Exhibit 10.4.3
January 10, 2002
Mr. L. Xxxxxxxx Xxx Xxxxxx
0000 XX 000xx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: Employee Retention Incentive Agreement
Dear Xxx:
This Letter Agreement ("Agreement") is entered into between InterDent,
Inc., a Delaware corporation (the "Company"), and L. Xxxxxxxx Xxx Xxxxxx
("Employee").
In May 2000, the Company granted Employee a stock option under the
Company's 1999 Stock Incentive Plan (the "Option") to purchase a total of
175,000 shares of Company common stock for $3.93 per share. The Option became
exercisable for 40% of the shares immediately upon grant, with the balance
becoming exercisable ratably over the next 48 months. Unless previously
exercised, the Option will expire on May 23, 2010.
As a result of a 1-for-6 reverse stock split effective on August 7,
2001, the Option currently represents the right to purchase a total of 29,167
shares of Company common stock for $23.58 per share.
To encourage Employee to remain in the employ of the Company, the
Company desires to grant Employee certain rights with respect to the Option as
set forth in the below terms of the Agreement:
1. Option Cash-out Right.
(a) Subject to the terms and conditions of this Agreement, the
Company hereby grants to Employee the right (the "Cash-out Right"), commencing
on June 16, 2002 and continuing until the expiration or earlier termination of
the Option, to surrender all or any part of that portion of the Option
representing the right to purchase 15,000 shares of Company common stock in
exchange for a cash payment from the Company equal to $13.17 for each Option
share so surrendered, subject to applicable tax withholding. Accordingly, if
exercised in full, the Cash-out Right will result in Employee surrendering a
15,000-share portion of the Option for a cash payment of $197,550, subject to
applicable tax withholding. The number of Option shares subject to the Cash-out
Right and the amount of the cash payment per Option share shall be subject to
appropriate adjustment in the event of any future stock split, stock dividend,
reverse stock split, combination of shares, merger or the like.
(b) If, prior to June 16, 2002, Employee's employment with the
Company is terminated by the Company for "cause" (as defined in Section 8(b) of
the Employment Agreement dated March 11, 1999 between Employee and the Company,
as amended) or by Employee without "good reason" (as defined in Section 8(c) of
the Employment Agreement dated March 11, 1999 between Employee and the Company,
as amended), then the Cash-out Right shall not become exercisable by Employee
and shall be forfeited.
(c) If, prior to June 16, 2002 (but subject to subsection (d)
below), Employee's employment with the Company is terminated by the Company
without "cause" or by Employee for "good reason", then the Cash-out Right shall
become exercisable by Employee for a portion of the Option shares determined by
multiplying 15,000 by a fraction, the numerator of which shall be the number of
full one-month periods from June 16, 2000 to the date of termination of
Employee's employment and the denominator of which shall be 24. In that event
the Cash-out Right shall remain exercisable until termination of the Option.
(d) If, prior to June 16, 2002, a "change in control" (as
defined in Section 9 of the Employment Agreement dated March 11, 1999 between
Employee and the Company, as amended) occurs following which Employee's
employment with the Company is terminated by the Company without "cause" or by
Employee for "good reason", then the Cash-out Right shall become exercisable in
full by Employee and shall remain exercisable until termination of the Option.
(e) To exercise the Cash-Out Right, Employee shall give
written notice to the Company in accordance with Section 2(b) below specifying
the number of Option shares as to which he desires to exercise the Cash-Out
Right. The amount to which Employee is entitled upon such exercise shall be paid
by the Company to Employee within five days after the effective date of such
notice.
2. Miscellaneous.
(a) Entire Agreement; Amendment. This Agreement constitutes the entire
agreement of the parties with regard to the subjects hereof and may be amended
only by written agreement between the Company and Employee.
(b) Notices. Any notice required or permitted under this
Agreement shall be in writing and shall be effective when delivered personally
or by facsimile to the party to whom it is addressed or two days after it is
deposited into the United States Mail as registered or certified mail, return
receipt requested, postage prepaid, in each case addressed to the Company,
Attention: Chief Executive Officer, at its principal executive offices or to
Employee at the address of Employee in the Company's records, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other party.
(c) Assignment; Rights and Benefits. Employee shall not assign
this Agreement or any rights hereunder to any other party or parties without the
prior written consent of the Company. The rights and benefits of this Agreement
shall inure to the benefit of and be enforceable by the Company's successors and
assigns and, subject to the foregoing restriction on assignment, be binding upon
Employee's heirs, executors, administrators, successors and assigns.
(d) Applicable Law; Attorneys' Fees. The terms and conditions
of this Agreement shall be governed by the laws of the State of California. In
the event either party institutes litigation hereunder, the prevailing party
shall be entitled to reasonable attorneys' fees to be set by the trial court
and, upon any appeal, the appellate court.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original.
If you agree with the terms set out in this Agreement, please sign the
enclosed copy of this letter and return it to me.
Very truly yours,
INTERDENT, INC.
By H. XXXXX XXXXX
--------------
Title Chairman and CEO
ACCEPTED AND AGREED TO:
L. XXXXXXXX XXX XXXXXX
L. Xxxxxxxx Xxx Xxxxxx
