

(b) Payment of Severance Pay . In the event that a Covered Executive’s Qualifying Termination occurs during the portion of the Protection Period that precedes any Change of Control described in Section 2.1(g)(i), Section 2.1(g)(ii) or Section 2.1(g)(iii), the Covered Executive will receive Severance Pay that will be paid on a bi-weekly basis commencing on the date of the Qualifying Termination pursuant to the Employer’s ordinary payroll schedule for the duration of the Severance Period specified in Section 3.2 subject to the six (6) month delay applicable to Key Employees described in Section 3.3 ( i.e ., the payment of Severance Pay in excess of the 409A Exempt Amount that would otherwise be payable to a Key Employee during the six (6) month period following the Qualifying Termination will be delayed). To the extent that such Change of Control is described in Section 2.1(g)(iv), such Severance Pay in excess of the 409A Exempt Amount will be paid on a bi-weekly basis commencing on the date of the Qualifying Termination pursuant to the Employer’s ordinary payroll schedule for the duration of the Severance Period specified in Section 3.1(a) subject to the six (6) month delay applicable to Key Employees described in Section 3.3 ( i.e ., the payment of Severance Pay in excess of the 409A Exempt Amount that would otherwise be payable to a Key Employee during the six (6) month period following the Qualifying Termination will be delayed).

In the event that a Covered Executive’s Qualifying Termination occurs during the portion of the Protection Period that occurs on or after a Change of Control described in Section 2.1(g)(i), Section 2.1(g)(ii) or Section 2.1(g)(iii), the Covered Executive will receive, subject to the six (6) month delay for distributions in excess of the 409A Exempt Amount as set forth in Section 3.3, a lump sum payment of Severance Pay, in the amount determined pursuant to Section 3.2(a), within ninety (90) days following such Qualifying Termination. To the extent that such Change of Control is described in Section 2.1(g)(iv), such Severance Pay in excess of the 409A Exempt Amount will be paid on a bi-weekly basis commencing on the date of the Qualifying Termination pursuant to the Employer’s ordinary payroll schedule for the duration of the Severance Period specified in Section 3.2(a) (as noted in Section 3.1(a)) subject to the six (6) month delay applicable to Key Employees described in Section 3.3 ( i.e ., the payment of Severance Pay in excess of the 409A Exempt Amount that would otherwise be payable to a Key Employee during the six (6) month period following the Qualifying Termination will be delayed).

The payment provisions of this Section 3.2(b) are summarized below:

CHANGE OF CONTROL EVENT	QUALIFYING TERMINATION DURING PROTECTION PERIOD OCCURRING BEFORE CHANGE OF CONTROL	QUALIFYING TERMINATION DURING PROTECTION PERIOD OCCURRING ON AND AFTER A CHANGE OF CONTROL
Section 2.1(g)(i) - change in stock ownership	· Bi-weekly payment of Severance Pay specified in Section 3.2(a) over Severance Period set forth in Section 3.2(a) · Amounts in excess of 409A Exempt Amount subject to six (6) month delay	· Lump sum payment of 409A Exempt Amount · Remainder of Severance Pay specified in Section 3.2(a) paid in Lump sum subject to six (6) month delay
Section 2.1(g)(ii) - change in effective control	· Bi-weekly payment of Severance Pay specified in Section 3.2(a) over Severance Period set forth in Section 3.2(a) · Amounts in excess of 409A Exempt Amount subject to six (6) month delay	· Lump sum payment of 409A Exempt Amount · Remainder of Severance Pay specified in Section 3.2(a) paid in Lump sum subject to six (6) month delay
Section 2.1(g)(iii) - sale of assets	· Bi-weekly payment of Severance Pay specified in Section 3.2(a) over Severance Period set forth in Section 3.2(a) · Amounts in excess of 409A Exempt Amount subject to six (6) month delay	· Lump sum payment of 409A Exempt Amount · Remainder of Severance Pay specified in Section 3.2(a) paid in Lump sum subject to six (6) month delay
Section 2.1(g)(iv) - liquidation or dissolution	· Bi-weekly payment of Severance Pay specified in Section 3.1(a) (as noted in Section 3.2(a)) over Severance Period set forth in Section 3.1(a) (as noted in Section 3.2(a)) · Amounts in excess of 409A Exempt Amount subject to six (6) month delay	· Lump sum payment of 409A Exempt Amount · Remainder of Severance Pay specified in Section 3.2(a) paid bi-weekly over Severance Period set forth in Section 3.2(a) subject to six (6) month delay

(i) 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. With

respect to performance cash awards, however, in the event the successor to the Company does not assume the awards, the awards will become payable at earned levels for completed plan years and at target performance levels for the year in which the Change of Control occurs and future plan years, as applicable, payable in accordance with the terms of such awards, and if not addressed in an award agreement, then payable on the date of the Change of Control.

(ii) 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 during the Protection Period in connection with such Change of Control, any such equity compensation awards outstanding as of the date of the Qualifying Termination will become immediately vested and/or exercisable, in accordance with the terms of such awards, except as set forth below in this paragraph, on the date of the Qualifying Termination or, if the Qualifying Termination occurs during the portion of the Protection Period that precedes the Change of Control, then on the date of the Change of Control, 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. With respect to performance cash awards, however, upon a Qualifying Termination during the Protection Period in connection with such Change of Control, a Covered Executive will be paid earned amounts for completed plan years and target amounts for the year in which the Qualifying Termination occurs and future plan years, as applicable, payable on the scheduled payment date. Furthermore, with respect to performance-based restricted stock units and performance options, upon a Qualifying Termination during the Protection Period in connection with such Change of Control, accelerated vesting is only provided to the extent that the applicable performance criteria are achieved (with pro rata vesting based on service during the performance period if the termination occurs during the performance period). 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.

(d) Parachute Limitation .

(1) If at any time or from time to time, it shall be determined by an independent nationally known financial accounting or law firm experienced in such matters selected by the Company (“Tax Professional”) that any payment or other benefit to the Covered Executive pursuant to the ESP or otherwise (“Potential Parachute Payment”) is or will, but for the provisions of this Section 3.2(d), become subject to the excise tax imposed by Section 4999 of the Code or any similar tax payable under any state, local, foreign or other law, but expressly excluding any income taxes and penalties or interest imposed pursuant to Section 409A of the Code (“Excise Taxes”), then the Covered Executive’s Potential Parachute Payment shall be either (a) provided to the Covered Executive in full, or (b) provided to the

Covered Executive as to such lesser extent which would result in no portion of such benefits being subject to the Excise Taxes, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by the Covered Executive, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Taxes (“Payments”).

(2) In the event of a reduction of benefits pursuant to Section 3.2(d)(1), the Tax Professional shall determine which benefits shall be reduced so as to achieve the principle set forth in Section 3.2(d)(1). For purposes of making the calculations required by Section 3.2(d)(1), the Tax Professional may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code and other applicable legal authority. The Company and the Covered Executive shall furnish to the Tax Professional such information and documents as the Tax Professional may reasonably request in order to make a determination under Section 3.2(d)(1). The Company shall bear all costs the Tax Professional may reasonably incur in connection with any calculations contemplated by Section 3.2(d)(1).

(3) If, notwithstanding any calculations performed or reduction in benefits imposed as described in Section 3.2(d)(1), the IRS determines that the Covered Executive is liable for Excise Taxes as a result of the receipt of any payments made pursuant to this ESP or otherwise, then the Covered Executive shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that the Covered Executive challenges the final IRS determination, a final judicial determination, a portion of the Payments equal to the “Repayment Amount.” The Repayment Amount shall be the smallest such amount, if any, as shall be required to be paid to the Company so that the Covered Executive’s net after-tax proceeds with respect to the Payments (after taking into account the payment of the Excise Taxes and all other applicable taxes imposed on such benefits) shall be maximized. The Repayment Amount shall be zero if a Repayment Amount of more than zero would not result in the Covered Executive’s net after-tax proceeds with respect to the Payments being maximized. If the Excise Taxes are not eliminated pursuant to this Section 3.2(d)(3), the Covered Executive shall pay the Excise Taxes.

(4) Notwithstanding any other provision of this Section 3.2(d), if (i) there is a reduction in the payments to a Covered Executive as described above in this Section 3.2(d), (ii) the IRS later determines that the Covered Executive is liable for Excise Taxes, the payment of which would result in the maximization of the Covered Executive’s net after-tax proceeds (calculated based on the full amount of the Potential Parachute Payment and as if the Covered Executive’s benefits had not previously been reduced), and (iii) the Covered Executive pays the Excise Tax, then the Company shall pay to the Covered Executive those payments which were reduced pursuant to Section 3.2(d)(1) or 3.2(d)(3) as soon as administratively possible after the Covered Executive pays the Excise Taxes to the extent that the Covered Executive’s net after-tax proceeds with respect to the payment of the Payments are maximized.

(e) Non-Compete . At the discretion of the Employer, a Covered Executive will be entitled to enter into a non-compete agreement whereby the Covered Executive will be precluded from competing with the Employer following a Qualifying Termination that occurs during the Severance Period described in Section 3.2(a) or such other period as may be set forth in a written agreement in consideration for a cash payment in an amount as determined at the discretion of the Employer. Such non-compete will be evidenced by a written agreement signed by the Employer and the Covered Executive. In the event that a Covered Executive enters into a non-compete agreement as described in this Section 3.2(e) and any provisions therein conflict with any of the provisions as set forth in this ESP, the provisions of the non-compete agreement will control.

3.3 Termination Distributions to Key Employees . A portion of the distributions under the ESP that are payable to a Covered Executive who is a Key Employee on account of a Qualifying Termination will be delayed for a period of six (6) months following such Covered Executive’s Qualifying Termination to the extent such distributions under the ESP exceed the 409A Exempt Amount. 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 on the first business day following the close of such period 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 ( e.g ., Severance Pay will be paid on a bi-weekly basis for the remainder of the Severance Period in the case of (i) Severance Pay that is not payable on account of a Change in Control, (ii) Severance Pay that is payable on account of a Qualifying Termination during the portion of the Protection Period that precedes a Change in Control described in Section 2(g), and (iii) Severance Pay that is payable on account of a Qualifying Termination during the portion of the Protection Period that occurs on and after a Change of Control described in Section 2.1(g)(iv)). 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).

(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) Payment of Legal Expenses . The obligation to reimburse the Covered Executive for any legal fees 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.

(g) 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) pays the excise taxes and any other interest and penalty payments (as applicable) 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 a reimbursement equal to the amount of any 409A Excise Tax paid by the Covered Executive (or his estate) pursuant to section 409A of the Code. The Company will provide a reimbursement to the Covered Executive with respect to any payment of the 409A Excise Tax (or portion thereof) no later than the close of the Covered Executive’s taxable year that immediately follows the taxable year in which such payment is made. If the Covered Executive is a Key Employee, payment of the amounts described in this Section 3.5 will be subject to a six (6) month delay (when applicable) for distributions in excess of the 409A Exempt Amount as provided in Section 3.3.

3.6 Alternate Plan Terms . Subject to the requirements of section 409A of the Code, 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, 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;

(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 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.

(e) 409A Compliance . If any payment made under the ESP (1) is subject to the execution of an effective release of claims, (2) “provides for the deferral of compensation” within the meaning of section 409A of the Code and is not otherwise exempt from the application of section 409A of the Code, and (3) could be made in either one of two consecutive taxable years on account of the requirement of the execution of an effective release of claims, then such payment shall be made in the later taxable year.

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

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;

(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.

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

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

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

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.

5.2 Controlling Document. In the event that the provisions of any other plan or benefit program of the Employer conflict with any of the provisions contained in the ESP, the provisions of the ESP will control; provided, however, that in the event that a Covered Executive enters into a non-compete agreement as described in Section 3.2(e) and any provisions therein conflict with any of the provisions as set forth in this ESP, the provisions of the non-compete agreement will control.

End of Article V

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 original effective date of the ESP, which such date was May 11, 2006. 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 (i) the five (5) year period described in Section 6.2 and (ii) the period relating to a Change of Control or Potential Change of Control 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 and accepts such position, the Covered Executive will not have incurred a Qualifying Termination for purposes of the ESP.

End of Article VI

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

IN WITNESS WHEREOF , this Second Amended and Restated Tenet Executive Severance Plan has been executed effective as of May 9, 2012, except as specifically provided otherwise herein.

	TENET HEALTHCARE CORPORATION


	By:	/s/ Paul Slavin
		Paul Slavin, Vice President, Executive & Corporate HR Services

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 ESPP.

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 , 20 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 , 20 .

COVERED EXECUTIVE	EMPLOYER

	By:
		Plan Administrator


Title:

B-2

Exhibit 10(f)

TENET

SEVENTH AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

As Amended and Restated Effective as of May 9, 2012

TABLE OF CONTENTS
SEVENTH AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

ARTICLE I PREAMBLE AND PURPOSE		1
1.1	Preamble	1
1,2	Purpose	1

ARTICLE II DEFINITIONS		2
2.1	Act	2
2.2	Actuarial Equivalent	2
2.3	Acquisition	2
2.4	Agreement	2
2.5	Alternate Payee	2
2.6	AMI SERP	2
2.7	Board	2
2.8	Bonus	2
2.9	Cause	2
2.10	Change of Control	2
2.11	Code	2
2.12	Company	2
2.13	Compensation Committee	3
2.14	Controlled Group Member	3
2.15	Date of Employment	3
2.16	Date of Enrollment	3
2.17	Deferred Vested Retirement Benefit	3
2.18	Disability	3
2.19	Disability Retirement Benefit	3
2.20	DRO	3
2.21	Early Retirement	4
2.22	Early Retirement Age	4
2.23	Early Retirement Benefit	4
2.24	Earnings	5
2.25	Effective Date	5
2.26	Eligible Children	5
2.27	Eligible Employee	5
2.28	Employee	5
2.29	Employer	5
2.30	Employment	5
2.31	ERA	5
2.32	Executive Severance Plan	5
2.33	Existing Retirement Benefit Plans Adjustment Factor	5
2.34	Final Average Earnings	6
2.35	Five Percent Owner	6
2.36	Good Reason	6
2.37	Initial Election Period	6
2.38	Key Employee	6
2.39	Normal Retirement	7
2.40	Normal Retirement Age	7

2.41	Normal Retirement Benefit	7
2.42	Normal Retirement Date	8
2.43	One Percent Owner	8
2.44	PAC	8
2.45	Participant	8
2.46	Plan Administrator	8
2.47	Plan Year	8
2.48	Prior Service Credit Percentage	8
2.49	Retirement Benefit	8
2.50	Retirement Plans	8
2.51	Severance Plan	9
2.52	Subsidiary	9
2.53	Surviving Spouse	9
2.54	Termination of Employment	9
2.55	Termination without Cause	9
2.56	Trust	9
2.57	Trustee	9
2.58	Year	9
2.59	Year of Service	9

ARTICLE III ELIGIBILITY AND PARTICIPATION		11
3.1	Determination of Eligibility	11
3.2	Early Retirement Election	11
3.3	Loss of Eligibility Status	11
3.4	Initial ERA Participation	11
3.5	Subsequent ERA Participation	11
3.6	Initial AMI SERP Participation	11

ARTICLE IV RETIREMENT BENEFITS		13
4.1	Normal Retirement Benefit	13
4.2	Early Retirement Benefit	14
4.3	Vesting of Retirement Benefit	15
4.4	Deferred Vested Retirement Benefit	15
4.5	Deferral of Distributions	16
4.6	Duration of Benefit Payment	17
4.7	Recipients of Benefit Payments	17
4.8	Disability	18
4.9	Change of Control	19
4.10	Golden Parachute Limitation	20
4.11	Executive Severance Plan	20

ARTICLE V PAYMENT		21
5.1	Commencement of Payments	21
5.2	Withholding; Unemployment Taxes	21
5.3	Recipients of Payments	21
5.4	No Other Benefits	21
5.5	No Lump Sum Form of Payment	21

ARTICLE VI PAYMENT LIMITATIONS		22
6.1	Spousal Claims	22
6.2	Legal Disability	22
6.3	Assignment	22

ARTICLE VII ADMINISTRATION OF THE PLAN		24
7.1	The PAC	24
7.2	Powers of the PAC	24
7.3	Appointment of Plan Administrator	24
7.4	Duties of Plan Administrator	24
7.5	Indemnification of the PAC and Plan Administrator	25
7.6	Claims for Benefits.	26
7.7	Arbitration	29
7.8	Receipt and Release of Necessary Information	30
7.9	Overpayment and Underpayment of Benefits	30
7.10	Change of Control	31

ARTICLE VIII AMENDMENT AND TERMINATION OF THE PLAN		32
8.1	Continuation	32
8.2	Amendment of Plan	32
8.3	Termination of Plan	32
8.4	Termination of Affiliate’s Participation	33

ARTICLE IX CONDITIONS RELATED TO BENEFITS		34
9.1	No Right to Assets	34
9.2	No Employment Rights	34
9.3	Offset	35
9.4	Conditions Precedent	35

ARTICLE X MISCELLANEOUS		36
10.1	Gender and Number	36
10.2	Notice	36
10.3	Validity	36
10.4	Applicable Law	36
10.5	Successors in Interest	36
10.6	No Representation on Tax Matters	36
10.7	Provisions Binding	36

EXHIBIT A		A-1

iii

TENET HEALTHCARE CORPORATION
SEVENTH AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

ARTICLE I
PREAMBLE AND PURPOSE

1.1 Preamble. Tenet Healthcare Corporation (the “Company”) adopted the Supplemental Executive Retirement Plan (the “Plan”) effective November 1, 1984 to attract, retain, motivate and provide financial security to highly compensated or management employees (the “Participants”) who render valuable services to the Company and its “Subsidiaries,” as defined in Article II. The Plan was amended on various occasions and most recently amended and restated effective December 31, 2008 to comply with final regulations issued under section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). By this instrument, the Company desires to amend and restate the Plan effective as of May 9, 2012, to make certain changes relating to a Change of Control and other termination event provisions. This amended and restated Plan will be known as the Tenet Healthcare Corporation Seventh Amended and Restated Supplemental Executive Retirement Plan.

The Company or its Subsidiaries may adopt one or more domestic trusts to serve as a possible source of funds for the payment of benefit under this Plan.

1.2 Purpose. It is intended that this Plan 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 this Plan will be exempt from the participation and vesting requirements of Part 2 of Title I of the Employee Retirement Income Security Act of 1974, as amended (the “Act”), the funding requirements of Part 3 of Title I of the Act, and the fiduciary requirements of Part 4 of Title I of the Act 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

ARTICLE II
DEFINITIONS

When a word or phrase appears in this Plan 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 Article II. The following words and phrases with the initial letter capitalized will have the meaning set forth in this Article II, unless a different meaning is required by the context in which the word or phrase is used.

2.1 Act means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and rulings thereunder.

2.2 Actuarial Equivalent or Actuarial Equivalence means an amount equal in value to the aggregate amounts to be received under different forms of and/or times of payment, as determined by the Plan actuary, calculated using factors based on six percent (6%) interest and a fifty/fifty (50/50) blend of the RP-2000 sex distinct mortality tables. Actuarial Equivalent factors will be used for calculating Retirement Benefit amounts to be received under different times and/or forms of payment, for converting different forms and times of payment of Retirement Benefits and for determining the present value of Retirement Benefits.

2.3 Acquisition refers to a company of which substantially all of its assets or a majority of its capital stock are acquired by, or which is merged with or into, the Company or a Subsidiary.

2.4 Agreement means a written agreement substantially in the form of Exhibit A between the Company and a Participant. Each Agreement will form a part of the Plan with respect to the affected Participant. Once a Participant enters into an Agreement, such Agreement may be updated by the Company to reflect changes in the Plan made by the Company. Any such update will be attached to and form a part of the Participant’s Agreement.

2.5 Alternate Payee means any spouse, former spouse, child, or other dependent of a Participant who is recognized by a DRO as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to such Participant.

2.6 AMI SERP means the American Medical International Inc. Supplemental Executive Retirement Plan or any successor or substitute for such plan.

2.7 Board means the Board of Directors of the Company.

2.8 Bonus means any annual cash award paid under the Company’s annual incentive plan.

2.9 (i) Cause shall have the meaning set forth in the Executive Severance Plan.

2.10 Change of Control shall have the meaning set forth in the Executive Severance Plan.

2.11 Code means the Internal Revenue Code of 1986, as amended, and the regulations and rulings issued thereunder.

2.12 Company means Tenet Healthcare Corporation.

2.13 Compensation Committee means the Compensation Committee of the Board of Directors of the Company.

2.14 Controlled Group Member means with respect to the Company or a Subsidiary, as applicable:

(a) Any corporation or association that is a member of a controlled group of corporations with the Company or the Subsidiary (within the meaning of section 1563(a) of the Code, determined without regard to section 1563(a)(4) and section 1563(e)(3)(C) of the Code);

(b) Any trade or business (whether or not incorporated) that is under common control with the Company or the Subsidiary as determined in accordance with section 414(c) of the Code;

(c) Any service organization that is a member of an affiliated service group (within the meaning of section 414(m) of the Code) with respect to which the Company or a Subsidiary is a member; and

(d) Any other entity required to be aggregated with the Company or a Subsidiary pursuant to section 414(o) of the Code.

Depending on the ownership of the Company in a Subsidiary, or the relationship between the Company and such Subsidiary, the Subsidiary may be a Controlled Group Member with respect to the Company.

2.15 Date of Employment means the date on which a person began to perform services directly for the Employer as a result of an Acquisition or becoming an employee .

2.16 Date of Enrollment means the date on or after June 1, 1984 on which an Eligible Employee first becomes a Participant in the Plan, provided that any Eligible Employee who becomes a Participant prior to June 1, 1985 will be deemed to have a Date of Enrollment of the later of the Participant’s Date of Employment or June 1, 1984.

2.17 Deferred Vested Retirement Benefit means the benefit payable pursuant to Section 4.4.

2.18 Disability means the inability of a Participant to engage in any substantial gainful activity by reason of a mental or physical impairment expected to result in death or last for at least twelve (12) months, or the Participant, because of such a condition, is receiving income replacement benefits for at least three (3) months under an accident or health plan covering the Employer’s employees.

2.19 Disability Retirement Benefit means the benefit payable pursuant to Section 4.8.

2.20 DRO means a domestic relations order that is a judgment, decree, or order (including one that approves a property settlement agreement) that relates to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent of a Participant and is rendered under a state (within the meaning of section 7701(a)(10) of the Code) domestic relations law (including a community property law) and that:

(a) Creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to receive all or a portion of the benefits payable with respect to a Participant under the Plan;

(b) Does not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan;

(d) Does not require the payment of benefits to an Alternate Payee that are required to be paid to another Alternate Payee under another order previously determined to be a DRO; and

(e) Clearly specifies: (i) the name and last known mailing address of the Participant and of each Alternate Payee covered by the DRO; (ii) the amount or percentage of the Participant’s benefits to be paid by the Plan to each such Alternate Payee, or the manner in which such amount or percentage is to be determined; (iii) the number of payments or payment periods to which such order applies; and (iv) that it is applicable with respect to this Plan.

2.21 Early Retirement means any Termination of Employment during the life of a Participant prior to the attainment of Normal Retirement Age and after attaining Early Retirement Age.

2.22 Early Retirement Age means the date the Participant attains age fifty-five (55) and has completed ten (10) Years of Service or attains age sixty-two (62) with no minimum Years of Service. For Eligible Employees who become Participants prior to August 3, 2011, a Participant will be credited with age and Years of Service during his severance period under the Severance Plan in effect as of the date in which the Participant commences participation in this Plan for purposes of determining if he satisfies the age and service conditions for Early Retirement Age as of the date of his Termination of Employment; provided, however, that, except as provided in Section 4.9(b), payment of Early Retirement Benefits under this Plan will not commence until the Participant has actually attained the requisite age and service conditions (e.g., if the Participant who timely elected an Early Retirement Age of age fifty-five (55) and ten (10) Years of Service will satisfy such conditions during the Severance Period, he will be deemed to have satisfied such conditions as of his Termination of Employment but his Early Retirement Benefits will not commence until he actually attains age fifty-five (55) and completed ten (10) Years of Service). Furthermore, if after the date the Participant commences participation in this Plan, the applicable Severance Plan is amended to modify the severance period, such modification will not apply to the Participant for purposes of determining his Early Retirement Age under this Plan. As provided in Sections 3.2 and 4.2(b), a Participant will elect during the Initial Election Period which definition of Early Retirement Age will apply to him under the Plan. If the Participant fails to make such election, the Participant will be deemed to have elected age sixty-two (62) as his Early Retirement Age under the Plan. The additional age and service crediting for this severance period under the Severance Plan shall not apply to any Eligible Employee who becomes a Participant on or after August 3, 2011.

2.23 Early Retirement Benefit means the benefit payable pursuant to Section 4.2.

2.24 Earnings means the base salary and any Bonus paid by the Employer to such Participant, but will exclude car and other allowances and other cash and non-cash compensation.

2.25 Effective Date of this Amendment and Restatement means May 9, 2012, except as specifically provided otherwise herein.

2.26 Eligible Children means all natural or adopted children of a Participant under the age of twenty-one (21), including any child conceived prior to the death of a Participant.

2.27 Eligible Employee means an Employee who is employed in the capacity of a Corporate Senior Vice President or above in a position designated as eligible to participate in this Plan by the Compensation Committee and who is not a Participant in the ERA.

2.28 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” will not include any person who is employed by the Employer in the capacity of an independent contractor, an agent or a leased employee even if such person is determined by the Internal Revenue Service, the Department of Labor or a court of competent jurisdiction to be a common law employee of the Employer.

2.29 Employer means the Company and its Subsidiaries who have adopted the Plan as participating employers. A Subsidiary may evidence its adoption of the Plan either by a formal action of its governing body or by taking other administrative actions with respect to this Plan on behalf of its Eligible Employees. An entity will cease to be a participating employer as of the date such entity ceases to be a Subsidiary.

2.30 Employment means any continuous period during which an Eligible Employee is actively engaged in performing services for the Employer plus the term of any leave of absence approved by the Employer.

2.31 ERA means the Tenet Executive Retirement Account.

2.32 Executive Severance Plan means the Tenet Second Amended and Restated Executive Severance Plan (also referred to as the “ESP”).

2.33 Existing Retirement Benefit Plans Adjustment Factor means, except as provided below, the percentage derived from the assumed benefit the Participant would be eligible for under Social Security and the Employer contribution portion of all Retirement Plans regardless of whether the Participant participates in such plans. The Existing Retirement Benefits Plan Adjustment Factor will be applied only to the base salary component of Final Average Earnings and is a projection of the benefits payable under the Social Security regulations in effect June 1, 1984, and Retirement Plans in effect on June 1, 1984, or the Participant’s Date of Enrollment in the Plan, if later. Once established for a Participant, the Existing Retirement Benefits Plan Adjustment Factor will not thereafter be altered to reflect any reduction in benefits under Social Security. At the direction of the Compensation Committee, the Existing Retirement Benefits Plan Adjustment Factor may be adjusted from time to time to reflect changes under the following conditions:

(a) a Participant is transferred to different Retirement Plans;

(b) the Employer’s contribution to a Retirement Plan is increased or decreased from the percentage used for the original calculation of the Participant’s Existing Retirement Benefits Plan Adjustment Factor; or

(c) the Participant becomes eligible for other Retirement Plans adopted by the Employer which would provide benefits greater or less than the Retirement Plan considered in calculating the Participant’s original Existing Retirement Benefits Plan Adjustment Factor.

Notwithstanding anything to the contrary above, for any Participant actively employed by the Employer upon a Change of Control who subsequently has a Termination of Employment, the Existing Retirement Benefit Plans Adjustment Factor for each such Participant shall be adjusted to reflect the impact of the occurrence of the Termination of Employment at an age earlier than assumed under the initial calculation of the assumed benefit described above and shall (i) be eliminated if the Participant is younger than age 45 upon such Termination of Employment, and (ii) if the Participant is age 45 or above, shall be reduced by multiplying it by the following fraction:

1- [(65- Participant’s age at Termination of Employment) /20].

For purpose of determining a Participant’s age for calculating the above adjustments to the Existing Retirement Benefit Plans Adjustment Factor, such age shall be expressed in whole months disregarding any fraction of a month.

2.34 Final Average Earnings means the Participant’s highest average monthly Earnings for any sixty (60) consecutive months during the ten (10) years, or actual employment period if less, preceding Termination of Employment.

2.35 Five Percent Owner means any person who own (or is considered as owning within the meaning of section 318 of the Code (as modified by section 416(i)(1)(B)(iii) of the Code)) more than five percent (5%) of the outstanding stock of the Company, a Subsidiary or a Controlled Group Member or stock possessing more than five percent (5%) of the total combined voting power of all stock of the Company, Subsidiary or Controlled Group Member. 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, each Subsidiary and each Controlled Group Member.

2.36 Good Reason shall have the meaning set forth in the Executive Severance Plan.

2.37 Initial Election Period the thirty (30) day period immediately following the Participant’s Date of Enrollment during which a Participant may elect the time at which to receive a distribution of Early Retirement Benefits pursuant to Section 4.2(b).

2.38 Key Employee means any employee or former employee including any deceased employee who at any time during the Plan Year was:

(a) an officer of the Company, a Subsidiary or a Controlled Group Member having compensation 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 one hundred sixty-five thousand dollars ($165,000) for 2012);

(b) a Five Percent Owner; or

For purposes of the preceding paragraphs, the Company has elected to determine the compensation of an officer or One Percent Owner in accordance with section 1.415(c)-.2(d)(4) of the Treasury Regulations (i.e., W-2 wages plus amounts that would be includible in wages except for an election under section 125(a) of the Code (regarding cafeteria plan elections) under section 132(f) of the Code (regarding qualified transportation fringe benefits) or section 402(e)(3) of the Code (regarding section 401(k) plan deferrals)) without regard to the special timing rules and special rules set forth, respectively, in sections 1.415(c)-2(e) and 2(g) of the Treasury Regulations.

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 Subsidiary and Controlled Group Member 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 2.38(a), compensation from the Company and all Subsidiaries and Controlled Group Members will be taken into account (Le., 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 2.38(a), no more than fifty (50) employees of the Company or its Subsidiaries and Controlled Group Members (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 Subsidiaries and Controlled Group Members for the Plan Year.

2.39 Normal Retirement means any Termination of Employment during the life of a Participant on or after attaining Normal Retirement Age.

2.40 Normal Retirement Age means the date on which the Participant attains age sixty-five (65).

2.41 Normal Retirement Benefit means the benefit payable pursuant to Section 4.1.

2.42 Normal Retirement Date means the first day of the calendar month following the Participant’s attainment of Normal Retirement Age.

2.43 One Percent Owner means any person who would be described in Section 2.35 if “one percent (1%)” were substituted for “five percent (5%)” each place where it appears therein.

2.44 PAC means the Pension Administration Committee of the Company established by the Compensation Committee, and whose members have been appointed by the Compensation Committee. The PAC will have the responsibility to administer the Plan and make final determinations regarding claims for benefits, as described in Article VI. In addition, the PAC has limited amendment authority over the Plan as provided in Section 8.2.

2.45 Participant means any Eligible Employee selected to participate in this Plan by the Compensation Committee, in its sole and absolute discretion.

2.46 Plan Administrator means the individual or entity appointed by the PAC to handle the day-to-day administration of the Plan, including but not limited to, determining the amount of a Participant’s benefits and complying with all applicable reporting and disclosure obligations imposed on the Plan. If the PAC does not appoint an individual or entity as Plan Administrator, the PAC will serve as the Plan Administrator.

2.47 Plan Year means the fiscal year of this Plan, which will commence on January 1 each year and end on December 31 of such year.

2.48 Prior Service Credit Percentage means the percentage to be applied to a Participant’s Years of Service with the Employer prior to his Date of Enrollment in the Plan, in accordance with the following formula:

Years of Service After Date of Enrollment		Prior Service Credit Percentage

During 1st year		25
During 2nd year		35
During 3rd year		45
During 4th year		55
During 5th year		75
After 5th year		100

In the event of the death or Disability of a Participant while an employee at any age or the Normal Retirement or Early Retirement of a Participant after age sixty (60), the Participant’s Prior Service Credit Percentage will be one hundred (100).

2.49 Retirement Benefit means an Early Retirement Benefit, Normal Retirement Benefit, Disability Retirement Benefit, or Deferred Vested Retirement Benefit payable pursuant to Article IV.

2.50 Retirement Plans means any qualified defined benefit pension plan or qualified defined contribution plan maintained by the Employer.

2.51 Severance Plan means the Tenet Employee Severance Plan, the Tenet Executive Severance Protection Plan or any or any similar, successor or replacement plan to such plans.

2.52 Subsidiary means any corporation, partnership, venture or other entity in which the Company owns fifty percent (50%) of the capital stock or otherwise has a controlling interest as determined by the Compensation Committee, in its sole and absolute discretion. Generally, a Subsidiary will only be a Controlled Group Member with respect to the Company if the Company owns at least eighty percent (80%) of the capital stock of the Subsidiary.

2.53 Surviving Spouse means the person legally married to a Participant for at least one (1) year prior to the earlier of the Participant’s death or Termination of Employment. If the Participant is not married at the time he incurs a Termination of Employment and marries after that date, such spouse will not qualify as a Surviving Spouse for purposes of the Plan. Likewise, if the Participant is married at the time he incurs a Termination of Employment, divorces after that date and remarries, his subsequent spouse will not qualify as a Surviving Spouse for purposes of the Plan.

2.54 Termination of Employment means the ceasing of the Participant’s Employment or reduction in employment or other provision of services for any reason whatsoever, whether voluntarily or involuntarily, including by reason of Normal Retirement or Early Retirement, that qualifies as a separation from service under section 409A of the Code. For this purpose a Participant who is on a leave of absence that exceeds six (6) months and who does not have statutory or contractual reemployment rights with respect to such leave, will be deemed to have incurred a Termination of Employment on the first day of the seventh (7th) month of such leave. A Participant who transfers employment from an Employer to a Controlled Group Member or a Subsidiary, regardless of whether such Controlled Group Member or a Subsidiary has adopted the Plan as a participating employer, will not incur a Termination of Employment. A Participant who experiences a “qualifying termination” under the Severance Plan will incur a Termination of Employment under the Plan, subject to the special provisions regarding Early Retirement Age under Section 2.22.

2.55 Termination without Cause means, for purposes of Section 4.9, the termination of a Participant by the Employer without Cause or a voluntary Termination of Employment by the Participant for Good Reason within two (2) years of a Change of Control.

2.56 Trust means the rabbi trust established with respect to the Plan the assets of which are to be used for the payment of Retirement Benefits under this Plan.

2.57 Trustee means the individual or entity appointed as trustee under the Trust. After the occurrence of a Change of Control, the Trustee must be independent of any successor to the Company or any affiliate of such successor.

2.58 Year means a period of twelve (12) consecutive calendar months.

2.59 Year of Service means each complete year (up to a maximum of twenty (20)) of continuous service (up to age sixty-five (65)) as an employee of the Employer beginning with the Date of Employment with the Employer. Years of Service will be deemed to have begun as of the first day of the calendar month of Employment and to have ceased on the last day of the calendar month of Employment. In the event a Participant incurs a

Termination of Employment and is reemployed by the Employer, Service completed before such reemployment will be treated as Years of Service under the Plan to the extent provided in the Company’s rehire policy, the provisions of which are incorporated herein by this reference. Years of Service prior to an employee’s Date of Enrollment in the Plan will be credited on a pro-rated basis pursuant to Section 2.48.

End of Article II

ARTICLE III
ELIGIBILITY AND PARTICIPATION

3.1 Determination of Eligibility. Each Eligible Employee who is selected to participate in the Plan by the Compensation Committee will become a Participant in the Plan as of the date specified by the Compensation Committee.

3.2 Early Retirement Election. An Eligible Employee must elect during the Initial Election Period to commence the distribution of his Retirement Benefits on the first day of the calendar month following his Early Retirement as provided pursuant to Section 4.2. In making this election the Participant must specify the Early Retirement Age that will apply to him under the Plan (i.e., age fifty-five (55) and ten (10) Years of Service or age sixty-two (62)). If the Eligible Employee fails to make this election during the Initial Election Period, he will be deemed to have affirmatively elected to commence the distribution of his Retirement Benefits on the first day of the calendar month following the date of his Retirement on or after attaining age sixty-two (62). Once made (or deemed made), this election cannot be revoked; however, the Participant may elect to defer payment of his Retirement Benefits pursuant to Section 4.5. Payment of such Early Retirement Benefit will be subject to the six (6) month restriction applicable to Key Employees, described in Section 5.1 of this Plan.

3.3 Loss of Eligibility Status. A Participant under this Plan who incurs a Termination of Employment, who ceases to be an Eligible Employee, or whose participation is terminated by the Compensation Committee will continue as an inactive Participant under this Plan until the Participant has received the complete payment of his Retirement Benefits under this Plan.

3.4 Initial ERA Participation. A Participant who participated in the ERA prior to becoming a Participant in the Plan will be given credit for his Years of Service while a participant in the ERA for purposes of determining the amount of his Retirement Benefit under this Plan, but such Retirement Benefit will be reduced on an Actuarial Basis by his benefit under the ERA. The Participant’s benefit under the ERA will be paid pursuant to the terms of the ERA and his Retirement Benefit under this Plan, if any, will be paid pursuant to the terms hereof.

3.5 Subsequent ERA Participation. A Participant’s participation in this Plan will be frozen upon being named to the ERA. The Participant’s Retirement Benefit under the Plan accrued as of the date his participation was frozen will commence pursuant to the terms hereof. Distribution of the Participant’s ERA benefit will be made pursuant to the terms of the ERA. In the event such Participant subsequently resumes participation in the Plan, he will be given credit for his Years of Service while a participant in the ERA for purposes of determining the amount of his Retirement Benefit under this Plan, but such Retirement Benefit will be reduced on an Actuarial Equivalent basis by his benefit under the ERA.

3.6 Initial AMI SERP Participation. A Participant who participated in the AMI SERP prior to becoming a Participant in the Plan will be entitled to a benefit under this Plan, if any, equal to the amount of his accrued benefit (as determined using the Actuarial Equivalent factors set forth in Section 2.2 of this Plan) less his prior accrued benefit under the AMI SERP (as determined using the actuarial equivalent factors set forth in the AMI SERP). The Participant’s accrued benefit under the AMI SERP will be paid pursuant

to the terms of the AMI SERP and his benefit under this Plan, if any, will be paid pursuant to the terms hereof.

End of Article III

ARTICLE IV
RETIREMENT BENEFITS

4.1 Normal Retirement Benefit .

(a) Calculation of Normal Retirement Benefit . Upon a Participant’s Normal Retirement, the Participant will be entitled to receive a monthly Normal Retirement Benefit for the Participant’s lifetime which is determined in accordance with the benefit formula set forth below, adjusted by the vesting percentage in Section 4.3. Payment of such Normal Retirement Benefit will commence as of the Participant’s Normal Retirement Date, subject to the six (6) month restriction applicable to Key Employees, described in Section 5.1 of the Plan. Except as provided below, the amount of such monthly Normal Retirement Benefit will be determined by using the following formula:

X = [Al x [B1 + [B2 x C]] x [2.7% - D] x E] + [A2 x [B1 +[B2 x C] x 2.7% x E]

X = Normal Retirement Benefit

Al = Final Average Earnings (From Base Salary)

A2 = Final Average Earnings (From Bonus)

B1 = Years of Service After Date of Enrollment

B2 = Years of Service Prior to Date of Enrollment

C = Prior Service Credit Percentage

D = Existing Retirement Benefit Plans Adjustment Factor

E = Vesting Percentage

Note: B1 and B2 Years of Service combined cannot exceed twenty (20) years.

To the extent that a Participant incurred a Termination of Employment prior to the Effective Date, such Participant’s Normal Retirement Benefit, Early Retirement Benefit, Disability Retirement Benefit or Deferred Vested Retirement Benefit, as applicable, will be determined under the benefit formula as in effect at the time the Participant’s Termination of Employment. However, the remaining provisions of this Plan, including but not limited to, the distribution provisions of Article IV and the claims procedures set forth in Section 7.6, will apply to such Participant.

(b) Death After Commencement of Normal Retirement Benefits . If a Participant who is receiving a Normal Retirement Benefit dies, his Surviving Spouse or Eligible Children will be entitled to receive (in accordance with Sections 4.6 and 4.7) a benefit equal to fifty percent (50%) of the Participant’s Normal Retirement Benefit.

(c) Death After Normal Retirement Age But Before Normal Retirement . If a Participant who is eligible for Normal Retirement dies while an employee after attaining age sixty-five (65), his Surviving Spouse or Eligible Children will be entitled to receive (in accordance with Sections 4.6 and 4.7) the installments of the Normal Retirement Benefit which would have been payable to the Surviving Spouse or Eligible Children in accordance with Section 4.1(b) as if the Participant had retired from the Employer on the day before he died. Distribution of such

benefits will not be subject to the six (6) month restriction applicable to Key Employees.

4.2 Early Retirement Benefit .

(a) Calculation of Early Retirement Benefit . Upon a Participant’s Early Retirement, the Participant will be entitled to receive a monthly Early Retirement Benefit for the Participant’s lifetime commencing on the Participant’s Normal Retirement Date, calculated in accordance with Section 4.1 and Section 4.3 with the following adjustments:

(i) Only the Participant’s actual Years of Service, adjusted appropriately for the Prior Service Credit Percentage, as of the date of Early Retirement will be used.

(ii) For purposes of determining Final Average Earnings, only the Participant’s Earnings as of the date of Early Retirement will be used.

(iii) To arrive at the payments to commence at Normal Retirement, the amount calculated under Section 4.2(a)(i) and Section 4.2(a)(ii) will be reduced by 0.25% for each month Early Retirement occurs before age sixty-two (62).

(b) Early Payment of Benefits . A Participant may elect during the Initial Election Period to receive a distribution of his Early Retirement Benefit on the first day of the calendar month following the date of his Early Retirement rather than on his Normal Retirement Date as specified in Section 4.2(a). Payment of such Early Retirement Benefit will be subject to the six (6) month restriction applicable to Key Employees, described in Section 5.1 of the Plan. A Participant who makes this election, will have the amount calculated under Section 4.2(a) further reduced by 0.25% for each month that the date of commencement of payment precedes the date on which the Participant will attain age sixty-two (62).

(c) Death After Early Retirement Benefits Commence . If a Participant dies after commencement of the payment of his Early Retirement Benefit, his Surviving Spouse or Eligible Children will be entitled to receive (in accordance with Sections 4.6 and 4.7) a benefit equal to fifty percent (50%) of the Participant’s Early Retirement Benefit.

(d) Death After Early Retirement But Before Benefit Commencement . If a Participant dies after his Early Retirement but before benefits have commenced his Surviving Spouse or Eligible Children will be entitled to receive (in accordance with Sections 4.6 and 4.7) a benefit equal to fifty percent (50%) of the benefit that would have been payable on the date of the Participant’s death had he elected to have benefits commence on that date. Distribution of such benefits will not be subject to the six (6) month restriction applicable to Key Employees.

(e) Death of Employee After Attainment of Early Retirement Age but Before Early Retirement . If a Participant dies after attaining Early Retirement Age but before taking Early Retirement, his Surviving Spouse or Eligible Children will be

entitled to receive (in accordance with Sections 4.6 and 4.7) a benefit equal to fifty percent (50%) of the Participant’s Early Retirement Benefit determined as if the Participant had retired on the day prior to his death with payments commencing on the first of the month following the Participant’s death. The benefits payable to a Surviving Spouse or Eligible Children under this Section 4.2(e) will be no less than the benefits payable to a Surviving Spouse or Eligible Children under Section 4.4 (regarding the Deferred Vested Retirement Benefit) as if the Participant had died immediately prior to age fifty-five (55).

4.3 Vesting of Retirement Benefit. A Participant’s interest in his Retirement Benefit will, subject to Section 9.4 (regarding Conditions Precedent), vest in accordance with the following schedule:

Years of Service		Vesting Percentage

Less than 5		0
5 but less than 6		25
6 but less than 7		30
7 but less than 8		35
8 but less than 9		40
9 but less than 10		45
10 but less than 11		50
11 but less than 12		55
12 but less than 13		60
13 but less than 14		65
14 but less than 15		70
15 but less than 16		75
16 but less than 17		80
17 but less than 18		85
18 but less than 19		90
19 but less than 20		95
20 or more		100

Notwithstanding the foregoing, a Participant who is at least sixty (60)years old and who has completed at least five (5) Years of Service will be fully vested, subject to Section 9.4 (regarding Conditions Precedent), in his Retirement Benefit. Except as required otherwise by applicable law, no Years of Service will be credited for Service after age sixty-five (65) or for more than twenty (20) years.

4.4 Deferred Vested Retirement Benefit. Upon any Termination of Employment of the Participant before Normal Retirement or Early Retirement for reasons other than death or Disability, such Participant will be entitled to a Deferred Vested Retirement Benefit, commencing on the Participant’s Normal Retirement Date, calculated under Section 4.1 and 4.3 but with the following adjustments:

(a) Calculation of Years of Service. Only the Participant’s actual Years of Service, adjusted appropriately for the Prior Service Credit Percentage, as of the date of his Termination of Employment will be used.

(b) Calculation of Earnings. For purposes of determining Final Average Earnings, as used in Section 4.1, only the Participant’s Earnings prior to the date of his Termination of Employment will be used.

(c) Early Termination Reduction. Subject to the maximum reduction under Section 4.4(g), to arrive at the payments to commence at the Participant’s Normal Retirement Date, the amount calculated under Section 4.1(a) will be reduced by 0.25% for each month the Participant’s Termination of Employment occurs before age sixty-two (62).

(d) Death After Commencement of Payments. If a Participant dies after commencement of the payment of his Deferred Vested Retirement Benefit under this Section 4.4, his Surviving Spouse or Eligible Children will be entitled at Participant’s death to receive (in accordance with Sections 4.6 and 4.7) a benefit equal to fifty percent (50%) of the Participant’s Deferred Vested Retirement Benefit.

(e) Death after Termination of Employment. If a Participant, who has a vested interest under Section 4.3, dies after Termination of Employment but at death is not receiving any Deferred Vested Retirement Benefits under this Plan and was not eligible for an Early Retirement Benefit pursuant to Section 4.2, his Surviving Spouse or Eligible Children will be entitled to receive (in accordance with Sections 4.6 and 4.7) commencing on the date that would have been the Participant’s Normal Retirement Date, a benefit equal to fifty percent (50%) of the Deferred Vested Retirement Benefit which would have been payable to the Participant at his Normal Retirement Date.

(f) Death while an Employee. If a Participant, who has a vested interest under Section 4.3, dies while still actively employed by the Employer before he was eligible for Early Retirement, his Surviving Spouse or Eligible Children will be entitled at the Participant’s death to receive a benefit equal to fifty percent (50%) of the Participant’s Retirement Benefit (in accordance with Sections 4.6 and 4.7) calculated as if the Participant was age fifty-five (55) and eligible for Early Retirement on the day before the Participant’s death; provided, however, that the combined reductions for Early Retirement and early payment will not exceed twenty-one percent (21%) of the amount calculated under Sections 4.2(a)(i) and (ii). Distribution of such benefits will not be subject to the six (6) month restriction applicable to Key Employees.

(g) Early Termination Reduction Limit. To arrive at the amount of the Deferred Vested Retirement Benefit payments to commence at the Participant’s Normal Retirement Date, the Early Termination reduction calculated under Section 4.4(c) (and indirectly under Section 4.4(d), and Section 4.4(e)) will be limited to the maximum percentage reduction for Early Retirement at age fifty-five (55) (i.e., twenty-one percent (21%)).

4.5 Deferral of Distributions. A Participant may elect to defer payment of his Normal Retirement Benefit payable pursuant to Section 4.1, his Early Retirement Benefit payable pursuant to Section 4.2 or his Deferred Vested Retirement Benefit payable pursuant to Section 4.4 for a period of at least five (5) years by making an election to defer such distribution at least twelve (12) months prior to the date that the Normal

Retirement Benefit, Early Retirement Benefit or Deferred Vested Retirement Benefit would otherwise be paid (Le., at least twelve (12) months prior to a Termination of Employment). In the event that the Participant becomes entitled to a distribution pursuant to Section 4.1, Section 4.2 or Section 4.4 during this twelve (12) month period, the deferral election will be of no effect and payment of the Participant’s benefits will commence at the time specified in Section 4.1, Section 4.2 or Section 4.4, as applicable. A Participant who becomes entitled to distribution of a Disability Retirement Benefit pursuant to Section 4.9 may not elect to defer payment of such distribution pursuant to this Section 4.5 and any deferral election made by such Participant will be null and of no effect.

4.6 Duration of Benefit Payment.

(a) Participant Benefit Payments. The Normal Retirement Benefit, Early Retirement Benefit, Disability Retirement Benefit or Deferred Vested Retirement Benefit under the Plan will be payable to the Participant in the form of a monthly benefit payable for life.

(b) Surviving Spouse Benefit Payments. The benefit payable to a Surviving Spouse under the Plan will be paid in the form of a monthly benefit payable for life; provided, that all benefits payable to the Surviving Spouse are subject to actuarial reduction based on the factors in Section 2.2 if the Surviving Spouse is more than three (3) years younger than the Participant.

(c) Eligible Children Benefit Payments. The benefit payable to a Participant’s Eligible Children under the Plan will be paid in the form of a monthly benefit payable until each such child reaches age twenty-one (21).

4.7 Recipients of Benefit Payments.

(a) Death without Surviving Spouse. If a Participant dies without a Surviving Spouse but is survived by any Eligible Children, then the Participant’s Retirement Benefit will be paid to his Eligible Children. The total monthly benefit payable will be equal to the monthly benefit that a Surviving Spouse would have received without actuarial reduction. This benefit will be paid in equal shares to all Eligible Children until the youngest of the Eligible Children attains age twenty-one (21). When any of the Eligible Children reaches twenty-one (21), his share of the total monthly benefit will be reallocated equally to the remaining Eligible Children.

(b) Death of Surviving Spouse. If the Surviving Spouse dies after the death of the Participant but is survived by Eligible Children then the total monthly benefit previously paid to the Surviving Spouse will be paid in equal shares to all Eligible Children until the youngest of the Eligible Children attains age twenty-one (21). When any of the Eligible Children reaches twenty-one (21), his share of the total monthly benefit will be reallocated equally to the remaining Eligible Children.

(c) Death without Surviving Spouse or Eligible Children. If the Participant dies without a Surviving Spouse or Eligible Children, no additional benefits will be paid under this Plan with respect to that Participant.

4.8 Disability.

(a) Disability Retirement Benefit . Any Participant who incurs a Disability will upon reaching Normal Retirement Age be paid, as a Disability Retirement Benefit, the Normal Retirement Benefit in accordance with Section 4.1 based on his vested interest as determined under Section 4.3 and Section 4.8(b). Payment of the Disability Retirement Benefit will begin as of the Participant’s Normal Retirement Date. A Participant who is entitled to a Disability Retirement Benefit may not elect to defer payment of such distribution pursuant to Section 4.5. Unless otherwise required under Code Section 409A, amounts payable pursuant to this Section 4.8(a) will not be subject to the six (6) month restriction applicable to Key Employees.

(b) Continued Accrual of Vesting Service . Upon a Participant’s Disability while an employee of the Employer, the Participant will continue to accrue Years of Service for purposes of vesting under Section 4.3 of this Plan during his Disability until the earliest of his:

(i) Recovery from Disability;

(ii) Attainment of Normal Retirement Age; or

(iii) Death.

(c) Not Eligible for Early Retirement Benefit . A Participant who is Disabled will not be entitled to receive an Early Retirement Benefit under this Plan.

(d) Calculation of Earnings . For purposes of calculating the amount of the Disability Retirement Benefit, the Participant’s Final Average Earnings will be determined using his Earnings up to the date of Disability.

(e) Death prior to Attainment of Early Retirement Age . If a Participant, who has a vested interest as determined under this Section 4.8 and Section 4.3, dies while on Disability before he attained Early Retirement Age, his Surviving Spouse or Eligible Children will be entitled at the Participant’s death to receive a benefit equal to fifty percent (50%) of the Participant’s Retirement Benefit (in accordance with Sections 4.6 and 4.7) calculated under Section 4.2 as if the Participant was age fifty-five (55) and eligible for Early Retirement on the day before the Participant’s death; provided, however, that the combined reductions for Early Retirement and early payment will not exceed twenty-one percent (21%) of the amount calculated under Sections 4.2(a)(i) and (ii). Distribution of such benefits will not be subject to the six (6) month restriction applicable to Key Employees.

(f) Death after Attainment of Early Retirement Age . If a Participant dies after attaining Early Retirement Age while on Disability, his Surviving Spouse or Eligible Children will be entitled to receive (in accordance with Sections 4.6 and 4.7) a benefit equal to fifty percent (50%) of the Participant’s Early Retirement Benefit determined as if the Participant had retired on the day prior to his death with payments commencing on the first of the month following the Participant’s death. The benefits payable to a Surviving Spouse or Eligible Children under this Section 4.8(f) will be no less than the benefits payable to a Surviving Spouse or

Eligible Children under Section 4.4 (regarding the Deferred Vested Retirement Benefit) as if the Participant had died immediately prior to age fifty-five (55). Distribution of such benefits will not be subject to the six (6) month restriction applicable to Key Employees.

(g) Death after Commencement of Payments . If a Participant dies after his commencement of Disability Retirement Benefits under this Section 4.8, his Surviving Spouse or Eligible Children will be entitled at the Participant’s death to receive (in accordance with Sections 4.6 and 4.7) a benefit equal to fifty percent (50%) of the Participant’s Disability Retirement Benefit.

4.9 Change of Control.

(a) Calculation of Benefits .

(i) Post-April 1994 Employees. In the event of a Change of Control while this Plan remains in effect, each Participant will be fully vested in his Retirement Benefit, without regard to the Participant’s Years of Service and the amount of such benefit will be calculated by granting the Participant Prior Service Credit under Sections 4.1, 4.2 and 4.4 for all Years of Service prior to his Date of Enrollment, plus, for Eligible Employees who become Participants before August 3, 2011, crediting of additional Years of Service at the end of the Severance Period and crediting of age during the Severance Period as determined under Section 3.1(h) of the ESP. Moreover, the Existing Retirement Benefit Plans Adjustment Factor shall be adjusted as set forth in Section 2.33. In addition, with respect to a Participant who (A) is an active employee, (B) has not yet begun to receive benefit payments under the Plan, and (C) incurs a Termination without Cause within two (2) years following a Change of Control, the provisions of Section 9.4(b) (Regarding Conditions Precedent) will not apply.

(ii) Employees as of April 1, 1994. With respect to a Participant who is an employee actively at work on April 1, 1994, with the corporate office or a division of the Employer which has not been declared to be a discontinued operation, who has not yet begun to receive benefit payments under the Plan and who incurs a Termination without Cause within two (2) years following a Change of Control, the provisions of Section 4.9(a)(i) above will not apply and instead a Participant’s Retirement Benefit under this Plan will be determined by:

(A) granting the Participant full Prior Service Credit under Sections 4.1, 4.2 and 4.4 for all Years of Service prior to his Date of Enrollment; plus, for Eligible Employees who become Participants before August 3, 2011, crediting of additional Years of Service at the end of the Severance Period and crediting of age during the Severance Period as determined under Section 3.1(h) of the ESP.

(B) with respect to a covered Participant who incurs a Termination without Cause within two (2) years following a Change of

Control, crediting the Participant with three (3) additional Years of Service (with total Years of Service not to exceed twenty (20) years), which shall be in lieu of any additional Years of Service and age provided under Section 3.1 of the ESP;

(C) The benefit formula in Section 4.1(a) shall be applied by defining A1 as “the greater of current monthly Earnings (from Base Salary) or Final Average Earnings (from Base Salary),” and A2 as “the greater of current monthly Earnings (from Bonus) or Final Average Earnings (from Bonus)”;

(D) The Existing Retirement Benefits Plan Adjustment Factor shall be adjusted as set forth in Section 2.33;

(E) The provisions of Section 9.4(b) (regarding Conditions Precedent) will not apply; and

(F) Further, the Participant will be fully vested in such Retirement Benefit without regard to his Years of Service.

(b) Payment of Benefits. Upon the Participant’s Termination of Employment within two (2) years following the occurrence of a Change of Control (except on account of a liquidation or dissolution of the Company), the Participant shall begin to receive such Retirement Benefit (notwithstanding the payout timing rules in Sections 2.22, 3.2, 4.2(a) & (b), and 4.4) commencing on the first day of the calendar month following the date of such Termination of Employment without reduction by virtue of Sections 4.2(a), 4.2(b) or 4.4(c), taking into account the crediting of the additional severance period under ESP Section 3.1(h) and Plan Section 4.9(a). In the event that the Participant does not incur a Termination of Employment within such two (2) year period or in the event of a Change of Control on account of the liquidation or dissolution of the Company, the Participant shall begin to receive the Retirement Benefit described in Section 4.9(a) as of his Normal Retirement Date or Early Retirement Date, as the case may be, with no reduction by virtue of Section 4.2(a), Section 4.2(b) or Section 4.4(c), subject to the six (6) month restriction applicable to Key Employees described in Section 5.1.

4.10 Golden Parachute Limitation . The calculation and administration of any liability that may arise out of the “golden parachute” provisions of Sections 280G and 4999 of the Code shall be addressed as set forth in the Executive Severance Plan.

4.11 Executive Severance Plan . A Participant who is entitled to receive benefits under this Plan following a Termination of Employment, shall to the extent applicable have such benefits calculated under the provisions of this Plan and Section 3.1(h) of the ESP. In the event of any direct conflict between the terms of this Plan and the ESP with respect to the calculation of benefits, the ESP shall control.

End of Article IV

ARTICLE V
PAYMENT

5.1 Commencement of Payments. Benefit payments under this Plan generally will begin on the Participant’s Normal Retirement Date; provided, that in the case of a benefit payable on account of Early Retirement, a Termination of Employment within two (2) years following a Change of Control or death, benefit payments will begin not later than the first day of the calendar month following the occurrence of the event which entitles the Participant (or a Surviving Spouse or Eligible Children) to benefits under this Plan. Benefit payments under this Plan that are payable to a Key Employee on account of a Termination of Employment will be delayed for a period of six (6) months following such Participant’s Termination of Employment. On the day following the expiration of such six (6) month period, the Participant will receive a catch-up payment equal to the amount of benefits that would have been paid during such six (6) month period but for the provisions of this Section 5.1 and the remainder of such payments will be paid according to the terms of the Plan.

5.2 Withholding; Unemployment Taxes. Any taxes required to be withheld by the Federal or any state or local government will be withheld from payments under this Plan to the extent required by the law in effect at the time payments are made.

5.3 Recipients of Payments. All Retirement Benefit payments to be made by the Employer under the Plan will be made to the Participant during his lifetime. All subsequent payments under the Plan will be made by the Plan to the Participant’s Surviving Spouse or Eligible Children.

5.4 No Other Benefits. No other benefits will be payable under this Plan to the Participant or his Surviving Spouse or Eligible Children by reason of the Participant’s Termination of Employment or otherwise, except as specifically provided herein.

5.5 No Lump Sum Form of Payment. Except with respect to permitted Plan terminations under Section 8.3, no lump sum form of payment will be payable from the Plan with respect to any Participant regardless of when such Participant incurs a Termination of Employment.

End of Article V

ARTICLE VI
PAYMENT LIMITATIONS

6.1 Spousal Claims .

(a) An Alternate Payee may be awarded all or a portion of the Participant’s Retirement Benefits pursuant to the terms of a DRO, in which case such benefits will be payable to the Alternate Payee at the same time and in the same form of payment as the Participant’s.

(b) Any taxes or other legally required withholdings from payments to such Alternate Payee will be deducted and withheld by the Company, benefit provider or funding agent. The Alternate Payee will be provided with a tax withholding election form for purposes of federal and state tax withholding, if applicable.

(c) The Plan Administrator will have sole and absolute discretion to determine whether a judgment, decree or order is a DRO, to determine whether a DRO will be accepted for purposes of this Section 6.1 and to make interpretations under this Section 6.1, including determining who is to receive benefits, all calculations of benefits and determinations of the form of such benefits, and the amount of taxes to be withheld. The decisions of the Plan Administrator will be binding on all parties with an interest.

(d) Any benefits payable to an Alternate Payee pursuant to the terms of a DRO will be subject to all provisions and restrictions of the Plan and any dispute regarding such benefits will be resolved pursuant to the Plan claims procedure in Article VII.

6.2 Legal Disability. If a person entitled to any payment under this Plan will, in the sole judgment of the Plan Administrator, be under a legal disability, or otherwise will be unable to apply such payment to his own interest and advantage, the Plan Administrator, in the exercise of its discretion, may direct the Company or payor of the benefit to make any such payment in any one or more of the following ways:

(a) Directly to such person;

(b) To his legal guardian or conservator; or

(c) To his spouse or to any person charged with the duty of his support, to be expended for his benefit and/or that of his dependents.

The decision of the Plan Administrator will in each case be final and binding upon all persons in interest, unless the Plan Administrator will reverse its decision due to changed circumstances.

6.3 Assignment. Except as provided in Section 6.1, no Participant, Surviving Spouse or Eligible Child will have any right to assign, pledge, transfer, convey, hypothecate, anticipate or in any way create a lien on any amounts payable hereunder. No amounts payable hereunder will be subject to assignment or transfer or otherwise be alienable, either by voluntary or involuntary act, or by operation of law, or subject to attachment, execution, garnishment, sequestration or other seizure under any legal, equitable or

other process, or be liable in any way for the debts or defaults of Participants or their Surviving Spouses or Eligible Children. The Company may assign all or a portion of this Plan to any Subsidiary which employs any Participant.

End of Article VI

ARTICLE VII
ADMINISTRATION OF THE PLAN

7.1 The PAC. The overall administration of the Plan will be the responsibility of the PAC.

7.2 Powers of the PAC. The PAC will have sole and absolute discretion regarding the exercise of its powers and duties under this Plan. In order to effectuate the purposes of the Plan, 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 Plan;

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

(d) To carry out the duties expressly reserved to it under the Plan; and

(e) To determine and resolve, in its sole and absolute discretion, all questions relating to the administration of the Plan and the Trust (i) when differences of opinion arise between the Company, a Subsidiary, the Plan Administrator, the Trustee, a Participant, 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 Plan for the greatest benefit of all parties concerned.

7.3 Appointment of Plan Administrator. The PAC will appoint the Plan Administrator, who will have the responsibility and duty to administer the Plan 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.

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

(a) To direct the administration of the Plan in accordance with the provisions herein set forth;

(b) To adopt rules of procedure and regulations necessary for the administration of the Plan, provided such rules are not inconsistent with the terms of the Plan;

(c) To determine all questions with regard to rights of Participants under the Plan including, but not limited to, questions involving the amount of a Participant’s benefits;

(d) To enforce the terms of the Plan and any rules and regulations adopted by the PAC;

(e) To review and render decisions respecting a claim for a benefit under the Plan;

(f) To furnish the Employer with information required for tax or other purposes;

(g) 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;

(h) To prescribe procedures to be followed by distributees in obtaining benefits;

(i) To receive from the Employer and from Participants such information as is necessary for the proper administration of the Plan;

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

(k) To make all determinations and computations concerning the benefits to which any Participant is entitled under the Plan;

(l) To give the Trustee specific directions in writing with respect to:

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

(ii) the making of 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 or the Company;

(m) To comply with all applicable lawful reporting and disclosure requirements of the Act;

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

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

7.5 Indemnification of the 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 Company 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 Plan other than losses resulting from the PAC’s, or any such person’s fraud or willful misconduct.

7.6 Claims for Benefits.

(a) Initial Claim. In the event that an Employee, Eligible Employee, Participant, Surviving Spouse, or Eligible Child claims to be eligible for benefits, or claims any rights under this Plan, 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 Participant, Surviving Spouse, or Eligible Child who feels unfairly treated as a result of the administration of the Plan 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 use representation and may examine this Plan, and any other pertinent documents generally available to Participants that are specifically related to the claim.

Different claims procedures apply to claims for benefits on account of Disability, referred to as “Disability claims,” and all other claims for benefits, referred to as “non-Disability claims.”

(b) Non-Disability Claims.

(i) Initial Decision. If a claimant files a non-Disability claim, written notice of the disposition of 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 this Plan, will set forth in writing the reasons for denial of the claim if a claim is denied (including references to any pertinent provisions of this Plan) 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 Plan’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 this Plan as a result of the disposition of a claim will be paid as soon as practicable following receipt of proof of entitlement, if requested.

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

(iii) 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 Plan 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.

(i) Initial Decision. If a claimant files a Disability claim, written notice of the disposition of such claim will be furnished to the claimant within forty-five (45) days after the claim is filed with the Plan Administrator. This period may be extended by the Plan Administrator for up to thirty (30) days provided that the Plan Administrator determines that such an extension is necessary due to matters beyond its control and the claimant is notified prior to the expiration of the initial forty-five (45) day period of the circumstances requiring the extension of time and the date by which the Plan Administrator expects to render a decision. If, prior to the first thirty (30) day extension period, the Plan Administrator determines that, due to matters beyond its control, a decision cannot be made within that extension period, the period for making the determination may be extended for up to an additional thirty (30) days provided that the claimant is notified prior to the expiration of the first thirty (30) day extension period of the circumstances requiring the extension and the date as of which the Plan Administrator expects to issue a decision. In the case of any extension, the notice of extension will specifically explain the standards on which entitlement to a benefit on account of Disability is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues and the

claimant will be given at least forty-five (45) days within which to provide the specified information.

Written notice of the disposition of the claim will refer, if appropriate, to pertinent provisions of this Plan, will set forth in writing the reasons for denial of the claim if a claim is denied (including references to any pertinent provisions of this Plan), the protocol relied upon in denying the claim or a statement that such protocol is available on request 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 Plan’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.

(ii) Request for Review. Within one hundred and eighty (180) days after receiving written notice of the Plan Administrator’s denial 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 this one hundred and eighty (180) day period, 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 one hundred and eighty (180) day period.

If the benefit denial is based in whole or in part on a medical judgment, the claimant will be entitled to a review by the PAC based on the PAC’s consultation with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment whereby such professional is neither an individual who was consulted in connection with the benefit denial that is the subject of the request for review nor the subordinate of any such individual. The claimant will also be provided with the identity of any medical or vocational experts whose advice was obtained on behalf of the Plan in connection with the benefit denial, without regard to whether the advice was relied upon in making the initial benefit determination.

The PAC’s review will take into account all comments, documents, records and other information submitted by the claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. In addition, the PAC’s review will not give deference to the initial adverse benefit determination.

If the Plan Administrator is a member of the PAC, he shall not participate in the PAC’s review of the request for review

(iii) Decision on Review. The claimant will be provided with written notice of the PAC’s benefit determination on review within a reasonable period of time; provided, however, that such period shall not last more than forty-five (45) days or ninety (90) days if an extension is required and proper notice is given to the claimant. 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 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 Plan 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. In addition, the notice will set forth the following additional information, to the extent applicable:

(A) the protocol relied upon in making the adverse decision;

(B) if the adverse decision is based on a medical necessity or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the decision, applying the terms of the Plan to the claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request; and

(C) the following statement: You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office.

The decision of the PAC will be final and conclusive.

7.7 Arbitration . In the event the claims review procedure described in Section 7.6(a) of the Plan (regarding non-Disability claims) does not result in an outcome thought by the claimant to be in accordance with the Plan 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 Plan document in the context of the particular facts involved. The claimant, the PAC and the Company 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 and the Company agree that the venue for the arbitration will be in Dallas, Texas. The costs of arbitration will be paid by the Company; the costs of legal representation for the claimant or witness costs for the claimant will be borne by the claimant; provided, that, (i) if the claimant prevails in such arbitration, the Company shall reimburse the claimant for his reasonable legal fees and expenses incurred in bringing the arbitration, and (ii) in all other cases, as part of his award, the Arbitrator may require the Company 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 Company, 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 Company 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 Company and the claimant and the arbitrator will adopt procedures to protect such rights. With respect to any dispute, the Company, 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 Plan, or to change or add to any benefits provided by the Plan, or to waive or fail to apply any requirements of eligibility for a benefit under the Plan. Nonetheless, the arbitrator will have absolute discretion in the exercise of its powers in this Plan. Arbitration decisions will not establish binding precedent with respect to the administration or operation of the Plan.

7.8 Receipt and Release of Necessary Information. In implementing the terms of this Plan, 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 person claiming benefits under this Plan 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.

7.9 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 Participant, Surviving Spouse or Eligible Child 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 Participant, Surviving Spouse or Eligible Child, for whatever reason, the Plan Administrator may, in its sole and absolute discretion, (a) withhold payment of any further benefits under the Plan until the overpayment has been collected provided that the entire amount of reduction in any calendar year does not exceed five thousand dollars ($5,000), and the reduction is made at the same time and in the same amount as the debt otherwise would have been

due and collected from the Participant or (b) may require repayment of benefits paid under this Plan without regard to further benefits to which the Participant, Surviving Spouse or Eligible Child may be entitled.

7.10 Change of Control . Upon a Change of Control and for the following three (3) years thereafter, if any arbitration arises relating to an event occurring or a claim made within three (3) years of a Change of Control, (i) the arbitrator shall not decide the claim based on an abuse of discretion principle or give the previous PAC decision any special deference, but rather shall determine the claim de novo based on its own independent reading of the Plan; and (ii) the Company shall pay the Participant’s reasonable legal and other related fees and expenses by applying Section 3.1(f) of the ESP (except that if the Participant is not entitled to severance benefits under the ESP on account of the Termination of Employment that entitles the Participant to receive benefits under this Plan, the reference to the “shorter of the Severance Period or the Reimbursement Period” in the ESP shall be changed to the “Reimbursement Period” only).

End of Article VII

ARTICLE VIII
AMENDMENT AND TERMINATION OF THE PLAN

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

8.2 Amendment of Plan. Except as provided below, t he Company, through an action of the Compensation Committee, reserves the right in its sole and absolute discretion to amend this Plan in any respect at any time, except that upon or during the two (2) year period after any Change of Control of the Company, (a) Plan benefits cannot be reduced, (b) Arts. 7 and 8 and Plan Section 9.1(b) cannot be changed and (c) no prospective amendment that adversely affects the rights or obligations of a Participant may be made unless the affected Participant receives at least one (1) year’s advance written notice of such amendment.

Moreover, no amendment may ever be made that retroactively reduces or diminishes the rights of a Participant to the benefits described herein that have been accrued or earned through the date of such amendment, even if a Termination of Employment has not yet occurred with respect to such Participant.

In addition to the Compensation Committee, the PAC has the right to make non-material amendments to the Plan to comply with changes in the law or to facilitate Plan administration; provided, however, that each such proposed non-material amendment must be discussed with the Chairperson of the Compensation Committee in order to determine whether such change would constitute a material amendment to the Plan.

The provisions of this Section 8.2 shall not restrict the right of the Company to terminate this Plan under Section 8.3 below or the termination of a Subsidiary’s participation under Section 8.4 below.

8.3 Termination of Plan. Except upon or during the two (2) year period after any Change of Control of the Company, the Company, through an action of the Compensation Committee, may terminate or suspend this Plan in whole or in part at any time or may terminate an Agreement with any Participant at any time. In the event of termination of the Plan or of a Participant’s Agreement, a Participant will be entitled to only the vested portion of his accrued benefits under Article IV of the Plan as of the time of the termination of the Plan or his Agreement. All further vesting and benefit accrual will cease on the date of Plan or Agreement termination. Benefit payments would be in the amounts specified and would commence at the time specified in Article IV as appropriate.

Notwithstanding the foregoing, the Compensation Committee may decide to terminate and liquidate the Plan under the following circumstances:

(a) Corporate Dissolution or Bankruptcy. The Compensation Committee may terminate and liquidate the Plan within twelve (12) months of a corporate dissolution taxed under section 331 of the Code or with the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A), provided that the amounts deferred under the Plan are included in Participants’ gross income in the latest of the following years (or if earlier, the taxable year in which the amount is actually or constructively received):

(i) The calendar year in which the Plan termination and liquidation occurs.

(ii) The first calendar year in which the amount is no longer subject to a substantial risk of forfeiture.

(iii) The first calendar year in which the payment is administratively practicable.

(b) Change of Control. The Compensation Committee may terminate and liquidate the Plan within the thirty (30) days preceding a Change of Control (except on account of a liquidation or dissolution of the Company) provided that all plans or arrangements that would be aggregated with the Plan under section 409A of the Code are also terminated and liquidated with respect to each Participant that experienced the Change of Control event so that under the terms of the Plan and all such arrangements the Participant is required to receive all amounts of compensation deferred under such arrangements within twelve (12) months of the termination of the Plan or arrangement, as applicable. In the case of a Change of Control event which constitutes a sale of assets, the termination of the Plan pursuant to this Section 8.3(b) may be made with respect to the Employer that is primarily liable immediately after the Change of Control transaction for the payment of benefits under the Plan.

(c) Termination of Plan. Except upon or during the two (2) year period after any Change of Control of the Company, t he Compensation Committee may terminate and liquidate the Plan provided that (i) the termination and liquidation does not occur by reason of a downturn of the financial health of the Company or an Employer, (ii) all plans or arrangements that would be aggregated with the Plan under section 409A of the Code are also terminated and liquidated, (iii) no payments in liquidation of the Plan are made within twelve (12) months of the date of termination of the Plan other than payments that would be made in the ordinary course operation of the Plan, (iv) all payments are made within twenty-four (24) months of the date the Plan is terminated and (v) the Company or the Employer, as applicable depending on whether the Plan is terminated with respect to such entity, do not adopt a new plan that would be aggregated with the Plan within three (3) years of the date of the termination of the Plan.

8.4 Termination of Affiliate’s Participation. A Subsidiary may terminate its participation in the Plan at any time by an action of its governing body and providing written notice to the Company. Likewise, the Company may terminate a Subsidiary’s participation in the Plan at any time by an action of the Compensation Committee and providing written notice to the Subsidiary. 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 PAC can administratively implement such termination. In the event that a Subsidiary’s participation in the Plan is terminated, each Participant employed by such Subsidiary will continue to participate in the Plan as an inactive Participant and will be entitled to a distribution of his vested Retirement Benefit pursuant to Article IV. A Subsidiary’s participation in the Plan may not be terminated upon the occurrence of or during the two (2) year period after any Change of Control.

End of Article VIII

ARTICLE IX
CONDITIONS RELATED TO BENEFITS

9.1 No Right to Assets

(a) Plan Unfunded . A Participant will have only an unsecured contractual right to the amounts, if any, payable under this Plan. Neither a Participant nor any other person will acquire by reason of the Plan any right in or title to any assets, funds or property of the Employer whatsoever including, without limiting the generality of the foregoing, any specific funds or assets which the Employer, in its sole discretion, may set aside in anticipation of a liability under this Plan. Any rights created under the Plan and this Agreement will be mere unsecured contractual rights of Plan participants and their beneficiaries against Employer. The fact that the Trust has been established, to assist in the payment of benefits under this Plan will not create any preferred claim by Participants or their beneficiaries on, or any beneficial ownership interest in, any assets of the Trust. The assets of the Trust and the Employer will be subject to the claims of the Employer’s general creditors under federal and state law.

(b) Rabbi Trust . Upon a Change of Control, the following shall occur:

(i) the Trust shall become (or continue to be) irrevocable;

(ii) for ten (10) years following a Change of Control, the Trustee can only be removed as set forth in the Trust;

(iii) if the Trustee is removed or resigns within ten (10) years following a Change of Control, the Trustee shall select a successor Trustee as set forth in the Trust;

(iv) for three (3) years following a Change of Control, the Company shall be responsible for directly paying all Trustee fees and expenses, together with all fees and expenses incurred under Article 7 relating to the PAC, Plan Administrator, and Plan administrative expenses; and

(v) any amendments to the Trust Agreement shall be subject to the following restrictions: (i) certain Trust Agreement provisions may not be amended for ten (10) years following a Change of Control, as set forth in the Trust; and (ii) no such amendment shall (A) change the irrevocable nature of the Trust; (B) adversely affect a Participant’s rights to Retirement Benefits without the consent of the Participant; (C) impair the rights of the Company’s creditors under the Trust; or (D) cause the Trust to fail to be a “grantor trust” pursuant to Code Sections 671 — 679.

9.2 No Employment Rights. Nothing in this Plan will constitute a contract of continuing employment or in any manner obligate the Employer to continue the service of a Participant, or obligate a Participant to continue in the service of the Employer, and nothing in this Plan will be construed as fixing or regulating the compensation paid to a Participant.

9.3 Offset. If at the time payments or installments of payments are to be made hereunder, any Participant or his Surviving Spouse or both are indebted to the Employer, then the payments remaining to be made to the Participant or his Surviving Spouse or both may, at the discretion of the PAC, be reduced by the amount of such indebtedness; provided, that the entire amount of reduction in any calendar year does not exceed five thousand dollars ($5,000), and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant. An election by the PAC not to reduce any such payment or payments will not constitute a waiver of any claim for such indebtedness.

9.4 Conditions Precedent. No Retirement Benefits will be payable hereunder to any Participant:

(a) whose Employment with the Employer is terminated because of his willful misconduct or gross negligence in the performance of his or her duties; or

(b) except as provided in Sections 4.9(a)(i) and 4.9(a)(ii), who within three (3) years after Termination of Employment becomes an employee with or consultant to any third party engaged in any line of business in competition with the Employer (i) in a line of business in which Participant has performed services for the Employer, or (ii) that accounts for more than ten percent (10%) of the gross revenues of the Employer taken as a whole.

End of Article IX

ARTICLE X
MISCELLANEOUS

10.1 Gender and Number. Wherever appropriate herein, the masculine may mean the feminine and the singular may mean the plural or vice versa.

10.2 Notice. Any notice or filing required to be given or delivered to the PAC or Plan Administrator will include delivery to or filing with a person or persons designated by the PAC or Plan Administrator, as applicable, for the disbursement and the receipt of administrative forms. 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 this Plan.

10.3 Validity. In the event any provision of this Plan is held invalid, void or unenforceable, the same will not affect, in any respect whatsoever, the validity of any other provision of this Plan.

10.4 Applicable Law. This Plan will be governed and construed in accordance with the laws of the State of Texas.

10.5 Successors in Interest. This Plan will inure to the benefit of, be binding upon, and be enforceable by, any corporate successor to the Company or successor to substantially all of the assets of the Company.

10.6 No Representation on Tax Matters. The Company makes no representation to Participants regarding current or future income tax ramifications of the Plan.

10.7 Provisions Binding. All of the provisions of this Plan will be binding upon all persons who will be entitled to any benefit hereunder, their heirs and personal representatives.

End of Article X

IN WITNESS WHEREOF, this Seventh Amended and Restated Tenet Healthcare Corporation Supplemental Executive Retirement Plan has been executed effective as of the date set forth above, except as specifically provided otherwise herein.

	TENET HEALTHCARE CORPORATION


	By:	/s/ Paul Slavin
		Paul Slavin, Vice President, Executive and Corporate Human Resources Services

EXHIBIT A

TENET HEALTHCARE CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AGREEMENT WITH PARTICIPANT - NO AMI SERP BENEFITS

THIS AGREEMENT is made as of , [and supersedes] [any previous agreement] [the previous agreement dated , ,] by and between TENET HEALTHCARE CORPORATION, a Nevada corporation (“Tenet”), and (“Participant”).

WHEREAS, Tenet has adopted the Tenet Healthcare Corporation Supplemental Executive Retirement Plan (the “Tenet SERP”) for a select group of highly compensated or management employees of Tenet and its Subsidiaries (as defined in the Tenet SERP); and

WHEREAS, Tenet has determined that Participant is currently eligible to participate in the Tenet SERP; and

WHEREAS, the Tenet SERP requires that an agreement be entered into between Tenet and Participant setting out certain terms and benefits of the Plan as they apply to the Participant.

NOW THEREFORE, Tenet and Participant hereby agree as follows:

1. Incorporation of Tenet SERP Terms. The Tenet SERP is hereby incorporated into and made a part of this Agreement as though set forth in full herein. The parties shall be bound by and have the benefit of each and every provision of the Tenet SERP. Participant’s benefits under the Tenet SERP will be calculated and paid pursuant to the terms of the Tenet SERP and this Agreement.

2. Participant Data for Benefit Calculation Purposes . Participant was born on , and his or her present Employment with Tenet or a Subsidiary thereof, (i) for purposes of determining “Years of Service,” under the Tenet SERP began on , (ii) for purposes of determining vesting under Section 3.3 of the Tenet SERP began on .

Participant’s spouse, was born on .

Participant’s Eligible Children under the age of 21 and their dates of birth are as follows:

Name

Birth Date

Participant agrees to notify the Senior Director of Executive Compensation of Tenet promptly from time to time of any change in his or her spouse or Eligible Children.

3. Existing Retirement Benefit Plans Adjustment Factor. Participant’s “Existing Retirement Benefit Plans Adjustment Factor” under Article II of the Tenet SERP is percent.

A-1

5. Dispute Resolution. Any dispute or claim for benefits under the Tenet SERP must be resolved through the claims procedure set forth in Article VII of the Tenet SERP which procedure culminates in binding arbitration. By accepting the benefits provided under the Tenet SERP, Participant hereby agrees to binding arbitration as the final means of dispute resolution with respect to the Tenet SERP.

6. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon Tenet and its successors and assigns and Participant and his or her beneficiaries.

IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on , 20 .

PARTICIPANT	TENET HEALTHCARE CORPORATION

	By:
		Vice President of Human Resources

A-2

TENET HEALTHCARE CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AGREEMENT WITH PARTICIPANT - AMI SERP BENEFITS

THIS AGREEMENT is made as of , and supersedes [any previous agreement] [the previous agreement dated of , ,] by and between TENET HEALTHCARE CORPORATION, a Nevada corporation (“Tenet”), and of (“Participant”).

WHEREAS, Tenet has determined that Participant is currently eligible to participate in the Tenet SERP; and

WHEREAS, the Tenet SERP requires that an agreement be entered into between Tenet and Participant setting out certain terms and benefits of the Plan as they apply to the Participant;

WHEREAS, Participant has also been a participant in the American Medical International, Inc. Supplemental Executive Retirement Plan (the “AMI SERP”) and the American Medical International, Inc. Pension Plan (the “AMI Pension Plan”) and has a frozen benefit under both plans as of December 31, 1995; and

WHEREAS, the amount of the benefits payable to Participant under the Tenet SERP will be reduced or offset by the benefits payable to Participant under the AMI SERP and the AMI Pension Plan.

NOW, THEREFORE, Tenet and Participant hereby agree as follows:

1. Calculation of Benefits. The Tenet SERP is hereby incorporated into and made a part of this Agreement as though set forth in full herein. The parties shall be bound by and have the benefit of each and every provision of the Tenet SERP, as amended from time to time, EXCEPT that when benefits become payable under the Tenet SERP, the amount of benefits calculated under the Tenet SERP will include an offset of the benefits earned under the AMI SERP and AMI Pension Plan as of December 31, 1995, in addition to offset provided by the Existing Retirement Benefits Adjustment Factor shown in item 3 below. For purposes of determining the offset attributable to the AMI SERP and the AMI Pension Plan, the amount of Participant’s benefits under the Tenet SERP, the AMI SERP and the AMI Pension Plan will be calculated as of Participant’s normal retirement date, as defined in such plans, and the offset will be determined accordingly using the actuarial factors and assumptions specified in the applicable plans. Participant’s benefits under the AMI SERP and AMI Pension Plan will be paid to Participant pursuant to the terms of such plans. Participant’s benefits under the Tenet SERP, as calculated pursuant to this item 1, will be paid in accordance with the terms of the Tenet SERP and this Agreement.

2. Participant Data for Benefit Calculation Purposes. Participant was born on , and his or her present employment with Tenet or a Subsidiary thereof, (i) for purposes of determining “Years of Service,” under the Tenet SERP began on , (ii) for purposes of determining vesting under Section 3.3 of the Tenet SERP began on .

A-3

Participant’s spouse, was born on .

Participant’s Eligible Children under the age of 21 and their dates of birth are as follows:

Name

Birth Date

Participant agrees to notify the Senior Director of Executive Compensation of Tenet promptly from time to time of any change in his or her spouse or Eligible Children.

3. Existing Retirement Benefit Plans Adjustment Factor. Participant’s “Existing Retirement Benefit Plans Adjustment Factor” under Article II of the Tenet SERP is percent.

4. Payment of Tenet SERP Benefits. Except as provided in the SERP, p ayments under the Tenet SERP will begin not later than the first day of the calendar month following the occurrence of an event which entitles Participant (or his or her Surviving Spouse or Eligible Children) to payments under the Tenet SERP. All benefits payable to a Participant by reason of a Termination of Employment will be subject to the six (6) month restriction applicable to Key Employees.

6. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon Tenet and its successors and assigns and Participant and his or her beneficiaries.

IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on , 20 .

PARTICIPANT	TENET HEALTHCARE CORPORATION

	By:
		Vice President of Human Resources

A-4

SECTION 409A UPDATE TO TENET HEALTHCARE CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AGREEMENT WITH PARTICIPANT - AMI SERP BENEFITS

[This Section 409A Update is to be provided and apply to each Active or Term Vested Participant who also is entitled to benefits under the AMI SERP who has an existing Agreement on December 31, 2008 paragraph 1 of which addresses or is silent regarding the AMI SERP]

THIS SECTION 409A UPDATE (“Section 409A Update”) amends the Agreement (“Agreement”) previously entered into between (the “Participant”) and Tenet Healthcare Corporation (the “Tenet”) with respect to the Participant’s benefits under the Tenet Healthcare Corporation Supplemental Executive Retirement Plan (the “Tenet SERP”) . Capitalized terms used in this Section 409A Update that are not defined herein or in the Participant’s Agreement will have the meaning set forth in the Tenet SERP.

1. Tenet made certain clarifying changes to the Tenet SERP in order for it to comply with the requirements of section 409A of the Internal Revenue Code.

2. One of the clarifying changes concerns the manner in benefits are paid under the Tenet SERP with respect to a participant who is also entitled to a benefit under the American Medical International, Inc. Supplemental Executive Retirement Plan (the “AMI SERP”). Accordingly, paragraph 1 of the Participant’s Agreement is revised to read as follows:

1. The Tenet SERP is hereby incorporated into and made a part of this Agreement as though set forth in full herein. The parties shall be bound by and have the benefit of each and every provision of the Tenet SERP, as amended from time to time, EXCEPT that when benefits become payable under the Tenet SERP, the amount of benefits calculated under the Tenet SERP will include an offset of the benefits earned under the AMI SERP and AMI Pension Plan as of December 31, 1995, in addition to offset provided by the Existing Retirement Benefits Adjustment Factor shown in item 3 below. For purposes of determining the offset attributable to the AMI SERP and the AMI Pension Plan, the amount of Participant’s benefits under the Tenet SERP, the AMI SERP and the AMI Pension Plan will be calculated as of Participant’s normal retirement date, as defined in such plans, and the offset will be determined accordingly using the actuarial factors and assumptions specified in the applicable plans. Participant’s benefits under the AMI SERP and AMI Pension Plan will be paid to Participant pursuant to the terms of such plans. Participant’s benefits under the Tenet SERP, as calculated pursuant to this item 1, will be paid in accordance with the terms of the Tenet SERP and this Agreement.

3. The provisions of this Section 409A Update are effective December 31, 2008. In all other respects the terms of the Participant’s Agreement remain in effect.

A-5

TENET HEALTHCARE CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

FOR PARTICIPANTS NAMED ON AND AFTER AUGUST 3, 2011

THIS AGREEMENT is made as of , [and supersedes] [any previous agreement] [the previous agreement dated , ,] by and between TENET HEALTHCARE CORPORATION , a Nevada corporation (“ Tenet ”), and (“ Participant ”).

WHEREAS , Tenet has adopted the Tenet Healthcare Corporation Supplemental Executive Retirement Plan (the “ Tenet SERP ”) for a select group of highly compensated or management employees of Tenet and its Subsidiaries (as defined in the Tenet SERP); and

WHEREAS , Tenet has determined that Participant is currently eligible to participate in the Tenet SERP; and

WHEREAS , the Tenet SERP requires that an agreement be entered into between Tenet and Participant setting out certain terms and benefits of the Plan as they apply to the Participant.

NOW, THEREFORE , Tenet and Participant hereby agree as follows:

1. Incorporation of Tenet SERP Terms . The Tenet SERP is hereby incorporated into and made a part of this Agreement as though set forth in full herein; provided, however, that the provisions of Section 2.22 regarding the crediting of age and Years of Service during the severance period under the Severance Plan will not apply (i.e., the Participant will not be credited with age and Years of Service during the severance period and instead his eligibility for an Early Retirement Benefit will be determined as of the date of his Termination of Employment). The parties shall be bound by and have the benefit of each and every applicable provision of the Tenet SERP. Participant’s benefits under the Tenet SERP will be calculated and paid pursuant to the terms of the Tenet SERP and this Agreement.

2. Participant Data for Benefit Calculation Purposes . Participant was born on , and his or her present employment with Tenet or a Subsidiary thereof, (i) for purposes of determining “Years of Service,” under the Tenet SERP began on , (ii) for purposes of determining vesting under Section 4.3 of the Tenet SERP began on .

A “ Domestic Partner ,” as defined under the Criteria for Domestic Partnership Status under the Tenet Employee Benefit Plan, will be treated as the Participant’s spouse for purposes of the Tenet SERP.

Participant’s spouse/Domestic Partner (please circle which applies):

was born on .

A-6

Participant’s Eligible Children under the age of 21 and their dates of birth are as follows:

Name

Birth Date

Participant agrees to notify the VP, Executive and Corporate HR Services of Tenet promptly from time to time of any change in his or her spouse, Domestic Partner or Eligible Children.

3. Existing Retirement Benefit Plans Adjustment Factor . Participant’s “Existing Retirement Benefit Plans Adjustment Factor” under Article II of the Tenet SERP is percent.

4. Payment of Tenet SERP Benefits . Except as provided in the SERP, payments under the Tenet SERP will begin not later than the first day of the calendar month following the occurrence of an event which entitles Participant (or his or her Surviving Spouse (including a Domestic Partner pursuant to paragraph 2 herein) or Eligible Children) to payments under the Tenet SERP.

5. Dispute Resolution . Any dispute or claim for benefits under the Tenet SERP must be resolved through the claims procedure set forth in Article VII of the Tenet SERP which procedure culminates in binding arbitration. By accepting the benefits provided under the Tenet SERP, Participant hereby agrees to binding arbitration as the final means of dispute resolution with respect to the Tenet SERP.

6. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon Tenet and its successors and assigns and Participant and his or her beneficiaries.

IN WITNESS WHEREOF , the parties hereto have entered into this Agreement on , 20 .

PARTICIPANT	TENET HEALTHCARE CORPORATION

	By:
		Cathy Fraser, SVP, Human Resources

A-7

Exhibit 10(g)

NINTH AMENDED AND RESTATED

TENET 2001 DEFERRED COMPENSATION PLAN

As Amended and Restated Effective as of May 9, 2012

NINTH AMENDED AND RESTATED

TENET 2001 DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

		Page

ARTICLE I PREAMBLE AND PURPOSE		1
1.1	Preamble	1
1.2	Purpose	2

ARTICLE II DEFINITIONS AND CONSTRUCTION		3
2.1	Definitions	3
2.2	Construction	8

ARTICLE III PARTICIPATION AND FORFEITABILITY OF BENEFITS		10
3.1	Eligibility and Participation	10
3.2	Forfeitability of Benefits	11

ARTICLE IV DEFERRAL, COMPANY CONTRIBUTIONS, ACCOUNTING AND INVESTMENT CREDITING RATES		12
4.1	Deferral	12
4.2	Company Contributions	14
4.3	Accounting for Deferred Compensation	14
4.4	Investment Crediting Rates	16

ARTICLE V DISTRIBUTION OF BENEFITS		19
5.1	General Rules	19
5.2	Distributions Resulting from Termination	19
5.3	Scheduled In-Service Withdrawals	20
5.4	Non-Scheduled Withdrawals	20
5.5	Financial Necessity Distributions	21
5.6	Elective Distributions	22
5.7	Death of a Participant	22
5.8	Disability of a Participant	22
5.9	Change of Control	23
5.10	Withholding	23
5.11	Suspension of Benefits	23

ARTICLE VI PAYMENT LIMITATIONS		24
6.1	Spousal Claims	24
6.2	Legal Disability	24
6.3	Assignment	25

ARTICLE VII FUNDING		26
7.1	(a) Funding	26
	(b) Rabbi Trust	26
7.2	Creditor Status	26

ARTICLE VIII ADMINISTRATION		27

8.1	The PAC	27
8.2	Powers of PAC	27
8.3	Appointment of Plan Administrator	27
8.4	Duties of Plan Administrator	27
8.5	Indemnification of PAC and Plan Administrator	29
8.6	Claims for Benefits	29
8.7	Arbitration	30
8.8	Receipt and Release of Necessary Information	31
8.9	Overpayment and Underpayment of Benefits	31
8.10	Change of Control	31

ARTICLE IX OTHER BENEFIT PLANS OF THE COMPANY		33
9.1	Other Plans	33

ARTICLE X AMENDMENT AND TERMINATION OF THE PLAN		34
10.1	Continuation	34
10.2	Amendment of Plan	34
10.3	Termination of Plan	34
10.4	Termination of Affiliate’s Participation	34

ARTICLE XI MISCELLANEOUS		36
11.1	No Reduction of Employer Rights	36
11.2	Provisions Binding	36

EXHIBIT A LIMITS ON ELIGIBILITY AND PARTICIPATION		A-1

TENET 2001 DEFERRED COMPENSATION PLAN

ARTICLE I
PREAMBLE AND PURPOSE

1.1 Preamble . Tenet Healthcare Corporation (the “Company”), through an action of the Compensation Committee of the Board of Directors (the “Committee”), adopted the predecessor to the Tenet 2001 Deferred Compensation Plan (the “Plan”) on October 10, 2000 to permit the Company and its participating Affiliates, as defined herein (collectively, the “Employer”), to attract and retain a select group of management or highly compensated employees and Directors, as defined herein.

Effective as of January 31, 2001, the Company transferred to this Plan amounts held for the benefit of certain participants in the Tenet Executive Deferred Compensation and Supplemental Savings Plan (the “Supplemental Plan”), other than those balances held for the benefit of physician-employees who participated in the Supplemental Plan and participants who are in pay-out status as of December 31, 2000, under the Supplemental Plan. Effective as of December 31, 2002, the Committee authorized the merger of the Supplemental Plan into this Plan.

The Plan was subsequently amended and restated by the Committee on July 22, 2003, September 10, 2003, October 8, 2002, December 4, 2001, July 24, 2001, May 22, 2001 and subsequently amended by the Committee effective April 1, 2004.

The Plan was amended and restated effective January 1, 2005 to comply with the provisions of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) with respect to compensation and bonus deferrals and employer contributions made on and after January 1, 2005. Compensation and bonus deferrals and employer contributions made to the Plan prior to January 1, 2005 were fully vested as of December 31, 2004 and are exempt from the requirements of section 409A of the Code.

Effective as of January 1, 2006, the Company adopted the Tenet 2006 Deferred Compensation Plan (the “2006 DCP”) to replace this Plan. Consequently, no additional deferrals or contributions were made to the Plan after December 31, 2005. Deferrals and contributions made to the Plan during the 2005 Plan Year (i.e., January 1, 2005 to December 31, 2005) were transferred to the 2006 DCP and will be administered pursuant to the terms of the 2006 DCP.

The Company amended and restated the Plan effective December 31, 2008 to (a) reflect that compensation and bonus deferrals and employer contributions made on or after January 1, 2005 have been transferred to the 2006 DCP and will be administered pursuant to the terms of the 2006 DCP, (ii) modify pursuant to existing Plan terms in effect as of October 3, 2004 the fixed return investment option to provide that interest will be credited based on one hundred and twenty percent (120%) of the long-term applicable federal rate as opposed to the current provision which credits interest based on the prime rate of interest less one percent (1%), and (c) reflect that compensation and bonus deferrals and RSU deferrals under the 2006 DCP will be suspended in the event that a Participant takes an unforeseeable emergency withdrawal from this Plan. This amended and restated Plan was known as the Eighth Amended and Restated Tenet 2001 Deferred Compensation Plan.

By this instrument, the Company amends and restates the Plan, effective May 9, 2012, to add certain Change of Control provisions and certain termination event definitions. This amended and restated Plan will be known as the Ninth Amended and Restated Tenet 2001 Deferred Compensation Plan.

The Employer may adopt one or more domestic trusts to serve as a possible source of funds for the payment of benefits under this Plan.

1.2 Purpose . Through this Plan, the Employer intends to permit the deferral of compensation and to provide additional benefits to Directors and a select group of management or highly compensated employees of the Employer. Accordingly, it is intended that this Plan 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 this Plan will be exempt from the participation and vesting requirements of Part 2 of Title I of the Employee Retirement Income Security Act of 1974, as amended (the “Act”), the funding requirements of Part 3 of Title I of the Act, and the fiduciary requirements of Part 4 of Title I of the Act 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

ARTICLE II
DEFINITIONS AND CONSTRUCTION

2.1 Definitions . When a word or phrase appears in this Plan 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) “ Account ” means one or more of the bookkeeping accounts maintained by the Company or its agent on behalf of a Participant to reflect amounts deferred or contributed to the Plan prior to January 1, 2005, and the earnings and losses thereon, as described in more detail in Section 4.4. A Participant’s Account may be divided into one or more “ Cash Accounts ” or “ Stock Unit Accounts ” as defined in Section 4.4. Amounts deferred or contributed to the Plan during the 2005 Plan Year are reflected in the bookkeeping accounts maintained by the Company or its agent under the 2006 DCP.

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

(c) “ 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.

(d) “ Alternate Payee ” means “any spouse, former spouse, child, or other dependent of a Participant who is recognized by a DRO as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to such Participant.

(e) “ Annual Incentive Plan Award ” means the amount payable to an Employee each year, if any, under the Company’s Annual Incentive Plan, as the same may be amended, restated, modified, renewed or replaced from time to time.

(f) “ Basic Deferral ” means the Compensation deferral made by a Participant to the Plan prior to January 1, 2005 as described in Section 4.1(a).

(g) “ Beneficiary ” means the person designated by the Participant to receive a distribution of his benefits under the Plan upon the death of the Participant. If the Participant is married, his spouse will be his Beneficiary, unless his spouse consents in writing to the designation of an alternate Beneficiary. In the event that a Participant fails to designate a Beneficiary, or if the Participant’s Beneficiary does not survive the Participant, the Participant’s Beneficiary will be his surviving spouse, if any, or if the Participant does not have a surviving spouse, his estate. The term “Beneficiary” also will mean a Participant’s spouse or former spouse who is entitled to all or a portion of a Participant’s benefit pursuant to Section 6.1.

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

(i) “ Bonus ” means (i) a bonus paid to a Participant in the form of an Annual Incentive Plan Award, (ii) an annual bonus payment to a Participant pursuant to an employment or similar agreement or (iii) any other bonus payment designated by the PAC as an eligible bonus under the Plan.

(j) “ Bonus Deferral ” means the Bonus deferral made by a Participant prior to January 1, 2005 as described in Section 4.1(b). A Participant was also permitted prior to January 1, 2005 to defer a portion of his Bonus as a Supplemental Deferral as described in Section 4.1(c).

(k) (i) “Cause”, on or within two (2) years after a Change of Control, shall have the same meaning as set forth in Section 2.1(f)(2) of the ESP.

(ii) Cause , for any Participant who is a Covered Executive under the ESP, with respect to any event not occurring on or within two (2) years after a Change of Control, shall have the same meaning as set forth in Section 2.1(f)(1) of the ESP.

(iii) Cause , for any Participant who is not a Covered Executive under the ESP, with respect to any event not occurring on or within two (2) years after a Change of Control, shall have the same meaning as set forth in Section 2.5(b)(ii) of the Stock Incentive Plan.

(l) “ Change of Control ” shall have the meaning set forth in the ESP.

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

(n) “ Company ” means Tenet Healthcare Corporation.

(o) “ Compensation ” means base salaries, commissions, and certain other amounts of cash compensation payable to the Participant during the Plan Year. Compensation will exclude cash bonuses, foreign service pay, hardship withdrawal allowances and any other pay intended to reimburse the Employee for the higher cost of living outside the United States, Annual Incentive Plan Awards, automobile allowances, ExecuPlan payments, housing allowances, relocation payments, deemed income, income payable under stock incentive plans, Christmas gifts, insurance premiums, and other imputed income, pensions, retirement benefits, and contributions to and payments from the 401(k) Plan and this Plan or any other nonqualified retirement plan maintained by the Employer. The term “Compensation” for Directors will mean any cash compensation from retainers, meeting fees and committee fees paid during the Plan Year.

(p) “ Compensation Committee ” means the Compensation Committee of the Board, which has the authority to amend and terminate the Plan as provided in Article X. The Compensation Committee also will be responsible for determining the amount of the Discretionary Contribution, if any, to be made by the Employer prior to January 1, 2005.

(q) “ Compensation and Bonus Deferrals ” means the Basic Deferrals, Bonus Deferrals, Supplemental Deferrals and/or Discretionary Deferrals made prior to January 1, 2005 as described in Section 4.1 of the Plan.

(r) “ Covered Person ” means a covered employee within the meaning of section 162(m)(3) of the Code or an Employee designated as a Covered Person by the Compensation Committee.

(s) “ Director ” means a member of the Board who is not an Employee.

(t) “ Disability ” means the total and permanent incapacity of a Participant, due to physical impairment or mental incompetence, to perform the usual duties of his employment with the Employer. Disability will be determined by the Plan Administrator on the basis of (i) evidence that the Participant has become entitled to receive benefits from an Employer sponsored long-term disability plan, or in the case of a Director, a long-term disability plan that covers such Director, or (ii) evidence that the Participant has become entitled to receive primary benefits as a disabled employee under the Social Security Act in effect on such date of Disability.

(u) “ Discretionary Contribution ” means the contribution made by the Employer on behalf of a Participant, if any, prior to January 1, 2005, as described in Section 4.2(b).

(v) “ Discretionary Deferral ” means the Compensation deferral described in Section 4.1(d) made by a Participant prior to January 1, 2005.

(w) “ DRO ” means a domestic relations order that is a judgment, decree, or order (including one that approves a property settlement agreement) that relates to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent of a Participant and is rendered under a state (within the meaning of section 7701(a)(10) of the Code) domestic relations law (including a community property law) and that:

(i) Creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to receive all or a portion of the benefits payable with respect to a Participant under the Plan;

(ii) Does not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan;

Does not require the Plan to provide increased benefits (determined on the basis of actuarial value);

Does not require the payment of benefits to an Alternate Payee that are required to be paid to another Alternate Payee under another order previously determined to be a DRO; and

(v) Clearly specifies: the name and last known mailing address of the Participant and of each Alternate Payee covered by the DRO; the amount or percentage of the Participant’s benefits to be paid by the Plan to each such Alternate Payee, or the manner in which such amount or percentage is to be determined; the number of payments or payment periods to which such order applies; and that it is applicable with respect to this Plan.

(x) “ Effective Date ” means May 9, 2012 except as provided otherwise herein.

*(y) `” Election Form ” means the written forms provided by the PAC or the Plan Administrator pursuant to which the Participant consents to participation in the Plan and made elections with respect to deferrals prior to January 1, 2005, and requests investment crediting rates and distributions. Such Participant consent and elections may be done either in writing or on-line through an electronic signature.

(z) “ Eligible Person ” means (i) each Employee who is eligible for a Bonus as defined in Section 2.1(i) for the applicable Plan Year, (ii) each Director, and (iii) all aviation personnel who are Employees and are designated as captains. In addition, the term “Eligible Person” will include any Employee designated as an Eligible Person by the PAC. As provided in Section 3.1, the PAC may at any time, in its sole and absolute discretion, limit the classification of Employees who are eligible to participate in the Plan for a Plan Year and/or may modify or terminate an Eligible Person’s participation in the Plan without the need for an amendment to the Plan.

(aa) “ Emergency ” means a Foreseeable Emergency or Unforeseeable Emergency that makes a Participant eligible for a Financial Necessity Distribution with respect to his Basic Deferrals, Bonus Deferrals, Supplemental Deferrals and/or Discretionary Deferrals credited to his Account under Section 5.5.

(bb) “ 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.`

(cc) “ Employer ” means the Company and each Affiliate which has adopted the Plan as a participating employer. An Affiliate may evidence its adoption of the Plan either by a formal action of its governing body or by commencing deferrals and taking other administrative actions with respect to this Plan on behalf of its employees. An entity will cease to be a participating employer as of the date such entity ceases to be an Affiliate.

(dd) “ESP” means the Tenet Executive Severance Plan, as amended from time to time.

(ee) “ Fair Market Value ” means the closing price of a share of Stock on the New York Stock Exchange on the date as of which fair market value is to be determined.

(ff) “ Foreseeable Emergency ” means, with respect to a Participant’s Basic Deferrals, Bonus Deferrals and/or Discretionary Deferrals credited to his Account, a severe financial hardship to the Participant resulting from an event that, although foreseeable, is outside the Participant’s control, as determined by the Plan Administrator in its sole and absolute discretion. Such potentially foreseeable but uncontrollable events include the following:

(i) expenses for medical care described in section 213(d) of the Code incurred by the Participant, the Participant’s spouse, or any dependents of the Participant (as defined in section 152 of the Code) or necessary for those persons to obtain medical care described in section 213(d) of the Code; and

(ii) such other events deemed by the Plan Administrator, in its sole and absolute discretion, to constitute a Foreseeable Emergency.

(gg) “ 401k) Plan ” means the Tenet Healthcare Corporation 401(k) Retirement Savings Plan, as such plan may be amended, restated, modified, renewed or replaced from time to time.

(hh) “ Matching Contribution ” means the contribution made by the Employer prior to January 1, 2005 pursuant to Section 4.2(a) on behalf of a Participant who made

Supplemental Deferrals to the Plan prior to January 1, 2005 as described in Section 4.1(c).

(ii) “ Non-Scheduled Withdrawal ” means an election by a Participant in accordance with Section 5.4 to receive a withdrawal of amounts from his Account prior to the time at which such Participant otherwise would be entitled to such amounts.

(jj) “ Open Enrollment Period ” means the period prior to the beginning of the Plan Year during which an Eligible Person could make his elections concerning Compensation Deferrals pursuant to Article IV.

(kk) “ PAC ” means the Pension Administration Committee of the Company established by the Compensation Committee of the Board, and whose members have been appointed by such Compensation Committee. The PAC will have the responsibility to administer the Plan and make final determinations regarding claims for benefits, as described in Article VIII. In addition, the PAC has limited amendment authority over the Plan as provided in Section 10.2.

(ll) “ Participant ” means each Eligible Person who has been designated for participation in this Plan prior to January 1, 2005 and each Employee or former Employee (or Director or former Director) whose participation in this Plan has not terminated.

(mml “ Plan ” means the Ninth Amended and Restated Tenet 2001 Deferred Compensation Plan as set forth herein and as the same may be amended from time to time.

(nn) “ Plan Administrator ” means the individual or entity appointed by the PAC to handle the day-to-day administration of the Plan, including but not limited to determining a Participant’s eligibility for benefits and the amount of such benefits and complying with all applicable reporting and disclosure obligations imposed on the Plan. If the PAC does not appoint an individual or entity as Plan Administrator, the PAC will serve as the Plan Administrator.

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

(pp) “ Scheduled In-Service Withdrawal ” means a distribution elected by the Participant pursuant to Section 4.1 or Section 4.2 for an in-service withdrawal of amounts of Basic Deferrals and/or Bonus Deferrals made in a given Plan Year before January 1, 2005, and earnings or losses attributable thereto, as set forth on the Election Form for such Plan Year.

(qq) “ Scheduled Withdrawal Date ” means the distribution date elected by the Participant for a Scheduled In-Service Withdrawal.

(rr) “ Severance Plan ” means the Tenet Executive Severance Protection Plan or the Tenet Executive Severance Plan.

(ss) “ Special Enrollment Period ” means the thirty (30) day period prior to January 1, 2005 after an Employee is employed by the Employer (or a Director is elected to the Board) and advised of his eligibility to participate in the Plan during which the Eligible Person may make his elections to defer Compensation and Bonus earned after such election pursuant to Article IV.

(tt) “ Stock ” means the common stock, par value $0.05 per share, of the Company.

(uu) “Stock Incentive Plan” means the Tenet Healthcare 2008 Stock Incentive Plan, as amended from time to time.

(vv) “ Stock Unit ” means a non-voting, non-transferable unit of measurement that is deemed for bookkeeping and distribution purposes only to represent one (1) outstanding share of Stock.

(ww) “ Supplemental Deferral ” means the Compensation and/or Bonus Deferral described in Section 4.1(c).

(xx) “ Supplemental Plan ” will have the meaning set forth in Section 1.1 of this Plan.

(yy) “ Termination of Employment ” means (i) with respect to an Employee, the date that such Employee ceases performing services for the Employer and its Affiliates in the capacity of an employee and (ii) with respect to a Director, the date that such Director ceases to provide services to the Company as a member of the Board. An Employee who transfers employment from an Employer to an Affiliate, regardless of whether such Affiliate has adopted the Plan as a participating employer, will not incur a Termination of Employment. A Participant who experiences a “qualifying termination” under the Severance Plan will incur a Termination of Employment under the Plan and such an Employee will be ineligible to make Compensation and Bonus Deferrals under the Plan during his severance period under the Severance Plan ( i.e ., will be ineligible for future participation in the Plan as an active Employee).

(zz) “ Trust” means the rabbi trust established with respect to the Plan the assets of which are to be used for the payment of benefits under the Plan.

(aaa) `” Trustee ” means the individual or entity appointed to serve as trustee of any trust established as a possible source of funds for the payment of benefits under this Plan as provided in Section 8.1. After the occurrence of a Change of Control, the Trustee must be independent of any successor to the Company or any affiliate of such successor.

(bbb) “ 2006 DCP ” means the Tenet 2006 Deferred Compensation Plan which is effective January 1, 2006. Compensation and Bonus Deferrals and employer contributions made to this Plan during the 2005 Plan Year were transferred to the 2006 DCP and will be administered pursuant to the terms of the 2006 DCP. Accordingly, the terms and conditions applicable to such deferrals and contributions are set forth in the 2006 DCP and not this Plan.

(ccc) “ Unforeseeable Emergency ” means a severe financial hardship to the Participant resulting from (A) a sudden and unexpected illness or accident of the Participant or one of the Participant’s dependents (as defined under section 152(a) of the Code), (B) loss of the Participant’s property due to casualty, or (C) such other similar extraordinary and unforeseeable circumstances arising as a result of an unforeseeable event or events beyond the control of the Participant, as determined by the Plan Administrator in its sole and absolute discretion.

delivery to a person or persons designated by the PAC or Plan Administrator, as applicable, for the disbursement and the receipt of administrative forms. 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 this Plan. The pronouns “he,” “him” and “his” used in the Plan will also refer to similar pronouns of the female gender unless otherwise qualified by the context.

End of Article II

ARTICLE III
PARTICIPATION AND FORFEITABILITY OF BENEFITS

3.1 Eligibility and Participation .

(a) Determination of Eligibility . It is intended that eligibility to participate in the Plan will be limited to Eligible Persons, as determined by the PAC, in its sole and absolute discretion. During the Open Enrollment Period, each Eligible Person will be contacted and informed that he may elect to defer portions of his Compensation and/or Bonus and will be provided with an Election Form, investment crediting rate preference designation and such other forms as the PAC or the Plan Administrator will determine. An Eligible Person will become a Participant by completing all required forms and making a deferral election during an Open Enrollment Period pursuant to Section 4.1. Eligibility to become a Participant for any Plan Year will not entitle an Eligible Person to continue as an active Participant for any subsequent Plan Year. Effective as of January 1, 2006 no new Eligible Persons could become Participants in this Plan. As noted elsewhere, amounts deferred or contributed to this Plan during the 2005 Plan Year were transferred to the 2006 DCP and will be administered pursuant to the terms of that plan. Accordingly, the terms of this Plan reflect the Plan’s provisions and operation with respect to amounts deferred or contributed before January 1, 2005.

(b) Limits on Eligibility . The PAC may at any time, in its sole and absolute discretion, limit the classification of Employees eligible to participate in the Plan and/or may limit or terminate an Eligible Person’s participation in the Plan. Any action taken by the PAC that limits the classification of Employees eligible to participate in the Plan or that modifies or terminates an Eligible Person’s participation in the Plan will be set forth in Exhibit A attached hereto. Exhibit A may be modified from time to time without a formal amendment to the Plan, in which case a revised Exhibit A will be attached hereto.

(c) Eligibility on Initial Employment . If an Eligible Person is employed or elected to the Board during a Plan Year prior to January 1, 2005 and designated by the PAC to be a Participant for such year, such Eligible Person may elect to participate during the Special Enrollment Period for the remainder of such Plan Year, by completing all required forms and making a deferral election pursuant to Section 4.1. Designation as a Participant for the Plan Year in which he is employed or elected to the Board will not entitle the Eligible Person to continue as an active Participant for any subsequent Plan Year.

(d) Loss of Eligibility Status . A Participant under this Plan who separates from employment with the Employer, or who ceases to be a Director, will continue as an inactive Participant under this Plan until the Participant has received payment of all amounts payable to him under this Plan. In the event that an Eligible Person ceases active participation in the Plan because the Eligible Person is no longer described as a Participant pursuant to this Section 3.1, or because he ceases making deferrals of Compensation and/or Bonuses, the Eligible Person will continue as an inactive Participant under this Plan until he has received payment of all amounts payable to him under this Plan.

3.2 Forfeitability of Benefits . Except as provided in Section 5.4 and Section 6.1, a Participant will at all times have a nonforfeitable right to amounts credited to his Account pursuant to Section 4.3, subject to the distribution provisions of Article V. As provided in Section 7.2, however, each Participant will be only a general creditor of the Company and/or his Employer with respect to the payment of any benefit under this Plan.

End of Article III

ARTICLE IV

DEFERRAL, COMPANY CONTRIBUTIONS, ACCOUNTING
AND INVESTMENT CREDITING RATES

4.1 Deferral . An Eligible Person may become a Participant in the Plan for the applicable Plan Year by electing during the Open Enrollment Period to defer his Compensation and/or Bonus pursuant to the terms of this Section 4.1 on an Election Form. Such Election Form will be submitted to the Plan Administrator by the date specified by the Plan Administrator and will be effective with respect to deferral elections with the first paycheck dated on or after the next following January 1. In the case of an Eligible Person who is employed or elected to the Board during the Plan Year, the Election Form will be entered into within the Special Enrollment Period and submitted to the Plan Administrator by the date specified by the Plan Administrator and the specified deferral elections will only be effective with respect to Compensation and/or Bonuses earned after the date such Election Form is received by the Plan Administrator.

A Participant’s Election Form will only be effective with respect to a single Plan Year and will be irrevocable for the duration of such Plan Year. Effective January 1, 2006, no additional Compensation or Bonus Deferrals or Employer contributions may be made under the Plan. Compensation or Bonus Deferrals or Employer contributions made during the 2005 Plan Year were transferred to the 2006 DCP and will be administered pursuant to that plan’s terms.

Prior to January 1, 2005, a Participant could specify on each Election Form, the method in which Compensation and/or Bonuses deferred under the Plan would be paid ( i.e., in either a lump sum or, in certain instances as described herein, in equal monthly installments over a period of not less than one year nor more than 15 years). If the Participant, during the Open Enrollment Period, elected a different method of payment on a subsequent Election Form with respect to Compensation and Bonus deferred prior to the Effective Date, such form of payment election superseded any prior payment elections made on an earlier Election Form, provided such election had been in effect for twelve (12) months. Compensation and Bonus Deferrals made under the Plan prior to January 1, 2005, will be subject to the distribution provisions of Article V.

Four types of deferrals could be made under the Plan prior to January 1, 2005:

(a) Basic Deferral . Each Eligible Person could elect to defer a stated dollar amount, or designated full percentage, of Compensation to the Plan up to a maximum percentage of seventy five percent (75%) (one hundred percent (100%) for Directors) of the Eligible Person’s Compensation for the applicable Plan Year until either (i) the Participant’s Termination of Employment or (ii) a future year in which the Participant is still employed by the Employer (or providing services as a member of the Board) and that is at least two (2) calendar years after the end of the Plan Year in which the Compensation would have otherwise been paid ( i.e ., as a Scheduled In-Service Withdrawal).

The Employer did not make any Matching Contributions with respect to any Basic Deferrals made to the Plan.

(b) Bonus Deferral. Each Eligible Person could elect to defer a stated dollar amount, or designated full percentage, of his Bonus to the Plan up to a maximum

percentage of one hundred percent (100%) (ninety seven percent (97%) if a Supplemental Deferral was elected pursuant to Section 4.1(c)) of the Employee’s Bonus for the applicable Plan Year until either (i) the Eligible Person’s Termination of Employment or (ii) a future year in which the Eligible Person is still employed by the Employer (or providing services as a member of the Board) and that is at least two (2) calendar years after the end of the Plan Year in which the Bonus would have otherwise been paid ( i.e ., as a Scheduled In-Service Withdrawal).

Bonus Deferrals generally were be made in the form of cash; provided, however, that if the Company modified the Annual Incentive Plan to provide for the payment of awards in Stock, Bonus Deferrals could have been made in the form of Stock. Any Bonus Deferrals made in the form of Stock would be converted to Stock Units, based on the number of shares so deferred, credited to the Stock Unit Account and distributed to the Participant at the time specified herein in an equivalent number of whole shares of Stock as provided in Section 4.4(b).

The Employer did not make any Matching Contributions with respect to any Bonus Deferrals made to the Plan.

(c) Supplemental Deferral. Each Eligible Person could elect to make Supplemental Deferrals to the Plan payable upon Termination of Employment in accordance with the following provisions of this Section 4.1(c).

(i) Statutory Limits. Each Eligible Person who was also a participant in the 401(k) Plan could elect to automatically have three percent (3%) of his Compensation deferred under the Plan when he reached any of the following statutory limitations under the 401(k) Plan: (A) the limitation on Compensation under section 401(a)(17) of the Code, as such limit is adjusted for cost of living increases, (B) the limitation imposed on elective deferrals under section 402(g) of the Code, as such limit is adjusted for cost of living increases, (C) the limitations on contributions and benefits under section 415 of the Code, or (D) the limitations on contributions imposed by the 401(k) Plan administrator in order to satisfy the limitations on contributions under sections 401(k) and 401(m) of the Code. The ability to make Supplemental Deferrals under this Section 4.1(c)(i) was not impacted by the Participant’s eligibility to make “catch-up contributions” under the 401(k) Plan

The Employer made Matching Contributions with respect to Supplemental Deferrals made to the Plan as provided in Section 4.2.

(ii) Bonus. Each Eligible Person who was also a participant in the 401(k) Plan could elect to automatically have three percent (3%) of his Bonus deferred under the Plan as a Supplemental Deferral whether or not the Eligible Person has reached the statutory limitations under the 401(k) Plan described in Section 4.1(c)(i). This Supplemental Deferral was applied to that portion of the Eligible Person’s Bonus in excess of that deferred as a Bonus Deferral under Section 4.1(b). For example, if the Eligible Person elected to defer fifty percent (50%) of his Bonus under Section 4.1(b) and also elected to make a Supplemental Deferral under this Section 4.1(c), fifty percent (50%) of the Eligible Person’s Bonus was

deferred under Section 4.1(b) and three percent (3%) of the Eligible Person’s Bonus was deferred under this Section 4.1(c).

The Employer made Matching Contributions with respect to Supplemental Deferrals made to the Plan as provided in Section 4.2.

(d) Discretionary Deferral. The PAC could authorize an Eligible Person to defer prior to January 1, 2005 a stated dollar amount, or designated full percentage, of Compensation to the Plan as a Discretionary Deferral. The PAC, in its sole and absolute discretion, could limit the amount or percentage of Compensation an Eligible Person could defer to the Plan as a Discretionary Deferral and could prohibit Scheduled In-Service Withdrawals with respect to such Discretionary Deferral. The Employer did not make any Matching Contributions pursuant to Section 4.2(a) with respect to any Discretionary Deferrals, but could have elected to make a Discretionary Contribution to the Plan with respect to such Discretionary Deferrals in the form of a discretionary matching contribution as described in Section 4.2(b).

4.2 Company Contributions .

(a) Matching Contribution. The Employer made a Matching Contribution to the Plan each Plan Year beginning before January 1, 2005 on behalf of each Participant who made a Supplemental Deferral to the Plan for such Plan Year. Such Matching Contribution equaled one hundred percent (100%) of the Participant’s Supplemental Deferrals for such Plan Year. Matching Contributions and earnings and losses thereon are subject to the distribution provisions of Article V.

(b) Discretionary Contribution. The Employer could have elected to make a Discretionary Contribution to a Participant’s Account for any Plan Year beginning before January 1, 2005 in such amount, and at such time, as determined by the Compensation Committee. Any such Discretionary Contribution made by the Employer, plus earnings and losses thereon, with respect to a Covered Person will not be paid until that Participant’s employment with the Employer is terminated; provided, however, that if such Participant has elected to receive a distribution of Account upon the occurrence of a Change of Control and a Change of Control occurs, such Participant will be entitled to receive such Change of Control distribution in accordance with Section 5.9 of this Plan. In all other respects, Discretionary Contributions will be subject to the distribution provisions of Article V.

4.3 Accounting for Deferred Compensation .

(a) Cash Account. If a Participant made an election to defer his Compensation and/or Bonus prior to January 1, 2005 pursuant to Section 4.1 and made a request for amounts deferred to be invested pursuant to Section 4.4(a), the Company could have, in its sole and absolute discretion, established and maintained a Cash Account for the Participant under this Plan. Each Cash Account will be adjusted at least quarterly to reflect the Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, Discretionary Deferrals, Matching Contributions and Discretionary Contributions credited thereto prior to January 1, 2005, earnings or losses credited thereon, and any payment or withdrawal of such Basic Deferrals, Bonus Deferrals,

Supplemental Deferrals, Discretionary Deferrals and, Matching Contributions and Discretionary Contributions pursuant to Article V. The amounts of Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, Discretionary Deferrals and Matching Contributions made prior to January 1, 2005 were credited to the Participant’s Cash Account within five (5) business days of the date on which such Compensation and/or Bonus would have been paid to the Participant had the Participant not elected to defer such amount pursuant to the terms and provisions of the Plan. Any Discretionary Contributions made prior to January 1, 2005 were credited to each Participant’s Cash Account at such times as determined by the Compensation Committee. In the sole and absolute discretion of the Plan Administrator, additional Cash Accounts may be established for each Participant to facilitate record-keeping convenience and accuracy. Each such Cash Account will be credited and adjusted as provided in this Plan.

(b) Stock Unit Account. If a Participant made an election prior to January 1, 2005 to defer his Compensation and/or Bonus pursuant to Section 4.1 and made a request for such deferrals to be deemed invested in Stock Units pursuant to Section 4.4(b), the Plan Administrator could have, in its sole and absolute discretion, established and maintained a Stock Unit Account and credited the Participant’s Stock Unit Account with a number of Stock Units determined by dividing an amount equal to the Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, and associated Matching Contributions and Discretionary Deferrals made as of such date by the Fair Market Value of a share of Stock on the date such Compensation and/or Bonus otherwise would have been payable. Such Stock Units were credited to the Participant’s Stock Unit Account as soon as administratively practicable after the determination of the number of Stock Units was made pursuant to the preceding sentence.

If the Participant was entitled to a Discretionary Contribution pursuant to Section 4.2 and elected to have amounts credited to his Account to be deemed invested in Stock Units pursuant to Section 4.5(b), the Plan Administrator could have, in its sole discretion, established and maintained a Stock Unit Account and credited the Participant’s Stock Unit Account with a number of Stock Units determined by dividing an amount equal to the Discretionary Contribution made as of such date by the Fair Market Value of a share of Stock on the date such Discretionary Contribution would have otherwise been made. Such Stock Units were credited to the Participant’s Stock Unit Account as soon as administratively practicable after the determination of the number of Stock Units was made pursuant to the preceding sentence.

Bonus Deferrals made in Stock were credited to the Stock Unit Account as provided in Section 4.1(b).

In the sole and absolute discretion of the Plan Administrator, additional Stock Unit Accounts may be established for each Participant to facilitate record-keeping convenience and accuracy.

(i) The Stock Units credited to a Participant’s Stock Unit Account or accounts will be used solely as a device for determining the number of shares of Stock eventually to be distributed to the Participant in accordance with this Plan. The Stock Units will not be treated as property of the

Participant or as a trust fund of any kind. No Participant will be entitled to any voting or other stockholder rights with respect to Stock Units credited under this Plan.

(ii) If the outstanding shares of Stock are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Stock or other securities, through merger, consolidation, spin-off, sale of all or substantially all the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of Stock or other securities, an appropriate and proportionate adjustment in a manner consistent with section 409A of the Code will be made by the Compensation Committee in the number and kind of Stock Units credited to a Participant’s Stock Unit Account or accounts.

(c) Accounts Held in Trust. Amounts credited to Participants’ Accounts may be secured by one or more trusts, as provided in Section 8.1, but will be subject to the claims of the general creditors of each such Participant’s Employer. Although the principal of such trust and any earnings or losses thereon will be separate and apart from other funds of the Employer and will be used for the purposes set forth therein, neither the Participants nor their Beneficiaries will have any preferred claim on, or any beneficial ownership in, any assets of the trust prior to the time such assets are paid to the Participant or Beneficiaries as benefits and all rights created under this Plan will be unsecured contractual rights of Plan Participants and Beneficiaries against the Employer. Any assets held in the trust with respect to a Participant will be subject to the claims of the general creditors of that Participant’s Employer under federal and state law in the event of insolvency. The assets of any trust established pursuant to this Plan will never inure to the benefit of the Employer and the same will be held for the exclusive purpose of providing benefits to that Employer’s Participants and their beneficiaries.

4.4 Investment Crediting Rates . At the time of making a deferral election described in Section 4.1, the Participant requested on an Election Form the type of investment crediting rate option with which the Participant would like the Company, in its sole and absolute discretion, to credit the Participant; namely, one of several investment crediting rate options payable in cash or an investment crediting rate option based on the performance of the price of the Company’s Stock and payable in the Company’s Stock. Such investment crediting rate election applied to all deferrals under the Plan, except for Bonus Deferrals made in Stock which automatically were credited to the Stock Unit Account as provided in Section 4.1(b) and Section 4.2.

(a) Cash Investment Crediting Rate Options. A Participant may request on an Election Form the type of investment in which the Participant would like Compensation and Bonus Deferrals made prior to January 1, 2005 to be deemed invested for purposes of determining the amount of earnings to be credited or losses to be debited to his Cash Account. The Participant will specify his preference from among the following possible investment crediting rate options:

(i) Prior to January 1, 2009, an annual rate of interest equal to one percent (1%) below the prime rate of interest as quoted by Bloomberg, compounded daily and effective on and after January 1, 2009, an annual rate of interest equal to one hundred and twenty percent (120%) of the long-term applicable federal rate, compounded daily; or

(ii) One or more benchmark mutual funds.

A Participant may change, on a daily basis, the investment crediting rate preference under this Section 4.4(a) applicable to his Account by filing an election in such manner as will be determined by the PAC. Notwithstanding any request made by a Participant, the Company, in its sole and absolute discretion, will determine the investment rate with which to credit amounts deferred by Participants under this Plan, provided, however, that if the Company chooses an investment crediting rate other than the investment crediting rate requested by the Participant, such investment crediting rate cannot be less than (i) above.

This Section will not apply to certain Participants who participated in a prior plan that was merged into this Plan and are in pay status and entitled to fixed installment amounts based on the terms of the prior plan.

(b) Stock Units. A Participant could have requested on an Election Form to have all or a portion of his Compensation and Bonus Deferrals made prior to January 1, 2005 to be deemed invested in Stock Units. Any request to have Compensation and Bonus Deferrals to be deemed invested in Stock Units is irrevocable and such amounts will be distributed in an equivalent whole number of shares of Stock pursuant to the provisions of Article V. Any fractional share interests will be paid in cash with the last distribution.

(c) Deemed Election. In his request(s) pursuant to this Section 4.4, the Participant may request that all or any portion of his Account (in whole percentage increments) be deemed invested in one or more of the investment crediting rate preferences provided under the Plan as communicated from time to time by the PAC. Although a Participant may express an investment crediting rate preference, the Company will not be bound by such request. If a Participant fails to set forth his investment crediting rate preference under this Section 4.4, he will be deemed to have elected an annual rate of interest equal to the rate of interest set forth in Section 4.4(a)(i) ( i.e ., prior to January 1, 2009 one percent (1%) below the prime rate of interest as quoted by Bloomberg, compounded daily, or effective on and after January 1, 2009, one hundred and twenty percent (120%) of the long-term applicable federal rate, compounded daily). The PAC will select from time to time, in its sole and absolute discretion, the possible investment crediting rate options to be offered under the Plan.

(d) Employer Contributions. Matching Contributions to the Plan made by the Employer prior to January 1, 2005 and allocated to a Participant’s Account will be credited with the same investment crediting rate as the Participant’s associated Supplemental Deferrals for the relevant Plan Year. Discretionary Contributions, if any, made by the Employer prior to January 1, 2005 and allocated to a Participant’s Account pursuant to Section 4.2 will be credited with the investment crediting rate specified (or deemed specified) by the Participant on his Election

Form for the relevant Plan Year with respect to the Participant’s Basic Deferrals and Bonus Deferrals.

Matching Contributions to the Plan made by the Employer prior to January 1, 2005 and allocated to a Participant’s Account will be credited with the same investment crediting rate as the Participant’s associated Supplemental Deferrals for the relevant Plan Year. Discretionary Contributions, if any, made by the Employer prior to January 1, 2005 and allocated to a Participant’s Account will be credited with the investment crediting rate specified (or deemed specified) by such Participant on his Election Form for the relevant Plan Year with respect to the Participant’s Basic Deferrals and Bonus Deferrals.

A Participant will retain the right to change the investment crediting rate applicable to Account as provided in this Section 4.4.

(e) Transferred Accounts. The Company transferred amounts deferred or contributed to the Plan during the 2005 Plan Year to the 2006 DCP and each Participant was permitted to express an investment crediting rate preference with respect to such transferred amounts.

End of Article IV

ARTICLE V

DISTRIBUTION OF BENEFITS

5.1 General Rules . A Participant may elect to receive payment of Basic Deferrals and Bonus Deferrals, and earnings or losses thereon, credited to his Account, at any of the following times:

(a) As soon as practicable after the Participant’s Termination of Employment, retirement, Disability or death;

(b) In the first January following, or in the second January following, but not later than the second January following, the Participant’s Termination of Employment, retirement, Disability or death; or

Generally, Supplemental Deferrals, Discretionary Deferrals and Employer contributions made prior to January 1, 2005, and earnings or losses thereon, are distributable only upon a Participant’s Termination of Employment, retirement, Disability or death.

All distributions from the Participant’s Account will be taxable as ordinary income when received and subject to appropriate withholding of income taxes. In the case of distributions in Stock, the appropriate number of shares of Stock may be sold to satisfy such withholding obligations pursuant to administrative procedures adopted by the Plan Administrator.

5.2 Distributions Resulting from Termination . In the case of a Participant who incurs a Termination of Employment, and has an Account balance of one hundred thousand dollars ($100,000) or less, as determined by the Plan Administrator pursuant to administrative procedures, such Participant will be paid the balance in his Account in a lump sum in accordance with Section 5.1. Such lump sum will be made in cash or in Stock or in a combination thereof depending on the Participant’s investment crediting rates as provided in Section 4.4(b).

A Participant who has an Account balance in excess of one hundred thousand dollars ($100,000) may elect to receive a distribution in the form of either a lump sum, as described in the preceding paragraph, or in substantially equal installments over a period of not less than one (1) nor more than fifteen (15) years. Installment distributions may be made in cash or in Stock or in a combination thereof depending on the Participant’s investment crediting rates as provided in Section 4.4(b). To the extent that installments will be made solely in cash, such installments will be made on a monthly basis. Installments of Stock or installments of cash and Stock will be made on an annual basis.

Such Participant’s Election Form that has been in effect for at least twelve (12) months and made during a Special Enrollment Period or an Open Enrollment Period, as applicable, will govern the form of distribution. In the event a Participant elects installments, such installment payments will begin in accordance with Section 5.1(a) or 5.1(b). All amounts held for a Participant’s or Beneficiary’s benefit will be revalued annually based on procedures established by the Plan Administrator if paid in installments. This preceding sentence will not apply to certain Participants who

participated in a prior plan that was merged into this Plan and are in pay status and entitled to fixed installment amounts based on the terms of the prior plan.

A Participant who is currently receiving installment distributions of his Account may elect to accelerate the distribution of such Account, subject to the following conditions:

(a) The Participant may request to accelerate the distribution of his Account in the form of either (i) a lump sum or (ii) a shorter period of installments that will be paid or commence to be paid, as applicable, on a future date that is no earlier than the first day of the thirteenth (13th) month following the Plan Administrator’s receipt of the Participant’s acceleration request; or

(b) The Participant may request an immediate lump sum distribution of his Account at any time provided that such distribution will be subject to a penalty equal to ten percent (10%) of the lump sum distribution.

5.3 Scheduled In-Service Withdrawals . In the case of a Participant who, while still in the employ of the Employer, has elected a Scheduled Withdrawal Date for distribution of his Basic Deferrals and Bonus Deferrals made prior to January 1, 2005, and earnings or losses thereon, such Participant will receive a lump sum payment that must occur at least two (2) calendar years after the end of the Plan Year in which the Basic and Bonus Deferrals occurred. A Participant may extend the Scheduled Withdrawal Date with respect to Basic Deferrals and Bonus Deferrals made prior to January 1, 2005, for any Plan Year, provided (i) such extension occurs at least one (1) year before the Scheduled Withdrawal Date, (ii) such extension is for a period of not less than two (2) years from the Scheduled Withdrawal Date, (iii) the Participant may not extend the Scheduled Withdrawal Date more than two (2) times, and (iv) any such extension will be effective only if consented to by the PAC. All such lump sum distributions will be paid in the January of the year specified on the election form.

If a Participant retires, incurs a Termination of Employment, incurs a Disability or dies prior to any Scheduled Withdrawal Date, the Scheduled In-Service Withdrawal will be disregarded and waived and the Participant’s Account balance will be distributed after the Participant’s retirement, death, Disability or Termination of Employment in the same form of distribution elected with respect to retirement, death, Disability or Termination of Employment.

5.4 Non-Scheduled Withdrawals . A Participant (regardless of whether an active Employee Participant, an inactive Employee Participant or a terminated Employee Participant) will be permitted to elect a Non-Scheduled Withdrawal from his Account, subject to the following restrictions:

(a) The election to take a Non-Scheduled Withdrawal will be made by filing a form provided by the Plan Administrator or its designee prior to the end of any calendar month.

(b) The amount of the Non-Scheduled Withdrawal will in all cases not exceed ninety percent (90%) of the gross amount of the Participant’s Account balance.

(c) The amount described in subsection (b) above will be paid in a lump sum as soon as practicable after the end of the month in which the Non-Scheduled Withdrawal election is made.

(d) If a Participant receives a Non-Scheduled Withdrawal from his Account, the Participant will permanently forfeit an amount equal to ten percent (10%) of the gross amount of the Non-Scheduled Withdrawal and the Employer will have no obligation to the Participant or his Beneficiary with respect to such forfeited amount.

(e) If a Participant receives a Non-Scheduled Withdrawal of any part of his Account, the Participant will be ineligible to participate in the Plan for the next following Plan Year.

The Plan Administrator will be responsible for reviewing all requests for Non-Scheduled Withdrawals and will have the sole and absolute authority and discretion to approve or deny such requests in accordance with the terms of the Plan.

5.5 Financial Necessity Distributions .

(a) Unforeseeable Emergency

Upon application by the Participant, the Plan Administrator, in its sole and absolute discretion, may direct payment of all or a portion of the Basic Deferrals, Bonus Deferrals and/or Discretionary Deferrals credited to the Account of a Participant prior to his Termination of Employment in the event of an Unforeseeable Emergency. Any such application will set forth the circumstances constituting such Unforeseeable Emergency. A Participant who receives an Unforeseeable Emergency distribution pursuant to this Section 5.5(a) will be precluded from making deferrals to the 2006 DCP for the reminder of the Plan Year in which such distribution is made and the following Plan Year.

In addition to the deferrals specified in this Section 5.5(a), upon application by the Participant, the Plan Administrator, in its sole and absolute discretion, may direct payment of all or a portion of the Supplemental Deferrals credited to the Account of the Participant prior to his Termination of Employment in the event of an Unforeseeable Emergency. Such application and payment will be subject to the same conditions and limitations as a request for any other payment of deferrals under this Section 5.5.

(b) Foreseeable Emergency

Upon application by the Participant, the Plan Administrator, in its sole and absolute discretion, may direct payment of all or a portion of the Basic Deferrals, Bonus Deferrals and/or Discretionary Deferrals credited to the Account of a Participant prior to his Termination of Employment in the event of a Foreseeable Emergency. Any such application will set forth the circumstances constituting such Foreseeable Emergency. A Participant who receives a Foreseeable Emergency distribution pursuant to this Section 5.5(b) will be ineligible to participate in the 2006 DCP for the next following Plan Year.

(c) General Rules Regarding Financial Necessity Distributions

The Plan Administrator may not direct payment of any Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, and/or Discretionary Deferrals credited to the Account of a Participant to the extent that such an Emergency is or may be relieved (i) by reimbursement or compensation by insurance or otherwise, or (ii) by cessation of Basic Deferrals, Bonus Deferrals and/or Discretionary Deferrals under the 2006 DCP for the next following Plan Year. In the event that the Plan Administrator, in its sole and absolute discretion, determines that such Emergency may be alleviated by such cessation of deferrals under the 2006 DCP for the next following Plan Year, the Plan Administrator will deny such financial necessity distribution and preclude the Participant from making Basic Deferrals, Bonus Deferrals, RSU Deferrals and/or Discretionary Deferral elections for the following Plan Year. Conversely, if the Plan Administrator, in its sole and absolute discretion, determines that such Emergency may not be alleviated by such cessation of Basic Deferrals, Bonus Deferrals, RSU Deferrals and/or Discretionary Deferrals, it may approve such financial necessity distribution. Any distribution from the Participant’s Account under the Plan due to Emergency will be permitted only to the extent necessary to satisfy such Emergency, in the sole and absolute discretion of the Plan Administrator, both with respect to the determination as to whether an Emergency exists and also with respect to determination of the amount distributable.

5.6 Elective Distributions . A Participant may elect to receive a distribution of amounts credited to his Account upon a determination by the Internal Revenue Service or a state taxing authority of competent jurisdiction that amounts credited to such Account are subject to inclusion in the gross income of such Participant or Beneficiary for federal or state income tax purposes. Neither the PAC nor the Plan Administrator will have any obligation to determine whether any such determination is or has been made with respect to any Participant and will assume that no such determination has been made until advised by the Participant, in writing, that such determination has been made and that either such determination is final and binding, or that obtaining judicial review of such determination is not reasonably likely to result in a reversal of such determination or is economically prohibitive.

5.7 Death of a Participant . If a Participant dies while employed by the Employer, the Participant’s Account balance will be paid to the Participant’s Beneficiary in the manner elected by the Participant.

In the event a terminated Participant dies while receiving installment payments from his Account, the remaining installments will be paid to the Participant’s Beneficiary as such payments become due in accordance with Section 5.1.

In the event a terminated Participant dies before receiving a lump sum payment of his Account or before he begins receiving installment payments from such Account, the lump sum payment or installment payments will be paid to the Participant’s Beneficiary as such payments become due in accordance with Section 5.1.

5.8 Disability of a Participant . In the event of the Disability of the Participant, the Participant will be entitled to a distribution of the Participant’s Account balance in the

manner elected in advance by the Participant and, if applicable, in accordance with Section 5.2.

5.9 Change of Control . A Participant may, during a Special Enrollment Period or an Open Enrollment Period, as applicable, file an Election Form in which the Participant elects to receive a lump sum distribution of his Account balance in the event that a Change of Control, as defined in Section 2.1(k), occurs. The Participant’s election with respect to a distribution of his Account in the event of a Change of Control must have been in effect for twelve (12) months prior to the time of the Change of Control. If elected, payment will be made as soon as practicable, but in any event not more than six (6) months, after the occurrence of a Change of Control.

The calculation and administration of any liability that may arise out of the “golden parachute” provisions of Sections 280G and 4999 of the Code shall be addressed as set forth in the ESP.

If a Participant has elected to receive a lump sum distribution of his Account balance in the event of a Change of Control, a portion of which distribution is characterized as a parachute payment, and such portion, when added to the present value of all other parachute payments to be received as a result of a Change of Control, exceeds an amount equal to two hundred ninety-nine percent (299%) of the Participant’s base amount, then the Participant may, within the thirty (30) day period following the Change in Control, elect (a) to revoke the election made pursuant to this Section 5.9, or (b) to receive in a lump sum distribution that portion of his Account balance which does not result in a parachute payment with the remainder being distributed in accordance with the Participant’s election under Section 5.1.

5.10 Withholding . Any taxes or other legally required withholdings from Compensation and Bonus deferrals made prior to the Effective Date and/or payments to Participants or Beneficiaries of their Account under the Plan will be deducted and withheld by the Employer, benefit provider or funding agent as required pursuant to applicable law. To the extent amounts are payable from a Participant’s Account in Stock, the appropriate number of shares of Stock may be withheld to satisfy such withholding obligation. A Participant or Beneficiary will be provided with a tax withholding election form for purposes of federal and state tax withholding, if applicable.

5.11 Suspension of Benefits . If a Participant terminates service and begins receiving installment distributions from his Account and such Participant is reemployed by the Employer, then such Participant’s installment distributions will be suspended during the period of his reemployment. Upon the Participant’s subsequent termination of service, such installment distributions will recommence in the same form as they were being paid before the reemployment.

End of Article V

ARTICLE VI
PAYMENT LIMITATIONS

6.1 Spousal Claims . In the event that an Alternate Payee is entitled to all or a portion of a Participant’s Account pursuant to the terms of a DRO, such Alternate Payee will have the following distribution rights with respect to such Participant’s Account to the extent set forth pursuant to the terms of the DRO:

(a) payment of benefit in a lump sum, in cash or Stock, based on the Participant’s investment crediting rates under the Plan as provided in Section 4.4 and the terms of the DRO, as soon as practicable following the acceptance of the DRO by the Plan Administrator;

(b) payment of benefit in a lump sum in cash or Stock, based on the Participant’s investment crediting rates under the Plan as provided in Section 4.4 and the terms of the DRO, in the first January following, or in the second January following, but not later than the second January following, the acceptance of the DRO by the Plan Administrator;

(c) payment of benefit in substantially equal installments, in cash and/or Stock, based on the Participant’s investment crediting rates under the Plan as provided in Section 4.4 and the terms of the DRO, over a period of not less than one nor more than fifteen (15) years from the date the DRO is accepted by the Plan Administrator, but only if the Alternate Payee has an Account balance in excess of one hundred thousand dollars ($100,000); and

(d) payment of benefit in substantially equal installments, in cash and/or Stock, based on the Participant’s investment crediting rates under the Plan as provided in Section 4.4 and the terms of the DRO, over a period of not less than one nor more than fifteen (15) years beginning the first January following, or the second January following, the date the DRO is accepted by the Plan Administrator, but only if the Alternate Payee has an Account balance in excess of one hundred thousand dollars ($100,000).

To the extent that installments will be made solely in cash, such installments will be made on a monthly basis. Installments of Stock or installments of cash and Stock will be made on an annual basis.

An Alternate Payee who desires to elect any of the distributions described in subsections (b), (c) or (d) above, must complete and deliver to the Plan Administrator all required forms and make such election within thirty (30) days from the date the Alternate Payee is notified that the DRO has been accepted. Any Alternate Payee who does not complete and deliver to the Plan Administrator all required forms and/or whose DRO does not provide for any of the distributions described in subsections (b), (c) or (d) above will receive his portion of the Participant’s Account awarded to him under the DRO in a lump sum according to subsection (a) above.

exercise of its discretion, may direct the Employer or payor of the benefit to make any such payment in any one or more of the following ways:

(a) Directly to such person;

(b) To his legal guardian or conservator; or

(c) To his spouse or to any person charged with the duty of his support, to be expended for his benefit and/or that of his dependents.

The decision of the Plan Administrator will in each case be final and binding upon all persons in interest, unless the Plan Administrator reverses its decision due to changed circumstances.

6.3 Assignment . Except as provided in Section 6.1, no Participant or Beneficiary will have any right to assign, pledge, transfer, convey, hypothecate, anticipate or in any way create a lien on any amounts payable under this Plan. No amounts payable under this Plan will be subject to assignment or transfer or otherwise be alienable, either by voluntary or involuntary act, or by operation of law, or subject to attachment, execution, garnishment, sequestration or other seizure under any legal, equitable or other process, or be liable in any way for the debts or defaults of Participants and their Beneficiaries.

End of Article VI

ARTICLE VII

FUNDING

7.1 (a) Funding . Benefits under this Plan will be funded solely by the Employer. Benefits under this Plan will constitute an unfunded general obligation of the Employer, but the Employer may create reserves, funds and/or provide for amounts to be held in trust to fund such benefits on its behalf. Payment of benefits may be made by the Employer, any trust established by the Employer or through a service or benefit provider to the Employer or such trust.

(b) Rabbi Trust . Upon a Change of Control, the following shall occur:

(i) the Trust shall become (or continue to be) irrevocable;

(ii) for three (3) years following a Change of Control, the Trustee can only be removed as set forth in the Trust;

(iii) if the Trustee is removed or resigns within three (3) years following a Change of Control, the Trustee shall select a successor Trustee, as set forth in the Trust;

(iv) for three (3) years following a Change of Control, the Company shall be responsible for directly paying all Trustee fees and expenses, together with all fees and expenses incurred under Article 8 relating to the PAC, Plan Administrator, and Plan administrative expenses; and

(v) the Trust Agreement may be amended only as set forth in the Trust (with the Trustee’s consent); provided, however, that no such amendment shall (A) change the irrevocable nature of the Trust; (B) adversely affect a Participant’s rights to benefits without the consent of the Participant; (C) impair the rights of the Company’s creditors under the Trust; or (D) cause the Trust to fail to be a “grantor trust” pursuant to Code Sections 671 — 679.

7.2 Creditor Status . Participants and their Beneficiaries will be general unsecured creditors of their respective Employer with respect to the payment of any benefit under this Plan, unless such benefits are provided under a contract of insurance or an annuity contract that has been delivered to Participants, in which case Participants and their Beneficiaries will look to the insurance carrier or annuity provider for payment, and not to the Employer. The Employer’s obligation for such benefit will be discharged by the purchase and delivery of such annuity or insurance contract.

End of Article VII

ARTICLE VIII

ADMINISTRATION

8.1 The PAC . The overall administration of the Plan will be the responsibility of the PAC.

8.2 Powers of PAC . The PAC will have sole and absolute discretion regarding the exercise of its powers and duties under this Plan. In order to effectuate the purposes of the Plan, 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 Plan;

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

(d) To determine and resolve, in its sole and absolute discretion, all questions relating to the administration of the Plan and the trust established to secure the assets of the Plan (i) when differences of opinion arise between the Company, an Affiliate, the Plan Administrator, the Trustee, a Participant, 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 Plan for the greatest benefit of all parties concerned.

8.3 Appointment of Plan Administrator . The PAC will appoint the Plan Administrator, who will have the responsibility and duty to administer the Plan 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.

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

(a) To direct the administration of the Plan in accordance with the provisions herein set forth;

(b) To adopt rules of procedure and regulations necessary for the administration of the Plan, provided such rules are not inconsistent with the terms of the Plan;

(c) To determine all questions with regard to rights of Employees, Participants, and Beneficiaries under the Plan including, but not limited to, questions involving eligibility of an Employee to participate in the Plan and the value of a Participant’s Accounts;

(d) To enforce the terms of the Plan and any rules and regulations adopted by the PAC;

(e) To review and render decisions respecting a claim for a benefit under the Plan;

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

(g) 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;

(h) To prescribe procedures to be followed by Participants in obtaining benefits;

(i) To receive from the Employer and from Participants such information as is necessary for the proper administration of the Plan;

(j) To establish and maintain, or cause to be maintained, the individual Accounts described in Section 4.3;

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

(l) To make all determinations and computations concerning the benefits, credits and debits to which any Participant, or other Beneficiary, is entitled under the Plan;

(m) To give the Trustee of the trust established to serve as a source of funds under the Plan 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;

(n) To comply with all applicable lawful reporting and disclosure requirements of the Act;

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

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

8.5 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 Plan other than losses resulting from the PAC’s, or any such person’s commission of fraud or willful misconduct.

8.6 Claims for Benefits .

(a) Initial Claim. In the event that an Employee, Eligible Person, Participant or his Beneficiary claims to be eligible for benefits, or claims any rights under this Plan, 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 Participant or Beneficiary who feels unfairly treated as a result of the administration of the Plan, 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 this Plan, and any other pertinent documents generally available to Participants 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 this Plan, will set forth in writing the reasons for denial of the claim if a claim is denied (including references to any pertinent provisions of this Plan) 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 Plan’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 this Plan 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 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 Plan 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.

8.7 Arbitration . In the event the claims review procedure described in Section 9.6 of the Plan does not result in an outcome thought by the claimant to be in accordance with the Plan 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 Participant 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 Plan 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 and the Company 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 admission and oral depositions. The arbitrator will resolve any discovery disputes by such pre hearing conferences as may be needed. The Company, 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 Company 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 Company and the claimant and the arbitrator will adopt procedures to protect such rights. With respect to any dispute, the Company, PAC and the claimant agree that all discovery activities will b expressly limited to matters directly relevant to the dispute and the arbitrator will be required to fully enforce this requirement.

8.8 Receipt and Release of Necessary Information . In implementing the terms of this Plan, 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 Participant or Beneficiary claiming benefits under this Plan 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.

8.9 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 Participant or Beneficiary 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 Participant or Beneficiary, for whatever reason, the Plan Administrator may, in its sole and absolute discretion, withhold payment of any further benefits under the Plan until the overpayment has been collected or may require repayment of benefits paid under this Plan without regard to further benefits to which the Participant or Beneficiary may be entitled.

8.10 Change of Control . Upon a Change of Control and for the following three (3) years thereafter, if any arbitration arises relating to an event occurring or a claim made within three (3) years of a Change of Control, (i) the arbitrator shall not decide the claim based on an abuse of discretion principle or give the previous PAC decision any special deference, but rather shall determine the claim de novo based on its own independent reading of the Plan; and (ii) the Company shall pay the Participant’s reasonable legal and other related fees and expenses by applying Section 3.1(f) of the ESP (except that if the Participant is not entitled to severance benefits under the ESP on account of the Termination of Employment that entitles the Participant to receive benefits under this

Plan, the reference to the “shorter of the Severance Period or the Reimbursement Period” in the ESP shall be changed to the “Reimbursement Period” only).

End of Article VIII

ARTICLE IX

OTHER BENEFIT PLANS OF THE COMPANY

9.1 Other Plans . Nothing contained in this Plan will prevent a Participant prior to his death, or a Participant’s spouse or other Beneficiary after such Participant’s death, from receiving, in addition to any payments provided for under this Plan, 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 this Plan 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 Directors. Unless otherwise specifically provided in any plan of the Company intended to “qualify” under section 401 of the Code, Compensation and Bonus Deferrals made under this Plan will constitute earnings or compensation for purposes of determining contributions or benefits under such qualified plan.

End of Article IX

ARTICLE X

AMENDMENT AND TERMINATION OF THE PLAN

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

10.2 Amendment of Plan . The Company, through an action of the Compensation Committee, reserves the right in its sole and absolute discretion to amend this Plan in any respect at any time, except that upon or during the two (2) year period after any Change of Control of the Company, (a) Plan benefits cannot be reduced, (b) Arts. 8 and 10 and Plan Section 7.1(b) cannot be changed, and (c) (except as provided in Section 10.3) no prospective amendment that adversely affects the rights or obligations of a Participant may be made unless the affected Participant receives at least one (1) year’s advance written notice of such amendment.

Moreover, no amendment may ever be made that retroactively reduces or diminishes the rights of any Participant to the benefits described herein that have been accrued or earned through the date of such amendment, even if a Termination of Employment has not yet occurred with respect to such Participant.

The provisions of this Section 10.2 shall not restrict the right of the Company to terminate this Plan under Section 10.3 below or the termination of an Affiliate’s participation under Section 10.4 below.

10.3 Termination of Plan . The Company, through an action of the Compensation Committee, may terminate or suspend this Plan in whole or in part at any time, provided that no such termination or suspension will deprive a Participant, or person claiming benefits under this Plan through a Participant, of any amount credited to his Accounts under this Plan up to the date of suspension or termination, except as required by applicable law and pursuant to the valuation of such Accounts pursuant to Section 4.4. Notwithstanding any provision of this Plan to the contrary, upon the complete termination of the Plan, the Compensation Committee, in its sole and absolute discretion, may direct that the Plan Administrator treat each Participant as having incurred a Termination of Employment and to commence the distribution of each such Participant’s Account to him or his Beneficiary, as applicable, in the form elected (or deemed elected) by such Participant pursuant to Section 5.1.

participation in the Plan is terminated, each Participant employed by such Affiliate will continue to participate in the Plan as an inactive Participant and will be entitled to a distribution of his entire Account or a portion thereof upon the earlier of his Scheduled Withdrawal Date, if any, or his Termination of Employment, in the form elected (or deemed elected) by such Participant pursuant to Section 5.1.

End of Article X

ARTICLE XI

MISCELLANEOUS

11.1 No Reduction of Employer Rights . Nothing contained in this Plan will be construed as a contract of employment between the Employer and an Employee, or as a right of any Employee to continue in the employment of the Employer, or as a limitation of the right of the Employer to discharge any of its Employees, with or without cause or as a right of any Director to be renominated to serve as a Director.

11.2 Provisions Binding . All of the provisions of this Plan will be binding upon all persons who will be entitled to any benefit hereunder, their heirs and personal representatives.

End of Article XI

IN WITNESS WHEREOF , this Ninth Amended and Restated Tenet 2001 Deferred Compensation Plan has been executed on this 19th day of September, 2012, effective as of May 9, 2012, except as specifically provided otherwise herein.

	TENET HEALTHCARE CORPORATION


	By:	/s/ Paul Slavin
		Paul Slavin, Vice President, Executive and Corporate Human Resources Services

EXHIBIT A(1)

LIMITS ON ELIGIBILITY AND PARTICIPATION

Section 3.1 of the Tenet 2001 Deferred Compensation Plan (the “Plan”) provides the Pension Administration Committee (“PAC”) with the authority to limit the classification of employees of Tenet Healthcare Corporation or its participating affiliates (collectively the “Employer”) eligible to participate in the Plan at any time and states that any such limitation will be set forth in this Exhibit A.

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

A-1

Exhibit 10(h)

SECOND AMENDED AND RESTATED

TENET 2006 DEFERRED

COMPENSATION

PLAN

As Amended and Restated Effective as of May 9, 2012

TABLE OF CONTENTS

SECOND AMENDED AND RESTATED

TENET 2006 DEFERRED COMPENSATION PLAN

		Page

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	10

ARTICLE III PARTICIPATION AND FORFEITABILITY OF BENEFITS		11
3.1	Eligibility and Participation	11
3.2	Forfeitability of Benefits	12

ARTICLE IV DEFERRAL, COMPANY CONTRIBUTIONS, ACCOUNTING AND INVESTMENT CREDITING RATES		13
4.1	General Rules Regarding Deferral Elections	13
4.2	Compensation and Bonus Deferrals	13
4.3	RSU Deferrals	15
4.4	Company Contributions	16
4.5	Accounting for Deferred Compensation	16
4.6	Investment Crediting Rates	18

ARTICLE V DISTRIBUTION OF BENEFITS		20
5.1	Distribution Election	20
5.2	Termination Distributions to Key Employees	21
5.3	Scheduled In-Service Withdrawals	21
5.4	Unforeseeable Emergency	22
5.5	Death of a Participant	22
5.6	Withholding	22
5.7	Impact of Reemployment on Benefits	22
5.8	Scheduled In-Service Stock Unit Distribution Election	22

ARTICLE VI PAYMENT LIMITATIONS		24
6.1	Spousal Claims	24
6.2	Legal Disability	25
6.3	Assignment	25

ARTICLE VII FUNDING		26
7.1	(a) Funding	26
7.2	Creditor Status	26

ARTICLE VIII ADMINISTRATION		27
8.1	The PAC	27
8.2	Powers of PAC	27

8.3	Appointment of Plan Administrator	27
8.4	Duties of Plan Administrator	27
8.5	Indemnification of PAC and Plan Administrator	29
8.6	Claims for Benefits	29
8.7	Receipt and Release of Necessary Information	31
8.8	Overpayment and Underpayment of Benefits	31
8.9	Change of Control	31

ARTICLE IX OTHER BENEFIT PLANS OF THE COMPANY		33
9.1	Other Plans	33

ARTICLE X AMENDMENT AND TERMINATION OF THE PLAN		34
10.1	Continuation	34
10.2	Amendment of Plan	34
10.3	Termination of Plan	34
10.4	Termination of Affiliate’s Participation	35

ARTICLE XI MISCELLANEOUS		36
11.1	No Reduction of Employer Rights	36
11.2	Provisions Binding	36

EXHIBIT A LIMITS ON ELIGIBILITY AND PARTICIPATION		A-1

SECOND AMENDED AND RESTATED

TENET 2006 DEFERRED COMPENSATION PLAN

ARTICLE I
PREAMBLE AND PURPOSE

1.1 Preamble . Tenet Healthcare Corporation (the “Company”) previously adopted the Tenet 2006 Deferred Compensation Plan (the “Plan”) to permit the Company and its participating Affiliates, as defined herein (collectively, the “Employer”), to attract and retain a select group of management or highly compensated employees and Directors, as defined herein. The Plan replaced the Tenet 2001 Deferred Compensation Plan (the “2001 DCP”) and compensation and bonus deferrals and employer contributions made to the 2001 DCP during the 2005 Plan Year ( i.e. , January 1, through December 31) were transferred to the Plan and will be administered pursuant to its terms.

Pursuant to the First Amended and Restated Plan, the Company amended and restated the Plan effective December 31, 2008 to (a) reflect that compensation and bonus deferrals and employer contributions made to the 2001 DCP have been transferred to the Plan and will be administered pursuant to its terms, (b) permit participants to elect prior to December 31, 2008 pursuant to transition relief issued under section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) to receive an in-service withdrawal of amounts deemed invested in stock units in 2009 or a subsequent year, (c) modify the fixed return investment option to provide that interest will be credited based on one hundred and twenty percent (120%) of the long-term applicable federal rate as opposed to the current provision which credits interest based on the prime rate of interest less one percent (1%), (d) reduce the employer matching contribution effective January 1, 2009, (e) comply with final regulations issued under section 409A of the Code and (f) make certain other design changes. This amended and restated Plan is known as the First Amended and Restated Tenet 2006 Deferred Compensation Plan.

By this instrument, the Company is further amending and restating the Plan, effective as of May 9, 2012, to add certain Change of Control provisions and revise certain termination event definitions. This amended and restated Plan will be known as the Second Amended and Restated Tenet 2006 Deferred Compensation Plan.

The Employer may adopt one or more domestic trusts to serve as a possible source of funds for the payment of benefits under this Plan.

purpose of providing deferred compensation for a select group of management or highly compensated employees.

End of Article I

ARTICLE II
DEFINITIONS AND CONSTRUCTION

(a) “Account” means one or more of the bookkeeping accounts maintained by the Company or its agent on behalf of a Participant, as described in more detail in Section 4.5. A Participant’s Account may be divided into one or more “ Cash Accounts ” or “ Stock Unit Accounts ” as defined in Section 4.5.

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

(c) “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.

(d) “Alternate Payee” means any spouse, former spouse, child, or other dependent of a Participant who is recognized by a DRO as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to such Participant.

(e) “Annual Incentive Plan Award” means the amount payable to an employee each year, if any, under the Company’s Annual Incentive Plan, as the same may be amended, restated, modified, renewed or replaced from time to time.

(f) “Basic Deferral” means the Compensation deferral made by a Participant pursuant to Section 4.2(a).

(g) “Beneficiary” means the person designated by the Participant to receive a distribution of his benefits under the Plan upon the death of the Participant. If the Participant is married, his spouse will be his Beneficiary, unless his spouse consents in writing to the designation of an alternate Beneficiary. In the event that a Participant fails to designate a Beneficiary, or if the Participant’s Beneficiary does not survive the Participant, the Participant’s Beneficiary will be his surviving spouse, if any, or if the Participant does not have a surviving spouse, his estate. The term “Beneficiary” also will mean a Participant’s spouse or former spouse who is entitled to all or a portion of a Participant’s benefit pursuant to Section 6.1.

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

(i) “Bonus” means (i) a bonus paid to a Participant in the form of an Annual Incentive Plan Award, (ii) an annual bonus payment to a Participant pursuant to

an employment or similar agreement, or (iii) any other bonus payment designated by the PAC as an eligible bonus under the Plan.

(j) “Bonus Deferral” means the Bonus deferral made by a Participant pursuant to Section 4.2(b). A Participant may also defer a portion of his Bonus as a Supplemental Deferral pursuant to Section 4.2(c).

(k) (i) “Cause”, on or within two (2) years of a Change of Control, shall have the same meaning as set forth in Section 2.1(f)(2) of the ESP.

(l) “Change of Control” shall have the meaning set forth in the ESP.

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

(n) “Company” means Tenet Healthcare Corporation.

(o) “Compensation” means base salaries, commissions, and certain other amounts of cash compensation payable to the Participant during the Plan Year. Compensation will exclude cash bonuses, foreign service pay, hardship withdrawal allowances and any other pay intended to reimburse the employee for the higher cost of living outside the United States, Annual Incentive Plan Awards, automobile allowances, ExecuPlan payments, housing allowances, relocation payments, deemed income, income payable under stock incentive plans, Christmas gifts, insurance premiums, and other imputed income, pensions, retirement benefits, and contributions to and payments from the 401(k) Plan and this Plan or any other nonqualified retirement plan maintained by the Employer. The term “Compensation” for Directors will mean any cash compensation from retainers, meeting fees and committee fees paid during the Plan Year.

(p) “Compensation Committee” means the Compensation Committee of the Board, which has the authority to amend and terminate the Plan as provided in Article X. The Compensation Committee also will be responsible for determining the amount of the Discretionary Contribution, if any, to be made by the Employer.

(q) “Compensation and Bonus Deferrals” means the Basic Deferrals, Bonus Deferrals, Supplemental Deferrals and/or Discretionary Deferrals made pursuant to Section 4.2 of the Plan.

(r) “Director” means a member of the Board who is not an employee.

(s) “Discretionary Contribution” means the contribution made by the Employer on behalf of a Participant as described in Section 4.4(b).

(t) “Discretionary Deferral” means the Compensation deferral described in Section 4.2(d) made by a Participant.

(u) “DRO” means a domestic relations order that is a judgment, decree, or order (including one that approves a property settlement agreement) that relates to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent of a Participant and is rendered under a state (within the meaning of section 7701(a)(10) of the Code) domestic relations law (including a community property law) and that:

(ii) Does not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan;

(iii) Does not require the Plan to provide increased benefits (determined on the basis of actuarial value);

(iv) Does not require the payment of benefits to an Alternate Payee that are required to be paid to another Alternate Payee under another order previously determined to be a DRO; and

(v) “Effective Date” means May 9, 2012, except as provided otherwise herein.

(w) “Election Form” means the forms provided by the PAC or the Plan Administrator pursuant to which the Participant consents to participation in the Plan and makes elections with respect to deferrals, requested investment crediting rates and distributions hereunder. Such Participant consent and elections may be done either in writing or on-line through an electronic signature.

(x) “Eligible Person” means (i) each Employee who is eligible for a Bonus as defined in Section 2.1(i) for the applicable Plan Year, and (ii) each Director. In addition, the term “Eligible Person” will include any Employee designated as an Eligible Person by the PAC. As provided in Section 3.1, the PAC may at any time, in its sole and absolute discretion, limit the classification of Employees who are eligible to participate in the Plan for a Plan Year and/or may modify or terminate an Eligible Person’s participation in the Plan without the need for an amendment to the Plan.

(y) “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.

(z) “Employer” means the Company and each Affiliate which has adopted the Plan as a participating employer. An Affiliate may evidence its adoption of the Plan either by a formal action of its governing body or by commencing deferrals and taking other administrative actions with respect to this Plan on behalf of its employees. An entity will cease to be a participating employer as of the date such entity ceases to be an Affiliate.

(aa) “Employer Contribution” means a Matching Contribution and/or Discretionary Contribution.

(bb) “ESP” means the Tenet Executive Severance Plan, as amended from time to time.

(cc) “Fair Market Value” means the closing price of a share of Stock on the New York Stock Exchange on the date as of which fair market value is to be determined.

(dd) “Five Percent Owner” means any person who owns (or is considered as owning within the meaning of section 318 of the Code (as modified by section 416(i)(1)(B)(iii) of the Code)) more than five percent (5%) of 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.

(ee) “401(k) Plan” means the Tenet Healthcare Corporation 401(k) Retirement Savings Plan, as such plan may be amended, restated, modified, renewed or replaced from time to time.

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

(ii) a Five Percent Owner; or

(iii) a One Percent Owner having compensation of more than one hundred fifty thousand dollars ($150,000).

amounts that would be includible in wages except for an election under section 125(a) of the Code (regarding cafeteria plan elections) under section 132(f) of the Code (regarding qualified transportation fringe benefits) or section 402(e)(3) of the Code (regarding section 401(k) plan deferrals)) without regard to the special timing rules and special rules set forth, respectively, in sections 1.415(c)-2(e) and 2(g) of the Treasury Regulations.

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(cc)(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(cc)(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.

(gg) “Matching Contribution” means the contribution made by the Employer pursuant to Section 4.4(a) on behalf of a Participant who makes Supplemental Deferrals to the Plan as described in Section 4.2(c).

(hh) “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.

(ii) “Open Enrollment Period” means the period occurring each year during which an Eligible Person may make his elections to defer his Compensation, Bonus and RSUs for a subsequent Plan Year pursuant to Article IV. Open Enrollment Periods will occur in accordance with section 409A of the Code ( i.e. , no later than December 31st of each year with respect to Compensation, no later than June 30 of each year with respect to Bonus and either prior to or within thirty (30) days after the date of grant with respect to RSUs). Different Open Enrollment Periods may apply with respect to different groups of Eligible Persons.

(jj) “PAC” means the Pension Administration Committee of the Company established by the Compensation Committee of the Board, and whose members have been appointed by such Compensation Committee. The PAC will have the responsibility to administer the Plan and make final determinations regarding claims for benefits, as described in Article VIII. In addition, the PAC has limited amendment authority over the Plan as provided in Section 10.2.

(kk) “Participant” means each Eligible Person who has been designated for participation in this Plan and each Employee or former Employee (or Director or former Director) whose participation in this Plan has not terminated.

(ll) “Participant Deferral” means a Basic Deferral, Bonus Deferral, Supplemental Deferral, RSU Deferral and/or Discretionary Deferral.

(mm) “Plan” means the Second Amended and Restated Tenet 2006 Deferred Compensation Plan as set forth herein and as the same may be amended from time to time.

(nn) “Plan Administrator” means the individual or entity appointed by the PAC to handle the day-to-day administration of the Plan, including but not limited to determining a Participant’s eligibility for benefits and the amount of such benefits and complying with all applicable reporting and disclosure obligations imposed on the Plan. If the PAC does not appoint an individual or entity as Plan Administrator, the PAC will serve as the Plan Administrator.

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

(pp) “RSU Deferral” means the RSU deferral made by a Participant pursuant to Section 4.3.

(qq) “RSU” means the restricted stock units awarded under the SIP.

(rr) “Scheduled In-Service Withdrawal” means a distribution elected by the Participant pursuant to Section 4.2 or Section 4.3 for an in-service withdrawal of amounts of Basic Deferrals, Bonus Deferrals and/or RSU Deferrals made in a given Plan Year, and earnings or losses attributable thereto, as set forth on the Election Form for such Plan Year. In addition, the term Scheduled In-Service Withdrawal includes the one-time distribution elected pursuant to Section 5.8 for an in-service withdrawal of amounts deemed invested in Stock Units.

(ss) “Scheduled Withdrawal Date” means the distribution date elected by the Participant for a Scheduled In-Service Withdrawal.

(tt) “Severance Plan” means the Tenet Employee Severance Plan, the Tenet Executive Severance Protection Plan or any or any similar, successor or replacement plan to such plans.

(uu) “SIP” means the Tenet Healthcare 2008 Stock Incentive Plan and the Third Amended and Restated Tenet Healthcare Corporation 2001 Stock Incentive Plan.

(vv) “Special Enrollment Period” means the thirty (30) day period after an Employee is employed by the Employer (or a Director is elected to the Board) or an Employee is transferred to the status of an Eligible Person provided that such Employee does not already participate in another plan of the Employer that would be aggregated with the Plan and advised of his eligibility to participate in the Plan during which the Eligible Person may make his elections to defer Compensation, Bonus and RSUs earned after such election pursuant to Article IV. For purposes of determining an Eligible Person’s initial eligibility, an Eligible Person, who incurs a Termination of Employment and is reemployed and eligible to participate in the Plan at a date which is more than twenty-four (24) months after such Termination of Employment, will be treated as being initially eligible to participate in the Plan on such reemployment. The Plan Administrator may also designate certain periods as Special Enrollment Periods to the extent permitted under section 409A of the Code.

(ww) “Stock” means the common stock, par value $0.05 per share, of the Company.

(xx) “Stock Incentive Plan” means the Tenet Healthcare 2008 Stock Incentive Plan, as amended from time to time.

(yy) “Stock Unit” means a non-voting, non-transferable unit of measurement that is deemed for bookkeeping and distribution purposes only to represent one outstanding share of Stock.

(zz) “Supplemental Bonus Deferral” means the Supplemental Bonus Deferral made pursuant to Section 4.2(d).

(aaa) “Supplemental Compensation Deferral” means the Supplemental Compensation Deferral made pursuant to Section 4.2(c).

(bbb) “Supplemental Deferral” means a Supplemental Compensation Deferral and/or Supplemental Bonus Deferral.

(ccc) “Termination of Employment” means (i) with respect to an Employee, the date that such Employee ceases performing services for the Employer and its Affiliates in the capacity of an employee or a reduction in employment or other provision of services that qualifies as a separation from service under Code Section 409A and (ii) with respect to a Director, the date that such Director ceases to provide services to the Company as a member of the Board or a reduction in employment or other provision of services that qualifies as a separation from service under Code Section 409A. For this purpose an Employee who is on a leave of absence that exceeds six (6) months and who does not have statutory or contractual reemployment rights with respect to such leave, will be deemed to have incurred a Termination of Employment on the first day of the seventh (7th) month of such leave. An Employee who transfers employment from an Employer to an Affiliate, regardless of whether such Affiliate has adopted the Plan as a participating employer, will not incur a Termination of Employment. A Participant who experiences a “qualifying termination” under the Severance Plan will incur a Termination of Employment under the Plan and such an Employee will be ineligible to make Compensation and Bonus Deferrals and RSU Deferrals under the Plan during his severance period under the Severance

Plan ( i.e. , will be ineligible for future participation in the Plan as an active Employee).

(ddd) “Trust” means the rabbi trust established with respect to the Plan, the assets of which are to be used for the payment of benefits under the Plan.

(eee) “Trustee” means the individual or entity appointed to serve as trustee of any trust established as a possible source of funds for the payment of benefits under this Plan as provided in Section 7.1. After the occurrence of a Change of Control, the Trustee must be independent of any successor to the Company or any affiliate of such successor.

(fff) “2001 DCP” means the Tenet 2001 Deferred Compensation Plan which was in effect prior to the enactment of section 409A of the Code. All pre-2005 employee deferrals and employer contributions under the 2001 DCP were fully vested as of January 31, 2004 and as such are not subject to the provisions of section 409A of the Code. All 2005 employee deferrals and employer contributions under the 2001 DCP are subject to, and were made in accordance with, the requirements of section 409A of the Code and such employee deferrals and employer contributions were transferred to and will be administered under this Plan. No employee deferrals or employer contributions will be made to the 2001 DCP after 2005.

(ggg) “Unforeseeable Emergency” means (i) a severe financial hardship to the Participant resulting from an illness or accident of the Participant, his spouse or his dependent (as defined under section 152(a) of the Code), (ii) a loss of the Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, as determined by the Plan Administrator in its sole and absolute discretion in accordance with the requirements of section 409A of the Code.

2.2 Construction . If any provision of this Plan is determined to be for any reason invalid or unenforceable, the remaining provisions of this Plan will continue in full force and effect. All of the provisions of this Plan 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 the Act, the Code or other applicable federal law. The term “delivered to the PAC or Plan Administrator,” as used in this Plan, will include delivery to a person or persons designated by the PAC or Plan Administrator, as applicable, for the disbursement and the receipt of administrative forms. 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 this Plan. The pronouns “he,” “him” and “his” used in the Plan will also refer to similar pronouns of the female gender unless otherwise qualified by the context.

End of Article II

ARTICLE III
PARTICIPATION AND FORFEITABILITY OF BENEFITS

3.1 Eligibility and Participation .

(b) Limits on Eligibility . The PAC may at any time, in its sole and absolute discretion, limit the classification of Employees eligible to participate in the Plan and/or may limit or terminate an Eligible Person’s participation in the Plan; provided, that no such termination will result in a cancellation of Compensation and Bonus Deferrals or RSU Deferrals for the remainder of a Plan Year in which an election to make such deferrals is in effect. Any action taken by the PAC that limits the classification of Employees eligible to participate in the Plan or that modifies or terminates an Eligible Person’s participation in the Plan will be set forth in Exhibit A attached hereto. Exhibit A may be modified from time to time without a formal amendment to the Plan, in which case a revised Exhibit A will be attached hereto.

An Employee who takes an Unforeseeable Emergency distribution pursuant to Section 5.4 of this Plan will have his Compensation and Bonus Deferrals and RSU Deferrals under this Plan suspended for the remainder of the Plan Year in which such distribution occurs. This mid-year suspension provision will also apply with respect to an Unforeseeable Emergency distribution made pursuant to 5.4 of the 2001 DCP. In addition, an Employee who takes an Unforeseeable Emergency distribution under either the 2001 DCP or this Plan will be ineligible to participate in the Plan for purposes of making Compensation and Bonus Deferrals and RSU Deferrals and receiving a Matching Contribution for the Plan Year following the year in which such distribution occurs.

(c) Eligibility on Initial Employment . If an Eligible Person is employed or elected to the Board during the Plan Year or promoted or transferred into an eligible position and designated by the PAC to be a Participant for such year, such Eligible Person may elect to participate in the Plan during the Special Enrollment Period for the remainder of such Plan Year, by completing all required forms under Section 4.1 and making a Compensation Deferral and/or RSU Deferral election pursuant to Section 4.2 or Section 4.3. For purposes of determining an Eligible Person’s initial eligibility, an Eligible Person, who incurs a Termination of Employment and is reemployed and eligible to participate in the Plan at a date which is more than twenty-four (24) months after such Termination of Employment, will be treated as being initially eligible to participate in the Plan on

such reemployment. Designation as a Participant for the Plan Year in which he is employed or elected to the Board or promoted will not entitle the Eligible Person to continue as an active Participant for any subsequent Plan Year.

(d) Loss of Eligibility Status . A Participant under this Plan who separates from employment with the Employer, or who ceases to be a Director, or who transfers to an ineligible employment position will continue as an inactive Participant under this Plan until the Participant has received payment of all amounts payable to him under this Plan. In the event that a Participant ceases to be an Eligible Person during the Plan Year, such Participant’s Compensation and Bonus Deferrals and RSU Deferrals will continue through the remainder of the Plan Year, but the Participant will not be permitted to make such deferrals for the following Plan Year unless he again becomes an Eligible Employee and an active Participant pursuant to Section 3.1(a). An Eligible Person who ceases active participation in the Plan because the Eligible Person is no longer described as a Participant pursuant to this Section 3.1, or because he ceases making deferrals of Compensation, Bonuses or RSUs, the Eligible Person will continue as an inactive Participant under this Plan until he has received payment of all amounts payable to him under this Plan.

3.2 Forfeitability of Benefits . Except as provided in Section 6.1, a Participant will at all times have a nonforfeitable right to amounts credited to his Account pursuant to Section 4.5. As provided in Section 7.2, however, each Participant will be only a general creditor of the Company and/or his Employer with respect to the payment of any benefit under this Plan.

End or Article III

ARTICLE IV
DEFERRAL, COMPANY CONTRIBUTIONS, ACCOUNTING
AND INVESTMENT CREDITING RATES

4.1 General Rules Regarding Deferral Elections . An Eligible Person may become a Participant in the Plan for the applicable Plan Year by electing during the Open Enrollment Period to defer his Compensation, Bonus and/or RSUs pursuant to the terms of this Section 4.1 on an Election Form. Such Election Form will be submitted to the Plan Administrator by the date specified by the Plan Administrator and will be effective with respect to:

(a) Compensation and/or Bonus deferral elections, with the first paycheck dated on or after the following January 1; and

(b) RSU deferral elections, with respect to RSUs that are awarded under the SIP, either prior to or within thirty (30) days after the grant date as required by section 409A of the Code.

In the case of an Eligible Person who is employed by the Employer or elected to the Board during the Plan Year, the Election Form will be entered into within the Special Enrollment Period and submitted to the Plan Administrator by the date specified by the Plan Administrator and the specified deferral elections will only be effective with respect to Compensation, Bonus and/or RSUs earned after the date such Election Form is received by the Plan Administrator.

A Participant’s Election Form will only be effective with respect to a single Plan Year and will be irrevocable for the duration of such Plan Year. Deferral elections for each applicable Plan Year of participation will be made during the Open Enrollment Period pursuant to a new Election Form.

4.2 Compensation and Bonus Deferrals . Five types of Compensation and Bonus Deferrals may be made under the Plan:

(a) Basic Deferral . Each Eligible Person may elect to defer a stated dollar amount, or designated full percentage, of Compensation to the Plan up to a maximum percentage of seventy five percent (75%) (one hundred percent (100%) for Directors) of the Eligible Person’s Compensation for the applicable Plan Year until either (i) the Participant’s Termination of Employment or (ii) a future year in which the Participant is still employed by the Employer (or providing services as a member of the Board) and that is at least two (2) calendar years after the end of the Plan Year in which the Compensation would have otherwise been paid ( i.e. , as a Scheduled In-Service Withdrawal subject to the provisions of Section 5.3).

Basic Deferrals will be made pursuant to administrative procedures established by the Plan Administrator. Such procedures will provide that Basic Deferrals will be subject to a “withholding hierarchy” for purposes of determining the amount of such contributions that may be contributed on behalf of a Participant. The Plan Administrator (or its delegatee) will determine the order of withholdings taken from a Participant’s Compensation ( e.g. , for federal, state and local taxes, social security, wage garnishments, welfare plan contributions, 401(k) deferrals, and

similar withholdings) and Basic Deferrals will be subject to such withholding hierarchy. As a result, Basic Deferrals may be effectively limited to Compensation available after the application of such withholding hierarchy.

The Employer will not make any Matching Contributions with respect to any Basic Deferrals made to the Plan.

(b) Bonus Deferral . Each Eligible Person may elect to defer a stated dollar amount, or designated full percentage, of his Bonus to the Plan up to a maximum percentage of one hundred percent (100%) (ninety seven percent (97%) if a Supplemental Deferral is elected pursuant to Section 4.2(c)) of the Employee’s Bonus for the applicable Plan Year until either (i) the Eligible Person’s Termination of Employment or (ii) a future year in which the Eligible Person is still employed by the Employer (or providing services as a member of the Board) and that is at least two (2) calendar years after the end of the Plan Year in which the Bonus would have otherwise been paid ( i.e. , as a Scheduled In-Service Withdrawal subject to the provisions of Section 5.3).

Bonus Deferrals will be made pursuant to administrative procedures established by the Plan Administrator. Such procedures will provide that Bonus Deferrals will be subject to a “withholding hierarchy” for purposes of determining the amount of such contributions that may be contributed on behalf of a Participant. The Plan Administrator (or its delegatee) will determine the order of withholdings taken from a Participant’s Bonus ( e.g. , for federal, state and local taxes, social security, wage garnishments, welfare plan contributions, and similar withholdings) and Bonus Deferrals will be subject to such withholding hierarchy. As a result, Bonus Deferrals may be effectively limited to Bonus available after the application of such withholding hierarchy.

Bonus Deferrals generally will be made in the form of cash; provided, however, that if the Company modifies the Annual Incentive Plan to provide for the payment of awards in Stock, Bonus Deferrals may be made in the form of Stock. Any Bonus Deferrals made in the form of Stock will be converted to Stock Units, based on the number of shares so deferred, credited to the Stock Unit Account and distributed to the Participant at the time specified herein in an equivalent number of whole shares of Stock as provided in Section 4.5(b).

The Employer will not make any Matching Contributions with respect to any Bonus Deferrals made to the Plan.

(c) Supplemental Compensation Deferral . Each Eligible Person who is a participant in the 401(k) Plan may elect to automatically have three percent (3%) of his Compensation deferred under the Plan as a Supplemental Compensation Deferral with respect to the pay period in which he reaches any of the following statutory limitations under the 401(k) Plan:

(i) the limitation on Compensation under section 401(a)(17) of the Code, as such limit is adjusted for cost of living increases, or

(ii) the limitation imposed on elective deferrals under section 402(g) of the Code, including the limit applicable to catch-up contributions to the extent

the Eligible Person is eligible to make such contributions, as such limit is adjusted for cost of living increases.

All Supplemental Compensation Deferrals will be payable upon Termination of Employment ( i.e. , Scheduled In-Service Withdrawals are not available with respect to Supplemental Compensation Deferrals). A Participant who earns more than Five Hundred and Sixteen Thousand Dollars ($516,000) in Compensation (excluding Bonus), or such other amount as the Plan Administrator deems necessary to satisfy the requirements of section 409A of the Code, and elects to make Supplemental Compensation Deferrals under this Section 4.2(c) will not be permitted to modify his 401(k) Plan deferral elections during the Plan Year in which such Supplemental Compensation Deferral election is in effect.

The Employer will make Matching Contributions with respect to Supplemental Compensation Deferrals made to the Plan as provided in Section 4.4.

(d) Supplemental Bonus Deferral . Each Eligible Person may elect to automatically have three percent (3%) of his Bonus deferred under the Plan as a Supplemental Bonus Deferral whether or not the Eligible Person is a participant in the 401(k) Plan or has reached the statutory limitations under the 401(k) Plan described in Section 4.2(c). This Supplemental Bonus Deferral will be applied to that portion of the Eligible Person’s Bonus in excess of that deferred as a Bonus Deferral under Section 4.2(b). For example, if the Eligible Person elects to defer fifty percent (50%) of his Bonus under Section 4.2(b) and also elects to make a Supplemental Bonus Deferral under this Section 4.2(c), fifty percent (50%) of the Eligible Person’s Bonus will be deferred under Section 4.2(b) and three percent (3%) of the Eligible Person’s Bonus will be deferred under this Section 4.2(d). All Supplemental Bonus Deferrals will be payable upon Termination of Employment ( i.e. , Scheduled In-Service Withdrawals are not available with respect to Supplemental Bonus Deferrals).

The Employer will make Matching Contributions with respect to Supplemental Deferrals made to the Plan as provided in Section 4.4.

(e) Discretionary Deferral . The PAC may authorize an Eligible Person to defer a stated dollar amount, or designated full percentage, of Compensation to the Plan as a Discretionary Deferral. The PAC, in its sole and absolute discretion, may limit the amount or percentage of Compensation an Eligible Person may defer to the Plan as a Discretionary Deferral and may prohibit Scheduled In-Service Withdrawals with respect to such Discretionary Deferral. The Employer will not make any Matching Contributions pursuant to Section 4.4(a) with respect to any Discretionary Deferrals, but may elect to make a Discretionary Contribution to the Plan with respect to such Discretionary Deferrals in the form of a discretionary matching contribution as described in Section 4.4(b).

4.3 RSU Deferrals . To the extent authorized by the PAC, an Eligible Person may elect to defer a designated full percentage, up to one hundred percent (100%) of his RSUs until either (a) the Eligible Person’s Termination of Employment or (b) a future year while the Eligible Person is still employed by the Employer and that is at least two (2) calendar years after the end of the Plan Year in which the RSU is granted ( i.e. , as a Scheduled In-

Service Withdrawal subject to the provisions of 5.3) pursuant to an Election Form. A deferral election made pursuant to this Section 4.3 will apply to the entire RSU grant ( i.e. , a Participant may not elect to make a separate election with respect to each portion of the RSU award based on the award’s vesting schedule). Such RSU Deferrals will be converted to Stock Units, based on the number of shares so deferred, credited to the Stock Unit Account and distributed to the Participant at the time specified on the Election Form in an equivalent number of whole shares of Stock as provided in Section 4.5(b).

The Employer will not make any Matching Contributions with respect to any RSU Deferrals made to the Plan.

4.4 Company Contributions .

(a) Matching Contribution . The Employer will make a Matching Contribution to the Plan each Plan Year on behalf of each Participant who makes Supplemental Deferrals to the Plan for such Plan Year. Such Matching Contribution will equal fifty percent (50%) of the Participant’s Supplemental Deferrals for such Plan Year. Matching Contributions and earnings and losses thereon will be distributed upon the Participant’s Termination of Employment in the manner elected by the Participant (or deemed elected by the Participant) for the Plan Year to which the Matching Contribution relates as provided in Section 5.1.

(b) Discretionary Contribution . The Employer may elect to make a Discretionary Contribution to a Participant’s Account in such amount, and at such time, as will be determined by the Compensation Committee. Any Discretionary Contribution made by the Employer, plus earnings and losses thereon, will be paid to the Participant upon his Termination of Employment with the Employer in the manner elected by the Participant (or deemed elected by the Participant) for the Plan Year to which the Discretionary Contribution relates as provided in Section 5.1.

4.5 Accounting for Deferred Compensation .

(a) Cash Account . If a Participant has made an election to defer his Compensation and/or Bonus and has made a request for amounts deferred to be deemed invested pursuant to Section 4.5(a), the Company may, in its sole and absolute discretion, establish and maintain a Cash Account for the Participant under this Plan. Each Cash Account will be adjusted at least quarterly to reflect the Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, Discretionary Deferrals, Matching Contributions and Discretionary Contributions credited thereto, earnings or losses credited thereon, and any payment of such Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, Discretionary Deferrals, Matching Contributions and Discretionary Contributions pursuant to Article V. The amounts of Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, Discretionary Deferrals and Matching Contributions will be credited to the Participant’s Cash Account within five (5) business days of the date on which such Compensation and/or Bonus would have been paid to the Participant had the Participant not elected to defer such amount pursuant to the terms and provisions of the Plan. Any Discretionary Contributions will be credited to each Participant’s Cash Account at such times as determined by the Compensation Committee. In the sole and absolute discretion of the Plan Administrator, more than one Cash Account may be established for each Participant to facilitate

record-keeping convenience and accuracy. Each such Cash Account will be credited and adjusted as provided in this Plan.

(b) Stock Unit Account . If a Participant has made an election to defer his Compensation and/or Bonus and has made a request for such deferrals to be deemed invested in Stock Units pursuant to Section 4.5(b), the Plan Administrator may, in its sole and absolute discretion, establish and maintain a Stock Unit Account and credit the Participant’s Stock Unit Account with a number of Stock Units determined by dividing an amount equal to the Basic Deferrals, Bonus Deferrals, Supplemental Deferrals and associated Matching Contributions, and Discretionary Deferrals made as of such date by the Fair Market Value of a share of Stock on the date such Compensation and/or Bonus otherwise would have been payable. Such Stock Units will be credited to the Participant’s Stock Unit Account as soon as administratively practicable after the determination of the number of Stock Units is made pursuant to the preceding sentence.

If the Participant is entitled to a Discretionary Contribution and has elected to have amounts credited to his Account to be deemed invested in Stock Units pursuant to Section 4.6(b), the Plan Administrator may, in its sole discretion, establish and maintain a Stock Unit Account and credit the Participant’s Stock Unit Account with a number of Stock Units determined by dividing an amount equal to the Discretionary Contribution made as of such date by the Fair Market Value of a share of Stock on the date such Discretionary Contribution would have otherwise been made. Such Stock Units will be credited to the Participant’s Stock Unit Account as soon as administratively practicable after the determination of the number of Stock Units has been made pursuant to the preceding sentence.

Bonus Deferrals made in Stock and RSU Deferrals will be credited to the Stock Unit Account as provided in Section 4.2(b).

In the sole and absolute discretion of the Plan Administrator, more than one Stock Unit Account may be established for each Participant to facilitate record-keeping convenience and accuracy.

(i) The Stock Units credited to a Participant’s Stock Unit Account will be used solely as a device for determining the number of shares of Stock eventually to be distributed to the Participant in accordance with this Plan. The Stock Units will not be treated as property of the Participant or as a trust fund of any kind. No Participant will be entitled to any voting or other stockholder rights with respect to Stock Units credited under this Plan.

Code will be made by the Compensation Committee in the number and kind of Stock Units credited to a Participant’s Stock Unit Account.

(c) Accounts Held in Trust . Amounts credited to Participants’ Accounts may be secured by one or more trusts, as provided in Section 7.1, but will be subject to the claims of the general creditors of each such Participant’s Employer. Although the principal of such trust and any earnings or losses thereon will be separate and apart from other funds of the Employer and will be used for the purposes set forth therein, neither the Participants nor their Beneficiaries will have any preferred claim on, or any beneficial ownership in, any assets of the trust prior to the time such assets are paid to the Participant or Beneficiaries as benefits and all rights created under this Plan will be unsecured contractual rights of Plan Participants and Beneficiaries against the Employer. Any assets held in the trust with respect to a Participant will be subject to the claims of the general creditors of that Participant’s Employer under federal and state law in the event of insolvency. The assets of any trust established pursuant to this Plan will never inure to the benefit of the Employer and the same will be held for the exclusive purpose of providing benefits to that Employer’s Participants and their beneficiaries.

4.6 Investment Crediting Rates . At the time of making a deferral election described in Section 4.1, the Participant will request on an Election Form the type of investment crediting rate option with which the Participant would like the Company, in its sole and absolute discretion, to credit the Participant; namely, one of several investment crediting rate options payable in cash or an investment crediting rate option based on the performance of the price of the Company’s Stock and payable in the Company’s Stock. Such investment crediting rate election will apply to all deferrals and contributions under the Plan, except for Bonus Deferrals made in Stock and RSU Deferrals which will automatically be credited to the Stock Unit Account as provided in Section 4.2(b) and Section 4.3.

(a) Cash Investment Crediting Rate Options . A Participant may request on an Election Form the type of investment in which the Participant would like Compensation and Bonus Deferrals to be deemed invested for purposes of determining the amount of earnings to be credited or losses to be debited to his Cash Account. The Participant will specify his preference from among the following possible investment crediting rate options:

(i) Prior to January 1, 2009, an annual rate of interest equal to one percent (1%) below the prime rate of interest as quoted by Bloomberg, compounded daily, and effective on and after January 1, 2009, an annual rate of interest equal to one hundred and twenty percent (120%) of the long-term applicable federal rate, compounded daily; or

(ii) One or more benchmark mutual funds.

A Participant may change, on a daily basis, the investment crediting rate preference under this Section 4.6(a) by filing an election in such manner as will be determined by the PAC. Notwithstanding any request made by a Participant, the Company, in its sole and absolute discretion, will determine the investment rate with which to credit amounts deferred by Participants under this Plan,

provided, however, that if the Company chooses an investment crediting rate other than the investment crediting rate requested by the Participant, such investment crediting rate cannot be less than (i) above.

(b) Stock Units . A Participant may request on an Election Form to have all or a portion of his Compensation and Bonus Deferrals to be deemed invested in Stock Units. Any request to have Compensation and Bonus Deferrals to be deemed invested in Stock Units is irrevocable and such amounts will be distributed in an equivalent whole number of shares of Stock pursuant to the provisions of Article V. Any fractional share interests will be paid in cash with the last distribution.

(c) Deemed Election . In his request(s) pursuant to this Section 4.6, the Participant may request that all or any portion of his Account (in whole percentage increments) be deemed invested in one or more of the investment crediting rate preferences provided under the Plan as communicated from time to time by the PAC. Although a Participant may express an investment crediting rate preference, the Company will not be bound by such request. If a Participant fails to set forth his investment crediting rate preference under this Section 4.6, he will be deemed to have elected an annual rate of interest equal to the rate of interest set forth in Section 4.6(a)(i) ( i.e ., prior to January 1, 2009 one percent (1%) below the prime rate of interest as quoted by Bloomberg, compounded daily, or effective on and after January 1, 2009, one hundred and twenty percent (120%) of the long-term applicable federal rate, compounded daily). The PAC will select from time to time, in its sole and absolute discretion, the possible investment crediting rate options to be offered under the Plan.

(d) Employer Contributions . Matching Contributions to the Plan made by the Employer and allocated to a Participant’s Account pursuant to Section 4.3 will be credited with the same investment crediting rate as the Participant’s associated Supplemental Deferrals for the relevant Plan Year. Discretionary Contributions, if any, made by the Employer and allocated to a Participant’s Account pursuant to Section 4.4 will be credited with the investment crediting rate specified (or deemed specified) by such Participant on his Election Form for the relevant Plan Year with respect to the Participant’s Basic Deferrals and Bonus Deferrals.

A Participant will retain the right to change the investment crediting rate applicable to Matching Contributions and Discretionary Contributions as provided in this Section 4.6.

(e) Prior Plan Contributions . The Company transferred Participant 2005 employee deferrals and employer contributions under the 2001 DCP to this Plan and permitted Participants to express an investment crediting rate preference with respect to such transferred amounts. Such transferred amounts will be administered pursuant to the terms of this Plan.

End of Article IV

ARTICLE V
DISTRIBUTION OF BENEFITS

5.1 Distribution Election . During each Open Enrollment Period beginning on and after January 1, 2009, the Eligible Person must specify in the Enrollment Form the time and manner in which his Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, RSU Deferrals and/or Discretionary Deferrals and any associated Matching Contributions or Discretionary Contributions will be paid. A Participant may make a separate distribution election for each type of Participant Deferral or Employer Contribution for each Plan Year beginning on or after January 1, 2010 in which he elects to make Participant Deferrals to the Plan. The Participant may not modify his election as to the manner in which such Participant Deferrals or Employer Contributions will be paid.

For Plan Years beginning prior to January 1, 2010, the Participant had to specify upon his initial enrollment in the Plan the time and form in which distributions of Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, RSU Deferrals and/or Discretionary Deferrals and any associated Matching Contributions or Discretionary Contributions would be made upon a Termination of Employment and such termination distribution election governed all deferrals or Employer contributions made to the Plan prior to January 1, 2010 (i.e., deferrals and Employer contributions made during the 2005, 2006, 2007, 2008 and 2009 Plan Years). Alternatively, the Participant could have elected to receive a Scheduled In-Service Withdrawal of his Basic Deferrals, Bonus Deferrals, RSU Deferrals and/or Discretionary Deferrals (if allowed by the PAC).

(a) Time of Distribution

A Participant who elects to receive a Scheduled In-Service Withdrawal with respect to Basic Deferrals, Bonus Deferrals, RSU Deferrals or Discretionary Deferrals will receive the deferred amount, as adjusted for earnings and losses, in a lump sum at the time specified in his Enrollment Form. In the event that the Participant incurs a Termination of Employment before his Scheduled In-Service Withdrawal date, his Scheduled In-Service Withdrawal election will be cancelled and of no effect and such amounts will be paid according to the Participant’s Termination of Employment distribution election with respect to the Plan Year with respect to which the Scheduled In-Service Withdrawal amounts relate ( i.e. , the Plan Year such amounts were deferred) or if no Termination of Employment distribution election is on file, in a lump sum upon such Termination of Employment based on the Plan’s default form of payment.

A Participant who elects to receive his Basic Deferrals, Bonus Deferrals, Supplemental Deferrals, RSU Deferrals and/or Discretionary Deferrals and any associated Matching Contributions or Discretionary Contributions made for a Plan Year upon his Termination of Employment, may receive such amounts at any of the following times:

(i) Subject to the six (6) month delay applicable to Key Employees described in Section 5.2, as soon as practicable after the Participant’s Termination of Employment;

(ii) In the twelfth (12th) month following the Participant’s Termination of Employment; or

(iii) In the twenty-fourth (24th) month following the Participant’s Termination of Employment.

Such amounts may be paid in the form of a lump sum or in the form of annual installments over a period of one (1) to fifteen (15) years. Such lump sum or installments will be made in cash or in Stock, or in a combination thereof, depending on the Participant’s investment crediting rates as provided in Section 4.6. If the Participant’s Account is paid in installments, such Account will be revalued during the term of such installments based on procedures established by the Plan Administrator.

A Participant who dies while an Employee or a Director, as applicable, will be deemed to have incurred a Termination of Employment on the date of his death; provided, however, that amounts payable pursuant to the Plan on account of death will not be subject to the six (6) month delay applicable to Key Employees.

(b) Failure to Elect Distribution

In the event that a Participant fails to elect the manner in which his Account balance will be paid upon his Termination of Employment, such Account balance will be paid in the form of a lump sum as soon as practicable following the Participant’s Termination of Employment, subject to the six (6) month delay applicable to Key Employees described in Section 5.2.

All distributions from the Plan will be taxable as ordinary income when received and subject to appropriate withholding of income taxes. In the case of distributions in Stock, the appropriate number of shares of Stock may be sold to satisfy such withholding obligations pursuant to administrative procedures adopted by the Plan Administrator.

5.2 Termination Distributions to Key Employees . Distributions under this Plan that are payable to a Key Employee on account of a Termination of Employment will be delayed for a period of six (6) months following such Participant’s Termination of Employment. This six (6) month restriction will not apply, or will cease to apply, with respect to a distribution to a Participant’s Beneficiary by reason of the death of the Participant.

5.3 Scheduled In-Service Withdrawals . A Participant who elects a Scheduled In-Service Withdrawal pursuant to Section 4.2 (regarding Compensation and Bonus Deferrals), Section 4.3 (regarding RSU Deferrals) or Section 5.8 (regarding the one-time section 409A transition election for amounts deemed invested in Stock Units) may subsequently elect to delay such distribution for a period of at least five (5) additional calendar years; provided, that such election is made at least (12) twelve months prior to the date that such distribution would otherwise be made. Further, in the event that a Participant elects a Scheduled In-Service Withdrawal and incurs a Termination of Employment prior to the Scheduled Withdrawal Date, the Participant’s Scheduled In-Service Withdrawal election and Compensation and Bonus Deferral and/or RSU Deferral election under Section 4.2, Section 4.3 or Section 5.8, respectively, will be cancelled and the Participant’s entire Account balance will be paid according to the Participant’s termination distribution election as provided in Section 5.1.

5.4 Unforeseeable Emergency . Upon application by the Participant, the Plan Administrator, in its sole and absolute discretion, may direct payment of all or a portion of the Participant’s Account balance prior to his Termination of Employment and any Scheduled Withdrawal Date in the event of an Unforeseeable Emergency. Any such application will set forth the circumstances constituting such Unforeseeable Emergency. The Plan Administrator will determine whether to grant an application for a distribution on account of an Unforeseeable Emergency in accordance with guidance issued pursuant to Section 409A of the Code.

A Participant who takes an Unforeseeable Emergency distribution pursuant to this Section 5.4 (including amounts attributable to 2005 employee deferrals and employer contributions made under the 2001 DCP which are transferred to and administered under this Plan) will have his Participant Deferrals under this Plan suspended for the remainder of the Plan Year in which such Unforeseeable Emergency distribution occurs. In addition, such Participant will be ineligible to participate in the Plan for purposes of making Participant Deferrals and receiving an Employer Contribution for the Plan Year following the year in which such distribution occurs.

5.5 Death of a Participant . If a Participant dies while employed by the Employer, the Participant’s Account balance will be paid to the Participant’s Beneficiary in the manner elected (or deemed elected) by the Participant pursuant to Section 5.1; provided, that the six (6) month restriction on distributions to Key Employees under Section 5.2 will not apply.

In the event a terminated Participant dies while receiving installment payments, the remaining installments will be paid to the Participant’s Beneficiary as such payments become due in accordance with Section 5.1.

In the event a terminated Participant dies before receiving his lump sum payment or before he begins receiving installment payments, the lump sum payment or installment payments will be paid to the Participant’s Beneficiary as such payments become due in accordance with Section 5.1; provided, that the six (6) month restriction on distributions to Key Employees under Section 5.2 will not apply.

5.6 Withholding . Any taxes or other legally required withholdings from Compensation and Bonus Deferrals, RSU Deferrals, termination distributions, Scheduled In-Service Withdrawal payments and Unforeseeable Emergency distributions to Participants or Beneficiaries under the Plan will be deducted and withheld by the Employer, benefit provider or funding agent as required pursuant to applicable law. To the extent amounts are payable under this Plan in Stock, the appropriate number of shares of Stock may be withheld to satisfy such withholding obligation. A Participant or Beneficiary will be provided with a tax withholding election form for purposes of federal and state tax withholding, if applicable.

5.7 Impact of Reemployment on Benefits . If a Participant incurs a Termination of Employment and begins receiving installment payments from the Plan and such Participant is reemployed by the Employer, then such Participant’s installment payments will continue as scheduled during the period of his reemployment.

5.8 Scheduled In-Service Stock Unit Distribution Election . Pursuant to transition relief under Section 409A of the Code regarding the time and form of payment, each

Participant who previously elected to have all or a portion of his Compensation and Bonus Deferrals and any associated Employer Matching Contributions or Discretionary Contributions made to the Plan on his behalf to be deemed invested in Stock Units pursuant to Section 4.6(b) and Section 4.6(d) may make a one-time election prior to December 31, 2008 to elect to receive a Scheduled In-Service Withdrawal of such amounts at a date certain during calendar year 2009 or later.

End of Article V

ARTICLE VI
PAYMENT LIMITATIONS

6.1 Spousal Claims .

(a) In the event that an Alternate Payee is entitled to all or a portion of a Participant’s Accounts pursuant to the terms of a DRO, such Alternate Payee will have the following distribution rights with respect to such Participant’s Account to the extent set forth pursuant to the terms of the DRO:

(i) payment of benefits in a lump sum, in cash or Stock, based on the Participant’s investment crediting rates under the Plan as provided in Section 4.6 and the terms of the DRO, as soon as practicable following the acceptance of the DRO by the Plan Administrator;

(ii) payment of benefits in a lump sum in cash or Stock, based on the Participant’s investment crediting rates under the Plan as provided in Section 4.6 and the terms of the DRO, twelve (12) months following, or twenty four (24) months following, the acceptance of the DRO by the Plan Administrator;

(iii) payment of benefits in substantially equal annual installments, in cash and/or Stock, based on the Participant’s investment crediting rates under the Plan as provided in Section 4.6 and the terms of the DRO, over a period of not less than one (1) nor more than fifteen (15) years from the date the DRO is accepted by the Plan Administrator; and

(iv) payment of benefits in substantially equal annual installments, in cash and/or Stock, based on the Participant’s investment crediting rates under the Plan as provided in Section 4.6 and the terms of the DRO, over a period of not less than one (1) nor more than fifteen (15) years beginning twelve (12) months following, or twenty four (24) months following, the date the DRO is accepted by the Plan Administrator.

An Alternate Payee with respect to a DRO that provides for any of the distributions described in subsections (ii), (iii), or (iv) above, must complete and deliver to the Plan Administrator all required forms within thirty (30) days from the date the Alternate Payee is notified by the Plan Administrator that the DRO has been accepted. Any Alternate Payee who does not complete and deliver to the Plan Administrator all required forms and/or whose DRO does not provide for any of the distributions described in subsections (ii), (iii), or (iv) above will receive his benefits in a lump sum according to subsection (i) above. Unvested RSUs may not be transferred pursuant to a DRO.

(b) Any taxes or other legally required withholdings from payments to such Alternate Payee will be deducted and withheld by the Employer, benefit provider or funding agent. To the extent amounts are payable under this Plan in Stock, the appropriate number of shares of Stock may be sold to satisfy such withholding obligation. The Alternate Payee will be provided with a tax withholding election form for purposes of federal and state tax withholding, if applicable.

6.2 Legal Disability . If a person entitled to any payment under this Plan is, in the sole judgment of the Plan Administrator, under a legal disability, or otherwise is unable to apply such payment to his own interest and advantage, the Plan Administrator, in the exercise of its discretion, may direct the Employer or payor of the benefit to make any such payment in any one or more of the following ways:

(a) Directly to such person;

(b) To his legal guardian or conservator; or

(c) To his spouse or to any person charged with the duty of his support, to be expended for his benefit and/or that of his dependents.

The decision of the Plan Administrator will in each case be final and binding upon all persons in interest, unless the Plan Administrator reverses its decision due to changed circumstances.

End of Article VI

ARTICLE VII
FUNDING

7.1 (a) Funding . Benefits under this Plan will be funded solely by the Employer. Benefits under this Plan will constitute an unfunded general obligation of the Employer, but the Employer may create reserves, funds and/or provide for amounts to be held in trust to fund such benefits on its behalf. Payment of benefits may be made by the Employer, any trust established by the Employer or through a service or benefit provider to the Employer or such trust.

(b) Rabbi Trust. Upon a Change of Control, the following shall occur:

(i) the Trust shall become (or continue to be) irrevocable;

(ii) for three (3) years following a Change of Control, the Trustee can only be removed as set forth in the Trust;

(iii) if the Trustee is removed or resigns within three (3) years of a Change of Control, the Trustee shall select a successor Trustee, as set forth in the Trust;

(iv) for three (3) years following a Change of Control, the Company shall be responsible for directly paying all Trustee fees and expenses, together with all fees and expenses incurred under Article 8 relating to the PAC, Plan Administrator, and Plan administrative expenses; and

End of Article VII

ARTICLE VIII
ADMINISTRATION

8.1 The PAC . The overall administration of the Plan will be the responsibility of the PAC.

(a) To appoint the Plan Administrator;

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

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

(d) To determine and resolve, in its sole and absolute discretion, all questions relating to the administration of the Plan and the trust established to secure the assets of the Plan (i) when differences of opinion arise between the Company, an Affiliate, the Plan Administrator, the Trustee, a Participant, 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 Plan for the greatest benefit of all parties concerned.