PROVINCE HEALTHCARE CO
AMENDED & RESTATED 1997 LONG-TERM EQUITY PLAN
<DOCUMENT>
<TYPE>EX-10.35
<SEQUENCE>3
<FILENAME>g67803ex10-35.txt
<DESCRIPTION>AMENDED & RESTATED 1997 LONG-TERM EQUITY PLAN
<TEXT>

<PAGE>   1
                                                                   EXHIBIT 10.35


                           PROVINCE HEALTHCARE COMPANY

                              AMENDED AND RESTATED
                      1997 LONG-TERM EQUITY INCENTIVE PLAN



                                    RECITALS

         WHEREAS, Principal Hospital Company ("Principal"), the corporate
predecessor of the Company, established the Principal Hospital Company 1997
Long-Term Equity Incentive Plan (the "Plan"), effective March 3, 1997, by action
of its board of directors and the Plan was subsequently approved by its
shareholders; and

         WHEREAS, the Plan was initially established with a reservation of
200,000 shares of the no-par common stock of Principal ("Stock") for issuance
under the Plan, and as a result of a three-for-one split of Stock that occurred
in March, 1997, the number of shares available for issuance under the Plan was
automatically increased in proportion to the stock split; and

         WHEREAS, the Plan was amended on September 24, 1997, to increase the
number of shares of Stock available for issuance under the Plan by 1,155,000,
resulting in a total of 1,755,000 shares, and such amendment was approved by the
shareholders of Principal; and

         WHEREAS, as a result of the merger of Principal with and into the
Company on February 4, 1998, pursuant to which Principal exchanged 1.83 shares
of Stock for each share of the common stock of the Company, par value $.01 per
share, ("Common Stock"), the Company assumed all of the rights and obligations
of Principal under the Plan and the number of shares of Common Stock available
for issuance under the Plan was adjusted to 959,016 shares; and

         WHEREAS, the Company, with approval of its shareholders, amended the
Plan effective March 24, 1998 in order to change the name of the Plan to the
"Province Healthcare Company 1997 Long-Term Equity Incentive Plan" and to
increase the number of shares authorized for issuance under the Plan to a total
of 1,209,016 shares; and

         WHEREAS, the Company, with approval of its shareholders, amended the
Plan effective on each of March 31, 1999 and March 14, 2000 in order to increase
the number of shares authorized for issuance under the Plan to a total of
2,609,016 shares and 3,609,016 shares, respectively; and

         WHEREAS, the Company desires to amend and restate the Plan for the sole
purpose of consolidating the various adjustments and amendments to the Plan
described above;

         NOW, THEREFORE, by action of the Board of Directors as permitted under
Section 16 of the Plan, the text of the Plan is hereby amended and restated to
read in its entirety as follows:


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1. Purpose.

         This plan shall be known as the Province Healthcare Company Amended and
Restated 1997 Long-Term Equity Incentive Plan (the "Plan"). The purpose of the
Plan shall be to promote the long-term growth and profitability of Province
Healthcare Company and its Subsidiaries by (i) providing certain directors,
officers and key employees of, and certain other key individuals who perform
services for, the Company and its Subsidiaries with incentives to maximize
stockholder value and otherwise contribute to the success of the Company and
(ii) enabling the Company to attract, retain and reward the best available
persons for positions of substantial responsibility. Grants of incentive or
nonqualified stock options, stock appreciation rights ("SARs"), either alone or
in tandem with options, restricted stock, performance awards, or any combination
of the foregoing may be made under the Plan.

2. Definitions.

         (a) "Board of Directors" and "Board" mean the board of directors of the
Company.

         (b) "Cause" means the occurrence of one of the following events:

             (i) Conviction of a felony or any crime or offense lesser than a
felony involving the property of the Company or a Subsidiary; or

             (ii) Conduct that has caused demonstrable and serious injury to the
Company or a Subsidiary, monetary or otherwise; or

             (iii) Willful refusal to perform or substantial disregard of duties
properly assigned, as determined by the Company; or

             (iv) Breach of duty of loyalty to the Company or a Subsidiary or
other act of fraud or dishonesty with respect to the Company or a Subsidiary.

         (c) "Change in Control" means the occurrence of one of the following
events:

             (i) if any "person" or "group" as those terms are used in Sections
13(d) and 14(d) of the Exchange Act, other than an Exempt Person, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities; or

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




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             (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation (A) which would result in all or a portion of the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (B) by which the corporate
existence of the Company is not affected and following which the Company's chief
executive officer and directors retain their positions with the Company (and
constitute at least a majority of the Board); or

             (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets, other than a sale to
an Exempt Person.

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

         (e) "Committee" means the Compensation Committee of the Board, or if no
such committee of the Board exists, means the Board. The membership of the
Committee shall be constituted so as to comply at all times with the applicable
requirements of Rule 16b-3 under the Exchange Act and Section 1 62(m) of the
Code.

         (f) "Common Stock" means the Common Stock, without par value, of the
Company, and any other shares into which such stock may be changed by reason of
a recapitalization, reorganization, merger, consolidation or any other change in
the corporate structure or capital stock of the Company.

         (g) "Company" means Province Healthcare Company, a Delaware
corporation, or any corporate successor thereto as contemplated by Section 15.

         (h) "Competition" is deemed to occur if a person whose employment with
the Company or its Subsidiaries has terminated obtains a position as a full-time
or part-time employee of, as a member of the board of directors of, or as a
consultant or advisor with or to, or acquires an ownership interest in excess of
5% of, a corporation, partnership, firm or other entity that engages in any of
the businesses of the Company or any Subsidiary with which the person was
involved in a management role at any time during his or her last five years of
employment with or other service for the Company or any Subsidiaries.

         (i) "Disability" means a disability that would entitle an eligible
participant to payment of monthly disability payments under any Company
disability plan or as otherwise determined by the Committee.

         (j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         (k) "Exempt Person" means (i) Golder, Thoma, Cressey, Rauner Inc., (ii)
any person, entity or group under the control of any party included in clause
(i), or (iii) any employee



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benefit plan of the Company or a trustee or other administrator or fiduciary
holding securities under an employee benefit plan of the Company.

         (l) "Fair Market Value" of a share of Common Stock of the Company
means, as of the date in question, the officially-quoted closing selling price
of the stock (or if no selling price is quoted, the bid price) on the principal
securities exchange on which the Common Stock is then listed for trading
(including for this purpose the Nasdaq National Market) (the "Market") for the
immediately preceding trading day or, if the Common Stock is not then listed or
quoted in the Market, the Fair Market Value shall be the fair value of the
Common Stock determined in good faith by the Board; provided, however, that when
shares received upon exercise of an option are immediately sold in the open
market, the net sale price received may be used to determine the Fair Market
Value of any shares used to pay the exercise price or withholding taxes and to
compute the withholding taxes.

         (m) "Incentive Stock Option" means an option conforming to the
requirements of Section 422 of the Code and any successor thereto.

         (n) "Non-Employee Director" has the meaning given to such term in Rule
16b-3 under the Exchange Act.

         (o) "Nonqualified Stock Option" means any stock option other than an
Incentive Stock Option.

         (p) "Other Company Securities" mean securities of the Company other
than Common Stock, which may include, without limitation, unbundled stock units
or components thereof, debentures, preferred stock, warrants and securities
convertible into or exchangeable for Common Stock or other property.

         (q) "Retirement" means retirement as defined under any Company pension
plan or retirement program or termination of one's employment on retirement with
the approval of the Committee.

         (r) "Subsidiary" means a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity entitled to elect the
management thereof, or such lesser percentage as may be approved by the
Committee, are owned directly or indirectly by the Company.

3. Administration.

         The Plan shall be administered by the Committee; provided that the
Board may, in its discretion, at any time and from time to time, resolve to
administer the Plan, in which case the term "Committee" shall be deemed to mean
the Board for all purposes herein. The Committee shall consist of at least two
directors. Subject to the provisions of the Plan, the Committee shall be
authorized to (i) select persons to participate in the Plan, (ii) determine the
form and substance of grants made under the Plan to each participant, and the
conditions and restrictions, if any, subject to which such grants will be made,
(iii) modify the terms of grants made under the Plan,



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(iv) interpret the Plan and grants made thereunder, (v) make any adjustments
necessary or desirable in connection with grants made under the Plan to eligible
participants located outside the United States and (vi) adopt, amend, or rescind
such rules and regulations, and make such other determinations, for carrying out
the Plan as it may deem appropriate. Decisions of the Committee on all matters
relating to the Plan shall be in the Committee's sole discretion and shall be
conclusive and binding on all parties. The validity, construction, and effect of
the Plan and any rules and regulations relating to the Plan shall be determined
in accordance with applicable federal and state laws and rules and regulations
promulgated pursuant thereto. No member of the Committee and no officer of the
Company shall be liable for any action taken or omitted to be taken by such
member, by any other member of the Committee or by any officer of the Company in
connection with the performance of duties under the Plan, except for such
person's own willful misconduct or as expressly provided by statute.

         The expenses of the Plan shall be borne by the Company. The Plan shall
not be required to establish any special or separate fund or make any other
segregation of assets to assume the payment of any award under the Plan, and
rights to the payment of such awards shall be no greater than the rights of the
Company's general creditors.

4. Shares Available for the Plan.

         An aggregate of 3,609,016 shares of Common Stock (the "Shares") may be
issued pursuant to the Plan. Such Shares may be in whole or in part authorized
and unissued, or shares which are held by the Company as treasury shares. If any
grant under the Plan expires or terminates unexercised, becomes unexercisable or
is forfeited as to any Shares, such unpurchased or forfeited Shares shall
thereafter be available for further grants under the Plan. In any one calendar
year, the Committee shall not grant to any one participant options or SARs to
purchase a number of shares of Common Stock in excess of 114,754. The number of
shares of Common Stock referenced in this paragraph are subject to adjustment as
provided in Section 15.

         Without limiting the generality of the foregoing provisions of this
Section 4 or the generality of the provisions of Sections 3, 6 or 17 or any
other section of this Plan, the Committee may, at any time or from time to time,
and on such terms and conditions (that are consistent with and not in
contravention of the other provisions of this Plan) as the Committee may, in its
sole discretion, determine, enter into agreements (or take other actions with
respect to the options) for new options containing terms (including exercise
prices) more (or less) favorable than the outstanding options.

5. Participation.

         Participation in the Plan shall be limited to those directors
(including Non-Employee Directors), officers (including non-employee officers)
and key employees of, and other key individuals performing services for, the
Company and its Subsidiaries selected by the Committee (including participants
located outside the United States). Nothing in the Plan or in any grant
thereunder shall confer any right on a participant to continue in the employ of
or the performance of services for the Company or shall interfere in any way
with the right of the Company to terminate the employment or performance of
services of a participant at any time.



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By accepting any award under the Plan, each participant and each person claiming
under or through him or her shall be conclusively deemed to have indicated his
or her acceptance and ratification of, and consent to, any action taken under
the Plan by the Company, the Board or the Committee.

         Incentive Stock Options or Nonqualified Stock Options, SARs, alone or
in tandem with options, restricted stock awards, performance awards, or any
combination thereof, may be granted to such persons and for such number of
Shares as the Committee shall determine (such individuals to whom grants are
made being sometimes herein called "optionees" or "grantees," as the case may
be). Determinations made by the Committee under the Plan need not be uniform and
may be made selectively among eligible individuals under the Plan, whether or
not such individuals are similarly situated. A grant of any type made hereunder
in any one year to an eligible participant shall neither guarantee nor preclude
a further grant of that or any other type to such participant in that year or
subsequent years.

6. Incentive and Nonqualified Options.

         The Committee may from time to time grant to eligible participants
Incentive Stock Options, Nonqualified Stock Options, or any combination thereof;
provided that the Committee may grant Incentive Stock Options only to eligible
employees of the Company or its subsidiaries (as defined for this purpose in
Section 424(f) of the Code). The options granted shall take such form as the
Committee shall determine, subject to the following terms and conditions.

         It is the Company's intent that Nonqualified Stock Options granted
under the Plan not be classified as Incentive Stock Options, that Incentive
Stock Options be consistent with and contain or be deemed to contain all
provisions required under Section 422 of the Code and any successor thereto, and
that any ambiguities in construction be interpreted in order to effectuate such
intent. If an Incentive Stock Option granted under the Plan does not qualify as
such for any reason, then to the extent of such nonqualification, the stock
option represented thereby shall be regarded as a Nonqualified Stock Option duly
granted under the Plan, provided that such stock option otherwise meets the
Plan's requirements for Nonqualified Stock Options.

         (a) Price. The price per Share deliverable upon the exercise of each
option ("exercise price") shall be established by the Committee, except that in
the case of the grant of any Incentive Stock Option, the exercise price may not
be less than 100% of the Fair Market Value of a share of Common Stock as of the
date of grant of the option, and in the case of the grant of any Incentive Stock
Option to an employee who, at the time of the grant, owns more than 10% of the
total combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the exercise price may not be less than 110% of the Fair Market
Value of a share of Common Stock as of the date of grant of the option, in each
case unless otherwise permitted by Section 422 of the Code.

         (b) Payment. Options may be exercised, in whole or in part, upon
payment of the exercise price of the Shares to be acquired. Payment shall be
made (i) in the form of cash (including cashiers check or wire transfer), (ii)
by delivery of eligible shares of Common Stock, as defined below, ("Eligible
Shares") (iii) with the assistance of a broker (reasonably acceptable



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to the Committee) through a credit transaction involving Shares to be acquired
on exercise, as permitted under Regulation T of the Federal Reserve Board, or
(iv) by any combination of the foregoing.

         For purposes of this Section 6(b), Common Stock shares are Eligible
Shares if they have been held by the grantee free of any risk of forfeiture to
the Company for at least six months or, upon approval by the Committee, were
acquired as an investment by the grantee through a purchase on the open market.
Eligible Shares shall be delivered to the Company either by (A) physical
delivery of the certificate(s) for all such Eligible Shares tendered in payment
of the price, accompanied by duly executed instruments of transfer in a form
acceptable to the Company, or (B) direction to the grantee's broker to transfer,
by book entry, such Eligible Shares from a brokerage account of the grantee to a
brokerage account specified by the Company. No grantee may tender shares of
Common Stock having a Fair Market Value exceeding the aggregate exercise price
payable with respect to the option being exercised (plus any applicable taxes).

         (c) Terms of Options. The term during which each option may be
exercised shall be determined by the Committee, but, except as otherwise
provided herein, in no event shall an option be exercisable in whole or in part,
in the case of a Nonqualified Stock Option or an Incentive Stock Option (other
than as described below), more than ten years from the date it is granted or, in
the case of an Incentive Stock Option granted to an employee who at the time of
the grant owns more than 10% of the total combined voting power of all classes
of stock of the Company or any of its Subsidiaries, if required by the Code,
more than five years from the date it is granted. All rights to purchase Shares
pursuant to an option shall, unless sooner terminated, expire at the date
designated by the Committee. The Committee shall determine the date on which
each option shall become exercisable and may provide that an option shall become
exercisable in installments. The Shares constituting each installment may be
purchased in whole or in part at any time after such installment becomes
exercisable, subject to such minimum exercise requirements as may be designated
by the Committee. Unless otherwise provided herein or in the terms of the
related grant, an optionee may exercise an option only if he or she is, and has
continuously since the date the option was granted, been a director, officer or
employee of or performed other services for the Company or a Subsidiary. Prior
to the exercise of an option and delivery of the Shares represented thereby, the
optionee shall have no rights as a stockholder with respect to any Shares
covered by such outstanding option (including any dividend or voting rights).

         (d) Limitations on Grants. If required by the Code, the aggregate Fair
Market Value (determined as of the grant date) of Shares for which an Incentive
Stock Option is exercisable for the first time during any calendar year under
all equity incentive plans of the Company and its Subsidiaries (as defined in
Section 422 of the Code) may not exceed $100,000.

         (e) Termination; Change in Control.

             (i) If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company and any Subsidiary due to
death or Disability, all of the



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participant's options and SARs shall become fully vested and exercisable and
shall remain so for a period of one year from the date of such death or
Disability, but in no event after the expiration date of the options or SARs.
Notwithstanding the foregoing, if the Disability giving rise to the termination
of employment is not within the meaning of Section 422(e)(3) of the Code, the
participant's Incentive Stock Options shall terminate 90 days after the date of
termination of employment.

             (ii) If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company and any Subsidiary upon the
occurrence of his or her Retirement, (A) all of the participant's options and
SARs that were exercisable on the date of Retirement shall remain exercisable
for, and shall otherwise terminate at the end of, a period of up to three years
after the date of Retirement, but in no event after the expiration date of the
options or SARs; provided that the participant does not engage in Competition
during such three-year period unless he or she receives written consent to do so
from the Board or the Committee, and (B) all of the participant's options and
SARs that were not exercisable on the date of Retirement shall be forfeited
immediately upon such Retirement. Notwithstanding the foregoing, Incentive Stock
Options not exercised by such participant within 90 days after Retirement will
cease to qualify as Incentive Stock Options and will be treated as Nonqualified
Stock Options under the Plan if required to be so treated under the Code.

             (iii) If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company or a Subsidiary due to Cause,
all of the participant's options and SARs shall be forfeited immediately upon
such cessation, whether or not then exercisable.

             (iv) Unless otherwise determined by the Committee, if a participant
ceases to be a director, officer or employee of, or to otherwise perform
services for, the Company or a Subsidiary for any reason other than death,
Disability, Retirement or Cause, (A) all of the participant's options and SARs
that were exercisable on the date of such cessation shall remain exercisable
for, and shall otherwise terminate at the end of, a period of 90 days after the
date of such cessation, but in no event after the expiration date of the options
or SARs; provided that the participant does not engage in Competition during
such 90-day period unless he or she receives written consent to do so from the
Board or the Committee, and (B) all of the participant's options and SARs that
were not exercisable on the date of such cessation shall be forfeited
immediately upon such cessation.

             (v) If there is a Change in Control of the Company, all of the
participant's options and SARs shall become fully vested and exercisable
immediately prior to such Change in Control and shall remain so until the
expiration date of the options and SARs.

         (f) Grant of Reload Options. The Committee may provide (either at the
time of grant or exercise of an option), in its discretion, for the grant to a
grantee who exercises all or any portion of an option ("Exercised Options") and
who pays all or part of such exercise price with shares of Common Stock, of an
additional option (a "Reload Option") for a number of shares of Common Stock
equal to the sum (the "Reload Number") of the number of shares of



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Common Stock tendered or withheld in payment of such exercise price for the
Exercised Options plus, if so provided by the Committee, the number of shares of
Common Stock, if any, tendered or withheld by the grantee or withheld by the
Company in connection with the exercise of the Exercised Options to satisfy any
federal, state or local tax withholding requirements. The terms of each Reload
Option, including the date of its expiration and the terms and conditions of its
exercisability and transferability, shall be the same as the terms of the
Exercised Option to which it relates, except that (i) the grant date for each
Reload Option shall be the date of exercise of the Exercised Option to which it
relates and (ii) the exercise price for each Reload Option shall be the Fair
Market Value of the Common Stock on the grant date of the Reload Option.

7. Stock Appreciation Rights.

         The Committee shall have the authority to grant SARs under this Plan,
either alone or to any optionee in tandem with options (either at the time of
grant of the related option or thereafter by amendment to an outstanding
option). SARs shall be subject to such terms and conditions as the Committee may
specify.

         No SAR may be exercised unless the Fair Market Value of a share of
Common Stock of the Company on the date of exercise exceeds the exercise price
of the SAR or, in the case of SARs granted in tandem with options, any options
to which the SARs correspond. Prior to the exercise of the SAR and delivery of
the cash and/or Shares represented thereby, the participant shall have no rights
as a stockholder with respect to Shares covered by such outstanding SAR
(including any dividend or voting rights).

         SARs granted in tandem with options shall be exercisable only when, to
the extent and on the conditions that any related option is exercisable. The
exercise of an option shall result in an immediate forfeiture of any related SAR
to the extent the option is exercised, and the exercise of an SAR shall cause an
immediate forfeiture of any related option to the extent the SAR is exercised.

         Upon the exercise of an SAR, the participant shall be entitled to a
distribution in an amount equal to the difference between the Fair Market Value
of a share of Common Stock on the date of exercise and the exercise price of the
SAR or, in the case of SARs granted in tandem with options, any option to which
the SAR is related, multiplied by the number of Shares as to which the SAR is
exercised. The Committee shall decide whether such distribution shall be in
cash, in Shares having a Fair Market Value equal to such amount, in Other
Company Securities having a Fair Market Value equal to such amount or in a
combination thereof.

         All SARs will be exercised automatically on the last day prior to the
expiration date of the SAR or, in the case of SARs granted in tandem with
options, any related option, so long as the Fair Market Value of a share of
Common Stock on that date exceeds the exercise price of the SAR or any related
option, as applicable. An SAR granted in tandem with options shall expire at the
same time as any related option expires and shall be transferable only when, and
under the same conditions as, any related option is transferable.




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8. Restricted Stock.

         The Committee may at any time and from time to time grant Shares of
restricted stock under the Plan to such participants and in such amounts as it
determines. Each grant of restricted stock shall specify the applicable
restrictions on such Shares, the duration of such restrictions (which shall be
at least six months except as otherwise provided in the third paragraph of this
Section 8), and the time or times at which such restrictions shall lapse with
respect to all or a specified number of Shares that are part of the grant.

         The participant will be required to pay the Company the aggregate par
value of any Shares of restricted stock (or such other amount as the Board may
determine to constitute capital under Section 154 of the Delaware General
Corporation Law, as amended) within ten days of the date of grant, unless such
Shares of restricted stock are treasury shares. Unless otherwise determined by
the Committee, certificates representing Shares of restricted stock granted
under the Plan will be held in escrow by the Company on the participant's behalf
during any period of restriction thereon and will bear an appropriate legend
specifying the applicable restrictions thereon, and the participant will be
required to execute a blank stock power therefor. Except as otherwise provided
by the Committee, during such period of restriction the participant shall have
all of the rights of a holder of Common Stock, including but not limited to the
rights to receive dividends and to vote, and any stock or other securities
received as a distribution with respect to such participant's restricted stock
shall be subject to the same restrictions as then in effect for the restricted
stock.

         Except as otherwise provided by the Committee, immediately prior to a
Change in Control or at such time as a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company and
its Subsidiaries due to death, Disability or Retirement during any period of
restriction, all restrictions on Shares granted to such participant shall lapse.
At such time as a participant ceases to be a director, officer or employee of,
or to otherwise perform services for, the Company or its Subsidiaries for any
other reason, all Shares of restricted stock granted to such participant on
which the restrictions have not lapsed shall be immediately forfeited to the
Company.

9. Performance Awards.

         Performance awards may be granted to participants at any time and from
time to time as determined by the Committee. The Committee shall have complete
discretion in determining the size and composition of performance awards so
granted to a participant and the appropriate period over which performance is to
be measured (a "performance cycle"). Performance awards may include (i) specific
dollar-value target awards (ii) performance units, the value of each such unit
being determined by the Committee at the time of issuance, and/or (iii)
performance Shares, the value of each such Share being equal to the Fair Market
Value of a share of Common Stock.

         The value of each performance award may be fixed or it may be permitted
to fluctuate based on a performance factor (e.g., return on equity) selected by
the Committee.

         The Committee shall establish performance goals and objectives for each
performance cycle on the basis of such criteria and objectives as the Committee
may select from



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time to time, including, without limitation, the performance of the participant,
the Company, one or more of its Subsidiaries or divisions or any combination of
the foregoing. During any performance cycle, the Committee shall have the
authority to adjust the performance goals and objectives for such cycle for such
reasons as it deems equitable.

         The Committee shall determine the portion of each performance award
that is earned by a participant on the basis of the Company's performance over
the performance cycle in relation to the performance goals for such cycle. The
earned portion of a performance award may be paid out in Shares, cash, Other
Company Securities, or any combination thereof, as the Committee may determine.

         A participant must be a director, officer or employee of, or otherwise
perform services for, the Company or its Subsidiaries at the end of the
performance cycle in order to be entitled to payment of a performance award
issued in respect of such cycle; provided, however, that, except as otherwise
determined by the Committee, if a participant ceases to be a director, officer
or employee of, or to otherwise perform services for, the Company and its
Subsidiaries upon his or her death, Retirement, or Disability prior to the end
of the performance cycle, the participant shall earn a proportionate portion of
the performance award based upon the elapsed portion of the performance cycle
and the Company's performance over that portion of such cycle.

         In the event of a Change in Control, a participant shall earn no less
than the portion of the performance award that the participant would have earned
if the performance cycle(s) had terminated as of the date of the Change in
Control.

10. Withholding Taxes.

         (a) Participant Election. Unless otherwise determined by the Committee,
a participant may elect to deliver shares of Common Stock (or have the Company
withhold shares acquired upon exercise of an option or SAR or deliverable upon
grant or vesting of restricted stock, as the case may be) to satisfy, in whole
or in part, the amount the Company is required to withhold for taxes in
connection with the exercise of an option or SAR or the delivery of restricted
stock upon grant or vesting, as the case may be. Such election must be made on
or before the date the amount of tax to be withheld is determined. Once made,
the election shall be irrevocable. The fair market value of the shares to be
withheld or delivered will be the Fair Market Value as of the date the amount of
tax to be withheld is determined. In the event a participant elects to deliver
shares of Common Stock (or have shares of Common Stock withheld) pursuant to
this Section 10(a), only a whole number of shares of Common Stock may be
delivered or withheld in payment of the exercise price of options.

         (b) Company Requirement. The Company may require, as a condition to any
grant or exercise under the Plan or to the delivery of certificates for Shares
issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 10(a) or this Section 10(b), of any federal,
state or local taxes of any kind required by law to be withheld with respect to
any grant or any delivery of Shares. The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or



                                       11
<PAGE>   12

bonus) otherwise due to a grantee, an amount equal to any federal, state or
local taxes of any kind required by law to be withheld with respect to any grant
or to the delivery of Shares under the Plan, or to retain or sell without notice
a sufficient number of the Shares to be issued to such grantee to cover any such
taxes, the payment of which has not otherwise been provided for in accordance
with the terms of the Plan.

11. Written Agreement; Vesting.

         Each employee to whom a grant is made under the Plan shall enter into a
written agreement with the Company that shall contain such provisions, including
without limitation vesting requirements, consistent with the provisions of the
Plan, as may be approved by the Committee. Unless the Committee determines
otherwise and except as otherwise provided in Sections 6, 7, 8 and 9 in
connection with a Change of Control or certain occurrences of termination, no
grant under this Plan may be exercised. and no restrictions relating thereto may
lapse, within six months of the date such grant is made.

12. Transferability.

         Unless the Committee determines otherwise, no option, SAR, performance
award, or restricted stock granted under the Plan shall be transferable by a
participant otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code. Unless
the Committee determines otherwise, an option, SAR, or performance award may be
exercised only by the optionee or grantee thereof or his guardian or legal
representative; provided that Incentive Stock Options may be exercised by such
guardian or legal representative only if permitted by the Code and any
regulations promulgated thereunder.

13. Listing, Registration and Qualification.

         If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of Shares subject to
any option, SAR, performance award or restricted stock grant is necessary or
desirable as a condition of, or in connection with, the granting of same or the
issue or purchase of Shares thereunder, no such option or SAR may be exercised
in whole or in part, no such performance award may be paid out and no Shares may
be issued unless such listing, registration or qualification is effected free of
any conditions not acceptable to the Committee.

         It is the intent of the Company that the Plan comply in all respects
with Section 162(m) of the Code, that awards made hereunder comply in all
respects with Rule 16b-3 under the Exchange Act, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give effect to
such intention and that if any provision of the Plan is found not to be in
compliance with Section 162(m), such provision shall be deemed null and void to
the extent required to permit the Plan to comply with Section 162(m), as the
case may be.



                                       12
<PAGE>   13

14. Transfer of Employee.

         The transfer of an employee from the Company to a Subsidiary, from a
Subsidiary to the Company, or from one Subsidiary to another shall not be
considered a termination of employment; nor shall it be considered a termination
of employment if an employee is placed on military or sick leave or such other
leave of absence which is considered by the Committee as continuing intact the
employment relationship.

15. Adjustments.

         In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other change in the corporate structure or shares of the Company, the
Committee shall make such adjustment as it deems appropriate in the number and
kind of Shares or other property reserved for issuance under the Plan, in the
number and kind of Shares or other property covered by grants previously made
under the Plan, and in the exercise price of outstanding options and SARs. Any
such adjustment shall be final, conclusive and binding for all purposes of the
Plan. In the event of any merger, consolidation or other reorganization in which
the Company is not the surviving or continuing corporation or in which a Change
in Control is to occur all of the Company's obligations regarding options, SARs
performance awards, and restricted stock that were granted hereunder and that
are outstanding on the date of such event shall, on such terms as may be
approved by the Committee prior to such event, be assumed by the surviving or
continuing corporation or canceled in exchange for property (including cash).

         Without limitation of the foregoing, in connection with any transaction
of the type specified by clause (iii) of the definition of a Change in Control
in Section 2(c), the Committee may, in its discretion, (i) cancel any or all
outstanding options under the Plan in consideration for payment to the holders
thereof of an amount equal to the portion of the consideration that would have
been payable to such holders pursuant to such transaction if their options had
been fully exercised immediately prior to such transaction, less the aggregate
exercise price that would have been payable therefor, or (ii) if the amount that
would have been payable to the option holders pursuant to such transaction if
their options had been fully exercised immediately prior thereto would be less
than the aggregate exercise price that would have been payable therefor, cancel
any or all such options for no consideration or payment of any kind. Payment of
any amount payable pursuant to the preceding sentence may be made in cash or, in
the event that the consideration to be received in such transaction includes
securities or other property, in cash and/or securities or other property in the
Committee's discretion.

16. Termination and Modification of the Plan.

         The Board of Directors or the Committee, without approval of the
stockholders, may modify or terminate the Plan, except that no modification
shall become effective without prior approval of the stockholders of the Company
if stockholder approval would be required for continued compliance with the
performance-based compensation exception of Section 162(m) of the Code or any
listing requirement of the principal stock exchange on which the Common Stock is
then listed.



                                       13
<PAGE>   14

17. Amendment or Substitution of Awards under the Plan.

         The terms of any outstanding award under the Plan may be amended from
time to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of exercise
of any award and/or payments thereunder or of the date of lapse of restrictions
on Shares); provided that, except as otherwise provided in Section 15, no such
amendment shall adversely affect in a material manner any right of a participant
under the award without his or her written consent. The Committee may, in its
discretion, permit holders of awards under the Plan to surrender outstanding
awards in order to exercise or realize rights under other awards, or in exchange
for the grant of new awards, or require holders of awards to surrender
outstanding awards as a condition precedent to the grant of new awards under the
Plan.

18. Commencement Date; Termination Date.

         The date of commencement of the Plan shall be March 3, 1997, subject to
approval by the shareholders of the Company. Unless previously terminated upon
the adoption of a resolution of the Board terminating the Plan, the Plan shall
terminate at the close of business on March 3, 2007; provided that the Board
may, prior to such termination, extend the term of the Plan for up to five years
for the grant of awards other than incentive Stock Options. No termination of
the Plan shall materially and adversely affect any of the rights or obligations
of any person, without his consent, under any grant of options or other
incentives theretofore granted under the Plan.

19. Governing Law.

         The corporate laws of the Company's jurisdiction of incorporation shall
govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity and
interpretation of this Plan shall be governed by the internal laws of the State
of Tennessee, without giving effect to any choice of law provisions.

         IN WITNESS WHEREOF, the undersigned officer has executed this amendment
and restatement of the Plan on this the 31st day of August, 2000 and certifies
that this amendment and restatement of the Plan was duly approved and adopted by
action of the Board of Directors of the Company taken on August 31, 2000.



                                    PROVINCE HEALTHCARE COMPANY



                                    By:  /s/ Howard T. Wall III
                                         ---------------------------------------
                                    Its: Secretary
                                         ---------------------------------------



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</TEXT>
</DOCUMENT>
