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EXHIBIT 4.3
ORTHALLIANCE, INC.
2000 EMPLOYEE STOCK OPTION PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the following meanings unless
the context clearly indicates to the contrary:
1.1 "Board" shall mean the Board of Directors of the Company.
1.2 "Change in Control" shall mean the occurrence of either of the
following events:
(a) any of the following events:
(i) the dissolution or liquidation of the Company; or
(ii) a reorganization, merger or consolidation of the
Company with one or more other corporations or
other entities (except with respect to a
transaction, the sole purpose of which is to
change the domicile or name of the Company), as a
result of which the Company ceases to exist or
becomes a subsidiary of another corporation or
other entities (which shall be deemed to have
occurred if another corporation shall own,
directly or indirectly, more than fifty percent
(50%) of the aggregate voting power of all
outstanding equity securities of the Company); or
(iii) a sale of all or substantially all of the
Company's assets; or
(b) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than (i) the Company, any
employee benefit plan of the Company, or any subsidiary of
the Company; or (ii) any entity holding Company Stock for or
pursuant to the terms of any such employee benefit plan, by
the acquisition or aggregation of securities is or becomes
the beneficial owner, directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of
the combined voting power of the Company's then outstanding
securities ordinarily (and apart from rights accruing under
special circumstances) having the right to vote at elections
of directors (the "Base Capital Stock"); except that any
change in the relative beneficial ownership of the Company's
securities by any person resulting solely from a reduction
in the aggregate number of outstanding shares of Base
Capital Stock, and any decrease thereafter in such person's
ownership of securities, shall be disregarded until such
person increases in any manner, directly or indirectly, such
person's beneficial ownership of any securities of the
Company.
1.3 "Code" shall mean the Internal Revenue Code of 1986, as amended,
including effective date and transition rules (whether or not codified). Any
reference herein to a specific section of the Code shall be deemed to include a
reference to any applicable corresponding provision of future law.
1.4 "Committee" shall mean a committee of at least two (2) Directors
appointed from time to time by the Board, having the duties and authority set
forth herein in addition to any other authority granted by the Board; provided,
however, that with respect to any Options granted to an individual who is also a
Section 16 Insider, the Committee shall consist of at least two (2) Directors
(who need not be members of the Committee with respect to Options granted to any
other individuals) who are Non-Employee Directors (within the meaning of Rule
16b-3), and all authority and discretion shall be exercised by such Non-Employee
Directors, and references herein to the "Committee" shall mean such Non-Employee
Directors insofar as any actions or determinations of the Committee shall relate
to or affect Options made to or held by any Section 16 Insider. At any time that
the Board shall not have appointed a committee as described above, any reference
herein to the Committee shall mean a reference to the Board.
1.5 "Company" shall mean OrthAlliance, Inc., a Delaware corporation.
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1.6 "Director" shall mean a member of the Board and any person who is an
advisory, honorary or emeritus director of the Company if such person is
considered a director for the purposes of Section 16 of the Exchange Act, as
determined by reference to such Section 16 and to the rules, regulations,
judicial decisions, and interpretative or "no-action" positions with respect
thereto of the Securities and Exchange Commission, as the same may be in effect
or set forth from time to time.
1.7 "Disabled Optionee" shall mean an Optionee who suffers a Disability.
1.8 "Disability" shall mean a physical or mental infirmity which impairs
an Optionee's ability to substantially perform his duties with the Company or a
Subsidiary for a period of 180 consecutive days, as determined by an independent
physician selected by agreement between the Company and the Optionee or, failing
such agreement, selected by two physicians (one of which shall be selected by
the Company and the other by the Optionee).
1.9 "Eligible Employee" shall mean an employee of the Company who is at
the time of grant not either (i) an Officer of the Company, or (ii) a Director
of the Company.
1.10 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended. Any reference herein to a specific section of the Exchange Act shall be
deemed to include a reference to any applicable corresponding provision of
future law.
1.11 "Exercise Price" shall mean the price at which an Optionee may
purchase a share of Stock under a Stock Option Agreement.
1.12 "Fair Market Value" on any date shall mean (i) the average closing
sales price of the Stock on such date on the national securities exchange having
the greatest volume of trading in the Stock during the thirty (30) day period
preceding such date or, if such exchange was not open for trading on such date,
the next preceding date on which it was open; (ii) if the Stock is not traded on
any national securities exchange, the average of the closing high bid and low
asked prices of the Stock on the over-the-counter market on the date such value
is to be determined, or in the absence of closing bids on such date, the closing
bids on the next preceding date on which there were bids; or (iii) if the Stock
is not traded on a national securities exchange or the over-the-counter market,
the fair market value as determined in good faith by the Board or the Committee
based on such relevant facts as may be available, including, without limitation,
the price at which recent sales of Stock have been made, the book value of the
Stock and the Company's current and future earnings.
1.13 "For Cause" termination shall mean the termination of an Optionee's
employment as a result of: (i) any act that constitutes on the part of the
Optionee, fraud, dishonesty, gross malfeasance of duty, or conduct grossly
inappropriate to the Optionee's position of employment; or (ii) the conviction
(from which no appeal may be or is timely taken) of the Optionee of a felony.
1.14 "Incentive Stock Option" shall mean an option to purchase Stock of
the Company which complies with and is subject to the terms, limitations, and
conditions of Section 422 of the Code and any regulations promulgated with
respect thereto.
1.15 "Officer" shall mean a person who constitutes an officer of the
Company for the purposes of Section 16 of the Exchange Act, as determined by
reference to such Section 16 and to the rules, regulations, judicial decisions,
and interpretative or "no-action" positions with respect thereto of the
Securities and Exchange Commission, as the same may be in effect or set forth
from time to time.
1.16 "Option" shall mean an option, including an Incentive Stock Option,
to purchase Stock granted pursuant to the provisions of Article VI hereof.
1.17 "Optionee" shall mean a person to whom an Option has been granted
hereunder or his permitted assign.
1.18 "Plan" shall mean the OrthAlliance, Inc. 2000 Employee Stock Option
Plan, the terms of which are set forth herein.
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1.19 "Purchasable" shall refer to Stock which may be purchased by an
Optionee under the terms of this Plan on or after a certain date specified in an
applicable Stock Option Agreement.
1.20 "Section 16 Insider" shall mean any person who is subject to the
provisions of Section 16 of the Exchange Act.
1.21 "Stock" shall mean the Class A Common Stock, $.001 par value per
share, of the Company, subject to applicable provisions of Section 5.2.
1.22 "Stock Option Agreement" shall mean a written agreement between the
Company and an Optionee under which the Optionee may purchase Stock hereunder,
as provided in Article VI hereof.
1.23 "Subsidiary" shall mean any corporation in which the Company
directly or indirectly owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock of such corporation.
ARTICLE II
THE PLAN
2.1 Name. This Plan shall be known as the "OrthAlliance, Inc. 2000
Employee Stock Option Plan."
2.2 Purpose. The purpose of the Plan is to advance the interests of the
Company, its Subsidiaries and its stockholders by affording certain Eligible
Employees of the Company and its Subsidiaries an opportunity to acquire or
increase their proprietary interests in the Company. The objective of the
Options is to promote the growth and profitability of the Company and its
Subsidiaries by providing Optionees with an additional incentive to achieve the
Company's objectives through participation in its success and growth and by
encouraging their continued association with or service to the Company and its
Subsidiaries.
2.3 Effective Date. The effective date of this Plan is April 7, 2000.
ARTICLE III
PARTICIPANTS
The class of persons eligible to participate in the Plan shall consist
of all Eligible Employees of the Company or any Subsidiary whose participation
in the Plan the Committee determines to be in the best interests of the Company.
ARTICLE IV
ADMINISTRATION
4.1 Duties and Powers of the Committee. This Plan shall be administered
by the Committee. The Committee shall select one of its members as its Chairman
and shall hold its meetings at such times and places as it may determine. The
Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it may deem necessary. The
Committee shall have the power to act by unanimous written consent in lieu of a
meeting, and to meet telephonically. In administering this Plan, the Committee's
actions and determinations shall be binding on all interested parties. The
Committee shall have the power to grant Options in accordance with the
provisions of this Plan. Subject to the provisions of this Plan, the Committee
shall have the discretion and authority to determine those persons to whom
Options will be granted, the number of shares of Stock subject to each Option,
such other matters as are specified herein, and any other terms and conditions
of a Stock Option Agreement. To the extent not inconsistent with the provisions
of this Plan, the Committee may give an Optionee an election to surrender an
Option in exchange for the grant of a new Option, and shall have the authority
to amend or modify an outstanding Stock Option Agreement or to waive any
provision thereof, provided that the Optionee consents to such action.
4.2 Interpretation; Rules. Subject to the express provisions of the
Plan, the Committee shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the details and provisions of each Stock Option Agreement, and to make all other
determinations necessary or advisable for the administration of the Plan,
including, without limitation, the amending or altering of the Plan and any
Options granted hereunder as may be required to comply with or to conform to any
federal, state or local laws or regulations.
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4.3 No Liability. Neither any Director nor any member of the Committee
shall be liable to any person for any act or determination made in good faith
with respect to the Plan or any Option granted hereunder.
4.4 Majority Rule. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of the
Committee.
4.5 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability, or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. Subject to any antidilution adjustment pursuant to the
provisions of Section 5.2 hereof, the maximum number of shares of Stock that may
be issued hereunder shall be Five Hundred Thousand (500,000). The amount of
Stock subject to the Plan may be increased from time to time in accordance with
Article VIII hereof. Shares subject to an Option may be either authorized and
unissued shares or shares issued and later acquired by the Company. The shares
covered by any unexercised portion of an Option that has terminated for any
reason (except as set forth in the following paragraph) may again be optioned
under this Plan, and such shares shall not be considered as having been optioned
or issued in computing the number of shares of Stock remaining available for
Options hereunder.
If Options are issued in respect of options to acquire stock of any
entity acquired, by merger or otherwise, by the Company or any Subsidiary, to
the extent that such issuance shall not be inconsistent with the terms,
limitations and conditions of Rule 16b-3 under the Exchange Act, the aggregate
number of shares of Stock for which Options may be granted hereunder shall
automatically be increased by the number of shares subject to the Options so
issued.
5.2 Antidilution.
(a) If (i) the outstanding shares of Stock are increased,
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of merger (excluding mergers of
orthodontic entities with and into the Company), consolidation, reorganization,
recapitalization, reclassification, combination or exchange of shares, or stock
split or stock dividend (excluding the conversion of the Company's Class B
Common Stock into shares of Stock as set forth in the Company's Amended and
Restated Certificate of Incorporation), (ii) any spin-off, split-off or other
distribution of assets materially affects the price of the Company's stock, or
(iii) there is any assumption and conversion to this Plan by the Company of an
acquired company's outstanding option grants, then:
(A) the aggregate number and kind of shares of Stock for
which Options may be granted hereunder shall be adjusted
appropriately by the Committee; and
(B) the rights of Optionees (concerning the number of
shares of Stock subject to Options and the Exercise Price) under
outstanding Options shall be adjusted appropriately by the
Committee.
(b) If not provided in a Stock Option Agreement to the contrary,
if a Change in Control occurs, the Committee, in its discretion, may provide:
(i) notwithstanding other provisions hereof, that all
Options granted under this Plan shall become exercisable
immediately, notwithstanding the provisions of the respective
Stock Option Agreements regarding exercisability, and that all
such Options shall terminate ninety (90) days after the
Committee gives written notice of the immediate right to
exercise all such Options and of the decision to terminate all
Options not exercised within such 90-day period; or
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(ii) notice to all Optionee's that all Options granted
under this Plan shall be assumed by the successor corporation or
substituted on an equitable basis with options issued by such
successor corporation.
(c) If the Company is to be liquidated or dissolved in
connection with a Change in Control, the provisions of Section 5.2(b) shall
apply. In all other instances, the adoption of a plan of dissolution or
liquidation of the Company shall, notwithstanding other provisions hereof, cause
all then-remaining restrictions pertaining to Options under the Plan to lapse,
and shall cause every Option outstanding under the Plan to terminate to the
extent not exercised prior to the adoption of the plan of dissolution or
liquidation by the stockholders; provided, however, that, notwithstanding any
other provisions hereof, the Committee may declare all Options granted under the
Plan to be exercisable at any time on or before the fifth (5th) business day
following such adoption, notwithstanding the provisions of the respective Stock
Option Agreements regarding exercisability.
(d) The adjustments described in paragraphs (a) through (c) of
this Section 5.2, and the manner of their application, shall be determined
solely by the Committee, and any such adjustment may provide for the elimination
of fractional share interests. The adjustments required under this Article V
shall apply to any successors of the Company and shall be made regardless of the
number or type of successive events requiring such adjustments.
ARTICLE VI
OPTIONS
6.1 Types of Options Granted. The Committee may, under this Plan, grant
only Options which do not qualify as Incentive Stock Options. Options may be
granted subject to conditions based on the financial performance of the Company
or any other factor the Committee deems relevant. Neither the Company, nor any
Subsidiary or any other person warrants or otherwise represents that favorable
or desirable tax treatment or characterization will be applicable in respect of
any Option or Stock.
6.2 Option Grant and Agreement. Each Option granted hereunder shall be
evidenced by minutes of a meeting or the written consent of the Committee and by
a written Stock Option Agreement executed by the Company and the Optionee. The
terms of the Option, including the Option's duration, time or times of exercise
and exercise price, shall be stated in the Stock Option Agreement. Every
Optionee shall be given a copy of the Plan.
6.3 Exercise Price. The Exercise Price of the Stock subject to each
Option shall be determined by the Committee.
6.4 Exercise Period. The period for the exercise of each Option granted
hereunder shall be determined by the Committee. In addition, no Option granted
to a Section 16 Insider shall be exercisable prior to the expiration of six (6)
months from the date such Option is granted, other than in the case of the death
or Disability of the Optionee.
6.5 Option Exercise.
(a) Unless otherwise provided in the Stock Option Agreement or
Section 6.4 hereof, an Option may be exercised at any time or from time to time
during the term of the Option as to any or all full shares which have become
Purchasable under the provisions of the Option, but not at any time as to less
than one hundred (100) shares unless the remaining shares that have become so
Purchasable are less than one hundred (100) shares. The Committee shall have the
authority to prescribe in any Stock Option Agreement that the Option may be
exercised only in accordance with a vesting schedule during the term of the
Option.
(b) An Option shall be exercised by (i) delivery to the Company
at its principal office of a written notice of exercise with respect to a
specified number of shares of Stock and (ii) payment to the Company at that
office of the full amount of the Exercise Price for such number of shares in
accordance with Section 6.5(c). If requested by an Optionee, an Option may be
exercised with the involvement of a stockbroker in accordance with the federal
margin rules set forth in Regulation T (in which case the certificates
representing the underlying shares will be delivered by the Company directly to
the stockbroker).
(c) The Exercise Price is to be paid in full in cash by a
certified or cashier's check payable to the
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Company upon the exercise of the Option, and the Company shall not be required
to deliver certificates for the shares purchased until such payment has been
made; provided, however, that the Committee may provide in a Stock Option
Agreement (or may otherwise determine in its sole discretion at the time of
exercise) that in lieu of cash, all or any portion of the Exercise Price may be
paid by tendering to the Company shares of Stock duly endorsed for transfer and
owned by the Optionee, or by authorization to the Company to withhold shares of
Stock otherwise issuable upon exercise of the Option, in each case to be
credited against the Exercise Price at the Fair Market Value of such shares on
the date of exercise (however, no fractional shares may be so transferred, and
the Company shall not be obligated to make any cash payments in consideration of
any excess of the aggregate Fair Market Value of shares transferred over the
aggregate Exercise Price); provided further, the Committee may provide in a
Stock Option Agreement (or may otherwise determine in its sole discretion at the
time of exercise) that, in lieu of cash or shares, full payment may be effected
through a broker-dealer sale and remittance procedure pursuant to which the
Optionee (i) shall provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sale of the purchased shares and remit to
the Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price (plus all applicable
Federal and State income and employment taxes required to be withheld by the
Company by reason of such purchase) and (ii) shall provide written directives to
the Company to deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale transaction.
(d) In addition to and at the time of payment of the Exercise
Price, the Company may withhold, or require the Optionee to pay to the Company
in cash, the amount of any federal, state and local income, employment or other
withholding taxes which the Committee determines are required to be withheld
under federal, state or local law in connection with the exercise of an Option;
provided, however, the Committee may provide in a Stock Option Agreement (or may
otherwise determine in its sole discretion at the time of exercise) that all or
any portion of such tax obligations may, upon the election of the Optionee, be
paid by tendering to the Company whole shares of Stock duly endorsed for
transfer and owned by the Optionee, or by authorization to the Company to
withhold shares of Stock otherwise issuable upon exercise of the Option, in
either case in that number of shares having a Fair Market Value on the date of
exercise equal to the amount of such taxes thereby being paid, and subject to
such restrictions as to the approval and timing of any such election as the
Committee may from time to time determine to be necessary or appropriate to
satisfy the conditions of the exemption set forth in Rule 16b-3 under the
Exchange Act, if such rule is applicable. To the extent tax withholding is
required at an applicable time with respect to Options or Stock acquired under
this Plan by an Optionee, the Company, applicable Subsidiary or other entity
upon which such withholding obligation arises shall be entitled to withhold from
such Optionee's compensation (derived from this Plan or otherwise) the
applicable amount required to be withheld).
(e) The holder of an Option shall not have any of the rights of
a stockholder with respect to the shares of Stock subject to the Option until
such shares have been issued and transferred to the Optionee upon the exercise
of the Option.
(f) Notwithstanding anything to the contrary herein or in a
Stock Option Agreement, a given Option shall not be exercisable to the extent
the exercise thereof would cause the Company to be a reporting company under the
Exchange Act.
6.6 Nontransferability of Option. No Option shall be transferable by an
Optionee other than by will or the laws of descent and distribution; provided,
however, that no Option shall be transferable prior to stockholder approval of
the Plan by an Optionee who is a Section 16 Insider. During the lifetime of an
Optionee, Options shall be exercisable only by such Optionee (or by such
Optionee's guardian or legal representative, should one be appointed).
6.7 Termination of Employment or Service. The Committee shall have the
power to specify, with respect to the Options granted to a particular Optionee,
the effect upon such Optionee's right to exercise an Option as a result of
termination of such Optionee's employment or service under various
circumstances, which effect may include immediate or deferred termination of
such Optionee's rights under an Option, or acceleration of the date at which an
Option may be exercised in full.
6.8 Employment Rights. Nothing in the Plan or in any Stock Option
Agreement shall confer on any person any right to continue in the employ of the
Company or any of its Subsidiaries, or shall interfere in any way with the right
of the Company or any of its Subsidiaries to terminate such person's employment
at any time.
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6.9 Disabled Optionee. In the event of termination of employment because
of the Optionee's becoming a Disabled Optionee, such Optionee (or his or her
legal representative) may exercise an Option within a period ending on the
earlier of (a) the last day of the one (1) year period following the beginning
of such Optionee's Disability or (b) the expiration date of an Option, to the
extent of the number of shares which were Purchasable hereunder at the date of
such termination.
6.10 Certain Successor Options. To the extent not inconsistent with the
terms, limitations and conditions of Code Section 422 and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or any Subsidiary of the Company) may contain terms that differ
from those stated in this Article, but solely to the extent necessary to
preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code Section 424(a).
ARTICLE VII
STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate
for shares of Stock purchased upon the exercise of any Option granted hereunder
or any portion thereof, prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed;
(b) The completion of any registration or other qualification of
such shares which the Committee shall deem necessary or advisable under any
federal or state law or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body;
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency or body which the Committee shall determine
to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Board from time to time may establish for reasons
of administrative convenience.
Stock certificates issued and delivered to Optionees shall bear such restrictive
legends as the Company shall deem necessary or advisable pursuant to applicable
federal and state securities laws.
ARTICLE VIII
TERMINATION AND AMENDMENT OF PLAN
8.1 Termination and Amendment. The Board may at any time terminate the
Plan, and may at any time and from time to time and in any respect amend the
Plan; provided, however, that the Board (unless its actions are approved or
ratified by the stockholders of the Company within twelve (12) months of the
date that the Board amends the Plan) may not amend the Plan to:
(a) grant Incentive Stock Options; or
(b) include Officers or Directors.
8.2 Effect on Optionee's Rights. No termination, amendment or
modification of the Plan shall affect adversely an Optionee's rights under a
Stock Option Agreement without the consent of the Optionee or his legal
representative.
ARTICLE IX
RELATIONSHIP TO OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock option,
incentive, or other compensation plans in effect for the Company or any of its
Subsidiaries; nor shall the adoption of the Plan preclude the Company or any of
its
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Subsidiaries from establishing any other form of incentive or other compensation
plan for employees of the Company or any of its Subsidiaries.
ARTICLE X
MISCELLANEOUS
10.1 Replacement or Amended Grants. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or accept the surrender of outstanding Options and grant new
Options in substitution for them. However, no modification of an Option shall
adversely affect an Optionee's rights under a Stock Option Agreement without the
consent of the Optionee or his legal representative.
10.2 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company.
10.3 Singular; Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural and the masculine pronoun shall include the
feminine gender and vice versa.
10.4 Headings Not Part of Plan. Headings of Articles and Sections hereof
are inserted for convenience and reference and do not constitute part of the
Plan.
10.5 Interpretation. With respect to Section 16 Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Plan administrators fails to so comply, it shall be
deemed void to the extent permitted by law and deemed advisable by the Plan
administrators.
10.6 Governing Law. This Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware without regard to conflicts
of laws principles.
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OrthAlliance, Inc.
2000 Employee Stock Option Plan
Form of Stock Option Agreement
ORTHALLIANCE, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), entered into as of this
_____ day of ________________, 2000 by and between OrthAlliance, Inc., a
Delaware corporation (the "Company"), and _________________ (the "Optionee").
WHEREAS, on April 7, 2000, the Board of Directors of the Company adopted
a stock option plan known as the "OrthAlliance, Inc. 2000 Employee Stock Option
Plan" (the "Plan") and recommended that the Plan be approved by the Company's
stockholders; and
WHEREAS, the Committee has granted the Optionee an Option (as described
below) to purchase the number of shares of the Company's Common Stock (the
"Stock") as set forth below, and in consideration of the granting of the Option
the Optionee intends to remain in the employ of the Company; and
WHEREAS, the Company and the Optionee desire to enter into a written
agreement with respect to the Option in accordance with the Plan; and
WHEREAS, capitalized terms not defined herein shall have the meanings
ascribed to them in the Plan;
NOW, THEREFORE, as an employment incentive and to encourage stock
ownership, and also in consideration of the mutual covenants contained herein,
the parties hereto agree as follows.
1. Incorporation of Plan. This Option is granted pursuant to the
provisions of the Plan and the terms and definitions of the Plan are
incorporated herein by reference and made a part hereof. A copy of the Plan has
been delivered to, and receipt is hereby acknowledged by, the Optionee.
Notwithstanding anything in this Agreement to the contrary, to the extent the
terms of this Agreement conflict with or otherwise attempt to exceed the
authority set forth under the Plan, the Plan shall govern and control in all
respects.
2. Grant of Option. Subject to the terms, restrictions, limitations, and
conditions stated herein and the terms of the Plan, the Company hereby evidences
its grant to the Optionee, not in lieu of salary or other compensation, of the
right and option to purchase all or any part of the number of shares of Stock
(as defined under the Plan), set forth on Schedule A attached hereto and
incorporated herein by reference (the "Option"). Except as otherwise provided
herein and subject to any applicable termination of the Option, the Option shall
be exercisable in the amounts and at the times specified on Schedule A. The
Option shall expire and shall not be exercisable after the date specified on
Schedule A as the expiration date or on such earlier date as determined pursuant
to the Plan.
3. Purchase Price. The price per share to be paid by the Optionee for
the shares subject to this Option (the "Exercise Price") shall be as specified
on Schedule A.
4. Exercise Terms. In the event this Option is not exercised with
respect to all or any part of the shares subject to this Option prior to its
expiration, the shares with respect to which this Option was not exercised shall
no longer be subject to this Option.
5. Restrictions on Transferability. No Option shall be transferable by
Optionee other than by will or the laws of descent and distribution; provided,
however, that no Option shall be transferable prior to stockholder approval of
the Plan by Optionee if Optionee is a Section 16 Insider. During the lifetime of
Optionee, Options shall be exercisable only by Optionee (or by Optionee's
guardian or legal representative, should one be appointed).
6. Notice of Exercise of Option. This Option may be exercised by the
Optionee, or by the Optionee's administrators, executors or personal
representatives, by a written notice (in substantially the form of the Notice of
Exercise attached hereto as Schedule B) signed by the Optionee, or by such
administrators, executors or personal
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representatives, and delivered or mailed to the Company as specified in Section
15 hereof to the attention of the Senior Vice President, General Counsel or such
other officer as the Company may designate. Any such notice shall (a) specify
the number of shares of Stock which the Optionee or the Optionee's
administrators, executors or personal representatives, as the case may be, then
elects to purchase hereunder, (b) contain such information as may be reasonably
required pursuant to Section 12 hereof, and (c) be accompanied by (i) a
certified or cashier's check payable to the Company in payment of the total
Exercise Price applicable to such shares as provided herein, (ii) shares of
Stock owned by the Optionee and duly endorsed or accompanied by stock transfer
powers having a Fair Market Value equal to the total Exercise Price applicable
to such shares purchased hereunder, or (iii) a certified or cashier's check
accompanied by the number of shares of Stock whose Fair Market Value when added
to the amount of the check equals the total Exercise Price applicable to such
shares purchased hereunder, or (iv) payment through a broker-dealer sale and
remittance procedure pursuant to which Optionee shall provide irrevocable
written instructions to a designated brokerage firm to effect the immediate sale
of the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price (plus all applicable Federal and State income and employment
taxes required to be withheld by the Company by reason of such exercise) and
written directives to the Company to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale
transaction. Upon receipt of any such notice and accompanying payment, and
subject to the terms hereof, the Company agrees to issue to the Optionee or the
Optionee's administrators, executors or personal representatives, as the case
may be, stock certificates for the number of shares specified in such notice
registered in the name of the person exercising this Option.
7. Adjustment in Option. The number of shares of Stock subject to this
Option, the Exercise Price and other matters are subject to adjustment during
the term of this Option in accordance with the Plan.
8. Termination of Employment.
(a) In the event of the termination of the Optionee's employment
with the Company or any of its Subsidiaries, other than a termination that is
either (i) For Cause, or (ii) for reasons of death or Disability or retirement,
the Optionee (or his or her personal representative) may exercise this Option at
any time within ninety (90) days after such termination to the extent of the
number of shares which were Purchasable hereunder at the date of such
termination; provided, however, that if the Optionee is a Section 16 Insider at
the time of termination and the exercise of this Option would subject the
Optionee to matching pursuant to Section 16(b) of the Exchange Act, such
Optionee may exercise this Option at any time within nine (9) months after the
date of termination, to the extent of the number of shares which were
Purchasable hereunder at the date of such termination.
(b) In the event of a termination of the Optionee's employment
that is For Cause, this Option, to the extent not previously exercised, shall
terminate immediately and shall not thereafter be or become exercisable.
(c) This Option does not confer upon the Optionee any right with
respect to continuance of employment by the Company or by any of its
Subsidiaries. This Option shall not be affected by any change of employment so
long as the Optionee continues to be an employee of the Company or any of its
Subsidiaries.
9. Disabled Optionee. In the event of termination of employment because
of the Optionee's becoming a Disabled Optionee, the Optionee (or his or her
legal representative) may exercise this Option within a period ending on the
earlier of (a) the last day of the one (1) year period following the beginning
of the Optionee's Disability or (b) the expiration date of this Option, to the
extent of the number of shares which were Purchasable hereunder at the date of
such termination.
10. Death of Optionee. In the event of the Optionee's death while
Optionee is employed by the Company, the appropriate persons described in
Section 6 hereof or persons to whom all or a portion of this Option is
transferred in accordance with Section 5 hereof may exercise this Option at any
time within a period ending on the earlier of (a) the last day of the one (1)
year period following the Optionee's death or (b) the expiration date of this
Option. In the event of such death, this Option may be so exercised to the
extent of the number of shares that were Purchasable hereunder at the date of
death.
11. Date of Grant. This Option was granted by the Board or Committee on
the date set forth in Schedule A (the "Date of Grant").
2
<PAGE> 11
12. Compliance with Regulatory Matters. The Optionee acknowledges that
the issuance of capital stock of the Company is subject to limitations imposed
by federal and state law and the Optionee hereby agrees that the Company shall
not be obligated to issue any shares of Stock upon exercise of this Option that
would cause the Company to violate law or any rule, regulation, order or consent
decree of any regulatory authority (including without limitation the Securities
and Exchange Commission) having jurisdiction over the affairs of the Company.
The Optionee agrees that he or she will provide the Company with such
information as is reasonably requested by the Company or its counsel to
determine whether the issuance of Stock complies with the provisions described
by this Section.
13. Investment Representation of Optionee
(a) Optionee represents to the Company the following:
(i) that Optionee has read and understands the terms and
provisions of the Plan, and hereby accepts this Agreement
subject to all the terms and provisions of the Plan;
(ii) that Optionee shall accept as binding and final all
decisions or interpretations of the Board or of the Committee
upon any questions arising under the Plan;
(iii) Optionee understands that, unless at the time of
exercise of the Option, a registration statement under the
Securities Act of 1933, as amended, is in effect covering the
Stock, as a condition to the exercise of the Option the Company
may require Optionee to represent that Optionee is acquiring the
Stock for Optionee's own account only and not with a view to, or
for sale in connection with, any distribution of the Stock.
(b) The Optionee understands and agrees that the certificate or
certificates representing any shares of Stock acquired hereunder may bear an
appropriate legend relating to registration and resale under federal and state
securities laws.
(c) The Optionee shall not have any rights of a stockholder of the
Company with respect to the shares of Stock which may be purchased upon exercise
of this Option, unless and until such shares shall have been issued and
delivered and his/her name has been entered as a stockholder on the stock
transfer records of the Company.
14. Miscellaneous.
(a) This Agreement shall be binding upon the parties hereto and
their representatives, successors and assigns.
(b) This Agreement is executed and delivered in, and shall be
governed by the laws of, the State of Delaware, without regard to conflicts of
laws principles.
(c) Any notice, request, document or other communication given
hereunder shall be deemed to be sufficiently given upon personal delivery to the
other party or upon the expiration of three (3) days after depositing same in
the United States mail, return receipt requested, properly addressed to the
respective parties or such other address as they may give to the other party in
writing in the same manner as follows:
Company: OrthAlliance, Inc.
21535 Hawthorne Blvd., Suite 200
Torrance, California 90503
Attention: Senior Vice President,
General Counsel
Optionee:
-----------------------------------
-----------------------------------
-----------------------------------
3
<PAGE> 12
(d) This Agreement may not be modified except in writing
executed by each of the parties hereto.
(e) This Agreement, together with the Plan, contains the entire
understanding of the parties hereto and supersedes any prior understanding
and/or written or oral agreement between them respecting the subject matter
hereof.
(f) The parties agree that the provisions of this Agreement are
severable and the invalidity or unenforceability of any provision in whole or
part shall not affect the validity or enforceability of any enforceable part of
such provision or any other provisions hereof.
(g) The headings with Sections herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
(h) No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature.
(i) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Board or Committee has caused this Stock
Option Agreement to be executed on behalf of the Company and the Optionee has
executed this Stock Option Agreement, all as of the day and year first above
written.
COMPANY:
Attest: ORTHALLIANCE, INC.
By:
----------------------------------- ---------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
----------------------------- ------------------------------
OPTIONEE:
By:
---------------------------------
4
<PAGE> 13
SCHEDULE A
TO
STOCK OPTION AGREEMENT
BETWEEN
ORTHALLIANCE, INC.
AND
[NAME OF OPTIONEE]
Dated ________________
1. Number of Shares Subject to Option: ________________ shares of Stock.
2. Option Exercise Price: $_________________ per share.
3. Date of Grant: ________________________
4. Option Vesting Schedule:
Options are exercisable with respect to the number of shares of Stock
indicated below on or after the date indicated next to the number of shares:
No. of Shares Vesting Date
------------- ------------
Notwithstanding the vesting schedule set forth above, upon a Change in
Control, as defined in the Plan, all Options granted hereunder shall become
exercisable immediately upon the occurrence of such Change in Control for a
period of ninety (90) days after written notice to Optionee of the right to such
Options. Any Options not exercised within such ninety day period shall terminate
after the expiration of such period.
5. Option Exercise Period:
The Option shall expire and cease to be exercisable after the expiration
of ten (10) years from the Date of Grant, subject to any earlier termination of
this Option that may be set forth in this Agreement.
<PAGE> 14
SCHEDULE B
TO
STOCK OPTION AGREEMENT
BETWEEN
ORTHALLIANCE, INC.
AND
[NAME OF OPTIONEE]
Dated ________________
NOTICE OF EXERCISE
The undersigned hereby notifies OrthAlliance, Inc. (the "Company") of
this election to exercise the undersigned's stock option to purchase
________________ shares of Stock (as defined under the Plan) pursuant to the
Stock Option Agreement (the "Agreement") between the undersigned and the Company
dated ________________. Accompanying this Notice is (1) a certified or a
cashier's check in the amount of $________________ payable to the Company,
and/or (2) _______________ shares of Stock (as defined under the Plan) presently
owned by the undersigned and duly endorsed or accompanied by stock transfer
powers, having an aggregate Fair Market Value (as defined under the Plan) as of
the date hereof of $__________________, such amounts being equal, in the
aggregate, to the purchase price per share set forth in Section 3 of the
Agreement multiplied by the number of shares being purchased hereby (in each
instance subject to appropriate adjustment pursuant to Section 7 of the
Agreement), and/or (3) evidence of a cashless exercise as set forth in Section 6
of the Agreement.
The undersigned is a resident of the State of _____________.
IN WITNESS WHEREOF, the undersigned has set his/her hand this ________
day of ________________, ______.
OPTIONEE [OR OPTIONEE'S ADMINISTRATOR,
EXECUTOR OR PERSONAL REPRESENTATIVE]
_____________________________________
Name:
Position (if other than Optionee):
