UNIVERSAL HOSPITAL SERVICES, INC. STOCK OPTION AGREEMENT (Nonqualified Stock Option)
Exhibit
10.13
UNIVERSAL
HOSPITAL SERVICES, INC.
(Nonqualified
Stock Option)
STOCK
OPTION AGREEMENT
(this
“Option
Agreement”)
entered
into as of ____________, by and between Universal Hospital Services, Inc.,
a
Delaware corporation (the “Company”),
and
____________ (the “Optionee”).
WHEREAS,
the
Company has decided to grant the Optionee a non-qualified stock option to
acquire shares of the Company’s common stock, $0.01 par value per share
(“Shares”),
in
accordance with the Universal Hospital Services, Inc. 2003 Stock Option Plan
(the “Plan”);
and
WHEREAS,
the
Optionee desires to accept such option subject to the terms and conditions
of
this Option Agreement.
NOW,
THEREFORE,
in
consideration of the premises and of the mutual covenants and agreements
contained herein, the Company and the Optionee, intending to be legally bound,
hereby agree as follows:
1. Grant
of Option.
As of
_____________ (the “Grant
Date”),
the
Company grants to the Optionee a nonqualified stock option (the “Option”)
to
purchase all (or any part) of _______ Shares on the terms and conditions
hereinafter set forth. This Option is not intended to be treated as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).
2. Exercise
Price.
The
exercise price (“Exercise
Price”)
for the
Shares covered by the Option shall be $___ per share.
3. Exercisability.
(a) Fixed
Vesting Options.
This
Option shall become exercisable with respect to ___ Shares upon each of
__________, __________, __________, and __________. All Options subject to
vesting pursuant to this Section 3(a) (the “Fixed
Vesting Options”)
shall
become exercisable upon a Change in Control (as defined in Section 14(b)) if
the
Optionee continues to be an employee (or a director or consultant, as
applicable) of the Company or any Subsidiary at such time, to the extent not
then exercisable.
(b) Target
Vesting Options.
This
Option shall become exercisable with respect to up to ____ Shares (the
“Annual
Eligible Shares”)
following the completion of each of the fiscal years ending December 31, _____,
_____, _____, _____ and _____ upon and to the extent of the Company’s attainment
of the Targets set forth on Schedule I attached hereto and incorporated herein
(“Schedule
I”)
in
accordance with the other terms specified in Schedule I. As a point of
clarification, if all of the Targets set forth on Schedule I attached hereto
are
met or exceeded, Options to purchase an aggregate of ____ Shares shall become
exercisable following the completion of the applicable Target time periods
pursuant to this subsection 3(b). Notwithstanding the foregoing, provided that
(i) Optionee shall continue to be an employee, director or consultant of
the Company or a Subsidiary, and (ii) the Company shall not have
(A) merged or consolidated with another corporation or other entity,
whether or not the Company is the surviving entity, or (B) liquidated or
sold or otherwise disposed of all or substantially all of its assets to another
entity, or (C) been subject to a Change in Control, then this Option shall
become exercisable with respect to all of the Shares subject to vesting pursuant
to this Section 3(b) (the “Target
Vesting Options”)
on the
eighth (8th)
anniversary of the Grant Date.
4. Term
of
Options.
(a) Each
Option shall expire on the tenth anniversary of the Grant Date, unless
terminated earlier pursuant to subsections 4(b) and 4(c) below.
(b) If
the
Optionee is terminated from his or her employment/consultancy for Cause (as
defined in Section 14) or voluntarily terminates his employment/consultancy
with
the Company at any time without Good Reason (as defined Section 14) or, if
the
Optionee is a director, the Optionee is removed as a director for Cause (as
defined in Section 14), the Option shall terminate on the date of such
termination of employment, whether or not then fully exercisable.
(c) If
the
Optionee dies, is Disabled (as defined in Section 14) while an
employee/consultant/director, or is terminated without Cause, or terminates
for
Good Reason, or, if the Option is a director, is removed without Cause or
otherwise resigns as a director, any portion of the Option that is not then
fully exercisable shall terminate immediately; provided, however, that the
Board
of Directors or committee appointed by the Board of Directors for purposes
of
administration and operation of the Plan (the “Committee”)
shall
have the discretion to vest any Options that are not exercisable. Any portion
of
the Option that is then exercisable shall terminate on the 90th day following
such termination of employment.
5. Manner
of Exercise of Option.
(a) The
Optionee may exercise the Option or portion thereof by giving written notice
to
the Company stating the number of Shares (which shall not be less than 100,
unless the total Shares purchased constitute the total number of Shares
remaining subject to the Option) to be purchased and accompanied by payment
in
full of the Exercise Price for such Shares. Payment shall be in cash by wire
transfer of immediately available funds to an account specified by the Company
by a certified or bank cashier’s check payable to the Company, or at any time
Shares are registered under Section 12 of the Securities Exchange Act of 1934,
as amended, by means of a “cashless exercise” approved by the Committee, in
which a broker: (i) transmits the Exercise Price for any Shares to the
Company in cash or acceptable cash equivalents, either (A) against the
Optionee’s notice of exercise and the Company’s confirmation that it will
deliver to the broker stock certificates issued in the name of the broker for
at
least that number of Shares having a fair market value equal to the Exercise
Price therefor, or (B) as the proceeds of a margin loan to the Optionee; or
(ii) agrees to pay the Exercise Price therefor to the Company in cash or
acceptable cash equivalents upon the broker’s receipt from the Company of stock
certificates issued in the name of the broker for at least that number of Shares
having a fair market value equal to the Exercise Price therefor. The Optionee’s
written notice of exercise of the Option pursuant to a “cashless exercise”
procedure must include the name and address of the broker involved, a clear
description of the procedure, and such other information or undertaking by
the
broker as the Committee shall reasonably require. Upon such purchase, delivery
of a certificate for paid-up, non-assessable Shares shall be made at the
principal office of the Company to the Optionee (or the person entitled to
exercise the Option pursuant to Section 7), not more than 10 days from the
date
of receipt of the notice by the Company.
2
(b) Notwithstanding
Section 5(a) of this Option Agreement, the Company may delay the issuance of
Shares covered by the Option and the delivery of a certificate for such Shares
until one of the following conditions is satisfied: (i) the Shares purchased
pursuant to the Option are at the time of the issuance of such Shares
effectively registered or qualified under applicable federal and state
securities laws or (ii) such Shares are exempt from registration and
qualification under applicable federal and state securities laws.
6. Administration.
This
Option Agreement shall be administered by the Committee pursuant to the Plan.
The Committee shall be authorized to interpret this Option Agreement and to
make
all other determinations necessary or advisable for the administration of this
Option Agreement. The determinations of the Committee in the administration
of
this Option Agreement, as described herein, shall be final and conclusive.
Each
of the Chief Executive Officer, the Chief Financial Officer and the Senior
Vice
President, Human Resources of the Company shall be authorized to implement
this
Option Agreement in accordance with its terms and to take such actions of a
ministerial nature as shall be necessary to effectuate the intent and purposes
thereof.
7. Non-Transferability.
Subject
to the terms of the Stockholders Agreement (as defined below), the right of
the
Optionee to exercise the Option shall not be assignable or transferable by
the
Optionee otherwise than by will or the laws of descent and distribution, and
such Shares may be purchased during the lifetime of the Optionee only by him
(or
his legal representative in the event that the Optionee is Disabled). Any other
such transfer shall be null and void and without effect upon any attempted
assignment or transfer, except as hereinabove provided, including without
limitation any purported assignment, whether voluntary or by operation of law,
pledge, hypothecation or other disposition contrary to the provisions hereof,
or
levy of execution, attachment, trustee process or similar process, whether
legal
or equitable, upon the Option.
8. Representation
Letter and Investment Legend.
(a) In
the
event that for any reason the Shares to be issued upon exercise of an
exercisable Option shall not be effectively registered under the Securities
Act
of 1933, as amended (the “1933
Act”),
upon
any date on which the Option is exercised, the Optionee (or the person
exercising the Option pursuant to Section 7) shall give a written representation
to the Company in the form attached hereto as Exhibit A, and the Company shall
place the legend described on Exhibit A, upon any certificate for the
Shares issued by reason of such exercise.
(b) The
Company shall be under no obligation to qualify Shares or to cause a
registration statement or a post-effective amendment to any registration
statement to be prepared for the purposes of covering the issue of Shares;
provided, that the Company will use its reasonable best efforts to comply with
any available exemption from registration and qualification of the Shares under
applicable federal and state securities laws.
3
9. Adjustments
upon Changes in Capitalization.
(a) In
the
event that the outstanding Shares are changed into or exchanged for a different
number or kind of shares or other securities of the Company or of another
corporation by reason of any reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares,
or
dividends payable in capital stock, appropriate adjustment shall be made in
the
number and kind of shares, and the Exercise Price therefor, as to which the
Option, to the extent not theretofore exercised, shall be
exercisable.
(b) Unless
otherwise determined by the Committee in its sole discretion, in the case of
a
Change in Control (as hereinafter defined) of the Company, the purchaser(s)
of
the Company’s assets or stock may, in his, her or its discretion, deliver to the
Optionee, to the extent that the Option has become exercisable, the same kind
of
consideration (net of the Exercise Price for such Shares) that is delivered
to
the stockholders of the Company as a result of the Change in Control, or the
Committee may, in its sole determination, cancel the Option, to the extent
not
theretofore exercised, in exchange for consideration in cash or in kind, which
consideration in either case shall be equal in value to the value of those
shares of stock or other consideration the Optionee would have received had
the
Option been exercised (to the extent the Option has become exercisable but
not
been exercised) and no disposition of the Shares acquired upon such exercise
been made prior to the Change in Control, less the Exercise Price therefor.
Upon
receipt of such consideration by the Optionee, the Option shall immediately
terminate and be of no further force and effect, with respect to both
exercisable and unexercisable portions thereof. The value of the stock or other
securities the Optionee would have received if the Option had been exercised
shall be determined in good faith by the Committee.
(c) Upon
dissolution or liquidation of the Company, the Option shall terminate, but
the
Optionee (if at such time an Employee or consultant) shall have the right,
immediately prior to filing of a certificate of dissolution or liquidation,
to
exercise any then exercisable Options.
(d) No
fraction of a Share shall be purchasable or deliverable upon the exercise of
the
Option, but in the event any adjustment hereunder of the number of shares
covered by the Option shall cause such number to include a fraction of a share,
such fraction shall be adjusted to the nearest smaller whole number of
shares.
10. No
Employment Rights Conferred.
Nothing
contained in this Option Agreement shall be construed or deemed by any person
under any circumstances to bind the Company or any of its subsidiaries to
continue the employment of the Optionee for the period within which this Option
may be exercisable or for any other period.
11. Rights
as a Stockholder.
The
Optionee shall have no rights as a stockholder with respect to any Shares which
may be purchased upon the exercisability of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided herein, no
adjustment shall be made for dividends or other rights for which the record
date
is prior to the date the stock certificate is issued.
12. Withholding
Taxes.
The
Optionee hereby agrees, as a condition to any exercise of the Option, to provide
to the Company an amount sufficient to satisfy its obligation to withhold
federal, state and local taxes arising by reason of such exercise (the
“Withholding
Amount”),
if
any, by (a) authorizing the Company to withhold the Withholding Amount from
his cash compensation, or (b) remitting the Withholding Amount to the Company
in
cash; provided that, to the extent that the Withholding Amount is not provided
by one or a combination of such methods, the Company may at its election
withhold from the Shares delivered upon exercise of the Option that number
of
Shares having a fair market value (in the good faith judgment of the Committee)
equal to the Withholding Amount.
4
13. Execution
of Stockholders Agreement.
The
Optionee acknowledges that he has previously executed and delivered the
stockholders agreement by and among the Company and the stockholders of the
Company named therein (the “Stockholders
Agreement”).
The
Optionee further agrees that this Option Agreement, the Option and all Shares
acquired by him upon exercise of the Option will be subject to the terms and
conditions of the Stockholders Agreement, as the same may be amended or modified
in accordance with its terms.
14. Definitions.
The
following terms shall have the following meanings when used in this Agreement
and Schedule I to this Agreement:
(a) “Cause,”
shall
have the meaning set forth in the executed written employment agreement, offer
letter or term sheet between the Optionee and the Company (or a subsidiary
thereof) or, in the absence of such employment agreement, offer letter or term
sheet, the occurrence of any of the following during the term of the Optionee’s
employment with the Company (or a subsidiary thereof):
(i) the
Optionee has failed to perform substantially his duties or has performed his
duties negligently;
(ii) the
Optionee has committed any serious crime or offense, as determined by the Board
of Directors or the Committee in their respective sole discretion;
(iii) the
Optionee has failed or refused to comply with any oral or written policy or
directive of the Committee;
(iv) the
Optionee has breached any provision or covenant contained in this Option
Agreement.
(b) “Change
in Control”
shall
mean when (i) any person, or any two or more persons acting as a group, and
all
affiliates of such person or persons (a “Group”)
(other
than any person or Group affiliated with X.X. Childs Associates L.P.), who
prior
to such time beneficially owned less than 50% of the then outstanding capital
stock of the Company shall acquire shares of the Company’s capital stock in one
or more transactions or series of transactions, including by merger, and after
such transaction or transactions such person or Group and affiliates
beneficially own 50% or more of the Company’s outstanding capital stock, or (ii)
the Company shall sell all or substantially all of its assets to any Group
(other than any person or Group affiliated with X.X. Childs Associates L.P.)
which, immediately prior to the time of such transaction, beneficially owned
less than a majority of the then outstanding capital stock of the Company.
5
(c) “Disabled”
shall
have the meaning set forth in the executed written employment agreement, offer
letter or term sheet between the Optionee and the Company (or a subsidiary
thereof) or, in the absence of such employment agreement, offer letter or term
sheet, the Optionee shall be deemed to have become “Disabled”
if,
during the term of the Optionee’s employment with the Company (or a subsidiary
thereof), the Optionee shall become physically or mentally disabled, whether
totally or partially, either permanently or so that the Optionee, in the good
faith judgment of the Committee, is unable substantially and competently to
perform his duties on behalf of the Company (or a subsidiary thereof) for a
period of 90 consecutive days or for 90 days during any six month period during
the term of employment. In order to assist the Committee in making that
determination, the Optionee shall, as reasonably requested by the Committee,
(i)
make himself available for medical examinations by one or more physicians chosen
by the Committee and (ii) grant to the Committee and any such physicians access
to all relevant medical information concerning him, arrange to furnish copies
of
his medical records to the Committee and use his best efforts to cause his
own
physicians to be available to discuss his health with the
Committee.
(d) “EBITDA”
shall
have the meaning set forth in Schedule I.
(e) “Good
Reason,”
with
respect to the Optionee, shall have the meaning attributed to it under the
executed written employment agreement, offer letter or term sheet between the
Optionee and the Company (or a subsidiary thereof) or, in the absence of such
employment agreement, offer letter or term sheet, “Good
Reason”
shall
be
deemed to have occurred if, other than for Cause, during the term of the
Optionee's employment with the Company (or a subsidiary thereof) the Optionee's
base salary has been reduced or the method under which the Optionee’s bonus is
calculated has been amended in a manner materially adverse to the Optionee,
other than in connection with a reduction of executive compensation imposed
by
the Committee generally on management employees in response to negative
financial results or other adverse circumstances affecting the Company or its
subsidiaries.
(f) “Person”
shall
mean an individual, corporation, partnership, limited liability company, trust,
unincorporated association, government or any agency or political subdivision
thereof, or any other entity.
15. Governing
Law.
This
Option Agreement shall be governed by the laws of the State of Delaware, without
regard to any conflicts of law principles thereof that would call for the
application of the laws of any other jurisdiction. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of,
this
Option Agreement may be brought against either of the parties in the courts
of
the State of Delaware, or if it has or can acquire jurisdiction, in the United
States District Court for the District of Delaware, and each of the parties
hereby consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection
to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world, whether
within or without the State of Delaware.
16. Incorporation
of Terms of Plan.
This
Option Agreement shall be interpreted under, and in accordance with, all of
the
terms and provisions of the Plan, which are incorporated herein by reference.
6
IN
WITNESS WHEREOF,
the
Company has caused this Stock Option Agreement to be executed, by its officer
thereunto duly authorized, and the Optionee has executed this Stock Option
Agreement, all as of the day and year first above written.
|
UNIVERSAL
HOSPITAL SERVICES, INC.
|
OPTIONEE
|
|
| _______________________________________________________ | ||
| By:_____________________________________________________ | Name: | |
|
Name:
Xxxx X. Xxxxxxxxx
|
||
| Title: President & CEO | Address: | |
| _______________________________________________________ | ||
| _______________________________________________________ | ||
| _______________________________________________________ | ||
|
|
Telecopier Number:__________________________________________________________ | |
|
Social
Security
Number:_______________________________________________________
|
7
SCHEDULE
I
TARGET
VESTING SCHEDULE
(a) Subject
to
adjustment as provided in (b) and (f) below, for each of the Target Periods
specified below, if the Company’s EBITDA (as defined below) in any such Target
Period is equal to or greater than the Base EBITDA Target for such Target Period
as specified below, the Target Vesting Options will vest and be exercisable
with
respect to the Annual Eligible Shares. If the Company’s EBITDA for any Target
Period exceeds 90% of the Base EBITDA Target for such Target Period, then the
amount of Target Vesting Options that will vest for each such Target Period
will
be that percentage of the Annual Eligible Shares determined according to a
linear extrapolation of the amount by which the Company’s EBITDA exceeds 90% of
the Base EBITDA Target, such that achievement of 91% of the Base EBITDA Target
would result in vesting of 10% of the Annual Eligible Shares and achievement
of
100% or more of the Base EBITDA Target would result in vesting of 100% of Annual
Eligible Shares.
TABLE
A
|
Target
Period
|
Annual
Eligible Shares
|
Base
EBITDA
Target
(000’s)
|
Maximum
Capital
Expenditures
(000’s)
|
|
Fiscal
2007
|
20%
of Target Vesting Shares
|
$110,000
|
$77,900
|
|
Fiscal
2008
|
20%
of Target Vesting Shares
|
$125,000
|
$92,300
|
|
Fiscal
2009
|
20%
of Target Vesting Shares
|
$141,000
|
$109,000
|
|
Fiscal
2010
|
20%
of Target Vesting Shares
|
$159,000
|
$126,000
|
|
Fiscal
2011
|
20%
of Target Vesting Shares
|
$179,000
|
$145,000
|
Notwithstanding
the foregoing,
(i) Excess
EBITDA in any Target Period then ended (i.e., the amount by which EBITDA for
such Target Period exceeds the Base EBITDA Target for such Target Period) may
be
carried back to the prior Target Period to permit vesting of Annual Eligible
Shares not previously vested, provided that (A) cumulative EBITDA for all Target
Periods then ended exceeds the 90% of the cumulative Base EBITDA Targets for
all
Target Periods then ended and (B) the Annual Eligible Shares from the prior
Target Period shall vest in a linear extrapolation of the amount by which the
Company’s cumulative EBITDA for all Target Periods then ended exceeds 90% of the
cumulative Base EBITDA Targets for such periods, such that achievement of 91%
of
the cumulative Base EBITDA Targets would result in vesting of 10% of the Annual
Eligible Shares not previously vested and achievement of 100% or more of the
cumulative Base EBITDA Targets would result in vesting of 100% of Annual
Eligible Shares not previously vested; and
(ii) if
(A) for
the fiscal year ended December 31, 2011 (the “Final
Target Period”),
EBITDA
exceeds the Base EBITDA Target for the Final Target Period and (B) the
cumulative EBITDA for all five Target Periods exceeds the cumulative Base EBITDA
Targets for all five periods, then the Target Vesting Options shall become
exercisable with respect to 100% of the Shares (to the extent not theretofore
vested in accordance with this Schedule I).
SCHEDULE
I-1
(b) Base
EBITDA Targets will be adjusted by the Committee in good faith (i) in the event
that the Company’s capital expenditures for the Target Period exceed the Maximum
Capital Expenditures specified for that Target Period (provided that if the
Company spends less than the Maximum Capital Expenditures for a Target Period,
then such amount of “under spent” capital expenditures can be applied to the
next succeeding Target Period to increase the Maximum Capital Expenditures
permitted for such succeeding Target Period) and (ii) in the event the Company
acquires or merges with any other company and such acquisition or merger does
not qualify as a Change in Control of the Company, to take into account the
additional EBITDA expected to be generated by the recently acquired business
for
Target Periods ending after the date of such acquisition or merger.
(c) In
the
event a Change in Control of the Company occurs before the end of the fiscal
year ending December 31, 2011, and the Optionee is still employed/retained
by
the Company at such time, any Target Vesting Options subject to vesting for
Target Periods ending after such Change in Control shall become exercisable
to
the same extent and in the same percentage as the percentage of Target Vesting
Options that had previously become exercisable bears to the percentage of Target
Vesting Options that were eligible to become exercisable in all preceding fiscal
years (e.g., if 50% of the eligible options had become vested in the Target
Periods prior to a Change in Control, then 50% of the unvested options relating
to Target Periods after the Change in Control would become vested).
(d)
(i) Upper
Threshold:
In the
event that on or prior to December 31, 2010, X.X. Childs Equity Partners III,
L.P. (“Childs”)
and its
affiliates and Halifax Capital Partners, L.P. each receive a net cash return
(after dilution from all options) on their total investment in the Company
resulting in an amount of cash at least equal to the multiple of their total
investment in the Company (the “Actual Ratio”) equal to or greater than the
Upper Threshold for the applicable time period below, all Target Vesting Options
will become exercisable to the extent not then exercisable:
|
Upper
Threshold
|
|
|
2.50
Times
|
On
or before 12/31/08
|
|
2.85
Times
|
On
or after 01/01/09 but before 1/1/10
|
|
3.25
Times
|
On
or after 01/01/10 but before 1/1/11
|
(ii)
Lower
Threshold:
In the
event that on or prior to December 31, 2010, X.X. Childs Equity Partners III,
L.P. (“Childs”)
and its
affiliates and Halifax Capital Partners, L.P. each receive a net cash return
(after dilution from all options) on their total investment in the Company
resulting in an amount of cash at least equal to the multiple of their total
investment in the Company (the “Actual Ratio”) equal to or greater than the
Lower Threshold for the applicable time period below, but less than the Upper
Threshold above, the unvested Target Vesting Options will become exercisable
as
set forth in the formula below:
SCHEDULE
I-2
|
Lower
Threshold
|
|
|
2.00
Times
|
On
or before 12/31/08
|
|
2.35
Times
|
On
or after 01/01/09 but before 1/1/10
|
|
2.75
Times
|
On
or after 01/01/10 but before 1/1/11
|
Formula:
.5
(TVO) +
(.5 (TVO) ((AR-LT)/(UT-LT))) - PVTO = incremental vested TVO
|
Where:
|
TVO= total Target Vesting Options |
|
AR
=
Actual Ratio
|
|
|
LT
=
Lower Threshold for the applicable time period
|
|
|
UT=
Upper Threshold for the applicable time period
|
|
|
PVTO
= Number of previously vested
TVOs
|
If
the
formula result (incremental vested TVO) is negative, there will be no increase
or decrease in vested Target Vesting Options.
(e) “EBITDA”
shall
mean
consolidated earnings of the Company and its subsidiaries, including equity
in
the earnings from non-consolidated subsidiaries, before interest, taxes,
depreciation, amortization, board fees and expenses, non-cash stock compensation
or option expense and other similar charges, unusual and non-recurring items
approved by the board or Committee and the management fees paid to X.X. Childs
Associates, L.P. and Halifax Capital Partners, L.P., or any of their respective
affiliates, and after deduction of all operating expenses, minority interest
expenses and incentive compensation, all as calculated in accordance with
generally accepted accounting principles consistently applied, as reflected
in
the Company's audited consolidated financial statements. For purposes of
calculating EBITDA, in the event that the Company makes an acquisition or
disposition of any assets or business, the Committee, in good faith, shall
adjust EBITDA for any fiscal year to include or exclude on a pro forma basis,
as
applicable, the EBITDA for such assets or business for the period of time the
assets or business are not owned by the Company for the fiscal year in which
the
assets or business are acquired or sold.
SCHEDULE
I-3
EXHIBIT
A
TO
In
connection with the purchase by me of _____ shares of common stock, $0.01 par
value per share, of Universal Hospital Services, Inc., a Delaware corporation
(the “Company”)
under
the nonqualified stock option granted to me pursuant to that certain Stock
Option Agreement dated ____________ (the “Option
Agreement”),
I
hereby acknowledge that I have been informed as follows:
1. The
shares
of common stock of the Company to be issued to me upon exercise of said option
have not been registered under the Securities Act of 1933, as amended (the
“Act”), and accordingly, must be held indefinitely unless such shares are
subsequently registered under the Act, or an exemption from such registration
is
available.
2. Routine
sales of securities made in reliance upon Rule 144 under the Act can be made
only after the holding period and in limited amounts in accordance with the
terms and conditions provided by that Rule, and with respect to which that
Rule
is not applicable, registration or compliance with some other exemption under
the Act will be required.
3. The
Company is under no obligation to me to register the shares or to comply with
any such exemptions under the Act, other than as set forth in the Stockholders
Agreement referenced and defined in paragraph 13 of the Option Agreement (the
“Stockholders
Agreement”).
4. The
availability of Rule 144 is dependent upon adequate current public information
with respect to the Company being available and, at the time that I may desire
to make a sale pursuant to the Rule, the Company may neither wish nor be able
to
comply with such requirement.
5. The
shares
of common stock of the Company to be issued to me upon the exercise of said
option are subject to the terms and conditions, including restrictions on
transfer, of the Stockholders Agreement.
In
consideration of the issuance of certificates for the shares to me, I hereby
represent and warrant that I am acquiring such shares for my own account for
investment, and that I will not sell, pledge, hypothecate or otherwise transfer
such shares in the absence of an effective registration statement covering
the
same, except as permitted by an applicable exemption under the Act. In view
of
this representation and warranty, I agree that there may be affixed to the
certificates for the shares to be issued to me, and to all certificates issued
hereafter representing such shares (until in the opinion of counsel, which
opinion must be reasonably satisfactory in form and substance to counsel for
the
Company, it is no longer necessary or required) a legend as
follows:
EXHIBIT
A-1
“The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Act”),
and
may not be sold, transferred, offered for sale, pledged or hypothecated in
the
absence of an effective registration statement as to the securities under the
Act or an opinion of counsel satisfactory to the corporation and its counsel
that such registration is not required.”
“The
securities represented by this certificate are subject to the terms and
conditions, including restrictions on transfer, of a Stockholders Agreement
among the Universal Hospital Services, Inc. and its stockholders dated as of
October 17, 2003, as amended from time to time, a copy of which is on file
at
the principal office of the corporation.”
I
further
agree that the Company may place a stop order with its transfer agent,
prohibiting the transfer of such shares, so long as the legend remains on the
certificates representing the shares.
I
hereby
represent and warrant that: My financial situation is such that I can afford
to
bear the economic risk of holding the shares issued to me upon exercise of
said
option for an indefinite period of time, I have no need for liquidity with
respect to my investment and have adequate means to provide for my current
needs
and personal contingencies, and can afford to suffer the complete loss of my
investment in such shares.
(a) I
am
either (please check one of the following):
|
1.
|
______ |
an
“accredited investor” within the meaning of Rule 501(a) under the Act, a
copy of which is annexed hereto as Annex
I,
and I, either alone or with my purchaser representative (as such
term is
defined in Rule 501 under the Act), have such knowledge and experience
in
financial and business matters that I am capable of evaluating the
merits
and risks of my investment in the shares issued to me upon exercise
of
said option. I have indicated the appropriate categories that apply
to me
in Annex
I
hereto.
|
|
2.
|
______ |
not
an “accredited investor” within the meaning of Rule 501(a) under the Act,
as I do not fulfill any of the categories set forth in Annex
I,
but I have such knowledge and experience in financial and business
matters
that I am capable of evaluating the merits and risks of my investment
in
the shares issued to me upon exercise of said
option.
|
(b) I
have
been afforded the opportunity to ask questions of, and to receive answers from,
the Company and its representatives concerning the shares issued to me upon
exercise of said option and to obtain any additional information I have deemed
necessary.
(c) I
have a
high degree of familiarity with the business, operations, financial condition
and prospects of the Company.
|
Very
truly yours,
|
|
| Name |
EXHIBIT
A-2
ANNEX
I
The
following are “accredited investors” for purposes of the offering and sale of
Shares.
Please
check all of the following categories that you fulfill.
|
a.
|
______ |
a
bank as defined in section 3(a)(2) of the Securities Act or a savings
and
loan association or other institution as defined in section 3(a)(5)(A)
of
the Securities Act, whether acting in its individual or fiduciary
capacity; broker or dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934, as amended; insurance company as
defined
in section 2(13) of the Securities Act; investment company registered
under the Investment Company Act of 1940, as amended, or a business
development company as defined in section 2(a)(48) of the Investment
Company Act of 1940, as amended; Small Business Investment Company
licensed by the U.S. Small Business Administration under section
301(c) or
(d) of the Small Business Investment Act of 1958; plan established
and
maintained by a state, its political subdivisions, or any agency
or
instrumentality of a state or its political subdivisions, for the
benefit
of its employees, if such plan has total assets in excess of $5,000,000;
employee benefit plan within the meaning of the Optionee Retirement
Income
Security Act of 1974, as amended, if the investment decision is made
by a
plan fiduciary, as defined in section 3(21) of such act, which plan
fiduciary is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit
plan
has total assets in excess of $5,000,000 or, if a self-directed plan,
with
investment decisions made solely by persons that are accredited
investors;
|
|
b.
|
______ |
a
private business development company as defined in section 202(a)(22)
of
the Investment Advisers Act of 1940, as amended;
|
|
c.
|
______ |
an
organization described in section 501(c)(3) of the Internal Revenue
Code
of 1986, as amended (the “Code”),
a corporation, Massachusetts or similar business trust, or a partnership,
not formed for the purpose of acquiring the Securities offered, with
total
assets in excess of $5,000,000;
|
|
d.
|
______ |
a
director or an executive officer of Universal Hospital Services,
Inc.;
|
|
e.
|
______ |
a
natural person whose individual net worth, individually or together
with
his or her spouse, exceeds
$1,000,000;
|
EXHIBIT
A-3
|
f.
|
______ |
(i)a
natural person who had an individual income*
in
excess of $200,000 in both of the past two years and who reasonably
expects reaching the same income level in the current year;
or
|
|
(ii)a
natural person who had a joint income* with
his or her spouse in excess of $300,000 in both of the past two years
and
who reasonably expects reaching the same income level
in the current year;
|
||
|
g.
|
______ |
a
trust, with total assets in excess of $5,000,000, not formed for
the
specific purpose of acquiring the Securities offered, whose purchase
is
directed by a person who either alone or with his purchaser representative
has such knowledge and experience in financial and business matters
that
he or she is capable of evaluating the merits and risks of the prospective
investment, or Universal Hospital Services, Inc. reasonably believes
immediately prior to making any sale that such person comes within
this
definition;
|
|
h.
|
______ |
an
entity in which all of the equity owners are accredited investors
meeting
one or more of the tests under subparagraphs (a) - (g).
|
____________________________________________
| * | For all investors, the term “individual income” means adjusted gross income as reported for federal income tax purposes, less any income attributable to a spouse or to property owned by a spouse, increased by the following amounts (but not included any amounts attributable to a spouse or to property owned by a spouse), and the term “joint income” means adjusted gross income as reported for federal income tax purposes, including any income attributable to a spouse or to a property owned by a spouse, increased by the following amounts (including any amounts attributable to a spouse or to property owned by a spouse): (i) the amount of any interest income received which is tax exempt under section 103 of the Code; (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form 1040); and (iii) any deduction claimed for depletion under section 611 et seq. of the Code. |
| * | For all investors, the term “individual income” means adjusted gross income as reported for federal income tax purposes, less any income attributable to a spouse or to property owned by a spouse, increased by the following amounts (but not included any amounts attributable to a spouse or to property owned by a spouse), and the term “joint income” means adjusted gross income as reported for federal income tax purposes, including any income attributable to a spouse or to a property owned by a spouse, increased by the following amounts (including any amounts attributable to a spouse or to property owned by a spouse): (i) the amount of any interest income received which is tax exempt under section 103 of the Code; (ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form 1040); and (iii) any deduction claimed for depletion under section 611 et seq. of the Code. |
EXHIBIT
A-4
