EMPLOYMENT AGREEMENT



     AGREEMENT made as of June 1, 1998, by and between Vanguard Health Systems,

Inc., a Delaware corporation (the "Company"), and Charles N. Martin, Jr. (the

"Executive").



     WHEREAS, the Executive currently serves as Chairman of the Board,

President and Chief Executive Officer of the Company;



     WHEREAS, the Company desires to secure for itself the continuing services

of the Executive from and after the date hereof and the Executive desires to

render such services, in each case pursuant to the terms and conditions hereof;



     WHEREAS, the Company's Board of Directors (the "Board"; provided, that if

a Compensation Committee of the Board of Directors shall have been duly

appointed, the term "Board" as used herein shall mean either of such Committee

or the full Board of Directors) has approved and authorized the Company's entry

into this Agreement with the Executive; and



     WHEREAS, the parties desire to enter into this Agreement setting forth the

terms and conditions of the employment relationship of the Executive with the

Company.



     NOW, THEREFORE, the parties agree as follows:



     1. Employment. The Company hereby employs the Executive, and the Executive

hereby accepts employment with the Company, upon the terms and subject to the

conditions set forth herein.



     2. Term. This Agreement is for the three-year period (the "Term")

commencing on June 1, 1998 (the "Effective Date") and terminating on the third

anniversary of the Effective Date, or upon the Executive's earlier death,

disability or other termination of employment pursuant to Section 10; provided,

however, that at the end of each day during the Extension Period (as defined

below) the Term shall automatically be extended for one additional day; and

provided, further, that commencing on the fifth anniversary of the Effective

Date and on each anniversary thereafter the Term shall automatically be

extended for one additional year unless, not later than 90 days prior to any

such anniversary, either party hereto shall have notified the other party

hereto that such extension shall not take effect. For purposes of this Section

2, the "Extension Period" shall be the period beginning on the Effective Date

and ending on the earlier of (i) the Date of Termination (as defined below) and

(ii) the day preceding the second anniversary of the Effective Date.





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     3. Position. During the Term, the Executive shall serve as Chairman of the

Board, President and Chief Executive Officer of the Company or in such other

senior executive position in the Company as the Executive should approve.



     4. Duties and Reporting Relationship. During the Term, the Executive

shall, on a full time basis, use his skills and render services to the best of

his ability in supervising and conducting the operations of the Company.



     5. Place of Performance. The Executive shall perform his duties and

conduct his business at the principal executive offices of the Company, except

for required travel on the Company's business.



     6. Salary and Annual Bonus.



     (a) Base Salary. The Executive's base salary hereunder shall be $900,000

per year, payable semi-monthly. The Board shall review such base salary at

least annually and make such adjustment from time to time as it may deem

advisable, but the base salary shall not at any time be less than $900,000 per

year. Notwithstanding the foregoing, since the Company has no operations on

June 1, 1998 other than the operations of Maryvale Medical Center, a 213-bed

acute care hospital located in Phoenix, Arizona, until the first day of the

month subsequent to the day on which the Executive gives to the Company the

Salary Increase Notice (as hereinafter defined), the Executive voluntarily

agrees that the Executive's base salary shall be $450,000 per year. The term

"Salary Increase Notice" shall mean a notice sent by the Executive to the

Company requesting that the Executive's base salary be restored hereunder to

$900,000 per year.

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