EXHIBIT 4.2
UNIVERSAL HEALTH SERVICES, INC.
STOCK OPTION AGREEMENT
OPTION AGREEMENT made as of this _________ day of _________, 20_____
between UNIVERSAL HEALTH SERVICES, INC., a Delaware Corporation (the "Company"),
and Name of Employee, an employee of the Company or of a subsidiary of the
Company (the "Optionee"), residing at Address.
W I T N E S S E T H :
WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase shares of its Class B Common Stock par value $.01 per share (the
"Stock"), as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and of the mutual promises
hereinafter contained, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee an option
(the "Option") to purchase all or any part of an aggregate of (shares) shares of
Stock (such number being subject to adjustment as provided in Paragraph 9
hereof) on the terms and conditions hereinafter set forth.
2. Purchase Price. The purchase price of the shares of Stock covered by
the Option shall be $___________ per share, which is not less than one hundred
percent (100%) of the fair market value of a share of Stock on the date this
option was granted. Payment shall be made in the manner prescribed in Paragraph
10 hereof.
3. Term of Option. The term of the Option shall be for a period of five
(5) years from the date hereof, subject to earlier termination as provided in
Paragraphs 5, 7 and 8 hereof.
Except as provided in Paragraphs 5, 7 and 8 hereof, the Option may not
be exercised at any time unless the Optionee shall then be and shall have been,
at all times from date of grant of the Option, an employee of the Company or of
a subsidiary of the Company. The holder of the Option shall not have any of the
rights of a stockholder of the Company with respect to the shares covered by the
Option until one or more certificates for such shares shall have been issued to
him upon the due exercise of the Option.
The Option shall be exercisable by the Optionee as follows: after the
Option has been outstanding for one year (from the date of grant), the Optionee
may purchase twenty-five percent (25%) of the total shares subject to the
Option; after the Option has been outstanding for two years, the Optionee may
purchase up to fifty percent (50%) of the total shares subject to the Option;
after the Option has been outstanding for three years, the Optionee may purchase
up to seventy-five percent (75%) of the total shares subject to the Option; and
after the Option has been outstanding for four years, the Optionee may exercise
the Option as to any or all of the shares subject thereto.
4. Nontransferability. The Option shall not be transferable otherwise than
by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Optionee only by him, more particularly
(but without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided above), pledged or hypothecated in any
way, shall not be assignable by operation of law, and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or
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other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment, or similar process
upon the Option, shall be null and void and without effect.
5. Employment. The granting of the Option is in consideration of the
Optionee's continuing employment by the Company; however, nothing in this
Option shall confer upon the Optionee the right to continue in the employment of
the Company or affect the right of the Company to terminate the Optionee's
employment at any time in the Company's sole discretion, with or without cause.
In the event that the Optionee shall cease to be employed for any
reason other than death, retirement with consent of the Company or disability
(as determined by the Committee in its sole discretion), the Option shall
terminate on the date his employment terminates. If the Optionee is disabled
(as determined by the Committee in its sole discretion), the Option shall
terminate one (1) year after the date of disability. If the Optionee retires
with the consent of the Company, the Option shall terminate three (3) months
after the date of retirement.
6. Investment Representation. The Optionee shall make the following
representations and warranties upon the exercise of the Option; provided that
such representations and warranties shall not be required if, in the opinion of
counsel to the Company, the issuance of such shares of Stock (the "Shares") is
pursuant to an applicable effective registration statement under the Securities
Act of 1933 (the "Act"):
a. The Shares are being acquired by the undersigned for his personal
account for investment purposes only, not for the benefit of any
other person and not with a view to, or in connection with, any
proposed offering, distribution, resale or disposition of the
Shares, or any part thereof.
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b. He has no present intention of selling or otherwise disposing of
all or any part of the Shares, that his economic circumstances
are such that he can assume all risks of the investment in the
Shares and that he does not now anticipate any need to sell the
Shares in order to utilize the proceeds therefrom.
c. He is a sophisticated investor having full access to all
information and records pertaining to the Company, is
knowledgeable with respect to and has experience in financial
matters, has made such independent investigations into the
Company as he deems necessary, is thoroughly familiar with the
financial condition and business of the Company and is not
relying on any representations or warranties of the Company or
its representatives in connection with the acquisition of the
Shares.
d. Before any disposition is made of the Shares, or any part
thereof, by sale, gift, pledge or otherwise, the undersigned will
deliver to the Company written notice describing briefly the
manner of such proposed disposition. No such disposition shall
be made unless and until (i) the undersigned shall have furnished
to the Company an opinion of counsel in form and substance
satisfactory to the Company and its counsel to the effect that
such proposed disposition does not require registration pursuant
to the Act, and the Company shall have advised the undersigned in
writing that such opinion of counsel is satisfactory to the
Company and its counsel, or (ii) an appropriate registration
statement with respect to the Shares shall have been declared
effective by the Securities and Exchange Commission (the
"Commission").
e. He has been informed that the Shares are not registered under the
Act and that the Shares must be held by the undersigned
indefinitely unless they are subsequently registered under the
Act or unless an exemption from such registration is available.
f. He understands that, if Rule 144 under the Act ("Rule 144") is
available with regard to the Shares at any time, any sales
pursuant to Rule 144 can only be made in full compliance with all
of the provisions of Rule 144.
g. He agrees that the certificate(s) representing the Shares shall
bear a restrictive legend on the face or reverse side thereof,
which shall read substantially as follows:
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The Shares evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and
must be held indefinitely unless they are transferred or sold or
offered for sale pursuant to an effective registration statement
under the Act, or after receipt of an opinion of counsel
satisfactory to the Company that such registration is not
required.
h. He understands that the transfer agent for the common stock of
the Company has been, or will be, directed to place a stop-
transfer order against the transfer of the Shares on the records
of the Company, and the undersigned agrees that no removal of the
stop-transfer order referred to herein, and no offer, sale or
other disposition of the Shares covered hereby shall be made
unless and until the undersigned shall have complied in full with
the requirements of this instrument.
7. Death of Optionee. If the Optionee shall die while in the employ of the
Company or a subsidiary of the Company, his estate, personal representative, or
beneficiary shall have the right, subject to the provisions of Paragraph 3
hereof, to exercise the Option (to the extent that the Optionee would have been
entitled to do so at the date of his death) at any time within one (1) year from
the date of his death.
8. Termination of Option. In the event of the institution of any legal
proceedings directed to the validity of the plan pursuant to which the Option is
granted, or to any option granted under it, the Company may, in its sole
discretion, and without incurring any liability therefor to any Optionee,
terminate the Option.
9. Stock Splits, Mergers, etc. In case of any stock split, stock dividend
or similar transactions which increases or decreases the number of outstanding
shares of the Stock, appropriate adjustment shall be made by the Board of
Directors, whose determination shall be final, to the number of shares which may
be purchased under the plan and the number and option exercise price per share
of Stock which may be purchased under any outstanding options. In the
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case of a merger, sale of assets or similar transaction which results in a
replacement of the Company's Stock with stock of another corporation, the
Company will make a reasonable effort, but shall not be required, to replace any
outstanding Options with comparable options to purchase the stock of such other
corporation, or will provide for immediate maturity of all outstanding options,
with all options not being exercised within the time period specified by the
Board of Directors being terminated.
10. Method of Exercising Option. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by written notice to the
Company at its office at 367 South Gulph Road, P.O. Box 61558, King of Prussia,
Pennsylvania 19406-0958 (Attention: Corporate Secretary). Such notice shall
state the election to exercise the Option, and the number of shares in respect
of which it is being exercised. It shall be signed by the person or persons so
exercising the Option and shall be accompanied by payment of the full purchase
price of such shares in cash or by certified check or in shares of Common Stock
in accordance with Section 5 of the Amended and Restated l992 Stock Option Plan,
and the Company shall issue, in the name of the person or persons exercising the
Option, and deliver a certificate or certificates representing such shares as
soon as practicable after the notice and payment shall be received.
In the event the Option shall be exercised by any person or persons
other than the Optionee, pursuant to Paragraph 7 hereof, such notice shall be
accompanied by appropriate proof of the right of such person or persons to
exercise the Option. All shares that shall be purchased upon the exercise of
the Option as provided herein shall be fully paid and non-assessable.
11. General. The Company shall at all times during the term of the Option
reserve and keep available such number of shares of the Stock as will be
sufficient to satisfy the
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requirements of this Agreement, shall pay all original issue taxes with respect
to the issue of shares pursuant hereto and all other fees and expenses
necessarily incurred by the Company in connection therewith, and will, from time
to time, use its best efforts to comply with all laws and regulations which, in
the opinion of counsel for the Company shall be applicable thereto.
12. Notices. Each notice relating to this Option Agreement shall be in
writing and delivered in person or by first class mail, postage prepaid, to the
proper address. Each notice shall be deemed to have been given on the date it is
received. Each notice to the Company shall be addressed to it at its principal
office, 367 South Gulph Road, P.O. Box 61558, King of Prussia, Pennsylvania
19406-0958 (Attention: Corporate Secretary). Each notice to the Optionee or
other person or persons then entitled to exercise this Option shall be addressed
to the Optionee or such other person or persons at the Optionee's address set
forth in the heading of this Agreement. Anyone to whom a notice may be given
under this Agreement may designate a new address by notice to that effect.
13. Enforceability. This Agreement shall be binding upon the Optionee, his
estate, his personal representatives and beneficiaries and shall be governed by
the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
exercised by its officers thereunto duly authorized, and the Optionee has
hereunto set his hand all as of the day and year first above written.
UNIVERSAL HEALTH SERVICES, INC.
By:______________________________
Xxxxx Filton
Vice President and Controller
OPTIONEE:
_________________________________
Name
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