Exhibit 10.20


 


Universal Hospital Services, Inc.


Executive Severance Pay Plan


 


December 31, 2008


 


I.              Purpose


 


To
provide a severance pay plan for the Executives (as defined below) of Universal
Hospital Services, Inc. (the “Company”) who are not eligible for severance
pay under any other plan or agreement with the Company. The provisions of this
Executive Severance Pay Plan (the “Plan”) will not apply to any Executive who
is covered by an employment agreement. Executives who receive severance under
this Plan will not be eligible to receive severance under any other plan or
agreement of the Company. No severance benefits become payable pursuant to this
Plan in the event of termination of employment upon an Executive’s death or
disability. This Plan replaces the Executive Severance Pay Plan dated June 1,
2007.


 


II.            Definitions.


 


A.    “Cause” means:


 


(i.)           Executive’s continued failure, whether
willful, intentional, or grossly negligent, after written notice, to perform
substantially Executive’s duties (the “Duties”) as determined by Executive’s
immediate supervisor, or the Chief Executive Officer, or a Senior Vice
President of the Company (other than as a result of a disability);


 


(ii.)          dishonesty or fraud in the performance of Executive’s
Duties or a material breach of Executive’s duty of loyalty to the Company or
its subsidiaries;


 


(iii.)         conviction or confession of an act or acts on
Executive’s part constituting a felony under the laws of the United States or
any state thereof or any misdemeanor which materially impairs such Executive’s
ability to perform the Duties;


 


(iv.)         any willful act or omission on Executive’s part
which is materially injurious to the financial condition or business reputation
of the Company or any of its subsidiaries; or


 


(v.)          any breach by Executive of any
non-competition, non-solicitation, non-disclosure or confidentiality agreement
applicable to Executive.


 


B.    “Date of Termination” means the date
specified as Executive’s last date of employment in the Company’s notice of
termination to Executive or Executive’s Notice of Resignation for Good Reason
to the Company.


 


C.    “Executive” means any Executive Vice
President, Senior Vice President or any Vice President of the Company.


 

















 


D.    “Resignation for Good Reason” means:


 


Executive’s
termination of employment upon 30 days’ written notice to the Company, for Good
Reason.  Executive shall have “Good
Reason” for termination of employment if, other than for cause, any of the
following has occurred, Executive has given notice thereof within 90 days of
the event, the Company has not cured within 30 days of receive of such notice,
and Executive actually terminates employment within 60 days thereafter:


 


(i.)           The Company has reduced or reassigned a
material portion of Executive duties (per Executive job description);


 


(ii.)          The Executive’s base salary has been
materially reduced other than in connection with an across-the-board reduction
(of approximately the same percentage) in executive compensation to employees
imposed by the board of directors of the Company in response to negative
financial results or other adverse circumstances affecting the Company; or


 


(iii.)         The Company has required Executive to
relocate in excess of 50 miles from the location where the Executive is
currently employed.


 


E.     “Severance Period” means the period from the
Date of Termination through the date which is 12 months from the Date of
Termination.


 


III.           Severance Pay


 


A.            Executives who separate from the Company as a
result of termination by the Company without Cause (other than death or
disability) or by the Executive for Good Reason and who sign the general
release and other agreement described in Section IV below within 45 days
of such termination and who do not rescind the general release within the time
allowed by the Company are entitled to the severance pay specified below.  An Executive who is separated from employment
due to dismissal for Cause is not entitled to any severance pay and an
Executive who voluntarily resigns, except for Resignation for Good Reason, from
employment is not entitled to severance pay.


 


B.            Upon qualifying for severance pay subject to Section IV,
Executive will be paid the following amounts in the following manner:


 


(i.)           Executive will continue to be paid his or her
salary through the Severance Period, in the manner and at the times paid during
such Executive’s employment with the Company; provided, however, that the first
such payment will be made on the 61st day following the date of termination, and
will include any such payments that would otherwise have been made prior to the
time the release was effective.


 


(ii.)          Executive
may elect to continue group health and dental benefits under COBRA to the
extent he or she is eligible.  If the
Executive timely elects to continue these benefits under COBRA, the Company
will pay the full premium for group health and dental benefits for 12 months
following the


 

















 


Date of Termination (or such shorter period
as such coverage is elected by Executive). 
The Company will make such payments beginning on the 61st day following the date of termination for any payment then due, and thereafter on
a monthly basis.  This 12 months
of coverage at the Company’s expense (or such shorter period as such coverage
is elected by Executive) will be considered the first 12 months (or shorter
period) of the Executive’s continuation period for group health and dental
benefits in accordance with COBRA.  After
such period, the Executive will be responsible for the full cost of premiums if
the Executive chooses to continue these benefits.


 


(iii.)         If prior to the date which is 12 months after the Date of Termination,
Executive finds other employment, the amount of severance payments payable to
Executive after such termination in accordance with B(i) above will be
reduced by the value of the compensation Executive receives in his or her new
employment through the date which is 12 months after the Date of Termination
and the amounts payable in accordance with B(ii) will be similarly
discontinued if similar medical and dental benefits are secured through the new
employer.


 


(iv.)         If termination is pursuant to Resignation for Good Reason, the Company
will provide the Executive a prorated portion of the bonus earned for the then
current fiscal year, based upon the number of days Executive was employed
during that year. Such Executive bonus will be payable in the next calendar
year at the time annual bonuses are paid to the other executives employed by
the Company, on that last day of the Company’s fiscal year.


 


(v.)          Executive will be paid or otherwise provided such benefits as may be
required by law.


 


(vi.)         All severance payments are subject to any required withholding.


 


IV.           General Release and Other Agreements.


 


Executive
will not be entitled to receive any of the severance pay described above until such
time as Executive signs (A) an effective general release of all claims
against the Company and its affiliates in the form and manner prescribed by the
Company and (B) an agreement further providing (i) Executive’s
agreement not to disclose or use confidential information of the Company, (ii) Executive’s
agreement during the Severance Period not to compete with the Company in the
medical equipment rental business, (iii) Executives’ agreement during the
Severance Period not to solicit for employment or hire any person who was an
employee of the Company at any time within the one year period before the
Executive’s Date of Termination, and (iv) Executive’s agreement during the
Severance Period not to induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of the Company to
cease doing business with the Company, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any Subsidiary.  A
failure to execute such a general release and other agreements within 45 days
of Executive’s Date of Termination or a subsequent rescission of such general
release within the


 

















 


time allowed will result in the loss of any rights to receive payments or
benefits under this Plan.


 


V.            Section 409A.


 


Although the Company does not guarantee to the
Executive any particular tax treatment relating to the payments under the Plan,
it is intended that such payments be exempt from, or comply with, Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and the Plan
shall be construed in a manner consistent with the requirements for avoiding
taxes or penalties under Section 409A of the Code.


 


(a)           A
termination of employment shall not be deemed to have occurred for purposes of
any provision of the Plan providing for the payment of amounts subject to Section 409A
of the Code upon or following a termination of employment unless such
termination is also a “Separation from Service” within the meaning of Section 409A
of the Code and, for purposes of any such provision of the Plan references to a
“resignation,” “termination,” “termination of employment” or like terms shall
mean “Separation from Service” within the meaning of Section 409A of the
Code.


 


(c)           Each installment paid under the Plan shall be treated as a separate
payment.


 


VI.           Amendment and Modification of Plan. This Plan may be modified, amended or
terminated at any time by the CEO and the Board of Directors of the Company.


 


VII.          No Employment Rights. Neither this Plan for the benefits hereunder
shall be a term of the employment of any employee, and the Company shall not be
obligated in any way to continue the Plan. The terms of this Plan shall not
give any employee the right to be retained in the employment of the Company.