<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 1997
REGISTRATION NO._______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
UNITED DENTAL CARE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 14755 PRESTON ROAD, SUITE 300 75-2309712
(State or other jurisdiction of DALLAS, TEXAS 75240 (I.R.S. Employer
incorporation or organization) (Address of principal executive offices) Identification No.)
</TABLE>
UNITED DENTAL CARE, INC. AMENDED AND RESTATED
1989 KEY EMPLOYEE STOCK OPTION PLAN
UNITED DENTAL CARE, INC. 1995 STOCK OPTION PLAN, AS AMENDED
(Full title of the plans)
MARK E. PAPE
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
UNITED DENTAL CARE, INC.
14755 PRESTON ROAD, SUITE 300
DALLAS, TEXAS 75240
(972) 458-7474
(Name, address and telephone number of agent for service)
COPIES TO:
STRASBURGER & PRICE, L.L.P.
901 MAIN STREET, SUITE 4300
DALLAS, TEXAS 75202
(214) 651-4300
ATTN: DAVID K. MEYERCORD, ESQ.
CALCULATION OF REGISTRATION FEE
<TABLE>
===================================================================================================================
Proposed Proposed maximum Amount of
Amount to be maximum aggregate registration
Title of securities to be registered (1) offering price offering price fee
registered per share (2) (1)(2)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value 1,022,000 shares $25.3352 $25,892,574 $7,846.24
===================================================================================================================
</TABLE>
(1) This Registration Statement also includes an indeterminate number of
additional shares that may become issuable as a result of terminated,
expired or surrendered options for Common Stock, or pursuant to the
antidilution adjustment provisions of the plans.
(2) Estimated solely for purposes of computing the amount of the registration
fee in accordance with Rule 457(h) under the Securities Act of 1933, as
amended. The offering price and registration fee calculations are based on
(i) the weighted average option price per share for 617,000 shares subject
to options outstanding under the plans and (ii) the average of the high and
low prices of the Common Stock reported on the Nasdaq National Market on
January 14, 1997, for an aggregate of 405,000 shares reserved for options
that may be granted under the 1995 Stock Option Plan.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference into this
Registration Statement and are deemed to be a part hereof from the date of
filing of such documents with the Securities and Exchange Commission (the
"Commission"):
(a) Annual Report on Form 10-K of the Registrant for the year ended
December 31, 1995, filed with the Commission pursuant to Section 13(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on March 20, 1996, except for the audited consolidated
financial statements of the Registrant and the Report of Independent
Accountants appearing therein.
(b) Consolidated financial statements of the Registrant, and the Report of
Independent Accountants, appearing at pages F-3 through F-15,
inclusive, of the Prospectus dated October 28, 1996 constituting part
of the Registration Statement on Form S-1 (Registration No. 333-12425)
of the Registrant.
(c) Current Report on Form 8-K of the Registrant filed with the
Commission pursuant to Section 13(a) of the Exchange Act on February
2, 1996.
(d) Current Report on Form 8-K/A of the Registrant filed with the
Commission pursuant to Section 13(a) of the Exchange Act on March 26,
1996.
(e) Quarterly Report on Form 10-Q of the Registrant for the quarter ended
March 31, 1996, filed with the Commission pursuant to Section 13(a)
of the Exchange Act on April 26, 1996.
(f) Quarterly Report on Form 10-Q of the Registrant for the quarter ended
June 30, 1996, filed with the Commission pursuant to Section 13(a) of
the Exchange Act on August 6, 1996.
(g) Quarterly Report on Form 10-Q of the Registrant for the quarter ended
September 30, 1996, filed with the Commission pursuant to Section
13(a) of the Exchange Act on November 13, 1996.
(h) The description of the Common Stock, $.10 par value per share (the
"Common Stock"), of the Registrant contained in Item 1 of the
Registration Statement on Form 8-A filed with the Commission pursuant
to Section 12(g) of the Exchange Act, as declared effective on
September 21, 1995 (File No. 0-26688), including all amendments or
reports filed for the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this Registration Statement which indicates that
all securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
date of filing of such documents.
Any statement contained in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or replaces such
statement. Any such statement so modified shall not be deemed to constitute a
part of this Registration Statement, except as so modified. Any such statement
so superseded shall not be deemed to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
David K. Meyercord, a partner in Strasburger & Price, L.L.P., counsel for
the Registrant, is an Assistant Secretary of the Registrant.
2
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware General Corporation Law ("Delaware
Law"), the Registrant has broad powers to indemnify its directors, officers,
employees and agents against liabilities they may incur in such capacities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act"). The Amended and Restated Bylaws of the Registrant (the
"Bylaws") provide that the Registrant shall indemnify its directors and
officers to the full extent permitted by Delaware Law. The Bylaws also provide
that rights to indemnification conferred under such Bylaws shall not be deemed
to be exclusive of any other right such persons may have or acquire under any
agreement, vote of stockholders or disinterested directors of the Registrant,
or otherwise.
The Restated Certificate of Incorporation of the Registrant provides that,
pursuant to Delaware Law, no director of the Registrant shall be liable to the
Registrant or its stockholders for monetary damages for breach of the
director's fiduciary duty as a director. This provision in the Certificate of
Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as injunctive or other forms of
non-monetary relief will remain available under Delaware Law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to the Registrant or its stockholders, for acts of
omissions not in good faith or involving intentional misconduct or a knowing
violation of law, for any transaction from which the director derived an
improper personal benefit, and for payment of dividends or approval of stock
repurchases or redemptions that are unlawful under Delaware Law. The provision
also does not affect a director's responsibilities under any other law, such as
the Federal securities laws.
The United Dental Care, Inc. Amended and Restated 1989 Key Employee Stock
Option Plan (the "1989 Plan") and the United Dental Care, Inc. 1995 Stock
Option Plan, as amended (the "1995 Plan" and, together with the 1989 Plan,
collectively the "Plans"), provide that members of the Board of Directors of
the Registrant serving as members of the respective Committees administering
the Plans shall be indemnified by the Registrant against the reasonable
expenses, including attorneys' fees, actually and reasonably incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plans or
any stock option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Registrant or, in the case of the 1995 Plan, by a
majority of the disinterested directors of the Registrant) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that a member of the Committee is liable for gross negligence or
intentional and willful misconduct in the performance of his duties as a member
of the Committee; provided that within sixty (60) days of institution of any
such action, suit or proceeding, such member of the Committee shall in writing
offer the Registrant the opportunity, at its expense, to handle and defend the
same. Such indemnification rights are in addition to all other rights to
indemnification and advancement of expenses to which members of the respective
Committees may otherwise be entitled.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 3.01 to the Registrant's Form S-1 Registration
Statement, Registration No. 33-94356).
4.2 Amended and Restated Bylaws of the Registrant (incorporated by
reference to Exhibit 3.02 to the Registrant's Form S-1 Registration
Statement, Registration No. 33-94356).
4.3 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.01 to the Registrant's Form S-1 Registration Statement,
Registration No. 33-94356).
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C>
4.4 United Dental Care, Inc. Amended and Restated 1989 Key Employee Stock
Option Plan (filed herewith).
4.5 United Dental Care, Inc. 1995 Stock Option Plan, as amended (filed
herewith).
5.1 Opinion of Strasburger & Price, L.L.P. (filed herewith).
23.1 Consent of Price Waterhouse LLP (filed herewith).
23.2 Consent of Strasburger & Price, L.L.P. (included in Exhibit 5.1 to
this Registration Statement).
24.1 Power of Attorney (contained on Signature Page of this Registration
Statement).
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(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 of 1933;
(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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective 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;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
above do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post- effective amendment
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.
(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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
4
<PAGE> 5
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 of 1933 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Act and
will be governed by the final adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Dallas, State of Texas, on January 20, 1997.
UNITED DENTAL CARE, INC.
BY: /S/ WILLIAM H. WILCOX
----------------------------
WILLIAM H. WILCOX
PRESIDENT AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
Each individual whose signature appears below constitutes and appoints
Mark E. Pape such person's true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in such
person's name, place, and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as such person might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ William H. Wilcox President, Chief Executive Officer and Director January 20, 1997
---------------------------------
William H. Wilcox
/s/ Mark E. Pape Senior Vice President and Chief Financial Officer; January 20, 1997
--------------------------------- Principal Financial and Accounting Officer
Mark E. Pape
/s/ Jack R. Anderson Director January 20, 1997
---------------------------------
Jack R. Anderson
/s/ George E. Bello Director January 20, 1997
---------------------------------
George E. Bello
/s/ James Ken Newman Director January 20, 1997
---------------------------------
James Ken Newman
/s/ William H. Longfield Director January 20, 1997
---------------------------------
William H. Longfield
/s/ James E. Buncher Director January 20, 1997
---------------------------------
James E. Buncher
/s/ Donald E. Steen Director January 20, 1997
---------------------------------
Donald E. Steen
/s/ Robert J. Nettinga Director January 20, 1997
---------------------------------
Robert J. Nettinga
</TABLE>
6
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.01
to the Registrant's Form S-1 Registration Statement, Registration No. 33-94356).
4.2 Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.02 to the
Registrant's Form S-1 Registration Statement, Registration No. 33-94356).
4.3 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.01 to the Registrant's
Form S-1 Registration Statement, Registration No. 33-94356).
4.4 United Dental Care, Inc. Amended and Restated 1989 Key Employee Stock Option Plan (filed herewith).
4.5 United Dental Care, Inc. 1995 Stock Option Plan, as amended (filed herewith).
5.1 Opinion of Strasburger & Price, L.L.P. (filed herewith).
23.1 Consent of Price Waterhouse LLP (filed herewith).
23.2 Consent of Strasburger & Price, L.L.P. (included in Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (contained on Signature Page of this Registration Statement).
</TABLE>
7
<PAGE> 1
EXHIBIT 4.4
UNITED DENTAL CARE, INC.
AMENDED AND RESTATED
1989 KEY EMPLOYEE STOCK OPTION PLAN
1. Purpose of Plan. This Key Employee Stock Option Plan ("Plan") is
intended to provide selected directors, officers and key employees of United
Dental Care, Inc. (the "Company") or its future parent or subsidiary
corporations ("Affiliates"), if any, with the opportunity to acquire or
increase ownership of shares of the Company, to give them additional incentive
to promote the success of the Company, and/or to encourage them to remain in
the employ of the Company or its Affiliates. Options issued pursuant to this
Plan shall not constitute incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Shares Subject to Plan. Subject to adjustment as provided in
paragraph 15 hereof, there will be reserved for issuance upon the exercise of
key employee stock options ("Options") to be granted from time to time under
the Plan an aggregate of 724,000 shares of Common Stock, $.10 par value (the
"Common Stock") of the Company, which is the maximum number of shares for which
Options may be granted pursuant to the Plan. Such shares may be, in whole or
in part, as the Board of Directors of Company ("Board of Directors") shall from
time to time determine, either authorized unissued Common Stock and/or issued
Common Stock which shall have been reacquired by the Company.
3. Administration of Plan. The Plan shall be administered by a
committee appointed by the Board of Directors (the "Committee"). The Committee
shall consist of not less than two (2) members of the Board of Directors, and,
except as is provided in the immediately following sentence, may be constituted
by all members of the Board of Directors. In the event that the Common Stock
is registered under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Act"), all members of the Committee shall be "disinterested
persons," as defined in Rule 16b-3 promulgated under the Act. The Compensation
Committee of the Company shall be the Committee. Subject to the provisions of
the Plan, the Committee shall have full power and authority in its discretion
to determine the employees to whom Options shall be granted, the number of
shares to be covered by each of the Options, and the time or times at which
Options shall be granted; to grant Options under the Plan; to interpret the
Plan; and to prescribe, amend, and rescind rules and regulations relating to
it. No member of the
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<PAGE> 2
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option.
4. Directors/Employees to Whom Options Shall be Granted. Options
may no longer be granted under the Plan. A person receiving an Option
("Optionee") may hold more than one Option, but only on the terms and subject
to the restrictions hereinafter set forth.
5. Option Price. The purchase price per share (the "Option Price")
of the Common Stock which shall be subject to each Option shall be determined
by the Committee. The Committee, in fixing the Option Price, shall have full
authority and discretion and shall be fully protected in exercising such
authority and discretion.
6. Term of Options. The Committee shall determine the term of each
Option granted under the Plan; provided, however, that each Option granted
under this Plan may not have a term in excess of ten (10) years from the date
such Option is granted. Each Option is subject to earlier termination as
hereinafter provided.
7. Option Agreement. Each Option granted under the Plan shall be
evidenced by a written option agreement (the "Option Agreement") which shall be
substantially in the form of Exhibit A attached hereto and incorporated herein
by reference but with such additional or different terms as may be specified by
the Committee at the time of the grant of the Option which are not inconsistent
with the terms of the Plan.
8. Exercise of Options.
(a) Cumulative Percentage. Each Option shall be exercisable in whole or in
part in such incremental amounts as may be specified by the Committee and set
forth in the Option Agreement between each Optionee and Company. To the extent
the Option shall be exercisable in incremental installments, such installments
shall accumulate and be exercisable, in whole or in part, in any subsequent
period until such Option terminates or otherwise becomes unexercisable. If an
installment covers a fractional share, the installment shall be rounded off to
the next highest share, except the final installment which shall be for the
balance of the total shares under Option.
(b) Fractional Shares. The Option may only be exercised with respect to
full shares and not for any fractional shares.
(c) Notice of Exercise. Subject to such administrative regulations as the
Committee administering the Plan may from time to time adopt, the Optionee
shall exercise an Option by giving written notice to the Company of the number
of full shares being
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<PAGE> 3
purchased and the aggregate purchase price to be paid therefor. Such notice
shall be accompanied by an undertaking to furnish or execute such documents as
the Company, in its discretion, shall deem necessary (i) to evidence the
exercise, in whole or in part, of the Option, (ii) to determine whether
registration of the shares is then required under the Securities Act of 1933,
as then in effect, (iii) to comply with or satisfy the requirements of the
Securities Act of 1933, or any other law, as then in effect, and (iv) to notify
the Company in writing of any disposition made of any shares issued pursuant to
the exercise of the Option within a period of thirty (30) days after the date
of the transfer of any such shares by the Optionee.
(d) Payment of Option Price. Each notice of exercise shall be accompanied
by full payment in cash of the Option Price for the shares being purchased;
provided, however, an Optionee may upon approval of the Committee exercise his
Option in whole or in part by tendering to the Company shares of the Common
Stock of the Company owned by him having a fair market value equal to the
Option Price or by a combination of both cash and stock having an aggregate
value equal to the Option Price.
9. Continuous Employment. Except as provided in paragraphs 13 and
14 hereof, an Option may not be exercised at any time unless the holder
thereof shall have been in the continuous employment of the Company or any of
the Affiliates, from the date of the grant of the Option to 5:00 p.m. on the
date of its exercise; provided, however, that such requirements shall not
apply to Directors who are not employees of the Company and the Committee shall
determine what conditions, if any, shall be included in Options granted to
Directors who are not employees. Whether authorized leave of absence or
absence for military or governmental service shall constitute termination of
employment for the purposes of the Plan shall be determined by the adoption of
a policy of the Committee, which policy determination, unless overruled by the
Board of Directors, shall be final and conclusive.
10. Requisite Government Approval. No Option may be exercised in
whole or in part and no certificates representing shares subject to such Option
shall be delivered if any requisite approval or consent of any governmental
authority of any kind having jurisdiction over the exercise of Options shall
not have been secured.
11. No Rights as Shareholders. The holder of an Option shall have no
rights as a shareholder with respect to any shares covered by the Option until
the issuance of one or more certificates to him for such shares upon the due
exercise of the Option. Except as provided in paragraph 15 hereof, no
adjustment shall be made for
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<PAGE> 4
dividends or other rights for which the record date is prior to the date of
issuance of certificates.
12. Non-Transferability. An Option shall not be transferable
otherwise than by the last will and testament of the Optionee or the laws of
descent and distribution. An Option may be exercised, during the lifetime of
the Optionee, only by the Optionee.
13. Termination of Employment By Retirement or Disability of
Optionees Other Than Directors.
(a) In the event that an Optionee shall voluntarily terminate his employment
with the Company or any of the Affiliates without the consent of the Company
(of which the Committee shall be the sole judge), or if the Optionee shall have
his employment involuntarily terminated by the Company or any of the Affiliates
for any reason involving a breach of faith or loyalty to the Company, then the
Option shall terminate immediately as to any unexercised portion thereof.
(b) If (i) the Optionee voluntarily terminates his employment with the
Company or any of the Affiliates with the consent of the Company (of which the
Committee shall be the sole judge), (ii) the Optionee shall have his employment
involuntarily terminated by the Company or any of the Affiliates for any
reason, including disability, not involving a breach of faith or loyalty to the
Company, or (iii) the Optionee retires from the Company or any of the
Affiliates, then the Optionee shall have the right for thirty (30) days after
such termination to exercise this Option (to the extent then exercisable) in
whole or in part.
14. Death of an Optionee Other Than a Director. If an Optionee shall
die while he is employed by the Company or any of the Affiliates, the Executor
or Administrator of the Optionee's estate or the person or persons acquiring
the Option upon the death of the Optionee may exercise such Option (to the
extent that the Optionee shall have been entitled to do so on the date of his
death) at any time within one (1) year after the Optionee's death, subject to
the other terms and conditions of this Plan; provided, however, that no Option
shall be exercisable after the expiration of ten (10) years from the date it is
granted.
15. Adjustments Upon Changes in Capitalization. In the event of
changes in the outstanding Common Stock of Company by reason of share
dividends, split-ups, reverse stock splits, recapitalizations, mergers,
consolidations, combinations, exchanges of shares, separations,
reorganizations, reclassifications, liquidations, or the like of or by the
Company, the Committee shall take such action, as shall be necessary to
preserve the rights of all holders under outstanding and unexercised Options so
that such
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<PAGE> 5
rights remain proportionate to the rights held by them under such outstanding
Options immediately prior to such event. Such actions shall include, but are
not limited to, adjustments in the number and class of shares available to be
granted under the Plan and adjustments in the Option Price thereof.
16. Effectiveness of the Plan. The Plan shall be effective upon its
adoption by the Board of Directors.
17. Time of Granting Options. Neither anything contained in the Plan
or in any resolution adopted or to be adopted by the Board of Directors or the
stockholders of the Company nor any action taken by the Committee shall
constitute the granting of any Option. The granting of an Option shall take
place only when the Option Agreement shall have been duly executed and
delivered by or on behalf of the Company and the Optionee to whom such Option
shall be granted.
18. Investment Purpose. Each Option under the Plan shall be granted
on the condition that the purchases of Common Stock thereunder shall be for
investment purposes, and not with a view to resale or distribution, except that
in the event the Common Stock subject to such Option is registered under the
Securities Act of 1933, as amended, or in the event a resale of such stock
without such registration would otherwise be permissible, such condition shall
be inoperative if, in the opinion of counsel for the Company, such condition is
not required under the Securities Act of 1933 or any other applicable law,
regulation, or rule of any governmental agency.
19. Indemnification of Committee. In addition to such other rights
of indemnification as they may have as Directors or as members of the
Committee, the members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees actually and
reasonably incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by them
in satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that a member of the Committee is liable for gross negligence or
intentional and willful misconduct in the performance of his duties; provided
that within sixty (60) days after institution of any such action, suit or
proceeding, such member of the Committee shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.
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<PAGE> 6
20. Termination and Amendment of the Plan. The Plan shall terminate
ten (10) years from the date the Plan is adopted by the Board of Directors or
the date the Plan is approved by the stockholders, whichever is earlier, unless
sooner terminated by the Board of Directors. The Board of Directors of the
Company may revise or amend the Plan in any respect whatsoever except that,
without the approval of the holders of a majority of the securities of the
Company entitled to vote with respect thereto, no such revision or amendment
shall (a) materially increase the benefits accruing to participants under this
Plan, (b) materially increase the number of shares of the Common Stock that may
be issued under this Plan, or (c) materially modify the requirements as to
participation in the Plan. The termination or modification of the Plan shall
not, without the consent of an Optionee, affect his rights under an Option
theretofore granted to him.
21. Applicable Law. This Plan is intended to be performed in the
State of Texas and shall be construed and enforced in accordance with and
governed by the laws of the State of Texas.
22. Discretion of the Committee to Enter into Amendments to Option
Agreements. Notwithstanding anything herein to the contrary, in its discretion
the Committee may, with respect to any Options granted under this Plan, enter
into amendments to Option Agreements to (i) modify the terms or application of
Paragraphs 13 and 14 as the same apply to any Option Agreements entered into or
Options granted pursuant to this Plan, (ii) elect to accelerate or provide for
the acceleration of the exercisability of Options granted under this Plan,
(iii) require that upon exercise of an Option, such number of shares otherwise
issuable shall be reduced by the amount necessary to satisfy the Optionee's
U.S. federal and, where applicable, state and local tax withholding
requirements, and (iv) enter into other amendments to the Option Agreements
which it deems necessary or advisable to accomplish the purpose of the Plan;
provided, however, that no such elimination or modification shall apply to any
previously executed Agreement or previously granted Options without the written
consent of the Optionee thereof (or such Optionee's legal representatives,
legatees or distributees, if applicable).
23. Director Stock Options and Non-Statutory Options. This Plan is
intended (i) to memorialize the Company's informal plan or program in effect
since its formation to provide certain directors with an opportunity to obtain
an equity interest in the Company in order to attract and retain highly
qualified directors by the grant of non-qualified stock options to purchase
shares of Common Stock of the Company and (ii) to acknowledge that options for
120,000 shares of a total of 200,000 shares granted to James B. Kingston under
the Incentive Stock Option Plan are non-statutory options (the "Non-Statutory
Options") and that such Non-Statutory Options
-6-
<PAGE> 7
are subject to the Plan. Prior grants of Options made to certain individuals
by the Board with respect to the number of shares and effective as of the dates
set forth below, pursuant to stock option agreements containing the terms of
such options and, in the case of the Non-Statutory Options pursuant to a stock
option agreement granted under the Company's Incentive Stock Option Plan, are
hereby included in and incorporated under the terms of this Plan for all
purposes:
<TABLE>
<CAPTION>
INDIVIDUAL NO. OF SHARES EFFECTIVE DATES
---------- ------------- ---------------
<S> <C> <C>
DIRECTORS
---------
William H. Longfield 20,000 May 1989
Charles R. Miller 20,000 May 1989
James Ken Newman 20,000 May 1989
Lawrence Kugelman 20,000 May 1989
NON-STATUTORY OPTIONS
---------------------
James B. Kingston 120,000 May 1989
</TABLE>
-7-
<PAGE> 8
EXHIBIT A
UNITED DENTAL CARE, INC.
KEY EMPLOYEE STOCK OPTION AGREEMENT
This Key Employee Stock Option Agreement ("Agreement") is made as of
the _____ day of ____________, _____, between United Dental Care, Inc. (the
"Company"), a Delaware corporation, and ______________________ ("Optionee"), an
employee of the Company.
WHEREAS, the Company desires, by affording the Optionee an opportunity
to purchase shares of its Common Stock, $.10 par value (the "Common Stock"), as
hereinafter provided, to carry out the purposes of its Key Employee Stock
Option Plan (as amended, "Plan").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto
agree as follows:
1. Grant of Option. The Company hereby grants to the employee a
stock option (the "Option") to purchase, subject to and upon the terms and
conditions hereinafter set forth, ________ shares of the Common Stock, $.10 par
value, of the Company.
2. Purchase Price. The purchase price of the Common Stock
subject to the Option shall be $______ per share.
3. Time to Exercise. This Option shall be exercisable
[COMMENCING _____________] [IN INSTALLMENTS AS FOLLOWS:
(a) FROM AND AFTER ___________ -
_______ SHARES
(b) FROM AND AFTER ___________ -
_______ SHARES
(c) FROM AND AFTER ___________-
_______ SHARES
(d) FROM AND AFTER ___________-
_______ SHARES
TO THE EXTENT NOT EXERCISED, INSTALLMENTS SHALL ACCUMULATE AND BE EXERCISABLE,
IN WHOLE OR IN PART, IN ANY SUBSEQUENT PERIOD.] Anything in this Agreement to
the contrary notwithstanding, this Option shall terminate and no part of the
Option may be exercised after 5:00 p.m. on __________, ______.
4. Subject to Plan. This Option and the exercise hereof is
subject to the terms and conditions of the Plan, now or hereinafter in effect,
which is incorporated herein by reference and made a part hereof, but the terms
of the Plan shall not be considered an enlargement of any benefits under this
Agreement.
5. Term.
(a) If the Optionee voluntarily terminates his employment
with the Company or any of its subsidiaries at any time without the consent of
the Company (of which the Committee shall be the sole judge), or if the
Optionee shall have his employment involuntarily terminated by the Company or
its subsidiaries for any reason involving a breach of faith or loyalty to such
Company, this Option shall terminate immediately as to any unexercised portion.
1
<PAGE> 9
(b) If (1) the Optionee voluntarily terminates his
employment with the Company and its subsidiaries with the consent of the
Company (of which the Committee shall be the sole judge), (2) the Optionee
shall have his employment involuntarily terminated by the Company and its
subsidiaries for any reason, including disability, not involving a breach of
faith or loyalty to such Company, or (3) the Optionee retires from the Company
and its subsidiaries, then the Optionee shall have the right for 30 days after
termination to exercise this Option for the number of shares, or any portion
thereof, then exercisable pursuant to Section 3 above.
(c) In the event of the death of the Optionee during any
period in which he was entitled to exercise this Option, this Option may be
exercised in full or in part at any time within twelve (12) months from the
date of death of the Optionee or within the unexpired term of this Option,
whichever is shorter, by the person to whom the Employee's rights under this
Option shall pass by the Employee's will or by the laws of descent and
distribution, whichever is applicable. During the lifetime of the Optionee,
the Option may be exercised only by the Optionee.
6. Restrictions on Exercise. The Option may not be exercised and
no certificates representing shares subject to such Option shall be delivered
if any requisite approval or consent of any governmental authority of any kind
having jurisdiction over the exercise of Options shall not have been secured.
The Option may only be exercised with respect to full shares and not for any
fractional shares.
7. Manner of Exercise. Subject to such administrative regulations
as the Committee administering the Plan may from time to time adopt, the
Optionee shall exercise the option by giving written notice to the Company of
the number of shares being purchased and the purchase price to be paid therefor
accompanied by the following:
(a) full payment in cash; provided, however, that in lieu
of cash an Optionee may, upon approval by the Committee exercise his Option by
tendering to the Company shares of the Common Stock of the Company owned by him
having a fair market value equal to the cash Option purchase price, or, by a
combination of both cash and stock;
(b) an undertaking to furnish or execute such documents
as the Company in its discretion shall deem necessary (1) to evidence the
exercise, in whole or in part, of the Option evidenced by this Agreement, (2)
to determine whether registration is then required under the Securities Act of
1933, as then in effect, (3) to comply with or satisfy the requirements of the
Securities Act of 1933, or any other law, as then in effect and (4) to notify
the Company in writing of any disposition made of any shares issued pursuant to
the exercise of the Option evidenced by this Agreement within a period of
thirty (30) days after the day of the transfer of any such shares by the
Optionee.
8. Non-Assignability. This Option is not assignable or
transferable by Optionee except by will or by the laws of descent and
distribution.
9. Rights as Stockholder. The Optionee shall have no rights as a
shareholder with respect to any shares covered by the Option evidenced by this
Agreement until the issuance of one or more certificates to him for such shares
upon due exercise of the Option. Except as provided in Section 10, no
adjustment shall be made for dividends or other rights for which the record
date is prior to the issuance of certificates.
10. Capital Adjustments. The number of shares of Common Stock
covered by the unexercised portion of the Option evidenced by this Agreement,
and the Option Price thereof, shall be subject to such adjustment as
appropriate or necessary to reflect any stock dividend, stock split, reverse
stock split, share combination, exchange of shares, recapitalization,
reclassification, merger, consolidation, separation, reorganization,
liquidation or the like of or by the Company, so that the rights of the holder
hereof shall remain proportionate to the rights held hereunder immediately
prior to such event.
2
<PAGE> 10
11. Investment Purpose. This Option is granted on the condition
that the purchases of Common Stock thereunder shall be for investment purposes,
and not with a view to resale or distribution except that in the event the
Common Stock subject to such Option is registered under the Securities Act of
1933, as amended, or in the event a resale of such stock without such
registration would otherwise be permissible, such condition shall be
inoperative if, in the opinion of counsel for the Company, such condition is
not required under the Securities Act of 1933, as amended, or other regulation
or rule of any governmental agency.
12. Law Governing. This Agreement is intended to be performed in
the State of Texas and shall be construed and enforced in accordance with and
governed by the laws of the State of Texas.
13. Binding Effect. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their personal representatives,
successors, heirs, and assigns.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and the Optionee has duly signed this Agreement
on the day and year first above written.
OPTIONEE:
---------------------------------
COMPANY:
UNITED DENTAL CARE, INC.
By:
------------------------------
Title:
---------------------------
3
<PAGE> 1
EXHIBIT 4.5
UNITED DENTAL CARE, INC.
1995 STOCK OPTION PLAN
----------------------
As Amended(1)
1. Purpose of Plan. This 1995 Stock Option Plan ("Plan") is
intended to provide selected officers and key employees of United Dental Care,
Inc., a Delaware corporation (the "Company"), and its existing or future parent
or subsidiary corporations ("Affiliates"), if any, and, subject to the
limitations specified herein, directors of the Company who are not employees of
the Company or any of its Affiliates ("non-employee directors of the Company"),
with the opportunity to acquire or increase ownership of shares of the Company,
to give them additional incentive to promote the success of the Company, and/or
to encourage them to remain in the employ of the Company or its Affiliates or
to act as non-employee directors of the Company. Options issued pursuant to
this Plan shall not constitute incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Shares Subject to Plan. Subject to adjustment as provided in
Section 17 hereof, there will be reserved for issuance upon the exercise of
stock options ("Options") to be granted from time to time under the Plan an
aggregate of 800,000 shares of Common Stock, $.10 par value (the "Common
Stock"), of the Company, which is the maximum number of shares for which
Options may be granted pursuant to the Plan. Such shares may be, in whole or
in part, either authorized unissued Common Stock and/or issued Common Stock
which shall have been reacquired by the Company. If an Option is terminated,
in whole or in part, for any reason other than its exercise, the number of
shares of Common Stock allocated to the Option or portion thereof may be
reallocated to other Options to be granted under this Plan.
3. Administration of Plan. The Plan shall be administered by a
committee appointed by the Board of Directors of the Company (the "Committee").
The Committee shall consist of not less than two (2) members of the Board of
Directors, and, except as is provided in the immediately following sentence,
may be constituted by all members of the Board of Directors. In the event that
the Common Stock is registered under Section 12 of the Securities Exchange Act
of 1934, as amended (the "Act"), all members of the Committee shall be
"disinterested persons," as defined in Rule 16b-3 promulgated under the Act.
Initially the Compensation Committee of the Company shall be the Committee.
The Committee shall have the authority to grant Options upon such terms (not
inconsistent with this Plan) as the Committee shall consider appropriate. Such
terms may include conditions (in addition to those contained in this Plan) on
the exercisability of all or any part of an Option, but the Committee may
nevertheless, in its discretion, accelerate the time at which any Option may be
exercised. In addition, the Committee shall have the authority to interpret
all provisions of this Plan; to prescribe the form of agreements evidencing the
grant of Options under this Plan; to adopt, amend, and rescind rules and
regulations pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of this Plan. The
express grant in this Plan of any specific power to the Committee shall not be
construed as limiting any power or authority of the Committee. Any decision
made, or action taken, by the Committee or in connection with the
administration of this Plan which is within the scope of the authority
delegated to the Committee shall be final and conclusive. Notwithstanding the
foregoing provisions of this Section 3 or any other provision of this Plan to
the contrary, however, Options shall be granted to non-employee directors of
the Company only on and subject to the terms and conditions stated in Section
10 hereof. No member of the Committee shall be liable for any act done in good
faith with respect to this Plan or any Option Agreement (hereinafter defined)
or Option. All expenses of administering this Plan shall be borne by the
Company.
4. Employees to Whom Options Shall be Granted. An Option may be
granted to such officers and key employees of the Company or any of the
Affiliates, whether or not they are directors, as may be selected by the
Committee for the purposes of accomplishing the objectives of the Plan.
Non-employee directors of the Company shall only be eligible to receive Options
under the provisions of Section 10 hereof. A person receiving
- -------------------------
(1)As amended by amendment submitted at 1996 Annual Meeting of Stockholders
1
<PAGE> 2
an Option ("Optionee") may hold more than one Option, but only on the terms and
subject to the restrictions hereinafter set forth.
5. Option Price. Subject to Section 10 hereof, the purchase
price per share (the "Option Price") of the Common Stock which shall be subject
to each Option shall be determined by the Committee so long as shares of Common
Stock are issued for lawful consideration. The Committee, in fixing the Option
Price, shall have full authority and discretion and shall be fully protected in
exercising such authority and discretion.
6. Term of Options. Subject to Section 10 hereof, the Committee
shall determine the term of each Option granted under the Plan; provided,
however, that each Option granted under this Plan may not have a term in excess
of ten (10) years from the date such Option is granted. Each Option is subject
to earlier termination as hereinafter provided.
7. Option Agreement. Each Option granted under the Plan shall be
evidenced by a written option agreement (as amended or supplemented pursuant to
this Plan, the "Option Agreement") which may contain such additional or
different terms as may be specified by the Committee at the time of the grant
of the Option which are not inconsistent with the terms of the Plan.
8. Exercise of Options.
(a) Cumulative Percentage. Subject to Section 10 hereof,
each Option shall be exercisable in whole or in part in such amounts as may be
specified by the Committee and set forth in the Option Agreement between each
Optionee and Company. Any Optionee who is required to report under Section 16
of the Act may not sell any shares acquired upon exercise of any Option prior
to the lapse of six months from the date of its grant or, if later, six months
following approval of the Plan by the Company's stockholders.
(b) Fractional Shares. Options may only be exercised
with respect to full shares and not for any fractional shares.
(c) Notice of Exercise. Subject to such administrative
regulations as the Committee administering the Plan may from time to time
adopt, the Optionee shall exercise an Option by giving written notice to the
Company of the number of full shares being purchased and the aggregate purchase
price to be paid therefor. Such notice shall be accompanied by an undertaking
to furnish or execute such documents as the Company, in its discretion, shall
deem necessary (i) to evidence the exercise, in whole or in part, of the
Option, (ii) to determine whether registration of the shares is then required
under the Securities Act of 1933, as then in effect, and (iii) to comply with
or satisfy the requirements of the Securities Act of 1933, or any other law, as
then in effect.
(d) Payment of Option Price. Each notice of exercise
shall be accompanied by full payment in cash of the Option Price for the shares
being purchased; provided, however, an Optionee other than a non-employee
director of the Company may upon approval of the Committee exercise his Option
by tendering to the Company shares of the Common Stock of the Company owned by
him having a Fair Market Value equal to the Option Price. "Fair Market Value"
shall mean, if the Common Stock is traded on one or more established markets or
exchanges, the mean of the opening and closing prices of the Common Stock in
the primary market or exchange on which the Common Stock is traded and, if the
Common Stock is not so traded or the Common Stock does not trade on the
relevant date, the value determined in good faith by the Committee.
(e) Payment of Withholding. Upon exercise of an Option
of any Optionee who is subject to the reporting and other provisions of Section
16 of the Act, such number of shares otherwise issuable shall be reduced by the
amount necessary to satisfy the Optionee's U.S. federal and, where applicable,
state and local tax withholding requirements. Otherwise, the Committee may, in
its discretion, require an Optionee to pay to the Company at the time of
exercise of an Option or portion thereof the amount that the Company deems
necessary to satisfy its obligation to withhold Federal, state or local income
or other taxes incurred by reason of the exercise. The number of shares so
withheld shall have an aggregate Fair Market Value on the date of exercise
sufficient to satisfy the applicable withholding taxes.
2
<PAGE> 3
9. Continuous Employment. Except as provided in Sections 14 and
15 hereof, or as otherwise provided herein with respect to non-employee
directors of the Company, an Option may not be exercised at any time unless the
holder thereof shall have been in the continuous employment of the Company or
any of the Affiliates, from the date of the grant of the Option to 5:00 p.m. on
the date of its exercise. Whether authorized leave of absence or absence for
military or governmental service, illness, temporary disability, or other
reasons shall constitute interruptions of continuous employment for the
purposes of the Plan shall be determined by the Committee, which determination
shall be final and conclusive.
10. Grants to Certain Non-Employee Directors. Notwithstanding any
provision of the Plan to the contrary, to the extent Options are available
hereunder, each Eligible Director (hereinafter defined) who serves as a
director of the Company on April 28, 1995, or becomes a non-employee director
of the Company after that date (the date applicable to a director, the
"Eligibility Date"), is hereby granted as of the Eligibility Date an Option to
purchase 16,000 shares of Common Stock at the Fair Market Value on the date of
grant.
Grants of Options under this Section 10 are automatic, and are
intended to constitute "formula" grants satisfying Rules 16b-3(c)(2)(i)(A) and
16b-3(c)(2)(ii) under the Act, or successor provisions thereto. "Eligible
Director" means each member of the Board of Directors of the Company who, as of
the Eligibility Date, (i) is not an officer or employee of the Company or any
of its Affiliates, (ii) does not beneficially own, and is not a representative
or affiliate (as defined in Rule 12b-2 under the Act) of any person or entity
that beneficially owns, 200,000 or more shares of the Common Stock of the
Company, and (iii) was not elected to the Board of Directors pursuant to any
contractual agreement with the Company or any stockholder thereof, or nominated
for election and subsequently elected to the Board of Directors pursuant to any
such contractual agreement.
Each Option granted to an Eligible Director shall vest in four equal
cumulative installments. Each installment shall become exercisable on the day
after each of the next four annual meetings of stockholders of the Company held
after the Eligibility Date. Each such Option may become exercisable under the
circumstances described in the second paragraph of Section 17. Each such
Option shall also be subject to the last sentence of Section 8(a). Each such
Option shall expire ten (10) years from the date of grant (or at the time
specified in Section 15 or 16 of the Plan, if earlier) and shall otherwise be
subject to the Plan and such terms and conditions not inconsistent with this
Section 10 as may be included in the Option Agreement for such Option.
If on any Eligibility Date sufficient shares are not available to
grant to any Eligible Director Options for 16,000 shares, then each such
Eligible Director shall instead receive an Option (a "Reduced Grant") equal to
his pro rata portion of the number of shares of Common Stock then available for
grant. Thereafter, if additional shares of Common Stock become available, then
each person who received a Reduced Grant who still meets the Eligible Director
requirements on the date additional shares become available shall automatically
receive an additional Option. The number of available shares shall be divided
among all such Eligible Directors who received Reduced Grants; provided,
however, that the aggregate number of shares granted to any one Eligible
Director pursuant to this Section 10 shall not exceed 16,000 shares. If more
than one Reduced Grant has been made, available Options shall be granted
sequentially starting with Eligible Directors with the earliest Eligibility
Date, and pro rata among Eligible Directors with the same Eligibility Date.
11. Compliance With Law and Requisite Government Approval. No
Common Stock shall be delivered in connection with the exercise of an Option
except in compliance with all applicable federal and state laws and regulations
(including without limitation, withholding tax requirements) and the rules of
all domestic stock exchanges on which the Company's shares may be listed. The
Company shall have the right to rely on an opinion of its counsel as to such
compliance. Any share certificate issued to evidence Common Stock for which an
Option is exercised may bear such legends and statements as the Committee may
deem advisable to assure compliance with federal and state laws and
regulations. No Option may be exercised in whole or in part and no
certificates representing shares subject to such Option shall be delivered if
any requisite approval or consent of any governmental authority of any kind
having jurisdiction over the exercise of Options shall not have been secured.
12. No Rights as Stockholders. The holder of an Option shall have
no rights as a stockholder with respect to any shares covered by the Option
until the issuance of one or more certificates to him for such shares upon the
due exercise of the Option. Except as provided in Section 17 hereof, no
adjustment shall be made for dividends or other rights for which the record
date is prior to the date of issuance of such certificates.
3
<PAGE> 4
13. Non-Transferability. An Option shall not be transferable
otherwise than by the last will and testament of the Optionee or the laws of
descent and distribution. An Option may be exercised, during the lifetime of
the Optionee, only by the Optionee.
14. Termination of Employment By Retirement or Disability of
Optionees. The provisions of this Section 14 shall apply to all Options other
than Options granted to non-employee directors of the Company pursuant to
Section 10 hereof:
(a) In the event that an Optionee shall voluntarily
terminate his employment with the Company or any of the Affiliates without the
consent of the Company (of which the Committee shall be the sole judge), or if
the Optionee shall have his employment involuntarily terminated by the Company
or any of the Affiliates for Cause, then the Option shall terminate as to any
unexercised portion thereof on the effective date of such termination.
(b) If (i) the Optionee voluntarily terminates his
employment with the Company or any of the Affiliates with the consent of the
Company (of which the Committee shall be the sole judge), (ii) the Optionee
shall have his employment involuntarily terminated by the Company or any of the
Affiliates for any reason, including disability, not involving Cause, or (iii)
the Optionee retires from the Company or any of the Affiliates, then the
Optionee shall have the right for thirty (30) days after such termination or
retirement to exercise his Option (to the extent that the Optionee shall have
been entitled to do so immediately prior to such termination or retirement) in
whole or in part, and any portion of the Option not exercisable immediately
prior to such termination or retirement shall terminate on the effective date
of such termination or retirement and cease to exist.
(c) An Optionee's employment shall be deemed terminated
"for Cause" if terminated by the Board of Directors of the Company or the board
of directors of an Affiliate because of dishonesty, other acts detrimental to
the interest of the Company or its Affiliates, or any material breach by the
Optionee of any employment, nondisclosure, noncompetition, or other contract
with the Company or one of its Affiliates. Whether Cause exists shall be
determined by such board of directors in its sole discretion and in good faith.
15. Death of an Optionee. If an Optionee shall die while he is
employed by the Company or any of the Affiliates or while a non-employee
director of the Company holding Options granted under Section 10 hereof, the
Executor or Administrator of the Optionee's estate or the person or persons
acquiring the Option upon the death of the Optionee may exercise such Option
(to the extent that the Optionee shall have been entitled to do so on the date
of his death) at any time within one (1) year after the Optionee's death,
subject to the other terms and conditions of this Plan, and any remaining
portion of such Option not exercisable by the Optionee on the date of his death
shall terminate immediately and cease to exist; provided, however, that no
Option shall be exercisable after the expiration of ten (10) years from the
date it is granted.
16. Termination of Director Status. If a non-employee director of
the Company granted an Option pursuant to Section 10 shall thereafter cease for
any reason (other than death, which shall be governed by Section 15 hereof) to
be a director of the Company, then the Option shall terminate on the effective
date of such termination as to any unexercised portion thereof.
17. Adjustments Upon Changes in Capitalization. In the event of
changes in the outstanding Common Stock of Company by reason of share
dividends, split-ups, reverse stock splits, recapitalizations, mergers,
consolidations, combinations, exchanges of shares, separations,
reorganizations, reclassifications, or the like of or by the Company, or
otherwise, in which the Company is the surviving company, the Committee shall
take such action, as shall be necessary to preserve the rights of all holders
under outstanding and unexercised Options so that such rights remain
proportionate to the rights held by them under such outstanding Options
immediately prior to such event. Such actions shall include, but are not
limited to, adjustments in the number and class of shares available to be
granted under the Plan, adjustments in other numbers of shares of Common Stock
referenced in the Plan, and adjustments in the number of shares granted and the
Option Price under any Option Agreement.
Unless an Optionee's Option Agreement provides otherwise, in the event
of dissolution or liquidation of the Company; a sale of all or substantially
all of the assets of the Company; or a merger or consolidation in which the
Company is not the surviving corporation (or survives only as a subsidiary of
another corporation) in which the
4
<PAGE> 5
shareholders of the Company and their proportionate ownership interests
immediately after the transaction are not substantially identical to that
immediately prior to the transaction; then each Option granted to a
non-employee director of the Company then outstanding shall terminate and the
Board of Directors may cause every other Option then outstanding to terminate,
but the Optionee of each then outstanding Option shall have the right,
immediately prior to such dissolution, liquidation, sale of assets, merger or
consolidation, to exercise such Options with all installments of exercisability
accelerated. Such termination and acceleration of exercisability shall not
apply to a given Option (including Options granted to non-employee directors)
if any surviving or acquiring corporation agrees to assume such Option in
connection with the merger or consolidation.
18. Date of the Plan and Approval of Stockholders. This Plan is
dated April 28, 1995, which is the date upon which the Board of Directors
adopted the Plan. This Plan is subject to the approval of the holders of a
majority of the shares present either in person or by proxy and entitled to
vote at a duly held meeting of the stockholders at which a quorum is present
representing a majority of all outstanding voting shares of the Company either
in person or by proxy or by the written consent of the holders of a majority of
the securities of the Company entitled to vote.
19. Time of Granting Options. Subject to Section 10 hereof,
unless otherwise designated by the Committee the grant date of an Option shall
be the date that the Option is awarded by the Committee.
20. Investment Purpose. Each Option under the Plan shall be
granted on the condition that the purchases of Common Stock thereunder shall be
for investment purposes, and not with a view to resale or distribution, except
that in the event the Common Stock subject to such Option is registered under
the Securities Act of 1933, as amended, or in the event a resale of such stock
without such registration would otherwise be permissible, such condition shall
be inoperative if, in the opinion of counsel for the Company, such condition is
not required under the Securities Act of 1933, as amended, or any other
applicable law, regulation, or rule of any governmental agency.
21. Indemnification of Committee. In addition to such other
rights of indemnification as they may have as directors of the Company or any
Affiliate or as members of the Committee, the members of the Committee shall be
indemnified by the Company against the reasonable expenses, including
attorneys' fees actually and reasonably incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted
thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by a majority of the disinterested
directors of the Company or by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action, suit
or proceeding, except in relation to matters as to which it shall be adjudged
in such action, suit or proceeding that a member of the Committee is liable for
gross negligence or intentional and willful misconduct in the performance of
his duties; provided that within sixty (60) days after institution of any such
action, suit or proceeding, such member of the Committee shall in writing offer
the Company the opportunity, at its own expense, to handle and defend the same.
The foregoing provisions shall be in addition to all rights to indemnification
and advancement of expenses to which the Committee members may be entitled
pursuant to any provision of the Certificate of Incorporation or Bylaws of the
Company or any Affiliate, agreement, vote or consent of stockholders of the
Company or any Affiliate, statute, or otherwise.
22. Amendment of the Plan. The Board of Directors of the Company
may suspend or discontinue the Plan or revise or amend it in any respect
whatsoever, except that if any person subject to Section 16 of the Act holds an
Option, no such revision or amendment shall (a) materially increase the
benefits accruing to participants under this Plan, (b) materially increase the
number of shares that may be issued under this Plan or (c) materially modify
the requirements as to participation in the Plan without the affirmative vote
of the holders of a majority of the securities of the Company present, or
represented, and entitled to vote at a meeting duly held in accordance with
applicable law or by written consent of the holding of a majority of the
securities of the Company entitled to vote. In addition, notwithstanding the
foregoing or anything herein to the contrary, the provisions of this Plan
governing the non-employee directors of the Company eligible to receive Options
pursuant to Section 10 hereof, the timing of such Option grants, the number of
Options to be granted to such non-employee directors, the exercise price per
share under each such Option, the periods during which such Options are
exercisable and the date on which such Options terminate, may not be amended
more than once every six (6) months other than to comport with changes
5
<PAGE> 6
in the Code, the Employee Retirement Income Security Act, or the rules
thereunder. The modification of the Plan shall not, without the consent of an
Optionee, affect his rights under an Option theretofore granted to him.
23. Termination of the Plan. The Plan shall terminate ten (10)
years from the date the Plan is adopted by the Board of Directors unless sooner
terminated by the Board of Directors. All Options granted hereunder must be
granted prior to the date on which the Plan is terminated. The termination of
the Plan shall not, without the consent of an Optionee, affect his rights under
an Option theretofore granted to him.
24. Compliance with Section 16 of the Act. With respect to
persons subject to Section 16 of the Act, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Act. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void with respect
to persons subject to Section 16 of the Act, to the extent permitted by law and
deemed advisable by the Committee.
25. Right of the Company and Affiliates to Terminate Employment.
Nothing contained in the Plan, or in any Option Agreement, shall confer upon
any Optionee the right to continue in the employ of the Company or any
Affiliate, or interfere in any way with the rights of the Company or any
Affiliate to terminate his employment at any time.
26. Applicable Law. This Plan is intended to be performed in the
State of Texas and shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware.
6
<PAGE> 1
EXHIBIT 5.1
January 20, 1997
United Dental Care, Inc.
14755 Preston Road
Suite 300
Dallas, Texas 75240
Gentlemen:
We have acted as counsel for United Dental Care, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), relating to an aggregate of 1,022,000 shares
(the "Shares") of Common Stock, $.10 par value per share, of the Company to be
offered upon the terms and subject to the conditions set forth in the United
Dental Care, Inc. Amended and Restated 1989 Key Employee Stock Option Plan and
the United Dental Care, Inc. 1995 Stock Option Plan, as amended (collectively,
the "Plans"). At your request, this opinion is furnished to the Company for
filing as Exhibit 5.1 to the Registration Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Restated
Certificate of Incorporation of the Company, the Amended and Restated Bylaws of
the Company, the Plans, records of relevant corporate proceedings with respect
to the offering of the Shares and such other documents and instruments as we
have deemed necessary or appropriate as a basis for the opinions hereinafter
expressed. We have also reviewed the Registration Statement on Form S-8 to be
filed by the Company with the Securities and Exchange Commission with respect
to the Shares.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to us as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that we have examined.
Based solely on the foregoing, we are of the opinion that the Shares
being registered pursuant to the Registration Statement will be, when paid for
and issued in accordance with the terms of the Plans, legally issued, fully
paid and non-assessable shares of Common Stock of the Company.
The opinion set forth above is limited exclusively to the General
Corporation Law of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. By giving the foregoing consent, we do not admit that
we come within the category of persons whose consent is required under Section
7 of the Securities Act or the regulations under the Securities Act.
Very truly yours,
/s/ STRASBURGER & PRICE, L.L.P.
STRASBURGER & PRICE, L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated February 5, 1996, except
for Note 12, as to which the date is September 11, 1996, which appears on page
F-3 of the Prospectus dated October 28, 1996 constituting part of the
Registration Statement on Form S-1 (Registration No. 333-12425) of United Dental
Care, Inc. We also consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated February 26, 1996 on the
combined financial statements of Associated Health Plans, Inc. and Associated
Companies, Inc. for the year ended December 31, 1995, which appears in United
Dental Care, Inc.'s Current Report on Form 8-K/A filed with the Securities and
Exchange Commission on March 26, 1996.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Dallas, Texas
January 17, 1997
