Employment Agreement

Amendment to Employment Agreement

Amendment 2 to Employment Agreement

Amendment 3 to Employment Agreement

Amendment 4 to Employment Agreement

Amendment 5 to Employment Agreement

Amendment 6 to Employment Agreement

 

<DOCUMENT>

<TYPE>EX-10.11

<SEQUENCE>96

<FILENAME>y67817exv10w11.txt

<DESCRIPTION>AMENDED AND RESTATED EMPLOYMENT AGREEMENT

<TEXT>

<PAGE>

 

                                                                   EXHIBIT 10.11

 

                              AMENDED AND RESTATED

                              EMPLOYMENT AGREEMENT

 

      THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") dated as

of September 23, 2004, is made by and between Vanguard Health Systems, Inc., a

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

"Executive").

 

      WHEREAS, the Company and the Executive executed an employment agreement

dated as of June 1, 1998 (the "Original Employment Agreement"), which was first

amended as of May 31, 2001, and was subsequently amended as of January 1, 2004

(with such amendments, the "Existing Employment Agreement");

 

      WHEREAS, the Company has entered into an agreement and plan of merger by

and among VHS Holdings LLC, Health Systems Acquisition Corp. and the Company,

dated as of July 23, 2004 (the "Merger Agreement") whereby the Health Systems

Corp. will merge into the Company with the Company as the surviving corporation;

 

      WHEREAS, the Executive currently serves as Chief Executive Officer and

Chairman of the Board of the Company;

 

      WHEREAS, the Company desires to secure for itself or its subsidiary the

continuing services of the Executive from and after the date hereof and the

Executive desires to render such services, in each case pursuant to the terms

and conditions hereof;

 

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

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

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

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

into this Agreement with the Executive;

 

      WHEREAS, the Company and Executive desire to amend and restate the

Existing Employment Agreement as set forth herein; 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

 

<PAGE>

 

                                                                               2

 

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 the Chief

Executive Officer and Chairman of the Board 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 $990,000

per year, payable semi-monthly. Commencing on January 1, 2005, 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.

 

<PAGE>

 

                                                                               3

 

      (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").

 

      (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, or 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. 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) any change in the Executive's title, authorities,

      responsibilities (including reporting responsibilities) which, in the

      Executive's reasonable judgment, represents an adverse change from his

      status, title, position or responsibilities (including reporting

      responsibilities) which were in effect immediately prior to the Change in

      Control or from his status, title, position or responsibilities (including

      reporting responsibilities) which were in effect following a Change in

      Control pursuant to the Executive's consent to accept any such change; the

      assignment to him of any duties or work responsibilities

 

<PAGE>

 

                                                                               4

 

      which, in his reasonable judgment, are inconsistent with such status,

      title, position or work responsibilities; or any removal of the Executive

      from, or failure to reappoint or reelect him to any of such positions,

      except if any such changes are because of Disability, retirement, death or

      Cause;

 

            (ii) a reduction by the Company in the Executive's annual base

      salary as in effect on the date hereof or as the same may be increased

      from time to time 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 $990,000;

 

            (iii) the relocation of the Executive's office at which he is to

      perform his duties, to a location more than thirty (30) miles from the

      location at which the Executive performed his duties prior to the Change

      in Control, 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;

 

            (iv) if the Executive had been based at the Company's principal

      executive offices immediately prior to the Change in Control, the

      relocation of the Company's principal executive offices to a location more

      than 30 miles from the location of such offices immediately prior to the

      Change in Control;

 

            (v) the failure by the Company, without the Executive's consent, to

      pay to the Executive any portion of the Executive's current compensation,

      or to pay to the Executive any portion of an installment of deferred

      compensation under any deferred compensation program of the Company,

      within seven (7) days of the date such compensation is due;

 

            (vi) the failure by the Company to continue in effect any

      stock-based and/or cash annual or long-term incentive compensation plan in

      which the Executive participates immediately prior to the Change in

      Control, unless the Executive participates after the Change in Control in

      other comparable plans generally available to senior executives of the

      Company and senior executives of any Person in control of the Company;

 

            (vii) the failure by the Company to continue to provide the

      Executive with benefits substantially similar in value to the Executive in

      the aggregate to those enjoyed by the Executive under any of the Company's

      pension, life insurance, medical, health and accident, or disability plans

      in which the Executive was participating immediately prior to the Change

      in Control, unless the Executive participates after the Change in Control

      in other comparable benefit plans generally available to senior executives

      of the Company and senior executives of any Person in control of the

      Company;

 

            (viii) the adverse and substantial alteration of the nature and

      quality of the office space within which the Executive performed his

      duties prior to a Change in Control as well as in the secretarial and

      administrative support provided to the Executive, provided, however, that

      a reasonable alteration of the secretarial or administrative support

      provided

<PAGE>

                                                                               5

 

      to the Executive as a result of reasonable measures implemented by the

      Company to effectuate a cost-reduction or consolidation program shall not

      constitute Good Reason hereunder; or

 

            (ix) any purported termination of the Executive's employment which

      is not effected pursuant to a Notice of Termination satisfying the

      requirements of Section 10(f) below; for purposes of this Agreement, no

      such purported termination shall be effective.

 

      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.

 

      (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 fifteen (15) 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).

 

      (h) Change in Control. For purposes of this Agreement, a Change in Control

of the Company shall have occurred if

 

            (i) any "Person" (as defined in Section 3(a)(9) of the Securities

      Exchange Act of 1934 (the "Exchange Act") as modified and used in Sections

      13(d) and 14(d) of the Exchange Act (other than (1) the Company or any of

      its subsidiaries, (2) any trustee or other fiduciary holding securities

      under an employee benefit plan of the Company or any of its subsidiaries,

      (3) an underwriter temporarily holding securities pursuant to an

 

<PAGE>

 

                                                                               6

 

      offering of such securities, (4) any entity owned, directly or indirectly,

      by the stockholders of the Company in substantially the same proportions

      as their ownership of the Company's common stock, (5) any Person that is a

      stockholder of the Company on the date hereof and any affiliates of such

      Person, or (6) Blackstone (as defined in the Company's 2004 Stock

      Incentive Plan), or any of its affiliates), is or becomes the "beneficial

      owner" (as defined in Rule 13d-3 under the Exchange Act), directly or

      indirectly, of securities of the Company representing more than 50% of the

      combined voting power of the Company's then outstanding voting securities;

 

            (ii) during any period of not more than two consecutive years, not

      including any period prior to the date of this Agreement, individuals who

      at the beginning of such period constitute the Board, and any new director

      (other than a director designated by a person who has entered into an

      agreement with the Company to effect a transaction described in clause

      (i), (iii), or (iv) of this Section 10(h)) whose election by the Board or

      nomination for election by the Company's stockholders was approved by a

      vote of at least two-thirds (2/3) of the directors then still in office

      who either were directors at the beginning of the period or whose election

      or nomination for election was previously so approved, cease for any

      reason to constitute at least a majority thereof;

 

            (iii) the stockholders of the Company approve a merger or

      consolidation of the Company with any other corporation, other than both

      (A) (1) a merger or consolidation which would result in the voting

      securities of the Company outstanding immediately prior thereto

      continuing, directly or indirectly, to represent (either by remaining

      outstanding or by being converted into voting securities of the surviving

      or parent entity) 50% or more of the combined voting power of the voting

      securities of the Company or such surviving or parent entity outstanding

      immediately after such merger or consolidation or (2) a merger or

      consolidation in which no person acquires 50% or more of the combined

      voting power of the Company's then outstanding securities; and (B)

      immediately after the consummation of such merger or consolidation

      described in clause (A) (1) or (A) (2) above (and for at least 180 days

      thereafter) neither the Company's Chief Operating Officer nor its Chief

      Financial Officer change from the people occupying such positions

      immediately prior to such merger or consolidation except as a result of

      their death or Disability and neither of such officers shall have changed

      prior to such merger or consolidation at the direction of a Person who has

      entered into an agreement with the Company the consummation of which will

      constitute a Change in Control of the Company; or

 

            (iv) the stockholders of the Company approve (A) a plan of complete

      liquidation of the Company or (B) an agreement for the sale or disposition

      by the Company of all or substantially all of the Company's assets (or any

      transaction having a similar effect).

 

      For purposes of Section 10(h)(i), 10(h)(ii) and 10(h)(iv)(B) of this

Agreement only, the "Company" shall mean any of Vanguard Health Systems, Inc.,

Vanguard Health Holding Company I, LLC, or Vanguard Health Holding Company II,

LLC; provided that, any reorganization involving solely the "Company" and its

subsidiaries shall not constitute a change in control under this agreement.

Notwithstanding any provision under Section 10(h) of this

 

<PAGE>

 

                                                                               7

 

Agreement, the transactions contemplated by the Merger Agreement shall not

constitute a Change in Control under this Agreement.

 

      (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;

 

            (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

 

<PAGE>

 

                                                                               8

 

      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).

 

      (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

 

<PAGE>

 

                                                                               9

 

            (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;

 

            (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 lesser of (x) the

      number three (3) and (y) the greater of (aa) the number of years

      (including partial years) remaining in the Term and (bb) 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.

 

      (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.

 

<PAGE>

 

                                                                              10

 

      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.

 

      (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,

 

<PAGE>

 

                                                                              11

 

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

Internal Revenue Code of 1986, as amended (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.

 

      (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

 

<PAGE>

 

                                                                              12

 

"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:           Charles N. Martin, Jr.

                                 20 Burton Hills Blvd.

                                 Suite 100

                                 Nashville, Tennessee 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

 

                                 with a copy to:

 

                                 VHS Holdings LLC

                                 c/o 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

 

 

<PAGE>

 

                                                                              13

 

                           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.

 

      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.

 

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

<PAGE>

 

                                                                              14

 

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of

the date first above written.

 

                                           VANGUARD HEALTH SYSTEMS, INC.

 

                                           By:/s/ Joseph D. Moore

                                              ----------------------------------

                                              Joseph D. Moore

                                              Executive Vice President

 

                                           THE EXECUTIVE

 

                                            /s/ Charles N. Martin, Jr.

                                           -------------------------------------

                                           Charles N. Martin, Jr.

 

</TEXT>

</DOCUMENT>

 

 

 

<DOCUMENT>

<TYPE>EX-10.36

<SEQUENCE>8

<FILENAME>y67817a1exv10w36.txt

<DESCRIPTION>AMENDMENT NO. 1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

<TEXT>

<PAGE>

 

                                                                   EXHIBIT 10.36

 

                                 AMENDMENT NO. 1

                                       TO

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

 

      This Amendment No. 1 (this "Amendment") dated as of December 1, 2004, is

made by and between Vanguard Health Systems, Inc., a Delaware corporation (the

"Company"), and Charles N. Martin, Jr. (the "Executive").

 

 

      WHEREAS, the Company and the Executive executed a certain Amended and

Restated Employment Agreement (the "EA") dated as of September 23, 2004, to

secure the services of the Executive as its Chief Executive Officer and Chairman

of the Board; and

 

      WHEREAS, the Company and the Executive wish the Executive's base salary

set forth in Section 6(a) of the EA to be increased to $1,019,700, effective as

of January 1, 2005.

 

      NOW, THEREFORE, in consideration of the premises and the mutual covenants

herein contained, the Company and the Executive hereby agree that the EA is

amended as follows:

 

      1. Defined Terms. Except for those terms defined above, the definitions of

      capitalized terms used in this Amendment are as provided in the EA.

 

      2. Amendment to Section 6(a). Section 6(a) of the EA entitled "Base

      Salary" is hereby deleted and replaced with the following new Section

      6(a):

 

            " (a). Base Salary. The Executive's base salary hereunder, from

            September 23, 2004 to December 31, 2004, shall be $990,000 per year,

            payable semi-monthly. Effective January 1, 2005, the Executive's

            base salary hereunder shall be $1,019,700 per year, payable

            semi-monthly. 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."

 

      3. Ratification. All other provisions of the EA remain unchanged and are

      hereby ratified by the Company and the Executive.

 

<PAGE>

 

                                      - 2 -

 

      IN WITNESS WHEREOF, the Company has caused this Amendment to be executed

by its duly authorized officer and the Executive has executed this Amendment,

each as of the day and year first set forth above.

 

                                    VANGUARD HEALTH SYSTEMS, INC.

 

                                    By: /s/ Ronald P. Soltman

                                       ---------------------------------

                                            Ronald P. Soltman

                                            Executive Vice President

 

                                    EXECUTIVE:

 

                                    /s/ Charles N. Martin, Jr.

                                    ------------------------------------

                                    Charles N. Martin, Jr.

 

</TEXT>

</DOCUMENT>

 

 

 

EX-10.1 2 exhibit10_1.htm

EXHIBIT 10.1

AMENDMENT NO. 2
TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

            This Amendment No. 2 (this “Amendment’) dated as of December  1, 2005, is made by and between Vanguard Health Systems, Inc., a Delaware corporation (the “Company”), and Charles N. Martin, Jr. (the “Executive”).

            WHEREAS, the Company and the Executive executed a certain Amended and Restated Employment  Agreement,  dated as of September 23, 2004, as amended as of December 1, 2004 (collectively, the “EA”), to secure the services of the Executive as its Chief Executive Officer and Chairman of the Board; and

            WHEREAS, the Company and the Executive wish the Executive’s base salary set forth in Section 6(a) of the EA to be increased to $1,050,291, effective as of January 1, 2006.

            NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree that the EA is amended as follows:

            1.         Defined Terms.  Except for those terms defined above, the definitions of capitalized terms used in this Amendment are as provided in the EA.

            2.         Amendment to Section 6(a).  Section 6(a) of the EA entitled “Base Salary” is hereby  deleted and replaced with the following new Section 6(a):

                        “(a).  Base Salary.  The Executive’s base salary hereunder, from September 23, 2004 to December 31, 2004, shall be $990,000 per year, and from January 1, 2005 to December 31, 2005 shall be $1,019,700 per year, in each case payable semi-monthly. Effective January 1, 2006, the Executive’s base salary hereunder shall be $1,050,291 per year, payable semi-monthly. 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.”

            3.         Ratification.  All other provisions of the EA remain unchanged and are hereby ratified by the Company and the Executive.


- 2 -

            IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by  its duly authorized officer and the Executive has executed this Amendment, each as of the day and year first set forth above.

                                                                        Vanguard Health Systems, Inc.

                                                                        By:  /s/ Ronald P. Soltman                               
                                                                                    Ronald P. Soltman
                                                                                    Executive Vice President

                                                                        Executive:

                                                                        /s/ Charles N. Martin, Jr.                                 
                                                                        Charles N. Martin, Jr.

 

 

 

 

EX-10.1 2 exhibit10_1.htm

EXHIBIT 10.1

AMENDMENT NO. 3
TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

            This Amendment No. 3 (this “Amendment’) to Amended and Restated Employment Agreement, dated as of October 1, 2007, but effective as of December 31, 2007 (the “Effective Date”), is made by and between Vanguard Health Systems, Inc., a Delaware corporation (the “Company”), and Charles N. Martin, Jr. (the “Executive”).

            WHEREAS, the Company and the Executive executed a certain Amended and Restated Employment Agreement dated as of September 23, 2004, as amended by Amendment No. 1 dated  as of December  1, 2004 and as further amended by Amendment No. 2 dated as of December 1, 2005 (collectively, the “EA”),  to secure the services of the Executive as the Company’s Chief Executive Officer and Chairman of the Board; and

            WHEREAS, the Company and the Executive wish to further amend the EA so that its provisions are in full compliance with the final regulations under Section 409A of the Internal Revenue Code of 1986, as amended, issued jointly by the United States Treasury Department and the Internal Revenue Service on April 10, 2007, including, without limitation, amending its provisions to insert the set of conditions set forth in Section 1.409A-1(n)(2)(ii) of the final regulations (such set of conditions commonly referred to as the “safe harbor good reason conditions”).

            NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree that the EA is further amended as follows, such amendments effective as of the Effective Date:

            1.         Defined Terms.  Except for those terms defined above, the definitions of capitalized terms used in this Amendment are as provided in the EA.

            2.         Amendment to First Paragraph of Section 10(d).  The first paragraph of Section 10(d) of the EA entitled “Termination by the Executive” is hereby amended by adding the following new sentence immediately after the first sentence thereof:

                        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.

1

            3.         Amendments to Subsections (i) through (ix) of Section 10(d).   The nine subsections (i) through (ix) of Section 10(d) of the EA entitled “Termination by the Executive” are hereby deleted in their entirety and replaced with the following six new subsections (i) through (vi):

                        (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 $990,000;

                        (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;

                        (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 theCompany’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.

            4.         Amendment to Section 10(f). Section 10(f) of the EA entitled “Notice of Termination” is hereby amended by adding the following new sentence at the end thereof:

                        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

2

without the consent of the Executive and if not sent within such 90 days, it shall not be a valid Notice of Termination.

            5.         Amendment to Section 10(g). Section 10(g) of the EA entitled “Date of Termination” is hereby amended by deleting the number “fifteen (15)” found on the sixth and seventh lines of Section 10(g) and by replacing such deleted number with the number “thirty (30)”.

            6.         Amendment to Section 11.  Section 11 of the EA entitled “Compensation During  Disability, Death or Upon Termination” is hereby amended by adding the following new Section 11(g) thereto:

                        (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

3

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.

            7.         Ratification.  All other provisions of the EA remain unchanged and are hereby ratified by the Company and the Executive.

            IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer and the Executive has executed this Amendment, each as of the day and year first set forth above.

                                                                        Vanguard Health Systems, Inc.

                                                                        By:       /s/ Ronald P. Soltman              
                                                                                    Ronald P. Soltman
                                                                                    Executive Vice President

                                                                        Executive:

                                                                                    /s/ Charles N. Martin, Jr.          
                                                                                    Charles N. Martin, Jr.

4

 

EX-10.61 4 exhibit10_61.htm

EXHIBIT 10.61

AMENDMENT NO. 4
TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

            This Amendment No. 4 (this “Amendment’) dated as of May 5, 2009, is made by and between Vanguard Health Systems, Inc., a Delaware corporation (the “Company”), and Charles N.  Martin, Jr. (the “Executive”).

            WHEREAS, the Company and the Executive executed a certain Amended and Restated Employment  Agreement  dated as of September 23, 2004, as further amended  (collectively, the “EA”),  to secure the services of the Executive as Chief Executive Officer and Chairman of the Board; and

            WHEREAS, the Company and the Executive wish the Executive’s base salary set forth in Section 6(a) of the EA to be increased to $1,098,079, effective as of April 1, 2009.

            NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree that the EA is amended as follows:

            1.         Defined Terms.  Except for those terms defined above, the definitions of capitalized terms used in this Amendment are as provided in the EA.

            2.         Amendment to Section 6(a).  Section 6(a) of the EA entitled “Base Salary” is hereby  deleted and replaced with the following new Section 6(a):

                        “(a)  Base Salary.  Effective April 1, 2009, the Executive’s base salary hereunder
                        shall be $1,098,079 per year, payable semi-monthly. Commencing July 1, 2010, 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.”

            3.         Ratification.  All other provisions of the EA remain unchanged and are hereby  ratified  by the Company and the Executive.

1


            IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by  its duly authorized officer and the Executive has executed this Amendment, each as of the day and year first set forth above.

                                                                        Vanguard Health Systems, Inc.

                                                                        By:/s/ Ronald P. Soltman                                 
                                                                                    Ronald P. Soltman
                                                                                    Executive Vice President

                                                                        Executive:

                                                                        /s/ Charles N. Martin, Jr.                                 
                                                                        Charles N. Martin, Jr.

2

 

 

 

 

EX-10.93 2 c21855exv10w93.htm EXHIBIT 10.93

Exhibit 10.93

AMENDMENT NO. 5

TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amendment No. 5 (this “Amendment’) dated as of May 31, 2011, is made by and between Vanguard Health Systems, Inc., a Delaware corporation (the “Company”), and Charles N. Martin, Jr. (the “Executive”).

WHEREAS, the Company and the Executive executed a certain Amended and Restated Employment Agreement dated as of September 23, 2004, as further amended (collectively, the “EA”), to secure the services of the Executive as Chief Executive Officer and Chairman of the Board; and

WHEREAS, the Company and the Executive wish the make certain technical amendments to the EA in contemplation of, among other things, the Company’s initial public offering of its common stock.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree that the EA is amended as follows:

1. Defined Terms. Except for those terms defined above and the change in the definition of “Change in Control” adopted pursuant to this Amendment, the definitions of capitalized terms used in this Amendment are as provided in the EA.

2. Amendment to Section 10(h). Section 10(h) of the EA is hereby deleted and replaced with the following new Section 10(h):

“(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, (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, and (iii) VHS Holdings LLC, a Delaware limited liability company, or any of its subsidiaries. The term Blackstone as used above shall mean each of 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.”

3. Amendment to Section 11(e)(i). Section 11(e)(i) of the EA shall be amended by adding the following phrase to the end of the paragraph as follows:

“; 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.”

4. Amendment to Section 11(g). Section 11(g) of the EA shall be amended by adding the following sentence to the end of Section 11(g):

“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.”

5. Ratification. All other provisions of the EA remain unchanged and are hereby ratified by the Company and the Executive.

 

2


 

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer and the Executive has executed this Amendment, each as of the day and year first set forth above.

 

 

 

 

 

 

 

 

 

Vanguard Health Systems, Inc.

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Ronald P. Soltman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name: Ronald P. Soltman

 

 

 

 

 

 

Title:   Executive Vice President

 

 

 

 

 

 

 

 

 

 

 

Executive:

 

 

 

 

/s/ Charles N. Martin, Jr.

 

 

 

 

 

 

 

 

 

 

 

Charles N. Martin, Jr.

 

 

 

3

 

 

 

EX-10.18 5 ex-10182012630x10k.htm EXHIBIT 10.18

EXHIBIT 10.18

 

AMENDMENT NO. 6 TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amendment No. 6 (this “Amendment’) dated as of October 1, 2011, is made by and between Vanguard Health Systems, Inc., a Delaware corporation (the “Company”), and Charles N. Martin, Jr. (the “Executive”).

 

WHEREAS, the Company and the Executive executed a certain Amended and Restated Employment Agreement dated as of September 23, 2004, as further amended (collectively, the “EA”), to secure the services of the Executive as Chief Executive Officer and Chairman of the Board; and

 

WHEREAS, the Company and the Executive wish the Executive’s base salary set forth in Section 6(a) of the EA to be increased to $1,250,000, effective as of October 1, 2011.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree that the EA is amended as follows:

 

1.    Defined Terms. Except for those terms defined above, the definitions of capitalized terms used in this Amendment are as provided in the EA.

 

2.    Amendment to Section 6(a). Section 6(a) of the EA entitled “Base Salary” is hereby deleted and replaced with the following new Section 6(a):

 

“(aBase Salary. Effective October 1, 2011, the Executive’s base salary hereunder shall be $1,250,000 per year, payable semi-monthly. Commencing July 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.”

 

3.    Ratification. All other provisions of the EA remain unchanged and are hereby ratified by the Company and the Executive.

 

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer and the Executive has executed this Amendment, each as of the day and year first set forth above.

 

 

 

VANGUARD HEALTH SYSTEMS, INC.

 

 

 

 

By:

/s/ James H. Spalding

 

 

James H. Spalding

 

 

Executive Vice President

 

 

 

 

 

EXECUTIVE:

 

 

/s/ Charles N. Martin, Jr.

 

 

Charles N. Martin, Jr.