Exhibit 10.18
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
This AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “ Employment Agreement
”) is dated as of December 31, 2008 and is between
UNIVERSAL HOSPITAL SERVICES, INC., a Delaware corporation (the
“ Company ”), and Rex Clevenger (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.
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, and (ii) with
respect to any equity owned by Executive or options or other awards
granted to the Executive.
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 Executive Vice President and
Chief Financial Officer of the Company, subject to the direction
and control of the Chief Executive Officer and the Board of
Directors (the “ Board ”) of UHS
Holdco, Inc., the parent of the Company (“ Parent
”), and, in connection therewith, to reside in the
Minneapolis, Minnesota area, to oversee and direct the development
and execution of the financial operations of the Company and to
perform such other duties as the Chief Executive Officer and Board
may from time to time reasonably direct. 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, and not to engage in any other
business activities of a material nature, as an employee, director,
consultant or in any similar capacity, whether or not the Executive
receives any compensation therefor, without the prior written
consent of the Board, provided , that the Executive shall be
entitled to engage in such other business activities as do not
unreasonably conflict with the Executive’s duties and
responsibilities to the Company pursuant to this Employment
Agreement upon notice to and consent by the Company, which consent
will not be unreasonably withheld. The Executive will not be
given duties inconsistent with his executive position.
2.
Term of Employment Agreement . The term of the
Executive’s employment hereunder began as of May 31,
2007, and will end as of the close of business on the third
anniversary of the date hereof 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
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 a rate of $313,800, 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, the Executive will be entitled to
receive a target bonus of 75% of base salary under the
Company’s Executive Bonus Plan based on the Company’s
achievement of the annual EBITDA target established by the Board
(or any compensation committee thereof) for each calendar year
(each an “ EBITDA Target ”), paid in the
calendar year following the calendar year in which it is earned, on
the same basis as other executives of the Company, as such plan has
been described to the Executive and may be amended from time to
time by the Board (or any compensation committee thereof).
The EBITDA 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.
(c)
Options
. 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 that has
been approved by the Board.
(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. 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 on the 61 st day following the Date
of Termination. Additionally, upon any termination hereunder,
the Executive’s estate shall be
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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, subject to
Section 16 hereof, be paid to the Executive or his legal
representative in a single lump sum payment on the 61
st
day
following the Date of Termination. Additionally, the
Executive or his legal representative shall be entitled to receive
the Accrued Obligations at the time specified therefor in
Section 4(a).
(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 therfor 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 shall pay, subject to
Section 4(j), to the Executive the sum of (i) 175% 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 be paid to the Executive or his legal
representative in a single lump sum payment on the 61
st
day
following the Date of Termination. Additionally, the Company
will pay to the Executive 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
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would be payable based on
the actual results of the Company, as calculated in accordance with
Section 3(b) above (the “ Pro-Rata Bonus
”). Additionally, the Executive shall be entitled to
receive the Accrued Obligations at the time specified therefor in
Section 4(a).
(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
therefore 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
shall pay, subject to Section 4(j), to the Executive the sum
of (i) 175% 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 16 hereof, be paid to the Executive or his legal
representative in a single lump sum payment on the 61
st
day
following the Date of Termination. The Executive shall be
entitled to receive the Accrued Obligations and the Pro Rata Bonus,
if any, at time specified therefor in Sections 4(a) and 4(d),
respectively.
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 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
4
or senior
management of the Company in each case, without the
Executive’s written consent;
(iv)
any diminution in title, or any material diminution in
responsibilities, duties or authorities, without the
Executive’s written consent; or
(v)
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, 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) 262.5% 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 16 hereof, be paid to the Executive or his
legal representative in a single lump sum payment on the 61
st
day
following the Date of Termination except that in the event the
Executive’s employment terminates within six (6) months
prior to a 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). 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 4(a) and 4(d), respectively.
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 a 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.
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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 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&rsquo
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