Exhibit 10.17

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Employment Agreement”)
dated as of December 31, 2008, is between UNIVERSAL HOSPITAL SERVICES, INC., a
Delaware corporation (the “Company”), and Gary D. Blackford (the “Executive”). 
This Employment Agreement amends and restates the employment agreement between
the Executive and the Company dated May 31, 2007, as amended by letter dated
July 27, 2007, but has no effect on the supplemental letter between the parties
dated May 31, 2007, which remains in full effect.

 

The Company wishes to continue to employ the Executive, and the Executive wishes
to remain employed with the Company, on the terms and conditions set forth in
this Employment Agreement.  This Employment Agreement replaces any existing
employment agreement between the Executive, on the one hand, and Company or any
of its subsidiaries or predecessor entities, on the other hand, and the parties
acknowledge that the Executive has no remaining rights, obligations or
entitlements under any such agreement, other than (i) any rights or entitlements
of the Executive to indemnification or coverage under any directors and officers
indemnity insurance, (ii) with respect to any equity owned by Executive or
options or other awards granted to the Executive, (iii) with respect to an
excise tax gross-up under Section 4(g) of the Employment Agreement, dated as of
June 25, 2002, between the Company and the Executive, as amended on or prior to
the date hereof (the “Original Agreement”), and (iv) under the letter of
June 25, 2002 with regarding the retention by the Executive of certain property
upon termination of his employment.

 

Accordingly, the Company and the Executive agree as follows:

 

1.             POSITION; DUTIES.  THE COMPANY AGREES TO EMPLOY THE EXECUTIVE,
AND THE EXECUTIVE AGREES TO SERVE AND ACCEPT EMPLOYMENT, FOR THE TERM (AS
DEFINED BELOW) AS CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF THE COMPANY, AS
CHAIRMAN AND A MEMBER OF THE BOARD OF DIRECTORS (THE “BOARD”) OF UHS
HOLDCO, INC., THE PARENT OF THE COMPANY (THE “PARENT”), AND AS A MEMBER OF THE
BOARD OF DIRECTORS OF THE COMPANY, SUBJECT, IN HIS CAPACITY AS CHIEF EXECUTIVE
OFFICER, TO THE DIRECTION AND CONTROL OF THE BOARD, AND, IN CONNECTION
THEREWITH, TO RESIDE IN THE MINNEAPOLIS, MINNESOTA AREA, TO OVERSEE AND DIRECT
THE OPERATIONS OF THE COMPANY AND TO PERFORM SUCH OTHER DUTIES COMMENSURATE WITH
HIS POSITION AS THE BOARD MAY FROM TIME TO TIME REASONABLY DIRECT.  THE
EXECUTIVE SHALL ALSO BE APPOINTED AS CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF ANY
PARENT HOLDING OR OPERATING COMPANY OTHER THAN ANY NON-PUBLIC COMPANY THAT
SOLELY HOLDS EQUITY OR DEBT OF THE COMPANY.  THE EXECUTIVE’S PLACE OF EMPLOYMENT
WILL BE IN THE MINNEAPOLIS, MINNESOTA AREA.  THE EXECUTIVE SHALL HAVE ALL OF THE
AUTHORITIES, DUTIES AND RESPONSIBILITIES COMMENSURATE WITH HIS POSITION.  DURING
THE TERM, THE EXECUTIVE AGREES TO DEVOTE SUBSTANTIALLY ALL OF HIS TIME, ENERGY,
EXPERIENCE AND TALENTS DURING REGULAR BUSINESS HOURS, AND AS OTHERWISE
REASONABLY NECESSARY, TO SUCH EMPLOYMENT.  THE EXECUTIVE SHALL BE ENTITLED TO
ENGAGE IN OTHER BUSINESS ACTIVITIES OF A MATERIAL NATURE, AS A DIRECTOR,
CONSULTANT OR IN ANY SIMILAR CAPACITY, WHETHER OR NOT THE EXECUTIVE RECEIVES ANY
COMPENSATION THEREFOR; PROVIDED, THAT THE EXECUTIVE NOTIFIES THE BOARD OF SUCH
OTHER BUSINESS ACTIVITIES AND THE BOARD DETERMINES IN GOOD FAITH THAT SUCH OTHER
BUSINESS ACTIVITIES DO NOT UNREASONABLY CONFLICT WITH THE EXECUTIVE’S DUTIES AND
RESPONSIBILITIES TO THE COMPANY PURSUANT TO THIS EMPLOYMENT AGREEMENT.  THE
EXECUTIVE

 

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WILL NOT BE GIVEN DUTIES INCONSISTENT WITH HIS EXECUTIVE POSITION.  THE PARTIES
ACKNOWLEDGE THAT THE EXECUTIVE IS A MEMBER OF THE BOARD OF DIRECTORS OF WRIGHT
MEDICAL GROUP, INC.

 

2.             TERM OF EMPLOYMENT AGREEMENT.  THE TERM OF THE EXECUTIVE’S
EMPLOYMENT HEREUNDER BEGAN MAY 31, 2007, AND ENDS AS OF THE CLOSE OF BUSINESS ON
MAY 31, 2010, SUBJECT TO EARLIER TERMINATION PURSUANT TO THE TERMS HEREOF
(INCLUDING THE RENEWAL TERM, AS DEFINED IN THE NEXT SENTENCE, THE “TERM”). 
FOLLOWING THE INITIAL TERM, THIS EMPLOYMENT AGREEMENT WILL AUTOMATICALLY BE
RENEWED FOR SUCCESSIVE ONE-YEAR TERMS (EACH A “RENEWAL TERM”) UNLESS NOTICE OF
TERMINATION IS GIVEN BY EITHER PARTY UPON NOT LESS THAN SIXTY (60) DAYS’ WRITTEN
NOTICE PRIOR TO THE DATE ON WHICH SUCH RENEWAL WOULD OTHERWISE OCCUR.  IN THE
EVENT THAT THE EXECUTIVE’S EMPLOYMENT IS NOT RENEWED BY THE COMPANY IN
ACCORDANCE WITH THIS SECTION 2 UPON THE EXPIRATION OF THE TERM OR ANY RENEWAL
TERM, THE EXECUTIVE’S EMPLOYMENT SHALL TERMINATE AS OF THE DATE OF SUCH
EXPIRATION, AND SUCH TERMINATION SHALL BE DEEMED A TERMINATION WITHOUT “CAUSE”
FOR PURPOSES OF THIS EMPLOYMENT AGREEMENT.

 

3.             COMPENSATION AND BENEFITS.

 

(A)           BASE SALARY.  THE EXECUTIVE’S BASE SALARY AS OF MAY 31, 2007, IS
AN ANNUAL RATE OF $432,000, PAYABLE IN EQUAL BI-WEEKLY INSTALLMENTS.  THE BOARD
WILL REVIEW THE EXECUTIVE’S BASE SALARY ANNUALLY AND MAKE SUCH INCREASES AS IT
DEEMS APPROPRIATE.  ANY DECREASE MAY ONLY BE MADE IN CONNECTION WITH AN
ACROSS-THE-BOARD REDUCTION (OF APPROXIMATELY THE SAME PERCENTAGE BUT NO MORE
THAN FIVE PERCENT (5%) OF THE THEN-BASE SALARY) IN EXECUTIVE COMPENSATION TO
EXECUTIVE EMPLOYEES IMPOSED BY THE BOARD IN RESPONSE TO MATERIALLY NEGATIVE
FINANCIAL RESULTS OR OTHER MATERIALLY ADVERSE CIRCUMSTANCES AFFECTING THE
COMPANY.  NECESSARY WITHHOLDING TAXES, FICA CONTRIBUTIONS AND THE LIKE WILL BE
DEDUCTED FROM THE EXECUTIVE’S BASE SALARY.

 

(B)           BONUS.  IN ADDITION TO THE EXECUTIVE’S BASE SALARY, BUT SUBJECT TO
THE OTHER PROVISIONS OF THIS EMPLOYMENT AGREEMENT, THE EXECUTIVE WILL BE
ENTITLED TO RECEIVE A BONUS BASED ON THE ACHIEVEMENT OF THE ANNUAL EBITDA TARGET
ESTABLISHED BY THE BOARD (OR ANY COMPENSATION COMMITTEE THEREOF) FOR EACH
CALENDAR YEAR, WHICH SHALL BE PAID IN THE CALENDAR YEAR FOLLOWING THE CALENDAR
YEAR IN WHICH IT IS EARNED; PROVIDED, THAT THE TARGET FOR ANY CALENDAR YEAR WILL
BE SUBJECT TO ADJUSTMENT BY THE BOARD (OR ANY COMPENSATION COMMITTEE THEREOF),
IN GOOD FAITH, TO REFLECT ANY ACQUISITIONS, DISPOSITIONS AND MATERIAL CHANGES TO
CAPITAL SPENDING MADE AFTER THE DATE HEREOF.  THE AMOUNT OF SUCH BONUS, IF ANY,
WILL CORRESPOND TO ACHIEVEMENT OF TARGET EBITDA IN ACCORDANCE WITH THE
FOLLOWING:

 

Percentage
Achievement of Target
EBITDA

 

Percentage of Base Salary

 

90% or less

 

0

%

100%

 

85

%

110% or more

 

170

%

 

Bonus amounts between the above amounts will be determined by straight line
interpolation (e.g., if percentage achievement is 95%, the bonus shall be 42.5%
of base salary).  For

 

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computational purposes, “base salary” shall equal the amount received pursuant
to Section 3(a) for the calendar year.

 

(C)           EQUITY GRANT.  AS SOON AS PRACTICABLE FOLLOWING MAY 31, 2007, THE
EXECUTIVE SHALL BE GRANTED OPTIONS TO PURCHASE PARENT’S COMMON STOCK, $.01 PAR
VALUE PER SHARE, UNDER PARENT’S STOCK OPTION PLAN PURSUANT TO TERMS MUTUALLY
AGREED UPON BY THE PARTIES IN ACCORDANCE WITH THE TERMS SET FORTH ON EXHIBIT A
ATTACHED HERETO.

 

(D)           OTHER.  THE EXECUTIVE WILL BE ENTITLED TO SUCH HEALTH, LIFE,
DISABILITY, PENSION, SICK LEAVE AND OTHER BENEFITS AS ARE GENERALLY MADE
AVAILABLE BY THE COMPANY TO ITS EXECUTIVE EMPLOYEES.  IF THE EXECUTIVE ELECTS
NOT TO PARTICIPATE IN THE COMPANY’S GROUP HEALTH PLAN, BUT RATHER OBTAINS HEALTH
COVERAGE DIRECTLY THROUGH MINNESOTA BLUE CROSS BLUE SHIELD, OR SUCH OTHER
INSURER AS THE BOARD MAY APPROVE, THE COMPANY SHALL REIMBURSE THE EXECUTIVE FOR
THE REASONABLE COST OF SUCH COVERAGE ON A MONTHLY BASIS, BUT IN NO EVENT LATER
THAN MARCH 15TH OF THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR TO WHICH SUCH
PREMIUM EXPENSES RELATE.  THE EXECUTIVE WILL ALSO ACCRUE FIVE WEEKS PAID
VACATION DURING EACH YEAR DURING THE TERM IN ACCORDANCE WITH AND SUBJECT TO THE
COMPANY’S VACATION POLICY.

 

4.             TERMINATION.

 

(A)           DEATH.  THIS EMPLOYMENT AGREEMENT WILL AUTOMATICALLY TERMINATE
UPON THE EXECUTIVE’S DEATH.  IN THE EVENT OF SUCH TERMINATION, THE COMPANY WILL
PAY TO THE EXECUTIVE’S LEGAL REPRESENTATIVES THE SUM OF (I) 100% OF THE
EXECUTIVE’S ANNUAL BASE SALARY (AS IN EFFECT ON THE DATE OF TERMINATION (AS
DEFINED BELOW)), (II) $11,350, AND (III) ANY EARNED BUT UNPAID BONUS FOR A
CALENDAR YEAR ENDING PRIOR TO THE DATE OF TERMINATION.  SUCH AMOUNT SHALL BE
PAID TO EXECUTIVE’S ESTATE IN A SINGLE LUMP SUM PAYMENT THE 61ST DAY FOLLOWING
THE DATE OF TERMINATION.  ADDITIONALLY, THE COMPANY WILL PAY TO THE EXECUTIVE’S
LEGAL REPRESENTATIVES A PRO RATA BONUS FOR THE CALENDAR YEAR IN WHICH SUCH
TERMINATION OCCURS (BASED ON THE NUMBER OF DAYS ELAPSED IN SUCH CALENDAR YEAR
PRIOR TO THE DATE OF TERMINATION), AT THE TIME DURING THE NEXT CALENDAR YEAR
THAT THE COMPANY PAYS BONUSES TO OTHER SENIOR EXECUTIVES FOR THE CALENDAR YEAR
IN QUESTION, TO THE EXTENT SUCH BONUS WOULD BE PAYABLE BASED ON ACTUAL RESULTS
OF THE COMPANY, AS CALCULATED IN ACCORDANCE WITH SECTION 3(B) ABOVE (THE
“PRO-RATA BONUS”).  ADDITIONALLY, UPON ANY TERMINATION HEREUNDER, THE
EXECUTIVE’S ESTATE SHALL BE ENTITLED TO RECEIVE ANY ACCRUED BUT UNPAID SALARY
AND UNUSED VACATION PAY THROUGH THE DATE OF TERMINATION IN ACCORDANCE WITH
SECTION 3(A) OF THIS AGREEMENT AND THE TERMS OF THE COMPANY’S VACATION PLAN OR
POLICY THEN IN EFFECT, AND ANY ACCRUED VESTED BENEFITS THROUGH ANY BENEFIT PLAN,
PROGRAM OR ARRANGEMENT OF THE COMPANY AT THE TIMES SPECIFIED THEREIN
(COLLECTIVELY, THE “ACCRUED OBLIGATIONS”).

 

(B)           DISABILITY.  IF DURING THE TERM THE EXECUTIVE BECOMES PHYSICALLY
OR MENTALLY DISABLED WHETHER TOTALLY OR PARTIALLY, EITHER PERMANENTLY OR SO THAT
THE EXECUTIVE HAS BEEN UNABLE SUBSTANTIALLY AND COMPETENTLY TO PERFORM HIS
DUTIES HEREUNDER FOR ONE HUNDRED EIGHTY (180) DAYS DURING ANY TWELVE-MONTH
PERIOD DURING THE TERM (A “DISABILITY”), THE COMPANY MAY TERMINATE THE
EXECUTIVE’S EMPLOYMENT HEREUNDER BY WRITTEN NOTICE TO THE EXECUTIVE.  IN THE
EVENT OF SUCH TERMINATION, THE COMPANY WILL PAY TO THE EXECUTIVE OR HIS LEGAL
REPRESENTATIVE THE SUM OF (I) 100% OF THE EXECUTIVE’S ANNUAL BASE SALARY (AS IN
EFFECT ON THE DATE OF TERMINATION), (II) $11,350 AND (III) ANY EARNED BUT UNPAID
BONUS FOR A CALENDAR YEAR ENDING PRIOR TO THE DATE OF TERMINATION.  SUCH AMOUNTS
UNDER CLAUSES (I), (II) AND (III) ABOVE SHALL,

 

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SUBJECT TO SECTION 15 HEREOF, BE PAID TO THE EXECUTIVE OR HIS LEGAL
REPRESENTATIVE IN A SINGLE LUMP SUM PAYMENT ON THE 61ST DAY FOLLOWING THE DATE
OF TERMINATION.  ADDITIONALLY, THE EXECUTIVE OR HIS LEGAL REPRESENTATIVE SHALL
BE ENTITLED TO RECEIVE THE ACCRUED OBLIGATIONS AND THE PRO-RATA BONUS, IF ANY,
AT THE TIME SPECIFIED THEREFOR IN SECTIONS 3(A) AND 4(A), RESPECTIVELY.

 

(C)           CAUSE.  THE EXECUTIVE’S EMPLOYMENT HEREUNDER MAY BE TERMINATED AT
ANY TIME BY THE COMPANY FOR CAUSE (AS DEFINED HEREIN) BY WRITTEN NOTICE TO THE
EXECUTIVE.  IN THE EVENT OF SUCH TERMINATION, ALL OF THE EXECUTIVE’S RIGHTS TO
ANY PAYMENTS (OTHER THAN THE ACCRUED OBLIGATIONS, WHICH SHALL BE PAID AT THE
TIME SPECIFIED THEREFOR IN SECTION 4(A)) WILL CEASE IMMEDIATELY.  THE COMPANY
WILL HAVE “CAUSE” FOR TERMINATION OF THE EXECUTIVE’S EMPLOYMENT HEREUNDER IF ANY
OF THE FOLLOWING HAS OCCURRED:

 

(I)            THE COMMISSION BY THE EXECUTIVE OF A FELONY FOR WHICH HE IS
CONVICTED; OR

 

(II)           THE MATERIAL BREACH BY THE EXECUTIVE OF HIS AGREEMENTS OR
OBLIGATIONS UNDER THIS EMPLOYMENT AGREEMENT, IF SUCH BREACH IS DESCRIBED IN A
WRITTEN NOTICE TO THE EXECUTIVE REFERRING TO THIS SECTION 4(C)(II), AND SUCH
BREACH IS NOT CAPABLE OF BEING CURED OR HAS NOT BEEN CURED WITHIN THIRTY (30)
DAYS AFTER RECEIPT OF SUCH NOTICE.

 

(D)           WITHOUT CAUSE.  THE EXECUTIVE’S EMPLOYMENT HEREUNDER MAY BE
TERMINATED AT ANY TIME BY THE COMPANY WITHOUT CAUSE BY WRITTEN NOTICE TO THE
EXECUTIVE.  IN THE EVENT OF SUCH TERMINATION, THE COMPANY WILL PAY, SUBJECT TO
SECTION 4(J), TO THE EXECUTIVE THE SUM OF (I) 185% OF THE EXECUTIVE’S ANNUAL
BASE SALARY (AS IN EFFECT ON THE DATE OF TERMINATION), (II) $11,350 AND
(III) ANY EARNED BUT UNPAID BONUS FOR A CALENDAR YEAR ENDING PRIOR TO THE DATE
OF TERMINATION.  SUCH AMOUNTS UNDER CLAUSES (I), (II) AND (III) ABOVE SHALL,
SUBJECT TO SECTION 15 HEREOF, BE PAID TO THE EXECUTIVE OR HIS LEGAL
REPRESENTATIVE IN A SINGLE LUMP SUM PAYMENT ON THE 61ST DAY FOLLOWING THE DATE
OF TERMINATION.  ADDITIONALLY, THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE THE
ACCRUED OBLIGATIONS AND THE PRO-RATA BONUS, IF ANY, AT THE TIME SPECIFIED
THEREFOR IN SECTIONS 3(A) AND 4(A), RESPECTIVELY.

 

(E)           RESIGNATION WITHOUT GOOD REASON.  THE EXECUTIVE MAY TERMINATE THE
EXECUTIVE’S EMPLOYMENT HEREUNDER UPON SIXTY (60) DAYS’ PRIOR WRITTEN NOTICE TO
THE COMPANY, WITHOUT GOOD REASON (AS DEFINED HEREIN).  IN THE EVENT OF SUCH
TERMINATION, ALL OF THE EXECUTIVE’S RIGHTS TO ANY PAYMENTS (OTHER THAN THE
ACCRUED OBLIGATIONS, WHICH SHALL BE PAID AT THE TIME SPECIFIED THEREFOR IN
SECTION 4(A)) WILL CEASE UPON THE DATE OF TERMINATION.

 

(F)            RESIGNATION FOR GOOD REASON.  THE EXECUTIVE MAY TERMINATE THE
EXECUTIVE’S EMPLOYMENT HEREUNDER AT ANY TIME UPON THIRTY (30) DAYS’ WRITTEN
NOTICE TO THE COMPANY FOR GOOD REASON.  IN THE EVENT OF SUCH TERMINATION, THE
COMPANY WILL PAY, SUBJECT TO SECTION 4(J), TO THE EXECUTIVE THE SUM OF (I) 185%
OF THE EXECUTIVE’S ANNUAL BASE SALARY (AS IN EFFECT ON THE DATE OF TERMINATION),
(II) $11,350 AND (III) ANY EARNED BUT UNPAID BONUS FOR A CALENDAR YEAR ENDING
PRIOR TO THE DATE OF SUCH TERMINATION.  SUCH AMOUNTS UNDER CLAUSES (I), (II) AND
(III) ABOVE SHALL, SUBJECT TO SECTION 15 HEREOF, BE PAID TO THE EXECUTIVE OR HIS
LEGAL REPRESENTATIVE IN A SINGLE LUMP SUM PAYMENT ON THE 61ST DAY FOLLOWING THE
DATE OF TERMINATION.  THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE ACCRUED
OBLIGATIONS AND THE PRO-RATA BONUS, IF ANY, AT TIME SPECIFIED THEREFOR IN
SECTIONS 3(A) AND 4(A), RESPECTIVELY.

 

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The Executive will have “Good Reason” for termination of the Executive’s
employment hereunder if other than for Cause, any of the following has occurred:

 

(I)            THE EXECUTIVE’S BASE SALARY OR THE PERCENTAGE OF BASE SALARY TO
WHICH THE EXECUTIVE MAY BE ENTITLED AS THE RESULT OF THE COMPANY REACHING THE
ANNUAL EBITDA TARGETS AS PROVIDED IN SECTION 3(B) OF THIS EMPLOYMENT AGREEMENT
HAS BEEN REDUCED OTHER THAN IN CONNECTION WITH AN ACROSS-THE-BOARD REDUCTION (OF
APPROXIMATELY THE SAME PERCENTAGE BUT NO MORE THAN FIVE (5%) OF THE THEN BASE
SALARY) IN EXECUTIVE COMPENSATION TO EXECUTIVE EMPLOYEES IMPOSED BY THE BOARD IN
RESPONSE TO MATERIALLY NEGATIVE FINANCIAL RESULTS OR OTHER MATERIALLY ADVERSE
CIRCUMSTANCES AFFECTING THE COMPANY;

 

(II)           THE BOARD (OR ANY COMPENSATION COMMITTEE THEREOF) ESTABLISHES AN
UNACHIEVABLE AND COMMERCIALLY UNREASONABLE ANNUAL EBITDA TARGET THAT THE COMPANY
MUST ACHIEVE IN ORDER FOR THE EXECUTIVE TO RECEIVE A BONUS UNDER SECTION 3(B) OF
THIS EMPLOYMENT AGREEMENT AND THE EXECUTIVE PROVIDES WRITTEN NOTICE OF HIS
OBJECTION TO THE BOARD (OR SUCH COMPENSATION COMMITTEE) WITHIN TEN (10) BUSINESS
DAYS AFTER SUCH TARGET HAS BEEN ESTABLISHED AND COMMUNICATED IN WRITING TO THE
EXECUTIVE STATING THAT THE EXECUTIVE BELIEVES SUCH TARGET TO BE UNACHIEVABLE AND
COMMERCIALLY UNREASONABLE;

 

(III)          THE EXECUTIVE IS NOT ELECTED OR RE-ELECTED TO THE BOARD;

 

(IV)          THE COMPANY HAS REQUIRED THE EXECUTIVE TO RELOCATE OUTSIDE THE
GREATER MINNEAPOLIS, MINNESOTA AREA OR HAS RELOCATED THE CORPORATE HEADQUARTERS
OF THE COMPANY OUTSIDE THE GREATER MINNEAPOLIS, MINNESOTA AREA OR HAS REMOVED OR
RELOCATED OUTSIDE THE GREATER MINNEAPOLIS AREA, A MATERIAL NUMBER OF EMPLOYEES
OR SENIOR MANAGEMENT OF THE COMPANY IN EACH CASE, WITHOUT THE EXECUTIVE’S
WRITTEN CONSENT;

 

(V)           ANY DIMINUTION IN TITLE, OR ANY MATERIAL DIMINUTION IN
RESPONSIBILITIES, DUTIES OR AUTHORITIES, WITHOUT THE EXECUTIVE’S WRITTEN
CONSENT; OR

 

(VI)          THE COMPANY HAS BREACHED THIS EMPLOYMENT AGREEMENT IN ANY MATERIAL
RESPECT IF SUCH BREACH IS DESCRIBED IN A WRITTEN NOTICE TO THE COMPANY REFERRING
TO THIS SECTION 4(C)(II), AND SUCH BREACH IS NOT CAPABLE OF BEING CURED OR HAS
NOT BEEN CURED WITHIN THIRTY (30) DAYS AFTER RECEIPT OF SUCH NOTICE.

 

(G)           CHANGE OF CONTROL.  IF THE EXECUTIVE IS TERMINATED WITHOUT CAUSE
OR RESIGNS FOR GOOD REASON AT ANY TIME WITHIN SIX (6) MONTHS PRIOR TO, OR TWENTY
FOUR (24) MONTHS FOLLOWING A CHANGE OF CONTROL, OR THE EXECUTIVE TERMINATES
EMPLOYMENT FOR ANY REASON DURING THE THIRTY (30) DAY PERIOD FOLLOWING THE SIX
(6) MONTH ANNIVERSARY OF THE CHANGE OF CONTROL, THEN, NOTWITHSTANDING SECTIONS
4(D) AND 4(F) AND IN LIEU OF AMOUNTS PROVIDED UNDER SECTIONS 4(D) AND 4(F), THE
COMPANY SHALL PAY THE EXECUTIVE THE SUM OF (I) 285% OF THE EXECUTIVE’S ANNUAL
BASE SALARY (AS IN EFFECT ON THE DATE OF TERMINATION), (II) $11,350 AND
(III) ANY EARNED BUT UNPAID BONUS FOR A CALENDAR YEAR ENDING PRIOR TO THE DATE
OF TERMINATION.  SUCH AMOUNTS UNDER CLAUSES (I), (II) AND (III) ABOVE SHALL,
SUBJECT TO SECTION 15 HEREOF, BE PAID TO THE EXECUTIVE OR HIS LEGAL
REPRESENTATIVE IN A SINGLE LUMP SUM PAYMENT ON THE 61ST DAY FOLLOWING THE DATE
OF TERMINATION, EXCEPT THAT IN THE EVENT THE EXECUTIVE’S EMPLOYMENT TERMINATES
WITHIN SIX (6) MONTHS PRIOR TO A

 

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Change in Control due to termination by the Company without Cause or due to
termination by the Executive for Good Reason, then on the Date of Termination,
the Executive shall be entitled to receive payment in accordance with the terms
of Section 4(d), and within thirty (30) days following a Change in Control, the
Executive shall receive a single lump sum payment in an amount equal to the
difference between the amount paid in accordance with Section 4(d) and the
amount to be paid in accordance with this Section 4(g).  The Executive shall be
entitled to receive the Accrued Obligations and the Pro-Rata Bonus, if any, at
the time specified therefor in Sections 3(a) and 4(a), respectively. 
Notwithstanding any provision of this Employment Agreement to the contrary, in
the event that any payment or benefit received or to be received by the
Executive in connection with a Change of Control of the Company or termination
of the Executive’s employment constitutes a “parachute payment,” within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the “Code”) which would be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise Tax”), then the Company shall pay the Executive in cash an
additional amount (the “Gross-Up Payment”) such that, after payment by the
Executive of all taxes, including but not limited to income taxes (and any
interest and penalties imposed with respect thereto) and the Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed on the parachute payments.  The Gross-up
Payment shall be paid to the Executive (or deposited with the government as
withholding and deduction) in a single lump sum payment within ninety (90) days
following the date on which the Executive is required to pay the Excise Tax to
the government in respect of the Executive’s “parachute payment”, but in no
event later than the end of the Executive’s taxable year next following the
Executive’s taxable year in which the Executive remits the related taxes.

 

FOR PURPOSES OF THIS SECTION 4(G), “CHANGE OF CONTROL” SHALL MEAN (I) WHEN ANY
“PERSON” (AS DEFINED IN SECTION 13(D) AND 14(D) OF THE SECURITIES EXCHANGE ACT
OF 1934) (OTHER THAN THE COMPANY, BEAR STEARNS MERCHANT MANAGER III (CAYMAN),
L.P. (ON NOVEMBER 1, 2008, BEAR STEARNS MERCHANT BANKING, WHICH WAS AFFILIATED
WITH BEAR, STEARNS & CO. INC., SPUN OUT INTO AN INDEPENDENT FIRM AND CHANGED ITS
NAME TO “IRVING PLACE CAPITAL”) OR ITS AFFILIATES, ANY TRUSTEE OR OTHER
FIDUCIARY HOLDING SECURITIES UNDER AN EMPLOYEE BENEFIT PLAN OF THE COMPANY OR
ANY SUBSIDIARY, OR ANY CORPORATION OWNED, DIRECTLY OR INDIRECTLY, BY THE
STOCKHOLDERS OF THE COMPANY, IN SUBSTANTIALLY THE SAME PROPORTIONS AS THEIR
OWNERSHIP OF STOCK OF THE COMPANY), ACQUIRES, IN A SINGLE TRANSACTION OR A
SERIES OF TRANSACTIONS (WHETHER BY MERGER, CONSOLIDATION, REORGANIZATION OR
OTHERWISE), (A) “BENEFICIAL OWNERSHIP” (AS DEFINED IN RULE 13D-3 UNDER THE
SECURITIES EXCHANGE ACT OF 1934) OF SECURITIES REPRESENTING MORE THAN 50% OF THE
COMBINED VOTING POWER OF THE COMPANY (OR, PRIOR TO A PUBLIC OFFERING, MORE THAN
50% OF THE COMPANY’S OUTSTANDING SHARES OF COMMON STOCK), OR (B) SUBSTANTIALLY
ALL OR ALL OF THE ASSETS OF THE COMPANY AND ITS SUBSIDIARIES ON A CONSOLIDATED
BASIS OR (II) A MERGER, CONSOLIDATION, REORGANIZATION OR SIMILAR TRANSACTION OF
THE COMPANY WITH A “PERSON” (AS DEFINED ABOVE) IF, FOLLOWING SUCH TRANSACTION,
THE HOLDERS OF A MAJORITY OF THE COMPANY’S OUTSTANDING VOTING SECURITIES IN THE
AGGREGATE IMMEDIATELY PRIOR TO SUCH TRANSACTION DO NOT OWN AT LEAST A MAJORITY
OF THE OUTSTANDING VOTING SECURITIES IN THE AGGREGATE OF THE SURVIVING
CORPORATION IMMEDIATELY AFTER SUCH TRANSACTION.  FOR PURPOSES OF THIS
SECTION 4(G), “SUBSIDIARY” SHALL MEAN ANY CORPORATION IN AN UNBROKEN CHAIN OF
CORPORATIONS BEGINNING WITH THE COMPANY IF, AT THE TIME OF A CHANGE OF CONTROL,
EACH OF THE CORPORATIONS (OTHER THAN THE LAST CORPORATION IN THE UNBROKEN CHAIN)
OWNS STOCK POSSESSING 50% OR MORE OF THE TOTAL COMBINED VOTING POWER OF ALL
CLASSES OF STOCK IN ONE OF THE OTHER CORPORATIONS IN THE CHAIN.  IN THE EVENT OF
ANY MERGER, CONSOLIDATION, REORGANIZATION OR SIMILAR

 

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TRANSACTION WITH, INTO OR INVOLVING ANOTHER CORPORATION OR OTHER ENTITY, SUCH
ENTITY SHALL BE A “PERSON” FOR PURPOSES OF THIS SECTION 4(G).

 

(H)           DATE AND EFFECT OF TERMINATION.  THE DATE OF TERMINATION OF THE
EXECUTIVE’S EMPLOYMENT HEREUNDER PURSUANT TO THIS SECTION 4 WILL BE, (I) IN THE
CASE OF SECTION 4(A), THE DATE OF THE EXECUTIVE’S DEATH, (II) IN THE CASE OF
SECTIONS 4(B), (C) OR (D), THE DATE SPECIFIED AS THE EXECUTIVE’S LAST DAY OF
EMPLOYMENT IN THE COMPANY’S NOTICE TO THE EXECUTIVE OF SUCH TERMINATION, (III)
IN THE CASE OF SECTION 4(E) OR 4(F), THE DATE SPECIFIED IN THE EXECUTIVE’S
NOTICE TO THE COMPANY OF SUCH TERMINATION, OR (IV) IN THE CASE OF SECTION 4(G),
THE DATE SPECIFIED IN THE EXECUTIVE’S NOTICE TO THE COMPANY FOR RESIGNATION FOR
GOOD REASON OR THE COMPANY’S NOTICE TO THE EXECUTIVE FOR TERMINATION WITHOUT
CAUSE (IN EACH CASE, THE “DATE OF TERMINATION”).  UPON ANY TERMINATION OF THE
EXECUTIVE’S EMPLOYMENT HEREUNDER PURSUANT TO THIS SECTION 4, THE EXECUTIVE WILL
NOT BE ENTITLED TO, AND HEREBY IRREVOCABLY WAIVES, ANY FURTHER PAYMENTS OR
BENEFITS OF ANY NATURE PURSUANT TO THIS EMPLOYMENT AGREEMENT OR AS A RESULT OF
SUCH TERMINATION, EXCEPT AS SPECIFICALLY PROVIDED FOR IN THIS EMPLOYMENT
AGREEMENT, THE STOCKHOLDERS AGREEMENT BETWEEN PARENT AND CERTAIN OF THE
EQUITYHOLDERS OF PARENT (THE “STOCKHOLDERS AGREEMENT”) OR IN ANY STOCK OPTION
PLANS ADOPTED BY PARENT.  NOTWITHSTANDING THE FOREGOING, UPON ANY TERMINATION OF
THE EXECUTIVE’S EMPLOYMENT HEREUNDER, THE EXECUTIVE SHALL CONTINUE TO BE
ENTITLED TO (I) THE RIGHTS TO INDEMNIFICATION PURSUANT TO THE COMPANY’S CHARTER
OR BY-LAWS OR ANY WRITTEN AGREEMENT BETWEEN THE EXECUTIVE AND THE COMPANY,
(II) RIGHTS WITH RESPECT TO ANY DIRECTORS AND OFFICERS INSURANCE POLICY OF THE
COMPANY, AND (III) RIGHTS WITH RESPECT TO THE GROSS-UP PAYMENT.

 

(I)            TERMINATIONS NOT A BREACH.  THE TERMINATION OF THE EXECUTIVE’S
EMPLOYMENT PURSUANT TO THIS SECTION 4 SHALL NOT CONSTITUTE A BREACH OF THIS
EMPLOYMENT AGREEMENT BY THE PARTY RESPONSIBLE FOR THE TERMINATION, AND THE
RIGHTS AND RESPONSIBILITIES OF THE PARTIES UNDER THIS EMPLOYMENT AGREEMENT AS A
RESULT OF SUCH TERMINATION SHALL BE AS DESCRIBED IN THIS SECTION 4.

 

(J)            RELEASE.  THE EXECUTIVE AGREES THAT THE EXECUTIVE SHALL BE
ENTITLED TO THE PAYMENTS AND SERVICES PROVIDED FOR IN THIS SECTION 4 (OTHER THAN
THE ACCRUED OBLIGATIONS), IF ANY, IF AND ONLY IF THE EXECUTIVE HAS EXECUTED AND
DELIVERED THE RELEASE ATTACHED AS ANNEX A WITHIN FORTY-FIVE (45) DAYS OF THE
DATE OF TERMINATION AND FIFTEEN (15) DAYS HAVE ELAPSED SINCE SUCH EXECUTION
WITHOUT ANY REVOCATION THEREOF BY THE EXECUTIVE.

 

(K)           WITHHOLDING.  ALL AMOUNTS PAYABLE TO THE EXECUTIVE AS COMPENSATION
HEREUNDER SHALL BE SUBJECT TO ALL CUSTOMARY WITHHOLDING, PAYROLL AND OTHER
TAXES.  THE COMPANY SHALL BE ENTITLED TO DEDUCT OR WITHHOLD FROM ANY AMOUNTS
PAYABLE TO THE EXECUTIVE ANY FEDERAL, STATE, LOCAL OR FOREIGN WITHHOLDING TAXES,
EXCISE TAX, OR EMPLOYMENT TAXES IMPOSED WITH RESPECT TO THE EXECUTIVE’S
COMPENSATION OR OTHER PAYMENTS OR THE EXECUTIVE’S OWNERSHIP INTEREST IN THE
COMPANY (INCLUDING, WITHOUT LIMITATION, WAGES, BONUSES, DIVIDENDS, THE RECEIPT
OR EXERCISE OF EQUITY OPTIONS AND/OR THE RECEIPT OR VESTING OF RESTRICTED
EQUITY).

 

5.             ACKNOWLEDGMENT.  THE EXECUTIVE AGREES AND ACKNOWLEDGES THAT IN
THE COURSE OF RENDERING SERVICES TO THE COMPANY AND ITS CLIENTS AND CUSTOMERS,
THE EXECUTIVE WILL HAVE ACCESS TO AND BECOME ACQUAINTED WITH CONFIDENTIAL
INFORMATION ABOUT THE PROFESSIONAL, BUSINESS AND FINANCIAL AFFAIRS OF THE
COMPANY AND ITS AFFILIATES.  THE EXECUTIVE ACKNOWLEDGES THAT THE COMPANY IS
ENGAGED AND WILL BE ENGAGED IN A HIGHLY COMPETITIVE BUSINESS, AND THE SUCCESS OF

 

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THE COMPANY IN THE MARKETPLACE DEPENDS UPON ITS GOOD WILL AND REPUTATION FOR
QUALITY AND DEPENDABILITY.  THE EXECUTIVE RECOGNIZES THAT IN ORDER TO GUARD THE
LEGITIMATE INTERESTS OF THE COMPANY AND ITS AFFILIATES, IT IS NECESSARY FOR THE
COMPANY TO PROTECT ALL CONFIDENTIAL INFORMATION.  THE EXISTENCE OF ANY CLAIM OR
CAUSE OF ACTION BY THE EXECUTIVE AGAINST THE COMPANY SHALL NOT CONSTITUTE AND
SHALL NOT BE ASSERTED AS A DEFENSE TO THE ENFORCEMENT BY THE COMPANY OF
SECTION 6.  THE EXECUTIVE FURTHER AGREES THAT THE EXECUTIVE’S OBLIGATIONS UNDER
SECTION 6 SHALL BE ABSOLUTE AND UNCONDITIONAL.

 

6.             CONFIDENTIALITY.  THE EXECUTIVE AGREES THAT DURING AND AT ALL
TIMES AFTER THE TERM, THE EXECUTIVE WILL KEEP SECRET ALL CONFIDENTIAL MATTERS
AND MATERIALS OF THE COMPANY (INCLUDING ITS SUBSIDIARIES AND AFFILIATES),
INCLUDING, WITHOUT LIMITATION, KNOW-HOW, TRADE SECRETS, REAL ESTATE PLANS AND
PRACTICES, INDIVIDUAL OFFICE RESULTS, CUSTOMER LISTS, PRICING POLICIES,
OPERATIONAL METHODS, ANY INFORMATION RELATING TO THE COMPANY (INCLUDING ANY OF
ITS SUBSIDIARIES AND AFFILIATES) PRODUCTS, PROCESSES, CUSTOMERS AND SERVICES AND
OTHER BUSINESS AND FINANCIAL AFFAIRS OF THE COMPANY (COLLECTIVELY, THE
“CONFIDENTIAL INFORMATION”), TO WHICH THE EXECUTIVE HAD OR MAY HAVE ACCESS AND
WILL NOT DISCLOSE SUCH CONFIDENTIAL INFORMATION TO ANY PERSON, OTHER THAN
(I) THE COMPANY, ITS RESPECTIVE AUTHORIZED EMPLOYEES AND SUCH OTHER PERSONS TO
WHOM THE EXECUTIVE HAS BEEN INSTRUCTED TO MAKE DISCLOSURE BY THE BOARD, (II) AS
APPROPRIATE (AS DETERMINED BY THE EXECUTIVE IN GOOD FAITH) TO PERFORM HIS DUTIES
HEREUNDER, OR (III) IN COMPLIANCE WITH LEGAL PROCESS OR REGULATORY
REQUIREMENTS.  “CONFIDENTIAL INFORMATION” WILL NOT INCLUDE ANY INFORMATION WHICH
IS IN THE PUBLIC DOMAIN DURING OR AFTER THE TERM, PROVIDED SUCH INFORMATION IS
NOT IN THE PUBLIC DOMAIN AS A CONSEQUENCE OF DISCLOSURE BY THE EXECUTIVE IN
VIOLATION OF THIS EMPLOYMENT AGREEMENT.

 

7.             INTELLECTUAL PROPERTY, INVENTIONS AND PATENTS.  THE EXECUTIVE
ACKNOWLEDGES THAT ALL DISCOVERIES, CONCEPTS, IDEAS, INVENTIONS, INNOVATIONS,
IMPROVEMENTS, DEVELOPMENTS, METHODS, DESIGNS, ANALYSES, DRAWINGS, REPORTS,
PATENT APPLICATIONS, COPYRIGHTABLE WORK AND MASK WORK (WHETHER OR NOT INCLUDING
ANY CONFIDENTIAL INFORMATION) AND ALL REGISTRATIONS OR APPLICATIONS RELATED
THERETO, ALL OTHER PROPRIETARY INFORMATION AND ALL SIMILAR OR RELATED
INFORMATION (WHETHER OR NOT PATENTABLE) WHICH RELATE TO THE COMPANY’S OR ANY OF
ITS SUBSIDIARIES’ ACTUAL OR ANTICIPATED BUSINESS, RESEARCH AND DEVELOPMENT OR
EXISTING OR FUTURE PRODUCTS OR SERVICES AND WHICH ARE CONCEIVED, DEVELOPED OR
MADE BY THE EXECUTIVE (WHETHER ABOVE OR JOINTLY WITH OTHERS) WHILE EMPLOYED BY
THE COMPANY OR ITS PREDECESSORS AND ITS SUBSIDIARIES (“WORK PRODUCT”), BELONG TO
THE COMPANY OR SUCH SUBSIDIARY.  THE EXECUTIVE SHALL PROMPTLY DISCLOSE SUCH WORK
PRODUCT TO THE BOARD AND, AT THE COMPANY’S EXPENSE, PERFORM ALL ACTIONS
REASONABLY REQUESTED BY THE BOARD (WHETHER DURING OR AFTER THE TERM) TO
ESTABLISH AND CONFIRM SUCH OWNERSHIP (INCLUDING, WITHOUT LIMITATION,
ASSIGNMENTS, CONSENTS, POWERS OF ATTORNEY AND OTHER INSTRUMENTS).

 

8.             MODIFICATION.  THE EXECUTIVE AGREES AND ACKNOWLEDGES THAT THE
DURATION AND SCOPE OF THE COVENANTS DESCRIBED IN SECTIONS 6 AND 7 ARE FAIR,
REASONABLE AND NECESSARY IN ORDER TO PROTECT THE GOODWILL AND OTHER LEGITIMATE
INTERESTS OF THE COMPANY AND ITS SUBSIDIARIES, THAT ADEQUATE CONSIDERATION HAS
BEEN RECEIVED BY THE EXECUTIVE FOR SUCH OBLIGATIONS, AND THAT THESE OBLIGATIONS
DO NOT PREVENT THE EXECUTIVE FROM EARNING A LIVELIHOOD.  IF, HOWEVER, FOR ANY
REASON ANY COURT OF COMPETENT JURISDICTION DETERMINES THAT ANY RESTRICTION
CONTAINED IN SECTION 6 OR 7 IS NOT REASONABLE, THAT CONSIDERATION IS INADEQUATE
OR THAT THE EXECUTIVE HAS BEEN PREVENTED UNLAWFULLY FROM EARNING A LIVELIHOOD,
SUCH RESTRICTION WILL BE INTERPRETED, MODIFIED OR REWRITTEN TO INCLUDE AS

 

8

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MUCH OF THE DURATION, SCOPE AND GEOGRAPHIC AREA IDENTIFIED IN SECTION 6 OR 7 AS
WILL RENDER SUCH RESTRICTIONS VALID AND ENFORCEABLE.

 

9.             EQUITABLE RELIEF.  THE EXECUTIVE ACKNOWLEDGES THAT THE COMPANY
WILL SUFFER IRREPARABLE HARM AS A RESULT OF A BREACH OF THIS EMPLOYMENT
AGREEMENT BY THE EXECUTIVE FOR WHICH AN ADEQUATE MONETARY REMEDY DOES NOT EXIST
AND A REMEDY AT LAW MAY PROVE TO BE INADEQUATE.  ACCORDINGLY, IN THE EVENT OF
ANY ACTUAL OR THREATENED BREACH BY THE EXECUTIVE OF SECTION 6, 7 OR 13 OF THIS
EMPLOYMENT AGREEMENT, THE COMPANY WILL, IN ADDITION TO ANY OTHER REMEDIES
PERMITTED BY LAW, BE ENTITLED TO OBTAIN REMEDIES IN EQUITY, INCLUDING WITHOUT
LIMITATION SPECIFIC PERFORMANCE, INJUNCTIVE RELIEF, A TEMPORARY RESTRAINING
ORDER AND/OR A PERMANENT INJUNCTION IN ANY COURT OF COMPETENT JURISDICTION, TO
PREVENT OR OTHERWISE RESTRAIN ANY SUCH BREACH WITHOUT THE NECESSITY OF PROVING
DAMAGES, POSTING A BOND OR OTHER SECURITY.  SUCH RELIEF WILL BE IN ADDITION TO
AND NOT IN SUBSTITUTION OF ANY OTHER REMEDIES AVAILABLE TO THE COMPANY.  THE
EXISTENCE OF ANY CLAIM OR CAUSE OF ACTION BY THE EXECUTIVE AGAINST THE COMPANY
OR ANY OF ITS SUBSIDIARIES, WHETHER PREDICATED ON THIS EMPLOYMENT AGREEMENT OR
OTHERWISE, WILL NOT CONSTITUTE A DEFENSE TO THE ENFORCEMENT BY THE COMPANY OF
THIS EMPLOYMENT AGREEMENT.  THE EXECUTIVE AGREES NOT TO DEFEND ON THE BASIS THAT
THERE IS AN ADEQUATE REMEDY AT LAW.

 

10.           REPRESENTATIONS.  THE EXECUTIVE HEREBY REPRESENTS AND WARRANTS TO
THE COMPANY THAT (I) THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS EMPLOYMENT
AGREEMENT BY THE EXECUTIVE DO NOT AND SHALL NOT CONFLICT WITH, BREACH, VIOLATE
OR CAUSE A DEFAULT UNDER ANY CONTRACT, AGREEMENT, INSTRUMENT, ORDER, JUDGMENT OR
DECREE TO WHICH THE EXECUTIVE IS A PARTY OR BY WHICH HE IS BOUND, (II) THE
EXECUTIVE IS NOT A PARTY TO OR BOUND BY ANY EMPLOYMENT AGREEMENT, NONCOMPETE
AGREEMENT OR CONFIDENTIALITY AGREEMENT WITH ANY OTHER PERSON OR ENTITY AND
(III) UPON THE EXECUTION AND DELIVERY OF THIS EMPLOYMENT AGREEMENT BY THE
COMPANY, THIS EMPLOYMENT AGREEMENT SHALL BE THE VALID AND BINDING OBLIGATION OF
THE EXECUTIVE, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.  THE EXECUTIVE HEREBY
ACKNOWLEDGES AND REPRESENTS THAT HE HAS CONSULTED WITH INDEPENDENT LEGAL COUNSEL
REGARDING HIS RIGHTS AND OBLIGATIONS UNDER THIS EMPLOYMENT AGREEMENT AND THE
TERMS OF THE RELEASE ATTACHED AS ANNEX A AND THAT HE FULLY UNDERSTANDS THE TERMS
AND CONDITIONS CONTAINED HEREIN AND THEREIN.

 

11.           SURVIVAL.  THIS EMPLOYMENT AGREEMENT SURVIVES AND CONTINUES IN
FULL FORCE IN ACCORDANCE WITH ITS TERMS NOTWITHSTANDING THE EXPIRATION OR
TERMINATION OF THE TERM.

 

12.           COOPERATION.  DURING THE TERM AND THEREAFTER, THE EXECUTIVE SHALL
REASONABLY COOPERATE WITH THE COMPANY AND ITS SUBSIDIARIES IN ANY INTERNAL
INVESTIGATION OR ADMINISTRATIVE, REGULATORY OR JUDICIAL PROCEEDING AS REASONABLY
REQUESTED BY THE COMPANY (INCLUDING, WITHOUT LIMITATION, BEING AVAILABLE TO THE
COMPANY UPON REASONABLE NOTICE FOR INTERVIEWS AND FACTUAL INVESTIGATIONS,
APPEARING AT THE COMPANY’S REQUEST TO GIVE TESTIMONY WITHOUT REQUIRING SERVICE
OF A SUBPOENA OR OTHER LEGAL PROCESS, MAKING AVAILABLE TO THE COMPANY ALL
PERTINENT INFORMATION REQUESTED BY THE COMPANY AND ALL RELEVANT DOCUMENTS
REQUESTED BY THE COMPANY WHICH ARE OR MAY COME INTO THE EXECUTIVE’S POSSESSION,
ALL AT TIMES AND ON SCHEDULES THAT ARE REASONABLY CONSISTENT WITH THE
EXECUTIVE’S OTHER ACTIVITIES AND COMMITMENTS, WITH DUE REGARD FOR SUCH
ACTIVITIES AND COMMITMENTS).  IN THE EVENT THE COMPANY REQUIRES THE EXECUTIVE’S
COOPERATION IN ACCORDANCE WITH THIS SECTION AFTER THE TERMINATION OF THE TERM,
THE COMPANY SHALL REIMBURSE THE

 

9

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EXECUTIVE FOR ALL OF HIS REASONABLE COSTS AND EXPENSES INCURRED, IN CONNECTION
THEREWITH, INCLUDING LEGAL FEES, PLUS PAY THE EXECUTIVE A REASONABLE AMOUNT PER
DAY FOR HIS TIME SPENT AND SUCH PAYMENTS SHALL BE MADE BY COMPANY ON A MONTHLY
BASIS, BUT IN NO EVENT LATER THAN MARCH 15TH OF THE CALENDAR YEAR FOLLOWING THE
CALENDAR YEAR TO WHICH SUCH AMOUNTS RELATE.  THE COMPANY SHALL INDEMNIFY THE
EXECUTIVE AND HOLD HIM HARMLESS FROM ANY CLAIM, LOSS OR DAMAGE AS A RESULT OF
HIS COOPERATION HEREUNDER.

 

13.           LIFE INSURANCE.  THE COMPANY MAY, AT ITS DISCRETION AND AT ANY
TIME AFTER THE EXECUTION OF THIS EMPLOYMENT AGREEMENT, APPLY FOR AND PROCURE, AS
OWNER AND FOR ITS OWN BENEFIT, AND AT ITS OWN EXPENSE, INSURANCE ON THE
EXECUTIVE’S LIFE, IN SUCH AMOUNT AND IN SUCH FORM OR FORMS AS THE COMPANY MAY
DETERMINE.  THE EXECUTIVE WILL HAVE NO RIGHT OR INTEREST WHATSOEVER IN SUCH
POLICY OR POLICIES, BUT THE EXECUTIVE AGREES THAT THE EXECUTIVE WILL, AT THE
REQUEST OF THE COMPANY, SUBMIT HIMSELF TO SUCH MEDICAL EXAMINATIONS, SUPPLY SUCH
INFORMATION AND EXECUTE AND DELIVER SUCH DOCUMENTS AS MAY BE REQUIRED BY THE
INSURANCE COMPANY OR COMPANIES TO WHICH THE COMPANY OR ANY SUCH SUBSIDIARY HAS
APPLIED FOR SUCH INSURANCE.

 

14.           NO MITIGATION.  THE EXECUTIVE SHALL BE UNDER NO OBLIGATION TO SEEK
OTHER EMPLOYMENT OR OTHERWISE MITIGATE THE OBLIGATIONS OF THE COMPANY UNDER THIS
AGREEMENT UPON TERMINATION OF THIS AGREEMENT, AND ANY PAYMENTS OR BENEFITS PAID
BY THE COMPANY HEREUNDER SHALL NOT BE OFFSET BY ANY REMUNERATION OR BENEFITS
RECEIVED FROM A SUBSEQUENT EMPLOYER.

 

15.           SECTION 409A.

 

(A)           COMPLIANCE.   IT IS THE INTENTION OF THE PARTIES TO THIS
EMPLOYMENT AGREEMENT THAT NO PAYMENT OR ENTITLEMENT PURSUANT TO THIS EMPLOYMENT
AGREEMENT WILL GIVE RISE TO ANY ADVERSE TAX CONSEQUENCES TO THE EXECUTIVE UNDER
SECTION 409A OF THE CODE.  THE EMPLOYMENT AGREEMENT SHALL BE INTERPRETED TO THAT
END AND, CONSISTENT WITH THAT OBJECTIVE AND NOTWITHSTANDING ANY PROVISION HEREIN
TO THE CONTRARY, THE COMPANY AND THE EXECUTIVE SHALL, TO THE EXTENT NECESSARY TO
COMPLY WITH SECTION 409A OF THE CODE, AGREE TO ACT REASONABLY AND IN GOOD FAITH
TO MUTUALLY REFORM THE PROVISIONS OF THIS EMPLOYMENT AGREEMENT TO AVOID THE
APPLICATION OF OR EXCISE TAX UNDER SECTION 409A OF THE CODE.  TO THIS END, THE
PARTIES AGREE THAT THE SEVERANCE BENEFITS PAYABLE UNDER THIS EMPLOYMENT
AGREEMENT WILL BE PAID ONLY UPON A “SEPARATION FROM SERVICE” (WITHIN THE MEANING
OF SECTION 409A OF THE CODE) THAT OCCURS COINCIDENT WITH OR FOLLOWING THE DATE
OF TERMINATION.  NOTWITHSTANDING ANY OTHER PROVISION HEREIN, IF THE EXECUTIVE IS
A “SPECIFIED EMPLOYEE”, AS DEFINED IN, AND PURSUANT TO, REG.
SECTION 1.409A-1(I) OR ANY SUCCESSOR REGULATION, ON THE DATE OF TERMINATION, ANY
PAYMENT PROVIDED HEREUNDER THAT IS DESIGNATED AS BEING “SUBJECT TO SECTION 15”
SHALL BE MADE TO THE EXECUTIVE NO EARLIER THAN THE DATE WHICH IS SIX (6) MONTHS
FROM THE DATE OF TERMINATION; PROVIDED, THAT SUCH PAYMENT MAY BE MADE EARLIER IN
THE EVENT OF THE EXECUTIVE’S DEATH.  IF ANY PAYMENT TO THE EXECUTIVE IS DELAYED
PURSUANT TO CLAUSE (I) OF THE FOREGOING SENTENCE, SUCH PAYMENT INSTEAD SHALL BE
MADE ON THE FIRST BUSINESS DAY FOLLOWING THE EXPIRATION OF THE SIX-MONTH PERIOD
REFERRED TO IN THE PRIOR SENTENCE OR THE DATE OF THE EXECUTIVE’S DEATH, AS
APPLICABLE.

 

(B)           PAYMENT PERIOD.  WHENEVER A PAYMENT UNDER THIS AGREEMENT SPECIFIES
A PAYMENT PERIOD WITH REFERENCE TO A NUMBER OF DAYS (E.G., “PAYMENT SHALL BE
MADE WITHIN NINETY (90) DAYS FOLLOWING THE DATE OF TERMINATION), THE ACTUAL DATE
OF PAYMENT WITHIN THE SPECIFIED PERIOD SHALL BE WITHIN THE SOLE DISCRETION OF
THE COMPANY.

 

10

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(C)                                  REIMBURSEMENT.  WITH REGARD TO ANY
PROVISION HEREIN THAT PROVIDES FOR REIMBURSEMENT OF COSTS AND EXPENSES OR
IN-KIND BENEFITS, EXCEPT AS PERMITTED BY SECTION 409A OF THE CODE, (I) THE RIGHT
TO REIMBURSEMENT OR IN-KIND BENEFITS SHALL NOT BE SUBJECT TO LIQUIDATION OR
EXCHANGE FOR ANOTHER BENEFIT, (II) THE AMOUNT OF EXPENSES ELIGIBLE FOR
REIMBURSEMENT, OF IN-KIND BENEFITS, PROVIDED DURING ANY TAXABLE YEAR SHALL NOT
AFFECT THE EXPENSES ELIGIBLE FOR REIMBURSEMENT, OR IN-KIND BENEFITS TO BE
PROVIDED, IN ANY OTHER TAXABLE YEAR, PROVIDED THAT THE FOREGOING CLAUSE
(II) SHALL NOT BE VIOLATED WITHOUT REGARD TO EXPENSES REIMBURSED UNDER ANY
ARRANGEMENT COVERED BY SECTION 105(B) OF THE CODE SOLELY BECAUSE SUCH EXPENSES
ARE SUBJECT TO A LIMIT RELATED TO THE PERIOD THE ARRANGEMENT IS IN EFFECT AND
(III) SUCH PAYMENTS SHALL BE MADE ON OR BEFORE THE LAST DAY OF THE EXECUTIVE’S
TAXABLE YEAR FOLLOWING THE TAXABLE YEAR IN WHICH THE EXPENSE OCCURRED.

 

(D)                                 INSTALLMENTS.  IF UNDER THIS AGREEMENT, AN
AMOUNT IS TO BE PAID IN TWO OR MORE INSTALLMENTS, FOR PURPOSES OF SECTION 409A
OF THE CODE, EACH INSTALLMENT SHALL BE TREATED AS A SEPARATE PAYMENT.

 

16.                                 ATTORNEY FEES. THE COMPANY SHALL PAY THE
EXECUTIVE’S REASONABLE LEGAL FEES OF PROSKAUER ROSE LLP AND OUT-OF-POCKET
EXPENSES INCURRED IN CONNECTION WITH THE NEGOTIATION AND DRAFTING OF THIS
EMPLOYMENT AGREEMENT AND ANY EQUITY AWARD AGREEMENTS, AND OTHER REASONABLE LEGAL
FEES AND OUT-OF-POCKET EXPENSES OF PROSKAUER ROSE LLP RELATED TO THE SALE OF THE
COMPANY CONSUMMATED ON OR ABOUT MAY 31, 2007, SUBJECT, IN EACH CASE, TO AND
WITHIN TEN (10) DAYS AFTER HIS WRITTEN REQUEST FOR SUCH PAYMENT ACCOMPANIED BY
REASONABLY SATISFACTORY EVIDENCE THAT SUCH FEES AND EXPENSES WERE ACTUALLY
INCURRED IN CONNECTION THEREWITH.  IF A COURT OF COMPETENT JURISDICTION
DETERMINES THAT THIS EMPLOYMENT AGREEMENT WAS BREACHED BY THE COMPANY, THE
EXECUTIVE SHALL BE ENTITLED TO RECOVER ANY AND ALL OUT-OF-POCKET COSTS AND
EXPENSES, INCLUDING REASONABLE LEGAL FEES, INCURRED IN ENFORCING THIS EMPLOYMENT
AGREEMENT AGAINST THE COMPANY, SUBJECT TO AND WITHIN TEN (10) DAYS AFTER HIS
REQUEST FOR REIMBURSEMENT ACCOMPANIED BY REASONABLY SATISFACTORY EVIDENCE THAT
THE COSTS AND EXPENSES WERE INCURRED IN CONNECTION THEREWITH.  THE EXECUTIVE
SHALL SUBMIT A WRITTEN REQUEST FOR PAYMENT OR REIMBURSEMENT WITHIN SIXTY (60)
DAYS OF INCURRING THE EXPENSE.

 

17.                                 INDEMNIFICATION.  THE COMPANY SHALL
INDEMNIFY THE EXECUTIVE (INCLUDING, FOR THE AVOIDANCE OF DOUBT, ADVANCEMENT OF
LEGAL EXPENSES) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW IN THE EVENT
HE WAS OR IS A PARTY OR IS THREATENED TO BE MADE A PARTY TO ANY THREATENED,
PENDING OR COMPLETED ACTION, SUIT OR PROCEEDING, OR IN THE EVENT A CLAIM OR
DEMAND FOR INFORMATION IS MADE OR THREATENED TO BE MADE AGAINST HIM, IN EACH
CASE BY REASON OF THE FACT THAT HE IS OR WAS A DIRECTOR, OFFICER, EMPLOYEE,
FIDUCIARY OR AGENT OF THE COMPANY OR, AT THE REQUEST OF THE COMPANY, ANY OTHER
ENTITY OR BENEFIT PLAN (EXCEPT WITH RESPECT TO THE EXECUTIVE’S FRAUD, GROSS
NEGLIGENCE, OR WILLFUL MISCONDUCT).  SUCH OBLIGATION SHALL CONTINUE AFTER ANY
TERMINATION OF EMPLOYMENT OR DIRECTORSHIP WITH REGARD TO ACTIONS OR INACTIONS
PRIOR THERETO, AND SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT. THE
EXECUTIVE SHALL BE COVERED BY THE COMPANY’S DIRECTORS AND OFFICERS INSURANCE
POLICY UPON TERMS AND CONDITIONS NO LESS FAVORABLE THAN THE TERMS PROVIDED BY
THE COMPANY TO ANY MEMBER OF THE BOARD OR OTHER SENIOR EXECUTIVE OF THE COMPANY.

 

18.                                 SUCCESSORS ASSIGNS AMENDMENT; NOTICE.  THIS
EMPLOYMENT AGREEMENT WILL BE BINDING UPON AND WILL INURE TO THE BENEFIT OF THE
COMPANY AND WILL NOT BE ASSIGNED BY THE COMPANY WITHOUT THE EXECUTIVE’S PRIOR
WRITTEN CONSENT.  THIS EMPLOYMENT AGREEMENT WILL BE

 

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BINDING UPON THE EXECUTIVE AND WILL INURE TO THE BENEFIT OF THE EXECUTIVE’S
HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVES, BUT WILL NOT BE
ASSIGNABLE BY THE EXECUTIVE.  THIS EMPLOYMENT AGREEMENT MAY BE AMENDED OR
ALTERED ONLY BY THE WRITTEN AGREEMENT OF THE COMPANY AND THE EXECUTIVE.  ALL
NOTICES OR OTHER COMMUNICATIONS PERMITTED OR REQUIRED UNDER THIS EMPLOYMENT
AGREEMENT WILL BE IN WRITING AND WILL BE DEEMED TO HAVE BEEN DULY GIVEN IF
DELIVERED BY HAND, BY FACSIMILE TRANSMISSION TO THE COMPANY (IF CONFIRMED) OR
MAILED (CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED)
TO THE EXECUTIVE OR THE COMPANY AT THE LAST KNOWN ADDRESS OF THE PARTY, OR SUCH
OTHER ADDRESS AS WILL BE FURNISHED IN WRITING BY LIKE NOTICE BY THE EXECUTIVE OR
THE COMPANY TO THE OTHER; PROVIDED, THAT ANY NOTICE TO THE COMPANY HEREUNDER
SHALL ALSO BE DELIVERED TO UHS HOLDCO, INC., C/O IRVING PLACE CAPITAL, 277 PARK
AVENUE, 39TH FLOOR, NEW YORK, NY  10172, ATTENTION: ROBERT JUNEJA.

 

19.                                 ENTIRE AGREEMENT.  THIS EMPLOYMENT AGREEMENT
EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE EXECUTIVE AND THE
COMPANY WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL SUCH PRIOR
AGREEMENTS AND UNDERSTANDINGS (INCLUDING THE ORIGINAL AGREEMENT), EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED HEREIN.

 

20.                                 SEVERABILITY.  IF ANY TERM, PROVISION,
COVENANT OR RESTRICTION OF THIS EMPLOYMENT AGREEMENT IS HELD BY A COURT OF
COMPETENT JURISDICTION TO BE INVALID, VOID OR UNENFORCEABLE, THE REMAINDER OF
THE TERMS, PROVISIONS, COVENANTS AND RESTRICTIONS OF THIS EMPLOYMENT AGREEMENT
WILL REMAIN IN FULL FORCE AND EFFECT AND WILL IN NO WAY BE AFFECTED, IMPAIRED OR
INVALIDATED.

 

21.                                 GOVERNING LAW; JURISDICTION.  THIS
EMPLOYMENT AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF.  EACH OF THE PARTIES AGREES THAT ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS EMPLOYMENT AGREEMENT SHALL BE BROUGHT IN THE
FEDERAL OR STATE COURTS IN THE STATE OF MINNESOTA (PROVIDED, THAT ANY ACTION
THAT CAN BE BROUGHT IN EITHER THE FEDERAL OR STATE COURTS SHALL BE BROUGHT IN
THE FEDERAL COURTS) AND, BY EXECUTION AND DELIVERY OF THIS EMPLOYMENT AGREEMENT,
EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS ITSELF IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, TO THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURT IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF THIS EMPLOYMENT
AGREEMENT.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
EMPLOYMENT AGREEMENT BROUGHT IN THE COURT REFERRED TO IN THE PRECEDING SENTENCE.

 

22.                                 COUNTERPARTS.  THIS EMPLOYMENT AGREEMENT MAY
BE EXECUTED IN TWO OR MORE COUNTERPARTS, EACH OF WHICH WILL BE DEEMED AN
ORIGINAL BUT ALL OF WHICH TOGETHER WILL CONSTITUTE ONE AND THE SAME INSTRUMENT,
AND ALL SIGNATURES NEED NOT APPEAR ON ANY ONE COUNTERPART.

 

23.                                 HEADINGS.  ALL HEADINGS IN THIS EMPLOYMENT
AGREEMENT ARE FOR PURPOSES OF REFERENCE ONLY AND WILL NOT BE CONSTRUED TO LIMIT
OR AFFECT THE SUBSTANCE OF THIS EMPLOYMENT AGREEMENT.

 

*   *   *   *   *

 

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the date first written above.

 

 

UNIVERSAL HOSPITAL SERVICES, INC.

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

Gary D. Blackford

 

 

 

Reviewed by

 

 

 

 

 

 

 

Date:

 

 

Legal Department

 

on behalf of

 

UHS

 

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Annex A

 

RELEASE

 

I, Gary D. Blackford, in consideration of and subject to the performance by
Universal Hospital Services, Inc., a Delaware corporation (together with its
subsidiaries, the “Company”), of its material obligations under the Employment
Agreement, dated as of December 31, 2008 (the “Agreement”), do hereby release
and forever discharge as of the date hereof the Company and all present and
former directors, officers, agents, representatives, executives, successors and
assigns of the Company and its direct or indirect owners (collectively, the
“Released Parties”) to the extent provided below. Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Agreement.

 

1.                                       Except as provided in paragraph 2
below, I knowingly and voluntarily release and forever discharge the Released
Parties from any and all claims, controversies, actions, causes of action,
cross-claims, counter-claims, demands, debts, compensatory damages, liquidated
damages, punitive or exemplary damages, other damages, claims for costs and
attorneys’ fees, or liabilities of any nature whatsoever in law and in equity,
both past and present (through the date hereof) and whether known or unknown,
suspected, or claimed against any of the Released Parties which I, or any of my
heirs, executors, administrators or assigns, may have, which arise out of or are
connected with my employment with, or my separation from, the Company
(including, but not limited to, any allegation, claim or violation, arising
under:  Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights
Act of 1991; the Age Discrimination in Employment Act of 1967, as amended
(including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963,
as amended; the Americans with Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Civil Rights Act of 1866, as amended; the Worker
Adjustment Retraining and Notification Act; the Employee Retirement Income
Security Act of 1974; any applicable Executive Order Programs; the Fair Labor
Standards Act; or their state or local counterparts; or under any other federal,
state or local civil or human rights law, or under any other local, state, or
federal law, regulation or ordinance; or under any public policy, contract or
tort, or under common law; or arising under any policies, practices or
procedures of the Company; or any claim for wrongful discharge, breach of
contract, infliction of emotional distress, defamation; or any claim for costs,
fees, or other expenses, including attorneys’ fees incurred in these matters),
(all of the foregoing collectively referred to herein as the “Claims”).

 

2.                                       I agree that this Release does not
waive or release any rights or claims that I may have under:  the Age
Discrimination in Employment Act of 1967 which arise after the date I execute
this Release; claims for benefits under any employee benefit plan maintained by
the Company; rights and entitlements under the Company’s equity plans and
related award agreements; claims in connection with the Gross-Up Payment (as
defined in the Agreement); claims for indemnification and coverage under any
directors and officers insurance policy; claims or claims for unemployment or
worker’s compensation as provided by law; or rights and claims under the
Original Agreement to the extent expressly reserved in the introductory
paragraph of the Agreement.

 

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3.                                       I acknowledge and intend that this
Release shall be effective as a bar and shall serve as a complete defense to
each and every one of the Claims and that it shall be given full force and
effect according to each and all of its express terms and provisions, including
those relating to unknown and unsuspected Claims (notwithstanding any state
statute that expressly limits the effectiveness of a release of unknown,
unsuspected and unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied.

 

4.                                       I represent that I have not made any
assignment or transfer of any Claim.  I agree that neither this Release, nor the
furnishing of the consideration for this Release, shall be deemed or construed
at any time to be an admission by the Company or any Released Party of any
improper or unlawful conduct.  I agree that this Release is confidential and
agree not to disclose any information regarding the terms of this Release,
except to my immediate family and any tax, legal or other counsel I have
consulted regarding the meaning or effect hereof or as required by law, and I
will instruct each of the foregoing not to disclose the same to anyone.

 

5.                                       Each provision of this Release shall be
interpreted in such manner as to be effective and valid under applicable law and
any provision of this Release held to be invalid, illegal or unenforceable in
any respect shall be severable.  This Release cannot be amended except in a
writing duly executed by the Company and me.

 

*     *     *    *     *

 

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I UNDERSTAND THAT I HAVE FIFTEEN (15) DAYS AFTER THE EXECUTION OF THIS RELEASE
TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE
UNTIL THE REVOCATION PERIOD HAS EXPIRED.

 

 

DATE:

 

 

UNIVERSAL HOSPITAL SERVICES, INC.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Gary D. Blackford

 

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