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EXH. 4.3
ORTHALLIANCE, INC.
1997 ORTHODONTIST STOCK OPTION PLAN, AS AMENDED
ORTHALLIANCE, INC.
1997 ORTHODONTIST 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 "Allied Orthodontist" shall mean an orthodontist or dentist who (i)
holds an equity interest in an Allied Practice, or (ii) is a party to an
existing employment agreement with an Allied Practice.
1.2 "Allied Practice" shall mean a professional business entity that
provides orthodontic or dental services to the public and is a party to an
existing (i) service agreement or (ii) consulting and business services
agreement with the Company or a subsidiary, whereby the Company or a subsidiary
provides management or consulting services to such entity in exchange for a
service or consulting fee.
1.3 "Board" shall mean the Board of Directors of the Company.
1.4 "Change in Control" shall mean the occurrence of any of the
following events:
(a) a reorganization, merger or consolidation of the Company with
one or more other corporations (except with respect to a
transaction in which the sole purpose 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 (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);
(b) a sale of all or substantially all of the Company's assets; or
(c) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than any person who is a
stockholder of the Company on or before the effective date of
the 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.
1.5 "Closing Stock Price" shall mean the price used to determine the
number of shares of Stock that a recruited or referred orthodontist or dentist
received or would have received upon the closing of the affiliation of such
orthodontist or dentist with the Company or a subsidiary.
1.6 "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.
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1.7 "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 are Non-Employee Directors (within the meaning of Rule 16b-3). 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.
1.8 "Company" shall mean OrthAlliance, Inc., a Delaware corporation.
1.9 "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.
1.10 "Consultant" shall mean a person who is engaged by the Company to
recruit prospective Allied Orthodontists for the Company or a Subsidiary.
1.11 "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.
1.12 "Exercise Price" shall mean the price at which an Optionee may
purchase a share of Stock under a Stock Option Agreement.
1.13 "Fair Market Value" on any date shall mean (i) the average closing
sales price of the Stock for the immediately preceding five (5) trading days;
(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 Nasdaq National
Market or other 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.
1.14 "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.
1.15 "Option" shall mean an option to purchase Stock granted pursuant to
the provisions of Article VI hereof.
1.16 "Optionee" shall mean an Allied Orthodontist or Consultant to whom
an Option has been granted hereunder or their permitted assign.
1.17 "Plan" shall mean the OrthAlliance, Inc. 1997 Orthodontist Stock
Option Plan, the terms of which are set forth herein.
1.18 "Section 16 Insider" shall mean any person who is subject to the
provisions of Section 16 of the Exchange Act.
1.19 "Stock" shall mean the Class A Common Stock, $.001 par value per
share, of the Company, subject to applicable provisions of Section 5.2.
1.20 "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.
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1.21 "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. 1997
Orthodontist 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 Allied
Orthodontists and Consultants 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
Allied Orthodontists and Consultants with an additional incentive to achieve the
Company's objectives through participation in its success and growth and by
rewarding Allied Orthodontists and Consultants for successfully recruiting or
referring additional orthodontists or dentists to affiliate with the Company or
a Subsidiary.
2.3 Effective Date. The effective date of this Plan is October 14, 1997,
subject to stockholder approval.
ARTICLE III
PARTICIPANTS
3.1 Allied Orthodontist. An Allied Orthodontist may be eligible to
participate in the Plan if the Committee determines, in its sole discretion,
that such Allied Orthodontist recruited or referred an orthodontist or dentist
to the Company and such orthodontist or dentist consummates a business
combination with the Company or a Subsidiary whereby such orthodontist or
dentist becomes an Allied Orthodontist.
3.2 Consultant. A Consultant may be eligible to participate in the Plan
if the Committee determines, in its sole discretion, that such Consultant
recruited an orthodontist or dentist to the Company and such orthodontist or
dentist consummates a business combination with the Company or a Subsidiary
whereby such orthodontist or dentist becomes an Allied Orthodontist.
ARTICLE IV
ADMINISTRATION
4.1 Duties and Powers of the Committee. This Plan shall be administered
by the Committee. The Committee shall hold its meetings at such times and places
as it may determine and shall keep minutes of such meetings. The Committee 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. Only 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
Allied Orthodontists and Consultants 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 the eligibility of
Allied Orthodontists and Consultants to receive a grant under the Plan, their
death, disability, or other termination of status as an Allied Orthodontist or
Consultant 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 Three Hundred Thousand (300,000). The amount of
Stock subject to the Plan may be increased from time to time in accordance with
Article VIII hereof. Shares of Stock 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 promulgated pursuant to 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, 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 a Change in Control occurs, the Committee, in its
discretion, may provide notice to all Optionees 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, the adoption
of a plan of dissolution or liquidation of the Company shall cause every Option
outstanding under the Plan to terminate to the extent not exercised prior to the
adoption of such 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.
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(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 non-qualified Options. Neither the Company, any Subsidiary nor any other
person warrants or otherwise represents that favorable or desirable tax
treatment or characterization will be applicable in respect of any Option or
shares of Stock relating thereto.
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 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 the same as the Closing Stock Price used for the orthodontist or
dentist that the Optionee recruited or referred to the Company that created such
Optionee's eligibility for a grant of an Option hereunder.
6.4 Exercise Period. The period for the exercise of each Option granted
hereunder shall commence immediately upon the grant date and remain exercisable
until such Option expires and is no longer exercisable after the fifth
anniversary of the grant date of such Option.
6.5 Option Exercise.
(a) Unless otherwise provided in the Stock Option Agreement or
this Section, 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 subject to the Option, but
not at any time as to less than one hundred (100) shares unless the remaining
shares subject to the Option 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).
(c) The Exercise Price is to be paid in full in cash by a
certified or cashier's check payable to the 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).
(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
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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.
(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.
6.6 Nontransferability of Option. No Option shall be transferable by an
Optionee other than by will or the laws of descent and distribution.
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 the stock exchange,
Nasdaq National Market or other over-the-counter market 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) Materially increase the number of shares of Stock subject to
the Plan, except as contemplated in Section 5.2 hereof;
(b) Materially change the class of persons that may participate in
the Plan; or
(c) Otherwise materially increase the benefits accruing to
participants under the Plan.
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, unless such termination, amendment or modification is required
to comply with applicable state and federal laws.
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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 Subsidiaries from establishing any other form of incentive or other
compensation plan for employees or Directors 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, unless such modification is
required to comply with applicable state and federal laws.
10.2 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company.
10.3 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.
10.4 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.
10.5 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.
1997 Orthodontist Stock Option Plan
Form of Stock Option Agreement
ORTHALLIANCE, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), entered into as of the
_____ day of ________________, 1999 by and between OrthAlliance, Inc., a
Delaware corporation (the "Company"), and _________________ (the "Optionee").
WHEREAS, on October 14, 1997, the Board of Directors of the Company
adopted a stock option plan known as the "OrthAlliance, Inc. 1997 Orthodontist
Stock Option Plan" (the "Plan") and recommended that the Plan be approved by the
Company's stockholders; and
WHEREAS, on June 3, 1999 the stockholders of the Company approved the
Plan;
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
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, 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 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"). The
Option shall be exercisable in the amounts 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.
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 representatives, and delivered or mailed
to the Company as specified in Section 12 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
<PAGE> 9
reasonably required pursuant to Section 10 hereof, and (c) be accompanied by a
certified or cashier's check payable to the Company in payment of the total
Exercise Price applicable to such shares as provided herein; or, if approved by
the Committee (i) 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 (ii) 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, subject to
compliance with applicable federal and state laws. 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 Death of Optionee. In the event of the Optionee's death, 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.
9 Date of Grant. This Option was granted by the Committee on the date
set forth in Schedule A (the "Date of Grant").
10 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.
11 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; and
(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.
12 Miscellaneous.
<PAGE> 10
(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:
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(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 Committee has caused this Stock Option
Agreement to be executed on behalf of the Company and attested by the Secretary
or an Assistant Secretary of the Company, and the Optionee has executed this
Stock Option Agreement, all as of the day and year first above written.
COMPANY:
ORTHALLIANCE, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
OPTIONEE:
By:
--------------------------------
<PAGE> 11
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 Exercise Period:
<PAGE> 12
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).
The undersigned is a resident of the State of ______________________.
IN WITNESS WHEREOF, the undersigned has set his/her hand and seal,
this ________ day of ________________, ______.
OPTIONEE [OR OPTIONEE'S ADMINISTRATOR,
EXECUTOR OR PERSONAL REPRESENTATIVE]
------------------------------------
Name:
-------------------------------
Position (if other than Optionee):
