HEALTHCARE SERVICES GROUP, INC.
2643 Huntingdon Pike
Huntingdon Valley, Pennsylvania 19006
[ ]
To:
1. We are pleased to inform you that on [ ]
you were granted an incentive stock option pursuant to the 1995 Incentive and
Non-Qualified Stock Option Plan (the "Plan") of Healthcare Services Group, Inc.
(the "Company") to purchase [ ] shares (the "Shares") of Common Stock, par value
$.01 per share, of the Company, at a price of $[ ] per Share. This grant is a
separate inducement and agreement in connection with your employment by the
Company, and not in lieu of any salary or other remuneration for services.
2. No part of the option is currently exercisable. The option may
first be exercised, with respect to 50% of the option one year from the date of
grant. This option may first be exercised with respect to the remaining 50% of
the option two years from the date of grant.
3. To the extent this option is not exercised, it will expire [five]
years from the date of the grant.
4. This option is issued in accordance with and is subject to and
conditioned upon all of the terms and conditions of the Plan (a copy of which in
its present form is attached hereto), as from time to time amended, provided,
however, that no future amendment or termination of the Plan shall, without your
consent, alter or impair any of your rights or obligations under this option.
Reference is made to the terms and conditions of the Plan, all of which are
incorporated by reference in this option agreement as if fully set forth herein.
5. Unless at the time of the exercise of this option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such Shares, any Shares purchased by you upon the exercise of this option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of this option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any Shares pursuant to this option if,
in the opinion of counsel to the Company, the Shares to be so issued are
required to be registered
or otherwise qualified under the Act or under any other applicable statute,
regulation or ordinance affecting the sale of securities, unless and until such
Shares have been so registered or otherwise qualified.
6. You understand and acknowledge that, under existing law, unless
at the time of the exercise of this option a registration statement under the
Act is in effect as to such Shares (i) any Shares purchased by you upon exercise
of this option may be required to be held indefinitely unless such Shares are
subsequently registered under the Act or an exemption from such registration is
available; (ii) any sales of such Shares made in reliance upon Rule 144
promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number
of shares which may be sold and the manner in which shares may be sold); (iii)
in the case of securities to which Rule 144 is not applicable, compliance with
Regulation A promulgated under the Act or some other disclosure exemption will
be required; (iv) certificates for Shares to be issued to you hereunder shall
bear a legend to the effect that the Shares have not been registered under the
Act and that the Shares may not be sold, hypothecated or otherwise transferred
in the absence of an effective registration statement under the Act relating
thereto or an opinion of counsel satisfactory to the Company that such
registration is not required; (v) the Company will place an appropriate "stop
transfer" order with its transfer agent with respect to such Shares; and (vi)
the Company has undertaken no obligation to register the Shares or to include
the Shares in any registration statement which may be filed by it subsequent to
the issuance of the shares to you. In addition, you understand and acknowledge
that the Company has no obligation to you to furnish information necessary to
enable you to make sales under Rule 144.
7. This option (or installment thereof) is to be exercised by
delivering to the Company a written notice of exercise in the form attached
hereto as Exhibit A, specifying the number of Shares to be purchased, together
with payment of the purchase price of the Shares to be purchased. The date the
Company receives the written notice shall be the exercise date. The purchase
price is to be paid in cash or, by delivering shares of the Company's stock
already owned by you and having a fair market value on the date of exercise
equal to the exercise price of the option, or a combination of such shares and
cash, or otherwise in accordance with the Plan.
8. You acknowledge that:
A. The particular needs of the Company's customers are not
generally known in the industry;
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B. The Company has a proprietary interest in the identity of
its customers and customer lists; and
C. Documents and information regarding the Company's methods of
operation, sales, pricing, costs, and the specialized requirements of the
Company's customers are highly confidential and constitute trade secrets.
9. During the term of your employment, you will have access to and
become familiar with various trade secrets and confidential information of the
Company, including, but not necessarily limited to, the documents and
information referred to in paragraph 8 above. You acknowledge that such
confidential information and trade secrets are owned and shall continue to be
owned solely by the Company. During the term of your employment and after such
employment terminates, you agree not to use such information for any purpose
whatsoever or to divulge such information to any person other than the Company
or persons to whom the Company has given its consent, unless such information
has already become common knowledge or unless you are compelled to disclose it
by governmental process.
10. You agree that:
A. During the term of your employment, you will not, either
solely or jointly with, or as manager or agent for, any person, corporation,
trust, joint venture, partnership, or other business entity, directly or
indirectly, carry on or be engaged or interested in the cleaning, housekeeping,
janitorial, and/or laundry business, whether commercial, industrial,
residential, wholesale, or retail, in any form whatsoever.
B. For a period of two (2) years after your employment has been
terminated for any reason, with or without cause, you will not, either solely or
jointly with, or as manager or agent for, any person, corporation, trust, joint
venture, partnership, or other business entity, directly or indirectly, solicit
or accept any customers or accounts that were customers or accounts (or legal
successors to customers or accounts) of the Company during any period of time
that you were employed by the Company.
C. For a period of three (3) years after your employment has
been terminated for any reason, with or without cause, you will not, either
solely or jointly with, or as manager or agent for, any person, corporation,
trust, joint venture, partnership, or other business entity, directly or
indirectly, solicit or accept any customers or accounts which were customers or
accounts (or legal successors to customers or accounts) of the Company, and for
whose accounts you were responsible at any time while in the employ of the
Company.
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D. At no time during your employment with the Company, and for
a period of three (3) years following termination of your employment, will you
accept any employment offered at, or in a position having direct responsibility
for, any of the facilities for which you have been directly or indirectly
responsible during the course of your employment with the Company, regardless of
any changes of ownership or affiliation of such facilities.
E. In the event your employment with the Company terminates for
any reason, you will be able to earn a livelihood without violating the
foregoing restrictions and your ability to earn a livelihood without violating
such restrictions is a material condition to the grant of this option.
11. REMEDIES
A. You acknowledge that compliance with paragraphs 9 and 10 is
necessary to protect the business and good will of the Company and that a breach
of those paragraphs will irreparably and continually damage the Company, for
which money damages may not be adequate. Consequently, you agree that, in the
event that you breach or threaten to breach any of these covenants, the Company
shall be entitled to both (a) a preliminary or a permanent injunction in order
to prevent the continuation of such harm and (b) money damages insofar as they
can be determined. Nothing in this Stock Option Agreement, however, shall be
construed to prohibit the Company from also pursuing any other remedy, the
parties having agreed that all remedies are cumulative.
B. In the event that there is a dispute arising under or
related to this Stock Option Agreement or that a party seeks to enforce any of
the terms of this Stock Option Agreement, each party agrees that any legal
proceeding will be instituted only in the Court of Common Pleas, Montgomery
County, Pennsylvania, or in the United States District Court for the Eastern
District of Pennsylvania. Each party irrevocably consents to the jurisdiction of
each of those courts and agrees that service of the Complaint or other process
may be made as provided in the applicable Rules of Court or as provided in
Paragraph 7 of this Stock Option Agreement.
C. If any provision of the Stock Option Agreement is adjudged
by any court to be void or unenforceable, in whole or in part, that adjudication
shall not affect the validity of the remainder of this Stock Option Agreement.
Each provision, paragraph and subparagraph of this Stock Option Agreement is
separate from the others and is a separate and distinct covenant. If a provision
is determined to be void or unenforceable because it is too broad, the parties
agree that the Court shall have the power to limit the restriction so as to make
it enforceable.
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D. If a party incurs costs or expenses in enforcing this Stock
Option Agreement, including attorney's fees and costs, the defaulting party
shall pay to the prevailing party, upon demand, those fees and costs.
12. This Stock Option Agreement is made in, and shall be construed
under the laws of, the Commonwealth of Pennsylvania.
Would you kindly evidence your acceptance of this option and your
agreement to comply with the provisions hereof and of the Plan by executing this
letter under the words "Agreed To and Accepted."
Very truly yours,
HEALTHCARE SERVICES GROUP, INC.
By:-----------------------------
Daniel P. McCartney
Chairman and Chief Executive
Officer
AGREED TO AND ACCEPTED:
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EXHIBIT A
Healthcare Services Group, Inc.
2643 Huntington Pike
Huntingdon Valley, Pennsylvania 19006
Gentlemen:
Notice is hereby given of my election to purchase _____ shares
of Common Stock, $.01 par value (the "Shares"), of Healthcare Services Group,
Inc. (the "Company"), at a price of $ per Share, pursuant to the provisions of
the stock option granted to me on _________________, under the Company's 1995
Incentive and Non-Qualified Stock Option Plan. Enclosed in payment for the
Shares is:
----
/___/ my check in the amount of $________.
----
/___/ ___________ Shares having a total value
$________, such value being based on the
closing price(s) of the Shares on the date
hereof.
The following information is supplied for use in issuing and
registering the Shares purchased hereby:
Number of Certificates
and Denominations ___________________
Name ___________________
Address ___________________
___________________
Social Security Number ___________________
Dated: _______________, ____
Very truly yours,
________________________
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