-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JcSK3GvbE0f12gzz/ED6mjBRG/70lDTvJSnGFDNBC91iEwV7xef8EjYwccaBrfcS 5VgNfSCGAISz1lFI4kMQuQ== 0001157523-07-009900.txt : 20071203 0001157523-07-009900.hdr.sgml : 20071203 20071017130601 ACCESSION NUMBER: 0001157523-07-009900 CONFORMED SUBMISSION TYPE: CORRESP PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20071017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL HOSPITAL SERVICES INC CENTRAL INDEX KEY: 0000886171 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS EQUIPMENT RENTAL & LEASING [7350] IRS NUMBER: 410760940 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: CORRESP BUSINESS ADDRESS: STREET 1: 7700 FRANCE AVE S STREET 2: SUITE 275 CITY: EDINA STATE: MN ZIP: 55435 BUSINESS PHONE: 952-893-3200 MAIL ADDRESS: STREET 1: 7700 FRANCE AVE S STREET 2: SUITE 275 CITY: EDINA STATE: MN ZIP: 55435 CORRESP 1 filename1.htm a5520588.htm

October 17, 2007

 
VIA EDGAR AND OVERNIGHT DELIVERY

U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Mail Stop 7010
Washington, D.C. 20549-7010
Attention: Rufus Decker
                 Jeffrey Gordon
  
 
Re:   Form 10-K for the fiscal year ended December 31, 2006
    Forms 10-Q for the periods ended March 31, 2007 and June 30, 2007
    File No. 0-20086

Dear Messrs. Decker and Gordon:

Set forth below is a response to the comment made by the staff (the “Staff”) of the Securities and Exchange Commission (“the Commission”) in its letter to Universal Hospital Services, Inc. (“we”, “our”, “the Company” or “UHS”) dated October 4, 2007.

FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2007

Note 7.  Stock-Based Compensation, page 12

Comment 1: We note your response to prior comment 4.  You sold UHS to UHS Holdco, Inc. for $2.58 per share in May 2007.  You subsequently issued options for 35.9 million shares of your parent company stock under your new 2007 Stock Option Plan.  The exercise price of these options was $1.00 per share, equivalent to your parent’s $1.00 per share fair market value as determined by the May 31, 2007 transaction.  It is unclear how you arrived at a fair market value of $1.00 per share based on the May 31, transaction.  Please provide us with a comprehensive explanation as to how this transaction led you to arrive at a $1.00 per share fair market value.  Please also expand your disclosure to clearly state the exercise price amount of these options as well as how you arrived at the fair value of $1.00 per share.
 
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Response:  As disclosed in footnote 1 to the unaudited quarterly financial statements included in our June 30, 2007 Form 10-Q (“the Form 10-Q”), UHS Holdco, Inc. acquired all of the outstanding capital stock of UHS on May 31, 2007 (“the Transaction”).  The $2.58 per share amount included in our responses to the Staff’s previous comments represents the consideration paid, as noted in the table within footnote 5 of the Form 10-Q, to the UHS predecessor company shareholders on May 31, 2007 and was primarily based upon the common shares and options outstanding under the predecessor company capital structure.  The $1.00 per share strike price of the 35.9 million options granted in June 2007 represented the fair value of options on the date of grant, which is equivalent to the fair value of the common shares issued as of the date of the Transaction.

The successor company has a different level of common shares issued and outstanding from the predecessor and the $1.00 per share valuation is a function of the equity contribution paid to UHS Holdco, Inc., as noted in footnote 5 of the Form 10-Q, and the common shares issued and outstanding as of the Transaction date (as calculated in the table below). We want to clarify for the Staff that the $2.58 and $1.00 per share valuation amounts referenced in your comment above were for two different legal entities with different levels of common shares issued and outstanding.  Accordingly, the amounts are not comparable.

The $1.00 per share exercise price for shares of UHS Holdco, Inc. common stock issued on the Transaction date was determined as follows:
 
 
(in thousands, except per share amount)
      
           
   
May 31, 2007 equity contributions by Bear Stearns Merchant Manager III (Cayman), L.P. (together with its investing affiliates, “BSMB”) and UHS management to UHS Holdco, Inc. related to the sale of the Company (the “Transaction”)
   $
248,794
  
             
 
Divided by
UHS Holdco, Inc. shares issued and outstanding as of May 31, 2007
    
248,794
  
             
   
Per share UHS Holdco, Inc. valuation at May 31, 2007
   $
1.00
  
 
As the option grant occurred within three weeks of the Transaction and because there were no material events, including without limitation, changes in the direction of the business, during the three-week period following the Transaction, we believe that the $1.00 per share stock price determined on the Transaction date was the most objective and best market valuation available on the June 18, 2007 option grant date.  Accordingly, we arrived at a $1.00 per share fair market value.  We will include the information in the above table in future filings.

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Please do not hesitate to call me should further questions arise.

Sincerely,


/s/ Rex T. Clevenger
Rex T. Clevenger
Executive Vice President & Chief Financial Officer

cc:  Christian O. Nagler, Kirkland & Ellis, LLP
       Diana J. Vance-Bryan, General Counsel
 
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