<PAGE> 1
As filed with the Securities and Exchange Commission on March __, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------------------
ORTHALLIANCE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-463213
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21535 HAWTHORNE BOULEVARD, SUITE 200
TORRANCE, CALIFORNIA 90503
(Address, including zip code, of registrant's principal executive offices)
ORTHALLIANCE, INC.
1999 ORTHODONTIST STOCK OPTION PLAN
(Full title of plan)
SAM WESTOVER
CHIEF EXECUTIVE OFFICER
21535 HAWTHORNE BOULEVARD, SUITE 200
TORRANCE, CALIFORNIA 90503
(310) 792-1300
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
COPY TO:
MICHAEL J. O'SULLIVAN, ESQ.
MUNGER, TOLLES & OLSON LLP
355 SOUTH GRAND AVENUE, SUITE 3500
LOS ANGELES, CALIFORNIA 90071-1560
(213) 683-9100
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Proposed
Proposed Maximum
Title of Maximum Aggregate
Securities To Be Amount To Be Offering Price Offering Amount of
Registered Registered (1) Per Share(2) Price(2) Registration Fee
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common
Stock, par value
$.001 per share 280,000 (2) $2,830,520 $747.26
- ------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the OrthAlliance, Inc. 1999
Orthodontist Stock Option Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without
the receipt of consideration which results in an increase in the number
of the outstanding shares of Common Stock of OrthAlliance, Inc.
(2) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(h) on the basis of the average prices of the total
of (a) options to be granted upon effectiveness of this Registration
Statement for 116,641 shares of Class A Common Stock at an exercise
price per share of $7.75, (b) options to be granted upon effectiveness
of this Registration Statement for 157,733 shares of Class A Common
Stock at an exercise price per share of $12.00 and (c) $6.00 per share
(the average of the high and low prices of the Registrant's Stock on
March 7, 2000 as reported by the Nasdaq National Market) for 5,626
shares of Class A Common Stock under the Plan for which the Registrant
has no present intent to grant options at a particular exercise price.
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<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 will
be sent or given to participants as specified by Rule 428(b)(1) of the
Securities Act of 1933, as amended (the "Securities Act"). These documents and
the documents incorporated by reference in this registration statement (the
"Registration Statement") pursuant to Item 3 of Part II below, taken together,
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents have been previously filed by the Registrant with the
Securities and Exchange Commission (the "Commission") and are incorporated by
reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998 filed with the Commission on March 31, 1999;
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999 filed with the
Commission on May 17, 1999, August 13, 1999 and November 12, 1999, respectively;
and
(c) The description of the Registrant's Class A Common Stock, par value
$.001 per share ("Common Stock"), contained in the Registration Statement on
Form 8-A, dated August 12, 1997, filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including any amendment filed for the
purpose of updating such description.
In addition, all documents filed by the Registrant subsequent to the date of
this Registration Statement pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act, and prior to the filing of a post-effective amendment to this
Registration Statement that indicate that all securities offered hereunder have
been sold or that deregister all securities then remaining unsold shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part of this Registration Statement from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
<PAGE> 4
Registrant's Amended and Restated Certificate of Incorporation ("Certificate")
provides that no director of the Registrant shall be liable for breach of
fiduciary duty as a director except for (i) any breach of the director's duty of
loyalty to the Registrant or its stockholders; (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of the
law; (iii) willful or negligent violations of certain provisions of the Delaware
General Corporation Law ("DGCL") imposing certain requirements with respect to
stock repurchases, redemptions and dividends; or (iv) any transaction from which
the director derived an improper personal benefit.
Pursuant to the Registrant's Certificate and Amended and Restated Bylaws, the
Registrant is obligated to indemnify each of its directors and officers to the
fullest extent permitted by the DGCL. Under Section 145 of the DGCL, the
Registrant may indemnify any of its directors and officers against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with a threatened,
pending or completed action, suit or proceeding brought against him by reason of
the fact that he is or was a director or officer (i) if any such person acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the Registrant and (ii) in connection with any criminal action
or proceeding if such person had no reasonable cause to believe such conduct was
unlawful.
In actions brought by or in the right of the Registrant, Section 145 of the DGCL
provides that no indemnification for expenses may be made in respect of any
claim, issue or matter as to which any director or officer of the Registrant
shall have been adjudged to be liable for negligence or misconduct in the
performance of such person's duty to the Registrant unless, and only to the
extent that, the Court of Chancery of the State of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in review of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Pursuant to the Registrant's Bylaws, the Registrant may purchase and maintain
insurance on behalf of any director or officer of the Registrant against any
liability asserted against and incurred by such director or officer, whether or
not the Registrant would have the power to indemnify such officer or director
against such liability under the Bylaws or DGCL.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
4.1 Amended and Restated Certificate of Incorporation of
Registrant (incorporated by reference to Exhibit 3.1
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
of Registrant's Registration Statement on Form S-1,
Registration No. 333-27143).
4.2 Amended and Restated Bylaws of Registrant (incorporated by
reference to Exhibit 3.2 of Registrant's Registration
Statement on Form S-1, Registration No. 333-27143).
4.3 OrthAlliance, Inc. 1999 Orthodontist Stock Option Plan.
4.4 Form of Stock Option Agreement pursuant to OrthAlliance,
Inc. 1999 Orthodontist Stock Option Plan.
5.1 Opinion of Munger, Tolles & Olson LLP regarding legality
of shares being registered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Munger, Tolles & Olson LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
</TABLE>
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
anew registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
<PAGE> 6
(b) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Torrance, State of California, on the 14th day of March, 2000.
ORTHALLIANCE, INC.
By: /s/ SAM WESTOVER
------------------------------
Sam Westover
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Sam Westover, James C. Wilson and Paul H. Hayase and
each of them, a true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for such person and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same with all exhibits thereto and other
documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and any of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed by the following persons in the capacities and as of the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ SAM WESTOVER President, Chief Executive March 14, 2000
- --------------------- Officer and Director
Sam Westover (Principal Executive Officer)
/s/ JAMES C. WILSON Chief Financial Officer March 14, 2000
- ---------------------- (Principal Financial and
James C. Wilson Accounting Officer)
/s/ W. DENNIS SUMMERS Chairman of the Board March 14, 2000
- ----------------------
W. Dennis Summers
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ RANDALL K. BENNETT Director March 14, 2000
- ------------------------
Randall K. Bennett
Director March __, 2000
- ------------------------
Douglas D. Durbin
Director March __, 2000
- ------------------------
G. Harry Durity
/s/ RAYMOND G.W. KUBISCH Director March 14, 2000
- ------------------------
Raymond G.W. Kubisch
/s/ CRAIG L. MCKNIGHT Director March 14, 2000
- ------------------------
Craig L. McKnight
/s/ JONATHAN E. WILFONG Director March 14, 2000
- ------------------------
Jonathan E. Wilfong
</TABLE>
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
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<S> <C> <C>
4.1 Amended and Restated Certificate of Incorporation of
Registrant (incorporated by reference to Exhibit 3.1 of
Registrant's Registration Statement on Form S-1,
Registration No. 333-27143).
4.2 Amended and Restated Bylaws of Registrant (incorporated by
reference to Exhibit 3.2 of Registrant's Registration
Statement on Form S-1, Registration No. 333-27143).
4.3 OrthAlliance, Inc. 1999 Orthodontist Stock Option Plan.
4.4 Form of Stock Option Agreement pursuant to OrthAlliance,
Inc. 1999 Orthodontist Stock Option Plan.
5.1 Opinion of Munger, Tolles & Olson LLP regarding legality
of shares being registered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Munger, Tolles & Olson LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
</TABLE>
<PAGE> 1
EXH. 4.3
ORTHALLIANCE, INC.
1999 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.
<PAGE> 2
1.5. "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.
1.6 "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.
1.7 "Company" shall mean OrthAlliance, Inc., a Delaware corporation.
1.8 "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.
1.9 "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.
1.10 "Exercise Price" shall mean the price at which an Optionee may
purchase a share of Stock under a Stock Option Agreement.
1.11 "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.
1.12 "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
<PAGE> 3
Commission, as the same may be in effect or set forth from time to time.
1.13 "Option" shall mean an option to purchase Stock granted pursuant to
the provisions of Article VI hereof.
1.14 "Optionee" shall mean an Allied Orthodontist to whom an Option has
been granted hereunder or their permitted assign.
1.15 "Plan" shall mean the OrthAlliance, Inc. 1999 Orthodontist Stock
Option Plan, the terms of which are set forth herein.
1.16 "Section 16 Insider" shall mean any person who is subject to the
provisions of Section 16 of the Exchange Act.
1.17 "Stock" shall mean the Class A Common Stock, $.001 par value per
share, of the Company, subject to applicable provisions of Section 5.2.
1.18 "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.
1.19 "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. 1999
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 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 with an additional incentive to achieve the Company's objectives
through participation in its success and growth.
2.3. Effective Date. The effective date of this Plan is December 30,
1999.
ARTICLE III. PARTICIPANTS
The Allied Orthodontists listed on Schedule A to this Plan shall be
eligible to participate in the Plan. Participation by other Allied Orthodontists
shall be as determined by the Committee, in its sole discretion.
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
<PAGE> 4
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 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.
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 to receive a grant under the Plan, their death, disability,
or other termination of status as an Allied Orthodontist 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 Two Hundred Eighty Thousand (280,000). 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
<PAGE> 5
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.
(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
<PAGE> 6
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, for the Allied Orthodontists specified in Schedule A, as
specified in Schedule A. For other Allied Orthodontists, or for other Option
grants to the Allied Orthodontists specified in Schedule A, the Exercise Price
of the Stock subject to each Option shall be determined by the Committee, but
shall not be less than the Fair Market Value of the Stock as of the date such
Option is granted.
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 third
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).
<PAGE> 7
(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 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:
<PAGE> 8
(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 with or without approval of or ratification by the stockholders of the
Company.
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.
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.
<PAGE> 9
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.
* * * *
<PAGE> 1
EXHIBIT 4.4
OrthAlliance, Inc.
1999 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 ________________, 2000 by and between OrthAlliance, Inc., a
Delaware corporation (the "Company"), and _________________ (the "Optionee").
WHEREAS, on December 16, 1999, the Board of Directors of the Company
adopted a stock option plan known as the "OrthAlliance, Inc. 1999 Orthodontist
Stock Option Plan" (the "Plan") and recommended that the Plan be approved by the
Company's stockholders;
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;
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.
<PAGE> 2
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 13 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 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
<PAGE> 3
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.
(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
<PAGE> 4
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:
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(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 the Optionee has executed this
Stock Option Agreement, all as of the day and year first above written.
COMPANY:
ORTHALLIANCE, INC.
By:
----------------------------------------
Name:
<PAGE> 5
Title:
OPTIONEE:
By:
----------------------------------------
<PAGE> 6
SCHEDULE A
TO
STOCK OPTION AGREEMENT
BETWEEN
ORTHALLIANCE, INC.
AND
[Name of Optionee]
Dated
-------------------
Number of Shares Subject to Option: shares of Stock.
---------------
Option Exercise Price: $ per share.
----------------
Date of Grant:
-------------------------------
Option Exercise Expiration Date:
----------------------
<PAGE> 7
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):
<PAGE> 1
EX-5.1
OPINION OF MUNGER, TOLLES & OLSON LLP RE: LEGALITY
Munger, Tolles & Olson LLP
355 South Grand Avenue, 35th Floor
Los Angeles, California 90071-1560
Telephone (213) 683-9100
Telecopier (213) 687-3702
March 14, 2000
OrthAlliance, Inc.
21535 Hawthorne Boulevard
Suite 200
Torrance, California 90503
Ladies and Gentlemen:
We have acted as counsel to OrthAlliance, Inc. (the "Company") in connection
with the filing of a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, covering the offering
of up to 280,000 shares (the "Shares") of the Company's Common Stock, pursuant
to the OrthAlliance, Inc. 1999 Orthodontist Stock Option Plan (the "Plan"). In
connection therewith, we have examined such corporate records, certificates of
public offices and other documents and records as we have considered necessary
or proper for the purpose of this opinion.
Based on the foregoing, and having regard to legal considerations which we deem
relevant, we are of the opinion that the Shares, when issued and delivered as
described in the Registration Statement and Plan, will be validly issued, fully
paid and nonassessable.
We are members of the Bar of the State of California and the foregoing opinion
is limited to the laws of the State of California and the General Corporation
Law of the State of Delaware.
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to our name in the Registration Statement and the
related Prospectus. In giving such consent, we do not thereby admit that we are
in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933.
Best regards,
/s/ Munger, Tolles & Olson LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ARTHUR ANDERSEN LLP
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 19, 1999
included in OrthAlliance, Inc.'s Form 10-K for the year ended December 31, 1998,
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Los Angeles, California
March 13, 2000
