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EXHIBIT 4
TENET HEALTHCARE CORPORATION
SECOND AMENDED AND RESTATED
1994 DIRECTORS STOCK OPTION PLAN
1. PURPOSE OF PLAN.
The purpose of the Second Amended and Restated 1994 Directors Stock Option Plan
of Tenet Healthcare Corporation is to promote the interests of the Company and
its shareholders by strengthening the Company's ability to attract, motivate and
retain Directors of training, experience and ability, and to encourage the
highest level of Directors' performance by providing Directors with a
proprietary interest in the Company's financial success and growth.
2. DEFINITIONS.
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the Compensation and Stock Option Committee of the
Board as shall be appointed by the Board from time to time.
(c) "Common Stock" means the $.075 par value Common Stock of the Company.
(d) "Company" means Tenet Healthcare Corporation, a Nevada corporation,
formerly known as National Medical Enterprises, Inc.
(e) "Director" means a member of the Board who is not an Employee.
(f) "Employee" means any full-time employee of the Company, or of any of
its subsidiaries.
(g) "Fair Market Value" means the closing price of a share of Common Stock
on the New York Stock Exchange on the date as of which fair market value is
to be determined or the actual sale price of the shares acquired upon
exercise if the shares are sold in a same day sale, or if no sales were
made on such date, the closing price of such shares on the New York Stock
Exchange on the next preceding date on which there were such sales.
(h) "Grant Date" means the date on which an Option is granted to a
Director.
(i) "Initial election" means election to the Board by the Board or by the
shareholders of the Company, whichever first occurs.
(j) "Option" means a non-qualified stock option.
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(k) "Plan" means the Company's Second Amended and Restated 1994 Directors
Stock Option Plan, as amended from time to time.
3. SHARES OF COMMON STOCK SUBJECT TO THIS PLAN.
Subject to the provisions of Section 7, the aggregate number of shares of Common
Stock that may be issued or transferred pursuant to exercise of Options under
this Plan is 1,200,000 shares of Common Stock. Such shares may be either
authorized but unissued shares of Common Stock or treasury shares.
4. ADMINISTRATION OF THIS PLAN.
(a) This Plan shall be administered by the Committee, which shall have the
power to interpret this Plan and, subject to its provisions, to prescribe,
amend and rescind rules and to make all other determinations necessary for
this Plan's administration.
(b) All action taken by the Committee in the administration and
interpretation of this Plan shall be final and binding upon all parties. No
member of the Committee will be liable for any action or determination made
in good faith by the Committee with respect to this Plan or any Option.
5. ELIGIBILITY.
(a) Only Directors shall be eligible to participate in this Plan. Each
Director who is serving in such capacity on the Grant Date automatically
shall be granted, on the last Thursday of October of each year, an Option
to acquire the greater of (x) 10,000 shares of Common Stock and (y) the
number of shares of Common Stock determined by dividing (i) the product of
four times the then-existing annual retainer fee, by (ii) the Fair Market
Value on the Grant Date.
(b) Upon Initial Election to the Board, each Director automatically shall
be granted, on the last Thursday of the month of such Director's election
to the Board, an Option to acquire two times the greater of (x) 10,000
shares of Common Stock and (y) the number of shares of Common Stock
determined by dividing (i) the product of four times the then-existing
annual retainer fee, by (ii) the Fair Market Value on the Grant Date.
(c) Each Option will be evidenced by a written instrument including terms
and conditions consistent with this Plan, as the Committee may determine.
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6. TERMS AND CONDITIONS OF STOCK OPTIONS.
(a) The purchase price of Common Stock under each Option will be the Fair
Market Value on the Grant Date. Notwithstanding any other provision to the
contrary contained in this Plan, including without limitation, Sections
6(c)(i), (ii) and (iii), each Option will expire not later than ten years
from the Grant Date.
(b) The Committee shall have the discretion to set the vesting terms for
all Options granted under this Plan, including the discretion to grant
Options that vest immediately upon grant. Upon vesting, an Option may be
exercised with respect to all shares of Common Stock covered thereby during
its term provided hereunder.
(c) Subject to the provisions of Section 6(a), each Option will expire at
the time the Director ceases to be a Director, except as follows:
(i) If the service of the Director is terminated by the Company other
than for cause, for which the Company will be the sole judge, or if
the Director is nominated but is not reelected by the shareholders of
the Company, then the Option will expire one year after the date of
termination;
(ii) If the Director retires at or after age 65, or retires with the
consent of the Committee, the Option will expire five years after the
date of retirement.
(iii) If the Director dies or becomes permanently and totally disabled
while serving in such capacity, the Option will expire five years
after the date of death or permanent and total disability. If the
Director dies or becomes permanently and totally disabled within the
one-year period referred to in subparagraph (i) above, the Option will
expire one year after the date of death or permanent and total
disability. If the Director dies or becomes permanently and totally
disabled within the five-year period referred to in subparagraph (ii)
above, the Option will expire upon the later of five years after
retirement or one year after the date of death or permanent and
totally disability.
(d) Upon the exercise of an Option, the exercise price will be payable in
full (i) in cash; or, (ii) with the consent of the Committee in its sole
discretion, (A) by the assignment and delivery to the Company of shares of
Common Stock, owned by the holder of the Option for at least six months,
with a Fair Market Value on the relevant exercise date equal to the
exercise price, (B) by execution and delivery of a promissory note, secured
by such number of shares of Common Stock determined by the Committee,
bearing interest at a rate determined by the Committee, or (C) by a
combination of any of the above. No
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payment by an assignment of shares or by a promissory note or by any
combination thereof will be allowed unless such payments are allowed under
applicable requirements of federal and state tax, securities and other
laws, rules and regulations and any regulatory authority having
jurisdiction.
7. ADJUSTMENT PROVISIONS.
(a) Subject to Section 7(b), if the outstanding shares of Common Stock of
the Company 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 Common 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 Common Stock, or other securities, an appropriate and
proportionate adjustment may be made in (i) the maximum number and kind of
shares provided in Section 3 and Section 5 and (ii) the number and kind of
shares or other securities subject to, and the purchase price in,
then-outstanding Options.
(b) Notwithstanding the provisions of Section 7(a), upon dissolution, or
liquidation of the Company or upon a reorganization, merger or
consolidation of the Company with one or more corporations as a result of
which the Company is not the surviving corporation, or upon the sale of all
or substantially all the assets of the Company, all Options then
outstanding under this Plan will be fully vested and the restrictions upon
exercise in Section 6(b) will immediately cease, unless provisions are made
in connection with such transaction for the continuance of this Plan or the
assumption or the substitution for such Options of new options covering the
stock of a successor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices.
(c) Adjustments under Section 7(a) and 7(b) will be made by the Committee,
whose determination as to what adjustments will be made and the extent
thereof will be final, binding, and conclusive. No fractional interest will
be issued under this Plan on account of any such adjustments.
(d) Upon the occurrence of a "Change of Control" of the Company, all
Options then outstanding under this Plan will be fully vested and the
restrictions upon exercise in Section 6(b) will immediately cease. For
purposes of this Section 7(d) the following definitions shall apply:
(i) A "Change in Control" of the Company shall have occurred when a
Person, alone or together with its Affiliates and Associates, becomes
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the beneficial owner of 20% or more of the general voting power of the
Company.
(ii) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities and Exchange Act of 1934, as amended
(the "Exchange Act")
(iii) "Person" shall mean an individual, firm, corporation or other
entity or any successor to such entity, but "Person" shall not include
the Company, any subsidiary of the Company, any employee benefit plan
or employee stock plan of the Company, or any Person organized,
appointed, established or holding Voting Stock by, for or pursuant to
the terms of such a plan or any Person who acquires 20% or more of the
general voting power of the Company in a transaction or series of
transactions approved prior to such transaction or series of
transactions by the Board.
(iv) "Voting Stock" shall mean shares of the Company's capital stock
having general voting power, with "voting power" meaning the power
under ordinary circumstances (and not merely upon the happening of a
contingency) to vote in the election of directors.
8. GENERAL PROVISIONS.
(a) Nothing in this Plan or in any instrument executed pursuant to this
Plan will confer upon any Director any right to continue as a Director or
affect the right of the Company to terminate the services of any Director
in accordance with the bylaws of the Company.
(b) No shares of Common Stock will be issued or transferred pursuant to an
Option unless and until all then-applicable requirements imposed by federal
and state securities and other laws, rules and regulations and by any
regulatory agencies having jurisdiction, and by any stock exchanges upon
which the Common Stock may be listed, have been fully met. As a condition
precedent to the issuance of shares pursuant to the exercise of an Option,
the Company may require the Director to take any reasonable action to meet
such requirements.
(c) No Director and no beneficiary or other person claiming under or
through such Director will have any right, title or interest in or to any
shares of Common Stock allocated or reserved under this Plan or subject to
any Option except as to such shares of Common Stock, if any, that have been
issued or transferred to such Director.
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(d) No Option and no right under this Plan, contingent or otherwise, will
be assignable or subject to any encumbrance, pledge or charge of any nature
except (i) with the written consent of the Committee, (ii) an assignment in
favor of the Company, and (iii) under such rules and regulations as the
Committee may establish pursuant to the terms of this Plan.
(e) No Option and no right under this Plan, contingent or otherwise, will
be transferable by a Director other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
by the Internal Revenue Code of 1986, as amended (the "Code") or Title I of
the Employee Retirement Income Security Act ("ERISA"), or the rules
thereunder. The designation of a beneficiary by a Director does not
constitute a transfer.
9. AMENDMENT AND TERMINATION.
(a) The Board will have the power, in its discretion, to amend, suspend or
terminate this Plan at any time, subject to approval of the shareholders of
the Company if and to the extent necessary for the continued applicability
of Rule 16b-3 under the Exchange Act.
(b) No amendment, suspension or termination of this Plan will, without the
consent of the holder, alter, terminate, impair or adversely affect any
right or obligation under any Option previously granted under this Plan.
(c) Notwithstanding the provisions of Section 9(a), the Board may not
amend the provisions of Section 5 or the definition of "Director" in
Section 2 more than once every six months, other than to comport with
changes in the Code, ERISA or the rules thereunder.
10. EFFECTIVE DATE OF PLAN AND DURATION OF PLAN.
This amended Plan is effective as of July 26, 2000. Unless this Plan is
previously terminated, this Plan will terminate on July 26, 2010 except with
respect to Options then outstanding.
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