1
EXHIBIT 10.15
AMERICAN DENTAL TECHNOLOGIES, INC.
EXECUTIVE CHANGE IN CONTROL BONUS AND SEVERANCE AGREEMENT
THIS AGREEMENT, dated as of October 16, 1999, is between American Dental
Technologies, Inc. (the "Company") and Xxxxxxx Xxxxxxx, who is currently
employed by the Company in the position of Chief Financial Officer (the
"Executive").
WITNESSETH:
WHEREAS, the Company believes that it is in the best interests of the
Company and its stockholders if the Executive is assured of appropriate
financial protection in the event of a Change in Control (as defined in Section
4 below), thus ensuring that the Executive shall have an incentive to perform
valuable services for the Company and shall not be distracted in the
anticipation, or in the event of, a Change in Control; and
WHEREAS, the Company believes that the assurance of appropriate financial
protection to the Executive in the event of a Change in Control shall encourage
the Executive to remain in the employ of the Company through the transition
period following a Change in Control, which is in the best interests of the
Company and its stockholders; and
WHEREAS, the Executive is willing to continue to provide dedicated
services to the Company with the appropriate financial protection provided for
herein;
NOW THEREFORE, in consideration of the premises and mutual covenants, the
parties hereto agree as follows:
AGREEMENT
1. OPERATION OF AGREEMENT. This Agreement sets forth the severance
compensation that the Company shall pay the Executive if the Executive's
employment with the Company terminates under one of the applicable provisions
set forth herein following a Change in Control that occurs on or prior to June
22, 2000.
2. TERM OF THE AGREEMENT. This Agreement shall be effective upon its
execution by both parties and shall terminate upon the first of the following
events to occur: (a) June 22, 2000, if a Change in Control has not occurred on
or before such date; (b) the termination of the Executive's employment with the
Company prior to a Change in Control; (c) the expiration of one year following
a Change in Control; (d) the termination of the Executive's employment with the
Survivor following a Change in Control due to the Executive's death, Disability
(as a defined in Section 3(a) below) or Retirement (as defined in Section 3(b)
below); (e) the termination of the Executive's employment by the Survivor for
Cause (as defined in Section 3(c) below) following a Change in Control; or (f)
2
termination of employment by the Executive for other than Good Reason (as
defined in Section 6) following the date of a Change in Control.
3. DEFINED TERMS. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
(a) "Disability" shall mean disability as defined in the Company's
Long-Term Disability Plan.
(b) "Retirement" shall mean retirement on or after age 65.
(c) "Cause" shall mean the Executive's termination of employment by
the Company, or, if the Executive is employed by the Survivor following a Change
in Control, termination of employment by the Survivor, due to misconduct,
personal dishonesty, conviction for violation of any law, rule or regulation
(other than traffic violations or minor misdemeanors), breach of fiduciary duty
to the Survivor, engaging in any conduct which adversely affects or conflicts
with the interest of the Survivor, including any breach of employment
agreement between the Executive and the Survivor. The President of the Survivor
shall make any determination under this Agreement regarding acts that constitute
grounds for the Executive to be terminated for Cause.
(d) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(e) "Survivor" shall mean the person or persons surviving any merger
or statutory share exchange involving the Company, the person or persons
purchasing all or substantially all of the assets of the Company and, in the
case of a Stock Sale, the Company.
4. CHANGE IN CONTROL. A Change in Control shall be deemed to have
occurred upon the occurrence of the conditions set forth in either of the
following paragraphs.
(a) Any person (as defined in Section 3(a)(9) of the Exchange Act)
or group of persons acting together for the purpose of acquiring, holding or
disposing of shares of the Company's authorized Common Stock ("Common Stock")
(other than a person who on March 23, 1993 owned 10 percent or more of the
outstanding shares of the Common Stock, or other than trustee or other
fiduciary holding shares of Common Stock under an employee benefit plan of the
Company, or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of shares
of the Company) becomes the beneficial owner (as defined in the Exchange Act
Rules and Regulations), directly or indirectly, of 30 percent or more of the
combined voting power of the Company's voting securities, or
(b) The stockholders of the Company approve a dissolution of the
Company or a definitive agreement (i) to merge or consolidate the Company with
or into another entity in which the Company is not the continuing or surviving
corporation or pursuant to which any shares of Common Stock would be converted
into cash, securities, or other property of another entity, other
2
3
than a merger of the Company in which holders of shares of Common Stock
immediately prior to the merger have the same proportionate ownership of shares
(or equivalent securities) of the surviving entity immediately after the merger
as immediately before, or (ii) to sell or otherwise dispose of substantially
all the assets of the Company.
5. CHANGE IN CONTROL OPTION GRANT AND CASH BONUS PAYMENT. As of the date
of this Agreement ("Grant Date"), the Executive shall receive a nonqualified
stock option under the Company's Amended and Restated Nonqualified Stock Option
Plan, as amended, to purchase up to 3,750 shares of Common Stock, and a
nonqualified stock option under the Company's Amended and Restated Long-Term
Incentive Plan, as amended, to purchase up to 3,750 shares of Common Stock.
Both stock options shall become exercisable on the date of a Change in Control
that occurs during the term of this Agreement, if the Executive is still
employed by the Company on such date. The per share purchase price under the
stock options shall be $3.50. Within ten (10) days following a Change in
Control, the Executive, if still employed by the Company on the date of the
Change in Control, shall receive a cash lump sum payment, equal to $30,000.00,
reduced by any applicable income and employment withholding taxes.
6. TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL. Except as
set forth in Section 10(a) hereunder, the Executive shall be entitled to
severance payments under Section 7 of this Agreement only if there has been a
Change in Control, the Executive has incurred a Termination of Employment, and
the Executive has properly executed the General Release attached hereto as
Appendix A, which must be returned to the President of the Survivor prior to
commencement of the severance benefit provided hereunder.
(a) For purposes of this Agreement, during the one-year period
following any Change in Control that occurs during the term of this Agreement,
"Termination of Employment" shall be defined as:
(i) The Executive's involuntary termination by the Survivor for
any reason other than death, Disability, Retirement or Cause; or
(ii) The Executive's termination of his employment with the
Survivor for "Good Reason," defined as the occurrence of any of the following
events without the Executive's written consent:
(A) Any material dimunition of the Executive's position,
duties and responsibilities from his position, duties and responsibilities with
the Company immediately prior to the Change in Control;
(B) Any reduction in the Executive's base salary in effect
immediately prior to the Change in Control;
3
4
(C) Required relocation of the Executive's principal place of
employment more than 50 miles from his or her place of employment immediately
prior to the Change in Control without the Executive's written consent; and
(D) The Company's breach of any provision in this Agreement.
(b) An Executive who believes that he or she is entitled to a
Termination of Employment for Good Reason as defined in subparagraph (a)(ii)
above, may apply in writing to the Survivor for confirmation of such
entitlement prior to the Executive's actual separation from employment, by
following the claims procedure set forth in Section 14 hereof. The submission
of such a request by an Executive shall not constitute "Cause" for termination
of the Executive as defined under Section 3(c) hereof. If the Executive's
request for a Good Reason Termination of Employment is denied under both the
request and appeal procedures set forth in paragraphs (b) and (c) of Section 14
hereof, then the parties shall use their best efforts to resolve the claim
within 90 days after the claim is submitted to arbitration pursuant to Section
14(d).
7. SEVERANCE BENEFIT.
(a) Upon satisfaction of the requirements set forth in Sections 6 and
10(a) hereof, the Executive shall receive base salary continuation payments,
distributed on normal payroll dates, for 6 months following the Executive's
Termination of Employment, at the Executive's base salary in effect at the time
of Termination of Employment, less any other severance payments provided by the
Survivor through an employment agreement or other company-sponsored program.
(b) The value of the base salary continuation payments provided in
paragraph (a) above, when aggregated with the cash bonus and any applicable
portion of the stock option income in Section 5 and any other severance
payments constituting "golden parachute" amounts (defined under Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), as compensation
that becomes payable or accelerated due to a Change in Control) pursuant to all
plans, agreements or policies of the Company and its subsidiaries, shall be
reduced to the highest amount permissible under Sections 280G and 4999 of the
Code before the Executive becomes subject to the excess parachute payment
excise tax under Section 4999 of the Code and the Company loses all or part of
its compensation deduction for such payments.
8. NO MITIGATION OR DUTY TO SEEK REEMPLOYMENT. The Executive shall be
under no duty or obligation to seek or accept other employment after Termination
of Employment and shall not be required to mitigate the amount of the cash
bonus or any salary continuation payments provided by this Agreement by seeking
employment or otherwise.
9. TAX WITHHOLDING. The Company may withhold from any cash amounts
payable to the Executive under this Agreement to satisfy all applicable
Federal, State, local or other income and employment withholding taxes. In the
event the Company fails to withhold such sums for any
4
5
reason, the Company may require the Executive to promptly remit to the Company
sufficient cash to satisfy all applicable income and employment withholding
taxes.
10. BINDING EFFECT.
(a) This Agreement shall be binding upon the successors and assigns
of the Company. The Company shall cause any successor to all or substantially
all of its operations (whether by purchase, merger, consolidation, sale of
substantially all assets or otherwise to) evidence the assumption of such
obligations in a written agreement. Notwithstanding any other provisions in
this Agreement, if the Company fails to obtain an agreement evidencing the
assumption of the Company's obligations by any such successor, the Executive
shall be entitled to immediate payment of the severance compensation provided
under Section 7, irrespective of whether the Executive's employment has then
terminated. For purposes of implementing the foregoing, the date on which any
succession becomes effective shall be deemed to constitute the date of the
Executive's Termination of Employment.
(b) This Agreement shall be binding upon the Executive and shall
inure to the benefit of and be enforceable by the Executive's legal
representatives and heirs. However, the rights of the Executive under this
Agreement shall not be assigned, transferred, pledged, hypothecated or
otherwise encumbered, except by operation of law.
11. AMENDMENT OF AGREEMENT. This Agreement may not be modified or
amended except by instrument in writing signed by the parties hereto.
12. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall continue in full force and effect.
13. LIMITATION ON RIGHTS.
(a) This Agreement shall not be deemed to create a contract of
employment between the Company and the Executive and shall create no right in
the Executive to continue in the Company's employment for any specific period
of time, or to create any other rights in the Executive or obligations on the
part of the Company, except as set forth herein. This Agreement shall not
restrict the right of the Company to terminate the Executive, or restrict the
right of the Executive to terminate employment.
(b) This Agreement shall not be construed to exclude the Executive
from participation in any other compensation or benefit programs in which the
Executive is specifically eligible to participate either prior to or following
the execution of this Agreement, or any such programs that generally are
available to other executive personnel of the Company, nor shall it affect the
kind and amount of other compensation to which the Executive is entitled.
5
6
(c) The rights of the Executive under this Agreement shall be solely
those of an unsecured general creditor of the Company. Payments under this
Agreement shall be made from the Company's general assets.
14. CLAIMS PROCEDURE.
(a) The administrator for purposes of this Agreement shall be the
Company or, following a Change in Control, the Survivor ("Administrator"), whose
current address is 0000 Xxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxx 00000, and whose
telephone number is (000) 000-0000. The "Named Fiduciary" as defined in Section
402(a)(2) of ERISA, also shall be the Company. The Company shall have the right
to designate one or more Company employees as the Administrator and the Named
Fiduciary at any time, and to change the address and telephone number of the
same. The Company shall give the Executive written notice of any change in the
Administrator and Named Fiduciary, or in the address or telephone number of the
same.
(b) The Administrator shall make all determinations as to the right
of any person to receive benefits under the Agreement. Any denial by the
Administrator of a claim for benefits by the Executive ("the claimant") shall be
stated in writing by the Administrator and delivered or mailed to the claimant
within ten (10) days after receipt of the claim, unless special circumstances
require an extension of time for processing the claim. If such an extension is
required, written notice of the extension shall be furnished to the claimant
prior to the termination of the initial 10-day period. In no event shall such
extension exceed a period of ten (10) days from the end of the initial period.
Any notice of denial shall set forth the specific reasons for the denial,
specific reference to pertinent provisions of this Agreement upon which the
denial is based, a description of any additional material or information
necessary for the claimant to perfect the claim, with an explanation of why such
material or information is necessary, and any explanation of claim review
procedures, written to the best of the Administrator's ability in a manner that
is intended to be understood without legal or actuarial counsel.
(c) A claimant whose claim for benefits has been wholly or partially
denied by the Administrator may request, within ten (10) days following the date
of such denial, in a writing addressed to the Administrator, a review of such
denial. The claimant shall be entitled to submit such issues or comments in
writing or otherwise, as the claimant shall consider relevant to a determination
of the claim, and the claimant may include a request for a hearing in person
before the Administrator. Prior to submitting the request, the claimant shall be
entitled to review such documents as the Administrator shall agree are pertinent
to the claim. The claimant may, at all stages of review, be represented by
counsel, legal or otherwise, of the claimant's choice. All requests for review
shall be promptly resolved. The Administrator's decision with respect to any
such review shall be set forth in writing and shall be mailed to the claimant
not later than ten (10) days following receipt by the Administrator of the
claimant's request unless special circumstances, such as the need to hold a
hearing, require an extension of time for processing, in which case the
Administrator's decision shall be so mailed not later than twenty (20) days
after receipt of such request.
6
7
(d) A claimant who has followed the procedures in paragraphs (b) and
(c) of this Section, but who has not obtained full relief on the claim for
benefits, may, within sixty (60) days following the claimant's receipt of the
Administrator's written decision on review, apply in writing to the
Administrator for binding arbitration of the claim before an arbitrator
mutually acceptable to both parties, the arbitration to be held in Corpus
Christi, Texas, in accordance with the arbitration rules of the American
Arbitration Association, as then in effect. If the parties are unable to
mutually agree upon an arbitrator, then the arbitration proceedings shall be
held before three arbitrators, one of which shall be designated by the Company,
one of which shall be designated by the claimant and the third of which shall
be designated mutually by the first two arbitrators in accordance with the
arbitration rules referenced above. The arbitrator(s) sole authority shall be
to interpret and apply the provisions of this Agreement; the arbitrator(s)
shall not change, add to, or subtract from, any of the Agreement's provisions.
The arbitrator(s) shall have the power to compel attendance of witnesses at the
hearing. Any court having jurisdiction may enter a judgment based upon such
arbitration. All decisions of the arbitrator(s) shall be final and binding on
the claimant and the Company without appeal to any court. Upon execution of
this Agreement, the Executive shall be deemed to have waived any right to
commence litigation proceedings regarding this Agreement outside of
arbitration without the express written consent of the Company.
15. LEGAL FEES AND EXPENSES. In the event any arbitration or litigation
is brought to enforce any provision of this Agreement and the Executive
prevails, then the Executive shall be entitled to recover from the Company the
Executive's reasonable costs and reasonable expenses of such arbitration or
litigation, including reasonable fees and disbursements of counsel (both at
trial and in appellate proceedings). If the Company prevails, then each party
shall be responsible for its/his respective costs, expenses and attorneys fees,
and the costs of arbitration shall be equally divided.
16. NONALIENATION OF BENEFITS. Except in so far as this provision may be
contrary to applicable law, no sale, transfer, alienation, assignment, pledge,
collateralization or attachment of any benefits under this Agreement shall be
valid or recognized by the Company.
17. ERISA. This Agreement is an unfunded compensation arrangement for a
member of a select group of the Company's management and any exemptions under
ERISA, as applicable to such an arrangement, shall be applicable to this
Agreement. Provided, however, the cash bonus and stock option under Section 5
are strictly incentive payments that are not subject to ERISA.
18. REPORTING AND DISCLOSURE. The Company, from time to time, shall
provide government agencies with such reports concerning this Agreement as may
be required by law, and the Company shall provide the Executive with such
disclosure concerning this Agreement as may be required by law or as the
Company may deem appropriate.
19. NOTICES. Any notice required or permitted by this Agreement shall be
in writing, sent by registered or certified mail, return receipt requested,
addressed to the Company at the Company's then principal office, or to the
Executive at the Executive's last address on file with the Company,
7
8
as the case may be, or to such other address or addresses as any party hereto
may from time to time specify in writing for the purpose of this Agreement in a
notice given to the other parties in compliance with this Section 19. Notices
shall be deemed given when received.
20. MISCELLANEOUS/SEVERABILITY. A waiver of the breach of any term or
condition of this Agreement shall not be deemed to constitute a waiver of any
subsequent breach of the same or any other term or condition. This Agreement is
intended to be performed in accordance with, and only to the extend permitted
by, all applicable laws, ordinances, rules and regulations. To the extent that
any provision or benefit under this Agreement is not deemed to be in accordance
with any applicable law, ordinance, rule or regulation, the noncomplying
provision shall be construed, or benefit limited, to the extent necessary to
comply with all applicable laws, ordinances and regulations and any such
provision or benefit shall not affect the validity of any other provision or
benefit provided by this Agreement. The headings in this Agreement are inserted
for convenience of reference only and shall not be a part of or control or
affect the meaning of any provision hereof.
21. GOVERNING LAW. To the extent not preempted by Federal law, this
Agreement shall be governed and construed in accordance with the laws of the
State of Texas. Payment and performance hereunder shall be considered to be
made in Corpus Christi, Texas.
22. ENTIRE AGREEMENT. This document represents the entire agreement and
understanding of the parties with respect to the subject matter of the
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
AMERICAN DENTAL TECHNOLOGIES, INC.
By: Xxx Xxxxxxx
------------------------------
Its: CEO
--------------------------
By: [ILLEGIBLE] CFO
------------------------------
, Executive
-------------------
8
9
APPENDIX A
RELEASE
THIS AGREEMENT ("Agreement") is made by and between Xxxxxxx Xxxxxxx
("Executive") and American Dental Technologies, Inc. ("Company").
RECITALS
A. Executive has terminated employment with the Company, effective
__________, _______________.
B. Executive has been given the opportunity to review this Agreement, to
consult with legal counsel, and to ascertain his rights and remedies.
C. Executive and Company, without any admission of liability, desire to
settle with finality, compromise, dispose of, and release any and all claims
and demands asserted or which could be asserted arising out of Executive's
employment at and separation from Company.
In consideration of the foregoing and of the promises and mutual covenants
contained herein, it is hereby agreed between Executive and Company as follows:
AGREEMENT
1. In exchange for the good and valuable consideration set forth in this
Agreement, Executive hereby releases, waives and discharges any and all manner
of action, causes of action, claims, rights, charges, suits, damages, debts,
demands, obligations, attorneys fees, and any and all other liabilities or
claims of whatsoever nature, whether in law or in equity, known or unknown,
including, but not limited to, any claim and/or claim of damages or other
relief for tort, breach of contract, personal injury, negligence, age
discrimination under The Age Discrimination In Employment Act of 1967 (as
amended), employment discrimination prohibited by other federal, state or
local laws including sex, race, national origin, marital status, age, handicap,
height, weight, or religious discrimination, and any other claims, which
Executive has claimed or may claim or could claim in any local, state or
federal or other forum, against Company, its directors, officers, employees,
agents, attorneys, successors and assigns as a result of or relating to
Executive's employment at and separation from Company and as an officer of
Company, or any claim and/or claim of damages or other relief, in any other
capacity, as a result of any acts or omissions by Company or any of its
directors, officers, employees, agents, attorneys, successors or assigns
("Covered Acts or Omissions") which occurred prior to the date of this
Agreement; excluding only (i) the Executive Change in Control Bonus and
Severance Agreement dated October 16, 1999 (the "CIC Agreement"), or (ii) those
for indemnification under the Company's articles of incorporation, bylaws or
applicable law by reason of his service as an officer of the Company.
X-0
00
0. Executive agrees to immediately return to Company all property,
assets, manuals, materials, information, notes, reports, agreements, memoranda,
customer lists, formulae, data, know-how, inventions, trade secrets, processes,
techniques, and all other assets, materials and information of any kind or
nature, belonging or pertaining to Company ("Company Information and
Property"), including, but not limited to, computer programs and diskettes or
other media for electronic storage of information containing Company
Information and Property, in Executive's possession, and Executive shall not
retain copies of any such Company Information and Property. Executive further
agrees that from and after the date hereof he will not remove from Company's
offices any Company Information and Property, nor retain possession or copies
of any Company Information and Property.
3. Executive agrees that he shall never make negative, disparaging,
defamatory or other unfavorable comments regarding Company, or any officer or
director of Company, to any person, except as required by law.
4. Executive covenants and agrees that he shall never commence or
prosecute, or knowingly encourage, promote, assist or participate in any way,
except as required by law, in the commencement or prosecution, of any claim,
demand, action, cause of action or suit of any nature whatsoever against
Company or any officer, director, employee or agent of Company ("Covered
Litigation") that is based upon any claim, demand, action, cause of action or
suit released pursuant to this Agreement or involving or based upon the Covered
Acts and Omissions.
5. Executive further agrees that he has read this Agreement carefully
and understands all of its terms.
6. Executive understands and agrees that he was advised to consult with
an attorney and did so prior to executing this Agreement.
7. Executive understands and agrees that he has been given twenty-one
(21) days within which to consider this Agreement.
8. Executive understands and agrees that he may revoke this Agreement
for a period of seven (7) calendar days following the execution of this
Agreement (the "Revocation Period"). This Agreement is not effective until this
revocation period has expired. Executive understands that any revocation, to be
effective, must be in writing and either (a) postmarked within seven (7) days of
execution of this Agreement and addressed to President, American Dental
Technologies, Inc., 0000 Xxxx Xxxx, Xxxxxx Xxxxxxx, XX 00000 or (b) hand
delivered within seven (7) days of execution of this Agreement to President,
American Dental Technologies, Inc., 0000 Xxxx Xxxx, Xxxxxx Xxxxxxx, XX 00000.
Executive understands that if revocation is made by mail, mailing by certified
mail, return receipt requested, is recommended to show proof of mailing.
9. In agreeing to sign this Agreement, Executive is doing so completely
voluntarily and of his or her own free-will and without any encouragement or
pressure from Company and agrees
A-2
11
that in doing so he or she has not relied on any oral statements or
explanations made by Company or its representatives.
10. Both parties agree not to disclose the terms of this Agreement to any
third party, except as is required by law, or as is necessary for purposes of
securing counsel from either parties' attorneys or accountants.
11. This Agreement shall not be construed as an admission of wrongdoing
by Company.
12. This Agreement contains the entire agreement between Executive and
Company. Any modification of this Agreement must be made in writing and signed
by Executive and each of the entities constituting the Company.
13. This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Texas, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Texas or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Texas.
14. In the event any provision of this Agreement or portion thereof is
found to be wholly or partially invalid, illegal or unenforceable in any
judicial proceeding, then such provision shall be deemed to be modified or
restricted to the extent and in the manner necessary to render the same valid
and enforceable, or shall be deemed excised from this Agreement, as the case
may require, and this Agreement shall be construed and enforced to the maximum
extent permitted by law, as if such provision had been originally incorporated
herein as so modified or restricted, or as if such provision had not been
originally incorporated herein, as the case may be.
15. If there is a breach or threatened breach of the provisions of this
Agreement, Company may, in addition to other available rights and remedies,
apply to any court of competent jurisdiction for specific performance and/or
injunctive relief in order to enforce, or prevent any violation of, any of the
provisions of this Agreement.
16. In the event that Executive violates the terms of this Agreement, in
addition to other available rights and remedies, the Company shall be released
of all of its remaining obligations under the CIC Agreement.
A-3
12
The parties hereto have entered into this Agreement as of this ___ day of
_______________, _____.
AMERICAN DENTAL TECHNOLOGIES, INC.
By:
-----------------------------------
Its:
-----------------------------
By:
-----------------------------------
____________________________, Executive
Schedule of Operations and Cash for Named Officers under the Executive change
of Control Agreements.
Name New Options Cash
---- ----------- ----
Xxx Xxxxxxx 37,000 @ $3.50 $150,000
Xxxx Xxxxxxx 25,000 @ $3.50 $100,000
Xxxxxxx Xxxxxx 25,000 @ $3.50 $100,000
Xxxx Xxxxxx 5,000 @ $3.50 $ 20,000
A-4
13
STOCK OPTION GRANT
UNDER LONG-TERM INCENTIVE PLAN
OF
AMERICAN DENTAL TECHNOLOGIES, INC.
A Nonqualified Stock Option is hereby granted as of the 15th day of
December, 1999, (the "Date of Grant"), by American Dental Technologies, Inc., a
Delaware corporation (the "Company"), to XXXXXXXX X. XXXXXXXX, XX. (the
"Optionee"), for and with respect to Common Stock of the Company, $.04 par
value per share (the "Common Stock"), pursuant to the Amended and Restated
Long-Term Incentive Plan of American Dental Technologies, Inc. (the "Plan"), in
consideration of services rendered and to be rendered by the Optionee to the
Company, subject to the terms and conditions in the Plan and as hereinafter
provided. Capitalized terms not defined herein shall have the meanings
respectively assigned to them in the Plan.
1. GRANT OF OPTION. The Company hereby grants to Optionee the right,
privilege, and option to purchase 312 shares of Common Stock at $1.381 per
share (the "Exercise Price"), in the manner and subject to the conditions
hereinafter provided (the "Option"). The Option is intended to be an option
which does not meet the requirements of Section 422 of the Code.
2. TIME OF EXERCISE OF OPTION. The Option with respect to the 312
shares of Common Stock may be exercised by the Optionee at any time and
from time to time within the time period beginning one year after grant of
the Option and ending ten years after grant of the Option, according to the
following schedule: One-fourth (78 shares) of the Options shall become
exercisable on the first anniversary of the date of grant of the Options,
and one-fourth of the Options shall become exercisable on each of the
second, third and fourth anniversaries of the date of grant of the Option.
To the extent not exercised, installments shall accumulate and Optionee may
exercise them thereafter in whole or in part until 5:00 p.m., Detroit,
Michigan time, on the Expiration Date, subject to Section 6. The Expiration
Date of the Option is December 15, 2009.
3. METHOD OF EXERCISE. The Option shall be exercisable only by written
notice directed to the Secretary of the Company at its principal place of
business, which notice (i) shall state the number of shares with respect to
which the Option is being exercised, the person in whose name the stock
certificate representing such shares is to be registered, and the address
and social security number of such person; (ii) shall be signed by the
person entitled to exercise the Option (and if such person is not the
Optionee, shall be accompanied by proof satisfactory to the Company of such
person's right to exercise the Option); and (iii) shall be accompanied by
payment in full of the Exercise Price for the number of shares specified.
Payment of the Option price shall be in cash, personal check or money
order. Optionee shall also furnish to the Company such assurances as the
Company may request pursuant to Section 8.5 of the Plan.
14
4. WITHHOLDING TAXES. The Company shall have the right to withhold from
Optionee's compensation or require Optionee to remit sufficient funds to
satisfy applicable withholding for income and employment taxes upon exercise of
the Option. At the discretion of the Committee and only if the applicable
requirements of Rule 16b-3 have been satisfied, (i) an Optionee may make a
written election to tender previously acquired shares of Common Stock or have
shares of stock withheld from the shares otherwise to be received pursuant to
the Option exercise, provided that the shares have an aggregate Fair Market
Value sufficient to satisfy in whole or in part the applicable withholding
taxes; or (ii) the cashless exercise procedure described in Section 2.4 of the
Plan may be utilized to satisfy the withholding requirements. The Company shall
not withhold from the exercise of the Option more shares than are necessary to
meet the established minimum tax withholding requirements of federal, state and
local obligations.
5. TRANSFERABILITY. The Option may be exercised only by Optionee during
the Optionee's lifetime and may not be transferred other than by will, the laws
of descent or distribution or a qualified domestic relations order as defined
by the Code. Any attempted assignment, transfer, pledge or hypothecation or
other disposition of the Option, other than in accordance with the terms set
forth herein and in the Plan, shall be void and of no effect.
6. TERMINATION OF EXERCISE RIGHTS. In the event the Optionee ceases to
be a director of the Company, the Option shall be exercisable only as permitted
by paragraphs (a), (c) and (d) of Section 6.1 of the Plan.
7. RIGHTS AS STOCKHOLDER. Neither Optionee nor any other person
entitled to exercise the Option under the terms hereof shall be, or have any of
the rights or privileges of, a stockholder of the Company in respect of any of
the shares of Common Stock issuable on exercise of the Option, unless and until
a stock certificate has been issued upon exercise of the Option and the
purchase price for such shares shall have been paid in full. No adjustment
shall be made for dividends or other rights with respect to such shares for
which the record date is prior to the date the certificate is issued.
8. EFFECT ON EMPLOYMENT OR SERVICES. The Option shall not confer upon
the Optionee any right to continue as a director of the Company.
9. ADJUSTMENT PROVISIONS. The aggregate number of shares of Common
Stock with respect to which this Option is granted may be adjusted by the
Committee pursuant to Section 7.1 of the Plan to prevent dilution or
enlargement of the benefits intended to be granted hereby.
10. APPLICABLE LAW. This Agreement shall be construed, administered and
governed in all respects under and by the laws of the State of Michigan.
11. APPLICATION OF PLAN. This Option shall be interpreted, administered
and subject to all terms and conditions of the Plan. The Optionee agrees to all
of the terms and conditions stated in this Agreement, as well as to all of the
terms
15
3
and conditions of the Plan, a copy of which may be obtained from the Company
upon request. In case of conflict, the terms of the Plan shall control.
AMERICAN DENTAL TECHNOLOGIES, INC.
(A Delaware Corporation)
By: /s/ XXX X. XXXXXXX
------------------------------------
Xxx X. Xxxxxxx
/s/ XXXXXXXX X. XXXXXXXX, XX.
------------------------------------
Xxxxxxxx X. Xxxxxxxx, Xx.
Optionee
