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EXHIBIT 10.1
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
NAME OF OPTIONEE:
NO. OF OPTION SHARES:
GRANT DATE:
OPTION EXERCISE PRICE:
EXPIRATION DATE:
CompDent Corporation, a Delaware corporation (the "Company"), hereby
grants to the person named above (the "Optionee") an option (the "Stock Option")
to purchase on or prior to the expiration date specified above (the "Expiration
Date") all or any part of the number of shares of Common Stock, par value $0.01
per share ("Common Stock"), of the Company indicated above (the "Option
Shares"), at the per share option exercise price specified above, subject to the
terms and conditions set forth herein.
1. VESTING AND EXERCISABILITY.
No portion of this Stock Option may be exercised until such
portion shall have vested. This Stock Option shall be vested and exercisable
with respect to the following number of Option Shares on the dates indicated:
Incremental (Aggregate) Number
of Option Shares Exercisable* Vesting Date
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1st anniversary of Grant Date
2nd anniversary of Grant Date
3rd anniversary of Grant Date
4th anniversary of Grant Date
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* Subject to Section 4
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Once any portion of this Stock Option becomes vested and exercisable,
it shall continue to be exercisable at any time or times prior to the Expiration
Date, subject to the provisions hereof, including, without limitation, Section 5
hereof which provides for the termination of unexercised options upon completion
of certain transactions described therein. In the event a Terminating Event (as
defined below) has occurred, this Stock Option shall no longer vest or become
exercisable with respect to any additional Option Shares after the date of a
Terminating Event, and this Stock Option may thereafter be exercised, to the
extent it was vested and exercisable on the date of such Terminating Event, by
the Optionee until the earlier of (i) three months from the date of such
Terminating Event or (ii) the Expiration Date. For purposes of this Agreement,
the term "Terminating Event" shall mean (A) a termination of the Optionee's
employment with the Company, Dental Health Management, Inc. ("DHMI") or any
professional corporation or association or other entity with which DHMI or any
other subsidiary of the Company has a management services or similar agreement
or (B) a material breach of any covenant, agreement or representation or
warranty of the Optionee under (i) that certain Asset Purchase Agreement dated
as of June 13, 1997 (the "Purchase Agreement") by and among the Company, Dental
Health Management, Inc. ("DHMI"), DentLease, Inc. ("DentLease"), Xxxxxxx
Management Group, Ltd. ("WMG"), Associated Dental Professionals, Ltd., Premier
Management Group, Ltd., Supreme Dental Management, Ltd., Elite Management Group,
Ltd., Paramount Dental Management, Ltd. and the Stockholders thereof (including
the Optionee) or the certificate delivered pursuant to Section 7.01(a), if such
breach constitutes the wilful breach of a covenant on the part of the Optionee
or is the result of the Optionee's fraud or intentional misrepresentation, (ii)
the Option Agreement dated as of
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even date herewith (the "Option Agreement") by and among the Company, DHMI,
DentLease, WMG, Optionee and certain other related parties, and (iii) the
Non-Competition Agreement executed and delivered by the Optionee to the Company,
DHMI and DentLease pursuant to the Purchase Agreement and the Option Agreement.
2. EXERCISE OF STOCK OPTION.
(a) The Optionee may exercise only vested portions of this
Stock Option and only in the following manner: Prior to the Expiration Date
(subject to Sections 1 and 5), the Optionee may give written notice on any
business day to the Option and Compensation Committee of the Board of Directors
of the Company, or other committee performing similar functions as in effect
from time-to-time or, if no such committee exists, the Board of Directors of the
Company (the "Committee") of his or her election to purchase some or all of the
Option Shares with respect to which this Stock Option has vested at the time of
such notice. Such notice shall specify the number of shares to be purchased
pursuant to the exercise of this Stock Option and shall be accompanied (i) by
payment therefor in cash and (ii) by such agreement, statement or other evidence
as the Committee may reasonably require in order to satisfy itself that the
issuance and conveyance of the Option Shares being purchased pursuant to such
exercise and any subsequent resale thereof will be in compliance with applicable
laws and regulations, including, without limitation, all federal and state
securities laws.
(b) Certificates for the Option Shares so purchased will be
issued and delivered to the Optionee upon compliance to the satisfaction of the
Committee with all requirements under applicable laws or regulations in
connection with such issuance. Until the Optionee shall have complied with the
requirements hereof, the Company shall be under no
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obligation to issue the Option Shares subject to this Stock Option, and the
determination of the Committee as to such compliance shall be final and binding
on the Optionee. The Optionee shall not be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares of stock subject
to this Stock Option unless and until this Stock Option shall have been
exercised pursuant to the terms hereof, the Company shall have issued and
delivered the Option Shares to the Optionee, and the Optionee's name shall have
been entered as a stockholder of record on the books of the Company. Thereupon,
the Optionee shall have full dividend and other ownership rights with respect to
such Option Shares, subject to the terms of this Agreement.
(c) Notwithstanding any other provision hereof, no portion of
this Stock Option shall be exercisable after the Expiration Date hereof or such
expiration date as is specified in Section 1 or 5 hereof.
3. TRANSFERABILITY. This Agreement is personal to the Optionee and is
not transferable by the Optionee in any manner other than by will or by the laws
of descent and distribution. This Stock Option may be exercised during the
Optionee's lifetime only by the Optionee. The Optionee may elect to designate a
beneficiary by providing written notice of the name of such beneficiary to the
Company, and may revoke or change such designation at any time by filing written
notice of revocation or change with the Company; such beneficiary may exercise
the Optionee's Stock Option in the event of the Optionee's death to the extent
provided herein. If the Optionee does not designate a beneficiary, or if the
designated beneficiary predeceases the Optionee, the Optionee's personal
representative, heirs or legatees to whom ownership has passed may exercise this
Stock Option to the extent provided herein in
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the event of the Optionee's death.
4. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. Subject to Section 5
hereof, if the shares of Common Stock as a whole are increased, decreased,
changed or converted into or exchanged for a different number or kind of shares
or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or the
like, an appropriate and proportionate adjustment shall be made in the number
and kind of shares and in the per share exercise price of shares subject to any
unexercised portion of this Stock Option. Subject to Section 5 hereof, in the
event of any such adjustment in this Stock Option, the Optionee thereafter shall
have the right to purchase the number of shares under this Stock Option at the
per share price, as so adjusted, which the Optionee could purchase at the total
purchase price applicable to this Stock Option immediately prior to such
adjustment. Adjustments under this Section 4 shall be determined by the
Committee and such determination shall be final, binding and conclusive.
5. EFFECT OF CERTAIN TRANSACTIONS. In the case of (a) the dissolution
or liquidation of the Company, (b) the sale of all or substantially all of the
assets of the Company to another person or entity, or (c) the sale of all of the
stock of the Company to an unrelated person or entity, this Stock Option shall
terminate on the effective date of such transaction or event, unless provision
is made in such transaction in the sole discretion of the parties thereto for
the assumption of this Stock Option or the substitution for this Stock Option of
a new stock option of the successor person or entity or a parent or subsidiary
thereof, with such adjustment as to the number and kind of shares and the per
share exercise price as such parties shall agree to.
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In the event of any transaction which will result in such termination, the
Company shall give to the Optionee written notice thereof at least fifteen (15)
days prior to the effective date of such transaction or the record date on which
stockholders of the Company entitled to participate in such transaction shall be
determined, whichever comes first. Until the earlier to occur of such effective
date or record date, the Optionee may exercise any vested portion of this Stock
Option, but after such effective date or record date, as the case may be, the
Optionee may not exercise this Stock Option. In the case of a merger,
reorganization or consolidation in which the Company is acquired by another
person or entity (other than a holding company formed by the Company) or in
which the Company is not the surviving corporation, the Company shall cause its
obligations under this Agreement to be assumed by the surviving corporation in
connection with such transaction and this Agreement shall otherwise remain in
full force and effect in accordance with its terms.
6. WITHHOLDING TAXES. The Optionee shall, not later than the date as of
which the exercise of this Stock Option becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements reasonably
satisfactory to the Committee for payment of any Federal, state, and local taxes
required by law to be withheld on account of such taxable event. The Optionee
may elect to have such tax withholding obligation satisfied, in whole or in
part, by authorizing the Company to withhold from shares of Common Stock to be
issued or transferring to the Company, a number of shares of Common Stock with
an aggregate Fair Market Value that would satisfy the withholding amount due.
For purposes of this Section 6 "Fair Market Value" on any given date means the
last reported sale price at which Common Stock is traded on such date or, if no
Common Stock is traded on such date,
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the next preceding date on which Common Stock was traded, as reflected on the
principal stock exchange or, if applicable, any other national stock exchange on
which the Common Stock is traded or admitted to trading.
7. PURCHASE AGREEMENT.
This Agreement has been entered into as a condition precedent to and in
consideration of the closing of the transactions contemplated by the Purchase
Agreement.
8. MISCELLANEOUS.
(a) That the Optionee understands and acknowledges:
(i) That he shall not be deemed for any purpose to be
a shareholder of the Company with respect to any of the Option Shares,
except to the extent that the Option herein granted shall have been
exercised with respect thereto and a stock certificate issued therefor.
(ii) That the existence of the Option herein granted
shall not effect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company's
capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock of the Company
or the rights thereof, or dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business or
any other corporate act or proceeding, whether of a similar character
or otherwise.
(iii) That as a condition of the granting of the
Option herein granted, the Optionee agrees, for himself and his
personal representative, that any dispute or
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disagreements which may arise under or as a result of or pursuant to
this Agreement shall be determined by the Board of Directors in its
sole discretion, and that any interpretation by the Board of Directors
of the terms of this Agreement shall be final, binding and conclusive.
(b) This Option shall not confer upon the Optionee any right
with respect to the continuance of the relationship between Optionee and the
Company or its related corporations, nor shall it interfere in any way with the
right of the Company to terminate the Optionee's relationship with the Company
or any of its subsidiaries.
(c) This Agreement shall be governed and interpreted by the
laws of the State of Delaware.
(d) As used in this Agreement, the masculine, feminine or
neuter gender and the singular or plural number shall be deemed to include the
others whenever the context so indicates or requires.
(e) This Agreement and the exhibits thereto constitute the
entire agreement between the parties with respect to the subject matter hereof,
and no change or modification shall be valid unless made in writing and signed
by the party against whom such change or modification is sought to be enforced.
(f) Notices hereunder shall be mailed or delivered to the
Company at its principal place of business, Attention: President, and shall be
mailed or delivered to the Optionee at the address set forth below, or in either
case at such other address as one party may subsequently furnish to the other
party in writing.
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COMPDENT CORPORATION
By:
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Title:
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The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.
Dated as of __________ __, 1997 OPTIONEE:
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Optionee's Address:
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