Document:

Exhibit 10.8

Exhibit 10.8

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT (INDICATED

BY ASTERISKS) HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES

AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL

TREATMENT.

THIRD AMENDMENT TO SUPPLEMENT ONE TO THE PROFESSIONAL

DETAILING SERVICES AGREEMENT

THIS THIRD AMENDMENT TO SUPPLEMENT ONE TO THE PROFESSIONAL DETAILING SERVICES AGREEMENT
(“Third Amendment”), is hereby made and entered into this 1st day of November, 2011, by and between
SOMAXON PHARMACEUTICALS, INC., a Delaware corporation (“Client”), and PUBLICIS TOUCHPOINT
SOLUTIONS, INC. (“Publicis”). Client and Publicis being hereinafter collectively referred to as
the “Parties”.

R E C I T A L S

WHEREAS, the Parties entered into that certain Professional Detailing Services Agreement dated
July 14, 2010 (the “Agreement”);

WHEREAS, the Parties entered into that certain Supplement One to the Agreement also dated July
14, 2010, amended and restated as of February 7, 2011, and amended as of March 22, 2011 (the
“Supplement”);

WHEREAS, the Parties now desire to further amend Supplement One to the Agreement pursuant to
the terms and conditions as set forth herein.

NOW, THEREFORE, in consideration of the above recitals, the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby understand and agree as follows:

1. All terms used herein shall have the same meaning as ascribed to them in the Agreement. To the
extent any term or provision of this Third Amendment conflicts with any term or provision of the
Agreement or Supplement One, the terms and provisions of the Third Amendment shall prevail.

2. The Year One Terms and Program Costs of Supplement One shall continue for twenty-six (26) Sales
Representatives, 1 Regional Field Coordinator, and 1 National Business Director for a two -month
period (November and December) through December 31, 2011, excluding start up costs as presented in
Schedule A attached with monthly fees at ***. During this period no portion of the
management fee will be placed at risk. An estimated 94 Sales Representatives will be terminated on
November 2, 2011 and will be paid through November 16, 2011. The cost of

 

	 	 	 
	***	 	Certain information on this page has been omitted
and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 

 

 

the final pay period for the terminated representative will solely be the responsibility of Somaxon
and is estimated to be *** which also includes the cost to return the equipment
currently in the representative possession. Publicis will not be responsible for any unrecovered
equipment.

3. Notwithstanding anything to the contrary in the Professional Detailing Services Agreement or in
any Supplement, the Parties expressly agree that Somaxon shall be solely responsible for any
bonuses due employees transferred to it and shall fully indemnify Publicis against any claims
related to compensation by any such transferred employee.

4. In all other respects, the terms and conditions of the Agreement and Supplement One shall remain
unchanged and in full force and effect.

5. Fleet

(a) The Program as outlined in this Supplement assumes fleet vehicles that will be utilized by
Client for the Program over a two year period. Client has financial responsibility for the book
value (remainder of lease) on those vehicles that are turned in before they have been fully
depreciated and any of the following costs that apply: pick-up, storage, detailing, maintenance
and repair and transportation. Should PSS be able to redeploy some or all of the vehicles to
another program, Client has financial responsibility for any period that remains until the vehicles
have been reassigned, or for any vehicles that have not been reassigned.

Client has financial responsibility for all remarketing costs as a result of vehicle mileage or
other reasons, in each case as approved by Client in advance, including but not limited to (as
applicable) fleet provider administrative fees, difference between the proceeds of the sale of the
original vehicle and its book value, and incremental amortization due to increased value of new
vehicles. Remarketing costs will be communicated to Client as they arise and will be outlined in a
Project Estimate.

(b) At termination or upon conversion, Client assumes financial responsibility for the remaining
leased car payments (to include rental, interest, depreciation), maintenance programs fees, motor
vehicle record check fees, maintenance costs, miscellaneous costs (title, registration, new car
carry charges, registration renewals, delivery charges due to territory realignments or changes in
driver’s address.) Publicis will make reasonable efforts to cancel any services provided by their
third party fleet provider in support of the fleet vehicles.

(c) During the term of this Supplement, Client assumes financial responsibility for all bridge
rental costs approved by Client in advance in writing.

6. In all other respects, the terms and conditions of the Agreement and Supplement One shall remain
unchanged and in full force and effect.

 

	 	 	 
	***	 	Certain information on this page has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Third Amendment to be effective as
specifically set forth herein.

	 	 	 	 	 	 	 
	SOMAXON PHARMACEUTICALS, INC.	 	PUBLICIS TOUCHPOINT SOLUTIONS, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Tran Nguyen
	 	By:
	 	/s/ Al Pavucek, Jr.
	 

	 	 
	 	 	 	 
	Name:

	 	Tran Nguyen
	 	Name:
	 	Al Pavucek, Jr.
	 

	 	 
	 	 	 	 
	Title:

	 	CFO
	 	Title:
	 	CFO
	 

	 	 
	 	 	 	 

 

 

 

Schedule A

***

 

 

 

 

 

	 	 	 
	***	 	Certain information on this page has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.Exhibit 10.01

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) dated as of September 1, 2011, is made by and
between Vanguard Health Systems, Inc., a Delaware corporation (the “Company”), and James H.
Spalding (the “Executive”).

WHEREAS, the Company desires to secure for itself or its subsidiary the services of the
Executive as its Executive Vice President, General Counsel and Secretary 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;

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; and

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained,
the Company and the Executive hereby agree as follows:

1. Employment. The Company or its subsidiary hereby employs the Executive, and the
Executive hereby accepts employment with the Company or its subsidiary, upon the terms and subject
to the conditions set forth herein.

2. Term. This Agreement is for the five-year period (the “Term”) commencing on the
date first written above (the “Effective Date”) and terminating on the fifth 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 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.

3. Position. During the Term, the Executive shall serve as Executive Vice President,
General Counsel and Secretary 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 $475,000 per year,
payable semi-monthly. Commencing on September 1, 2012, the Board shall review such base salary at
least annually and make such adjustments from time to time as it may deem advisable, but the base
salary shall not at any time be reduced from the base salary in effect from time to time.

(b) Annual Bonus. The Board (or if there is a compensation committee of the Board, the
compensation committee) shall provide the Executive with an annual bonus plan providing the
Executive with an opportunity to earn annual bonus compensation and shall cause the Company to pay
to him any earned annual bonus in addition to his base salary.

7. Vacation, Holidays and Sick Leave. During the Term, the Executive shall be entitled
to paid vacation, paid holidays and sick leave in accordance with the Company’s standard policies
for its senior executive officers.

8. Business Expenses. The Executive will be reimbursed for all ordinary and necessary
business expenses incurred by him in connection with his employment upon timely submission by the
Executive of receipts and other documentation as required by the Internal Revenue Code and in
conformance with the Company’s normal procedures.

9. Pension and Welfare Benefits. During the Term, the Executive shall be eligible to
participate fully in all health benefits, insurance programs, pension and retirement plans and
other employee benefit and compensation arrangements available to senior officers of the Company
generally.

10. Termination of Employment.

(a) General. The Executive’s employment hereunder may be terminated without any breach
of this Agreement only under the following circumstances.

(b) Death or Disability.

(i) The Executive’s employment hereunder shall automatically terminate upon the death
of the Executive.

(ii) If, as a result of the Executive’s incapacity due to physical or mental illness,
the Executive shall have been absent from his duties with the Company for any six (6) months
(whether or not consecutive) during any twelve (12) month period, the Company may terminate
the Executive’s employment hereunder for any such incapacity (a “Disability”).

 

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(c) Cause. The Company may terminate the Executive’s employment. hereunder for Cause.
For purposes of this Agreement, “Cause” shall mean (i) the willful failure or refusal by the
Executive to perform his duties hereunder (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness), which has not ceased within ten (10)
days after a written demand for substantial performance is delivered to the Executive by the
Company, which demand identifies the manner in which the Company believes that the Executive has
not performed such duties, (ii) the willful engaging by the Executive in misconduct which is
materially injurious to the Company, monetarily or otherwise (including, but not limited to,
conduct described in Section 14) or (iii) the conviction of the Executive of, the entering of a
plea of nolo contendere by the Executive with respect to, a felony. Notwithstanding the foregoing,
the Executive’s employment hereunder shall not be deemed to have been terminated for Cause unless
and until there shall have been delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the entire membership of the Board at a meeting
of the Board (after written notice to the Executive and a reasonable opportunity for the Executive,
together with the Executive’s counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive should be terminated for cause.

(d) Termination by the Executive. The Executive shall be entitled to terminate his
employment hereunder (A) for Good Reason or (B) for any other reason. To be a valid termination of
employment by the Executive under this Agreement for Good Reason, the date of the actual
termination of the Executive’s employment due to any of the Good Reason acts or conditions set
forth in Sections 10(d)(i) through 10(d)(vi) below must occur within a period of two years
following the initial existence of such Good Reason act or condition which arose without the
consent of the Executive. For purposes of this Agreement, “Good Reason” shall mean, (i) without the
Executive’s express written consent, any failure by the Company to comply with any material
provision of this Agreement, which failure has not been cured within ten (10) days after notice of
such noncompliance has been given by the Executive to the Company or (ii) the occurrence (without
the Executive’s express written consent), following a Change in Control during the term of this
Agreement, of any one of the following acts by the Company, or failures by the Company to act,
unless, in the case of any act or failure to act described below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of Termination given in respect
thereof:

(i) a material diminution in the Executive’s base compensation, except for
across-the-board salary reductions similarly affecting all senior executives of the
Company and all senior executives of any Person (as defined in Section 10(h)(i)
below) in control of the Company provided in no event shall any such
reduction reduce the Executive’s base salary below $475,000;

(ii) a material diminution in the Executive’s authority, duties or
responsibilities;

(iii) a material diminution in the authority, duties or responsibilities of the
supervisor to whom the Executive is required to report, including a requirement that
the Executive’s supervisor report to a corporate officer or employee instead of
reporting directly to the Board of Directors of the Company;

 

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(iv) a material diminution in the budget over which the Executive retains
authority;

(v) a material change in the geographic location at which the Executive must
perform services under this Agreement, except for required travel on the Company’s
business to an extent substantially consistent with his business travel obligations
prior to the Change in Control; or

(vi) any other action or inaction that constitutes a material breach by the
Company of the terms of this Agreement.

The Executive’s continued employment shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting Good Reason hereunder.

(e) Voluntary Resignation. Should the Executive wish to resign from his position with
the Company or terminate his employment for other than Good Reason during the Term, the Executive
shall give sixty (60) days written notice to the Company, setting forth the reasons and specifying
the date as of which his resignation is to become effective.

(f) Notice of Termination. Any purported termination of the Executive’s employment by
the Company or by the Executive shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 18. “Notice of Termination” shall mean a notice that shall
indicate the specific termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated. In respect of a Notice of Termination sent
by the Executive as a result of any of the Good Reason acts or conditions set forth in Sections
10(d)(i) through 10(d)(vi) above, it must be sent by the Executive to the Company within 90 days
following the initial existence of such Good Reason act or condition which arose without the
consent of the Executive and if not sent within such 90 days, it shall not be a valid Notice of
Termination.

(g) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s
employment is terminated because of death, the date of the Executive’s death, (ii) if the
Executive’s employment is terminated for Disability, the date Notice of Termination is given, or
(iii) if the Executive’s employment is terminated pursuant to Subsection (c), (d) or (e) hereof or
for any other reason (other than death or Disability), the date specified in the Notice of
Termination (which, in the case of a termination for Good Reason shall not be less than thirty (30)
nor more than sixty (60) days from the date such Notice of Termination is given, and in the case of
a termination for any other reason shall not be less than thirty (30) days (sixty (60) days in the
case of a termination under Subsection (e) hereof) from the date such Notice of Termination is
given); provided, that in the case of a termination for Cause, nothing herein shall prevent the
Company from immediately terminating the Executive’s employment, so long as the Company continues
to meet all of its responsibilities hereunder with respect to payment of salary, benefits and other
obligations during the minimum notice period described in this Subsection (g) (and for purposes of
measuring such obligations, the Date of Termination shall be deemed to be the end of such minimum
notice period).

 

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(h) Change in Control. For purposes of this Agreement, a Change in Control of the
Company shall mean the occurrence of any of the following events:

(i) any person or group, other than the Permitted Holders, is or becomes the
“beneficial owner” (as defined in rules 13d-3 and 13d-5 under the Act) directly or
indirectly of more than 50% of the total voting power of the voting stock of the
Company, including by way of merger, consolidation or otherwise;

(ii) a reorganization, recapitalization, merger or consolidation (a
“Corporate Transaction”) involving the Company, unless securities
representing 50% or more of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the Company or
the corporation resulting from such Corporate Transaction (or the parent of such
corporation) are held subsequent to such transaction by the person or persons who
were the “beneficial owners” of the outstanding voting securities entitled to vote
generally in the election of directors of the Company immediately prior to such
Corporate Transaction, in substantially the same proportions as their ownership
immediately prior to such Corporate Transaction;

(iii) the sale or disposition, in one or a series of related transactions, of
all or substantially all, of the assets of the Company to any “person” or “group”
(as such terms are defined in Sections 13(d)(3) or 14(d)(2) of the Act) other than
the Permitted Holders; or

(iv) during any period of 12 months, individuals who at the beginning of such
period constituted the Company’s Board of Directors (the “Board), together with any
new directors whose election by the Board or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the directors of
the Company (then still in office) who were either directors at the beginning of
such period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board, then in office;

provided, however, that such transaction also constitutes a change in control event
within the meaning of Section 409A.

The term Permitted Holders as used above shall mean any of (i) Blackstone or its
affiliates, and (ii) an employee benefit plan (or trust forming a part thereof)
maintained by (A) the Company or (B) any corporation or other person or entity of
which a majority of its voting power of its voting equity securities or equity
interest is owned, directly or indirectly, by the Company. The term Blackstone as
used above shall mean each of Blackstone FCH Capital Partners IV L.P., Blackstone
Health Commitment Partners L.P., Blackstone Capital Partners IV-A L.P., Blackstone
Family Investment Partnership IV-A L.P., Blackstone Health Commitment Partners-A
L.P., Blackstone FCH Capital Partners IV-B L.P., and Blackstone FCH Capital Partners
IV-A L.P., and their respective Affiliates.”

 

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(i) Resignation as Member of Board. If the Executive’s employment by the Company is
terminated for any reason, the Executive hereby agrees that he shall simultaneously submit his
resignation as a member of the Board in writing on or before the Date of Termination if the
Executive is a member of the Board at such time. If the Executive fails to submit such required
resignation in writing, the provisions of this Subsection 10(i) may be deemed by the Company to
constitute the Executive’s written resignation as a member of the Board effective as of the Date of
Termination.

11. Compensation During Disability, Death or Upon Termination.

(a) During any period that the Executive fails to perform his duties hereunder as a result of
incapacity due to physical or mental illness (“Disability Period”), the Executive shall continue to
receive his full salary at the rate then in effect for such period until his employment is
terminated pursuant to Section 10(b)(ii) hereof, provided that payments so made to the Executive
during the Disability Period shall be reduced by the sum of the amounts, if any, payable to the
Executive with respect to such period under disability benefit plans of the Company or under the
Social Security disability insurance program, and which amounts were not previously applied to
reduce any such payment.

(b) If the Executive’s employment is terminated by his death or Disability, the Company shall
pay (i) any amounts due to the Executive under Section 6 through the date of such termination and
(ii) all such amounts that would have become due to the Executive under Section 6 had the
Executive’s employment hereunder continued until the last day of the calendar year in which such
termination of employment occurred, in each case in accordance with Section 13(b), if applicable.

(c) If the Executive’s employment shall be terminated by the Company for Cause or by the
Executive for other than Good Reason, the Company shall pay the Executive his full salary through
the Date of Termination at the rate in effect at the time Notice of Termination is given, and the
Company shall have no further obligations to the Executive under this Agreement.

(d) If (A) following a Change in Control the Company shall terminate the Executive’s
employment in breach of this Agreement, or (B) following a Change in Control the Executive shall
terminate his employment for Good Reason, then

(i) the Company shall pay the Executive (x) his full salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given, (y) a
pro rata portion of his current year annual bonus pursuant to Section 6(b) and (z)
all other unpaid amounts, if any, to which the Executive is entitled as of the Date
of Termination under any compensation plan or program of the Company, at the time
such payments are due;

 

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(ii) in lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination, the Company shall pay as liquidated damages
to the Executive an aggregate amount equal to the product of (A) the
sum of (1) the Executive’s annual salary rate in effect as of the Date of
Termination and (2) the average of the annual bonuses actually paid to the Executive
by the Company with respect to the two fiscal years which immediately precede the
year of the Term in which the Date of Termination occurs; provided if there was a
bonus or bonuses paid to the Executive with respect only to one fiscal year which
immediately precedes the year of the Term in which the Date of Termination occurs,
then such single year’s bonus or bonuses shall be utilized in the calculation
pursuant to this clause (2) and (B) the number three (3);

(iii) the Company shall (x) continue coverage for the Executive under the
Company’s life insurance, medical, health, disability and similar welfare benefit
plans (or, if continued coverage is barred under such plans, the Company shall
provide to the Executive substantially similar benefits) for a period equal to the
greater of (A) the remainder of the Term and (B) 18 months, and (y) provide the
benefits which the Executive would have been entitled to receive pursuant to any
supplemental retirement plan maintained by the Company had his employment continued
at the rate of compensation specified herein for a period equal to the greater of
(A) the remainder of the Term and (B) 18 months. Benefits otherwise receivable by
the Executive pursuant to clause (x) of this Subsection 11(d)(iii) shall be reduced
to the extent comparable benefits are actually received by the Executive from a
subsequent employer during the period during which the Company is required to
provide such benefits, and the Executive shall report any such benefits actually
received by him to the Company; and

(iv) the payments provided for in this Section 11(d) (other than Section
11(d)(iii)) shall be made not later than the fifth day following the Date of
Termination, provided, however, that if the amounts of such payments, and the
limitation on such payments set forth in Section 15 hereof, cannot be finally
determined on or before such day, the Company shall pay to the Executive on such day
an estimate, as determined in good faith by the Company, of the minimum amount of
such payments to which the Executive is clearly entitled and shall pay the remainder
of such payments (together with interest at the rate provided in section
1274(b)(2)(B) of the Code (as defined in Section 15)) as soon as the amount thereof
can be determined but in no event later than the thirtieth (30th) day after the Date
of Termination. In the event that the amount of the estimated payments exceeds the
amount determined by the Company within six (6) months after payment to have been
due, such excess shall be paid by the Executive to the Company, no later than the
thirtieth (30th) business day after demand by the Company. At the time that payments
are made under this Section 11(d), the Company shall provide the Executive with a
written statement setting forth the manner in which such payments were calculated
and the basis for such calculations including, without limitation, any opinions or
other advice the Company has received from outside counsel, auditors or consultants
(and any such opinions or advice which are in writing shall be attached to the
statement).

 

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(e) If (A) prior to any Change in Control the Company shall terminate the Executive’s
employment in breach of this Agreement or (B) prior to any Change in Control the Executive shall
terminate his employment for Good Reason, then

(i) the Company shall pay the Executive (x) his full salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given, (y) a
pro rata portion of his current year annual bonus pursuant to Section 6(b) and (z)
any all other unpaid amounts, if any, to which the Executive is entitled as of the
Date of Termination under any compensation plan or program of the Company, at the
time such payments are due; for greater certainty, the pro-rata portion of the
Executive’s current year annual bonus will be determined following the end of the
applicable measurement period and will be paid at the same as annual bonuses are
otherwise paid to the Company’s senior executives.

(ii) in lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination, the Company shall pay as liquidated damages
to the Executive an aggregate amount equal to the product of (A) the sum of (1) the
Executive’s annual salary rate in effect as of the Date of Termination and (2) the
average of the annual bonuses actually paid to the Executive by the Company with
respect to the two fiscal years which immediately precede the year of the Term in
which the Date of Termination occurs; provided if there was a bonus or bonuses paid
to the Executive with respect only to one fiscal year which immediately precedes the
year of the Term in which the Date of Termination occurs, then such single year’s
bonus or bonuses shall be utilized in the calculation pursuant to this clause (2)
and (B) the number two (2); such amount to be paid in substantially equal monthly
installments during the period commencing with the month immediately following the
month in which the Date of Termination occurs and ending with the month
corresponding to the end of the Term hereunder; and

(iii) the Company shall, at its cost (provided that Executive shall continue to
be responsible to pay the standard employee portion of such cost), (x) continue
coverage for the Executive under the Company’s life insurance, medical, health,
disability and similar welfare benefit plans (or, if continued coverage is barred
under such plans, the Company shall provide to the Executive substantially similar
benefits) for a period equal to the greater of (A) the remainder of the Term and (B)
18 months, and (y) provide the benefits which the Executive would have been entitled
to receive pursuant to any supplemental retirement plan maintained by the Company
had his employment continued at the rate of compensation specified herein for a
period equal to the greater of (A) the remainder of the Term and (B) 18 months.
Benefits otherwise receivable by the Executive pursuant to clause (x) of this
Subsection 11(e)(iii) shall be reduced to the extent comparable benefits are
actually received by the Executive from a subsequent employer during the period
during which the Company is required to provide such benefits, and the Executive
shall report any such benefits actually received by him to the Company.

 

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(f) The Executive shall not be required to mitigate the amount of any payment provided for in
this Section 11 by seeking other employment or otherwise, and, except as provided in Sections 11(d)
and 11(e) hereof, the amount of any payment or benefit provided for in this Section 11 shall (i)
not be reduced by any compensation earned by the Executive as the result of employment by another
employer or by retirement benefits and (ii) be the sole amount due to the Executive from the
Company upon such termination of employment, the Executive hereby waiving any claim for other
compensation or related damages (whether consequential, punitive or other) as a result of such
termination.

(g) Notwithstanding anything to the contrary set forth in this Agreement, if the Executive is
a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the final regulations and any guidance promulgated thereunder (“Section
409A”) at the time of the Executive’s termination, then for purposes solely of the amounts of
liquidated damages payable to the Executive in installments pursuant to Section 11(e)(ii) above,
only the portion of the Deferred Compensation Separation Benefits (as defined below) which do not
exceed the Section 409A Limit (as defined below) may be made within the first six (6) months
following the Executive’s termination of employment in accordance with the payment schedule
applicable to each such payment or benefit. The term “Deferred Compensation Separation Benefits” as
used herein shall mean the liquidated damages payable to Executive pursuant to Section 11(e)(ii)
above, together with any other post-termination payments or separation benefits which may be
considered deferred compensation under Section 409A. The term “Section 409A Limit” as used herein
shall mean the lesser of two (2) times: (i) Executive’s annualized compensation based upon the
annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s
taxable year of Executive’s termination of employment as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or
(ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section
401(a)(17) of the Code for the year in which the Executive’s employment is terminated. Any portion
of the Deferred Compensation Separation Benefits in excess of the Section 409A Limit shall accrue
and, to the extent such portion of the Deferred Compensation Separation Benefits would otherwise
have been payable within the first six (6) months following the Executive’s termination of
employment pursuant to Section 11(e)(ii) above, will become payable to the Executive on the first
payroll date that occurs on or after the date six (6) months and one (1) day following the date of
the Executive’s termination of employment. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment schedule applicable to each
payment or benefit. The parties hereto agree that this Section 11(g) is intended to comply with the
requirements of Section 409A so that none of the liquidated damages payments and other separation
compensation and benefits to be provided hereunder to Executive will be subject to the additional
tax imposed upon Executive under Section 409A, and any ambiguities herein will be interpreted to so
comply. The Company and the Executive agree to work together in good faith to consider amendments
to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable
to avoid imposition of any additional tax or income recognition prior to actual payment to the
Executive under Section 409A. Notwithstanding the foregoing, for purposes of Section 409A, the
right to a series of installment payments under this Agreement shall be treated as a right to a
series of separate payments and, in addition, any payment that is otherwise exempt from the
application of Section 409A shall not be included in the calculation of Deferred Compensation Separation Benefits.

 

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12. Representations.

(a) The Company represents and warrants that this Agreement has been authorized by all
necessary corporate action of the Company and is a valid and binding agreement of the Company
enforceable against it in accordance with its terms.

(b) The Executive represents and warrants that he is not a party to any agreement or
instrument which would prevent him from entering into or performing his duties in any way under
this Agreement.

13. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.

(b) This Agreement is a personal contract and the rights and interests of the Executive
hereunder may not be sold, transferred, assigned, pledged, encumbered, or hypothecated by him,
except as otherwise expressly permitted by the provisions of this Agreement. This Agreement shall
inure to the benefit of and be enforceable by the Executive and his personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
If the Executive should die while any amount would still be payable to him hereunder had the
Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there
is no such designee, to his estate.

14. Confidentiality and Non-Competition Covenants.

(a) The Executive covenants and agrees that he will not at any time during and after the end
of the Term, directly or indirectly, use for his own account, or disclose to any person, firm or
corporation, other than authorized officers, directors and employees of the Company or its
subsidiaries, Confidential Information (as hereinafter defined) of the Company. As used herein,
“Confidential Information” of the Company means information of any kind, nature or description
which is disclosed to or otherwise known to the Executive as a direct or indirect consequence of
his association with the Company, which information is not generally known to the public or in the
businesses in which the Company is engaged or which information relates to specific investment
opportunities within the scope of the Company’s business which were considered by the Executive or
the Company during the term of this Agreement. During the Term and for a period of two years
following the termination of the Executive’s employment, the Executive shall not induce any
employee of the Company or its subsidiaries to terminate his or her employment by the Company or its subsidiaries in order to obtain employment by any person, firm
or corporation affiliated with the Executive.

 

10

 

(b) The Executive covenants and agrees that while the Executive remains employed by the
Company or its subsidiary and for a period of two (2) years following the termination of the
Executive’s employment, the Executive shall not, directly or indirectly, own any interest in,
operate, join, control, or participate as a partner, director, principal, officer, or agent of,
enter into the employment of, act as a consultant to, or perform any services for any entity which
is a hospital system or is in the hospital or hospital management business. Notwithstanding
anything herein to the contrary, (1) the foregoing provisions of this Section 14(b) shall not
prevent the Executive from (x) acquiring securities representing not more than 5% of the
outstanding voting securities of any publicly held corporation or (y) working as an accountant or
an attorney for a law or accounting firm and (2) the foregoing provisions of this Section 14(b)
shall not be applicable to a termination of the Executive’s employment (i) by the Company or (ii)
by the Executive for Good Reason.

15. Prohibition on Parachute Payments.

(a) Notwithstanding any other provisions of this Agreement, in the event that any payment or
benefit received or to be received by the Executive in connection with a Change in Control of the
Company or the termination of the Executive’s employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the Company or such Person) (all such
payments and benefits, including, without limitation, base salary and bonus payments, being
hereinafter called “Total Payments”) would not be deductible (in whole or in part), by the Company,
an affiliate or any Person making such payment or providing such benefit as a result of section
280G of the Code, then, to the extent necessary to make such portion of the Total Payments
deductible (and after taking into account any reduction in the Total Payments provided by reason of
section 280G of the Code in such other plan, arrangement or agreement), (A) the cash portion of the
Total Payments shall first be reduced (if necessary, to zero), and (B) all other non- cash payments
by the Company to the Executive shall next be reduced (if necessary, to zero). For purposes of this
limitation (i) no portion of the Total Payments the receipt or enjoyment of which the Executive
shall have effectively waived in writing prior to the Date of Termination shall be taken into
account, (ii) no portion of the Total Payments shall be taken into account which in the opinion of
tax counsel selected by the Company’s independent auditors and reasonably acceptable to the
Executive does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of the
Code, including by reason of section 280G(b)(4)(A) of the Code, (iii) such payments shall be
reduced only to the extent necessary so that the Total Payments (other than those referred to in
clauses (i) or (ii)) in their entirety constitute reasonable compensation for services actually
rendered within the meaning of section 280G(b)(4)(B) of the Code or are otherwise not subject to
disallowance as deductions, in the opinion of the tax counsel referred to in clause (ii); and (iv)
the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments
shall be determined by the Company’s independent auditors in accordance with the principles of
sections 280G(d)(3) and (4) of the Code.

 

11

 

(b) If it is established pursuant to a final determination of a court or an Internal Revenue
Service proceeding that, notwithstanding the good faith of the Executive and the Company in
applying the terms of this Section 15, the aggregate “parachute payments” paid to or for the
Executive’s benefit are in an amount that would result in any portion of such “parachute payments”
not being deductible by reason of section 280G of the Code, then the Executive shall have an
obligation to pay the Company upon demand an amount equal to the excess of the aggregate “parachute
payments” paid to or for the Executive’s benefit over the aggregate “parachute payments” that could
have been paid to or for the Executive’s benefit without any portion of such “parachute payments”
not being deductible by reason of section 280G of the Code.

16. Entire Agreement. This Agreement contains all the understandings between the
parties hereto pertaining to the matters referred to herein, and on the Effective Date shall
supersede all undertakings and agreements, whether oral or in writing, previously entered into by
them with respect thereto. The Executive represents that, in executing this Agreement, he does not
rely and has not relied upon any representation or statement not set forth herein made by the
Company with regard to the subject matter, bases or effect of this Agreement or otherwise.

17. Amendment or Modification, Waiver. No provision of this Agreement may be amended
or waived unless such amendment or waiver is agreed to in writing, signed by the Executive and by a
duly authorized officer of the Company. No waiver by any party hereto of any breach by another
party hereto of any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at the same time, any
prior time or any subsequent time.

18. Notices. Any notice to be given hereunder shall be in writing and shall be deemed
given when delivered personally, sent by courier or telecopy or registered or certified mail,
postage prepaid, return receipt requested, addressed to the party concerned at the address
indicated below or to such other address as such party may subsequently give notice of hereunder in
writing:

	 	 	 	 	 
	 

	 	To Executive at:
	 	James H. Spalding
	 

	 	 	 	c/o Vanguard Health Systems, Inc.
	 

	 	 	 	20 Burton Hills Blvd.
	 

	 	 	 	Suite 100
	 

	 	 	 	Nashville, TN 37215
	 
	 	 	 	 
	 

	 	To the Company at:
	 	Vanguard Health Systems, Inc.
	 

	 	 	 	20 Burton Hills Blvd.
	 

	 	 	 	Suite 100
	 

	 	 	 	Nashville, TN 37215

Attention: General Counsel
	 

	 	 	 	Telecopy: (615) 665-6197

 

12

 

	 	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	Blackstone Management Associates IV LLC
	 

	 	 	 	345 Park Avenue
	 

	 	 	 	New York, NY 10154
	 

	 	 	 	Attention: Neil Simpkins
	 
	 	 	 	 
	 

	 	 	 	and a copy to:
	 
	 	 	 	 
	 

	 	 	 	Simpson Thacher & Bartlett LLP
	 

	 	 	 	425 Lexington Avenue
	 

	 	 	 	New York, NY 10017-3954
	 

	 	 	 	Attention: Brian Robbins

Any notice delivered personally or by courier under this Section 18 shall be deemed given on
the date delivered and any notice sent by telecopy or registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date telecopied or mailed.

19. Severability. If any provision of this Agreement or the application of any such
provision to any party or circumstances shall be determined by any court of competent jurisdiction
to be invalid and unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it is so determined to
be invalid and unenforceable, shall not be affected thereby, and each provision hereof shall be
validated and shall be enforced to the fullest extent permitted by law.

20. Survivorship. The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the intended preservation of
such rights and obligations.

21. Governing Law; Attorney’s Fees.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State
of Tennessee, without regard to its conflicts of laws principles.

(b) The prevailing party in any dispute arising out of this Agreement shall be entitled to be
paid its reasonable attorney’s fees incurred in connection with such dispute from the other party
to such dispute.

22. Headings. All descriptive headings of sections and paragraphs in this Agreement
are intended solely for convenience, and no provision of this Agreement is to be construed by
reference to the heading of any section or paragraph.

23. Withholdings. All payments to the Executive under this Agreement shall be reduced
by all applicable withholding required by federal, state or local tax laws.

 

13

 

24. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument.

25. Termination of Severance Protection Agreement. Concurrently with the execution of
this Agreement, the Company and the Execute hereby terminate the Amended and Restated Severance
Protection Agreement, dated as of September 23, 2004, between the Company and the Executive.

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

	 	 	 	 	 
	 	VANGUARD HEALTH SYSTEMS, INC.

 	 
	 	BY: 	      /s/ Phillip W. Roe
 	 
	 	 	Phillip W. Roe 	 
	 	 	Executive Vice President 	 
	 
	 	THE EXECUTIVE

 	 
	 	/s/ James H. Spalding
 	 
	 	James H. Spalding 	 
	 	 	 
	 

 

14

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