Exhibit 10.10
EMPLOYMENT AGREEMENT
Employment Agreement (the "Agreement"), dated as hereinafter indicated to
be effective on February 15, 2001 (the "Effective Date"), by and between
x-xxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), and Xxxxxxx Xxxxxxx
("Employee").
WHEREAS, the parties hereto had entered into that certain Employment
Agreement, dated October 13, 1999 as amended and replaced by new agreement on
December 17, 1999, among the Company and Employee (the "Prior Agreement"); and,
WHEREAS, the Company and Employee wish to continue the employment of
Employee on the terms and conditions described herein with this Agreement
superceding and wholly replacing the Prior Agreement including subsequent
Amendments in its entirety;
NOW THEREFORE, in consideration of the mutual premises and conditions
contained herein, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT. The Company hereby agrees to employ Employee, and
Employee hereby accepts employment by the Company, upon the terms and subject to
the conditions hereinafter set forth.
SECTION 2. DUTIES. Employee shall serve as the Senior Vice President, Chief
Operating Officer and Chief Financial Officer of the Company (the "Position")
reporting to the Company's President. Employee's duties and powers shall be
those consistent with the office of the Position, with such additional duties or
titles as mutually determined necessary or appropriate from time to time by the
Company's President. Employee agrees to devote his full time and best efforts to
the Company in the performance of his duties. All of the Employee's powers and
authorities shall be subject to the reasonable direction and control of the
President. Employee acknowledges that the executive offices of the Company will
be located in Phoenix, Arizona and he shall perform his duties under this
Agreement from those executive offices.
SECTION 3. TERM. Except as otherwise provided in Section 6 hereof, the term
of this Agreement shall be for two (2) years ("Term"), beginning on the
Effective Date (also referred to as the "Commencement Date"). Unless and until
terminated as provided for in Section 6, this Agreement shall automatically
extend and renew on each annual anniversary of the Effective Date by adding one
(1) year to the Term from year to year until terminated.
SECTION 4. COMPENSATION AND BENEFITS. In consideration for the services of
the Employee hereunder, the Company will compensate Employee as follows:
(a) BASE SALARY. During the Term of this Agreement and until
terminated, Employee shall receive a monthly minimum base salary (the "Base
Salary") equal to the greater of: (i) fourteen thousand five hundred eighty
three and 33/100 dollars ($14,583.33) per month; or (ii) such amount as
determined by the President in writing. Employee's Base Salary shall be
paid in accordance with Company's standard policy regarding payment of
compensation to employees but no less frequently than monthly.
Page 1 of 18
(b) BONUS. Commencing with the fiscal year beginning April 1, 2000 and
continuing from year to year until this Agreement is terminated, Employee
shall be eligible to receive a cash bonus each year during the term of this
Agreement determined in accordance with the Management Incentive
Compensation Plan as amended from time to time, a copy of which is attached
as Exhibit "A". Such bonus shall be payable by the Company to Employee as
provided for in the Management Incentive Compensation Plan.
(c) BENEFITS. The Company shall grant Employee options to purchase
shares of the Company's Common Stock in such amounts, with such vesting and
at such prices as determined by the President all in accordance with the
terms of a Stock Option Agreement, and in the general form of option
agreement attached as Exhibit "B". In addition, during the term of this
Agreement, Employee shall be allowed to participate in, and be entitled to
benefits, plans and programs, including improvements or modifications of
the same, which are now, or may hereafter be, those available to officers
or employees of a like position ("Executives"). Employee shall be entitled
to medical, dental and retirement benefits which are generally made
available to Executives, provided further that Employer will pay the total
premium costs associated with the medical and dental insurance, not
including deductibles and/or co-payments, covering the health of Employee,
Employee's spouse and Employee's dependants. Medical, dental and disability
insurance already effective shall remain in force, or if not shall become
effective on the first day of the month following the Commencement Date.
During each year of his employment Employee shall be entitled to three (3)
weeks of vacation, and such other days of compensated absences, (i.e. sick
leave or personal days) in accordance with the Company's policies and
procedures as determined from time to time by the President.
SECTION 5. EXPENSES. It is acknowledged by the parties that Employee, in
connection with the services to be performed by him pursuant to the terms of
this Agreement, will be required to make payments for travel, entertainment of
business associates, mobile telephone and similar expenses (the "Out of Pocket
Expenses"). The Company will reimburse Employee for all reasonable and necessary
Out of Pocket Expenses incurred by Employee in the performance of his duties.
Employee will comply with such budget limitations, approval and reporting
requirements with respect to such Out of Pocket Expenses as the Company may
establish from time to time. In the event that the Company relocates its
corporate offices or Employee is asked to move to other corporate offices
outside of the Phoenix, Arizona area, then Employee shall be entitled to
reimbursement of the costs of relocation described on Exhibit "C".
SECTION 6. TERMINATION. Employee's employment hereunder will commence on
the Commencement Date and continue until the end of the Term including any
renewals thereof, except that the employment of Employee hereunder will
terminate upon the occurrence of the following events:
(a) Death or Disability. Employee's employment will terminate
immediately upon the death of Employee during the term of his employment
hereunder or, at the option of the Company, in the event of Employee's
disability, upon 30 days notice to Employee. Employee will be deemed
"disabled" if, as a result of Employee's incapacity due to physical or
mental illness, Employee shall have been continuously absent from his
duties with the company on a full-time basis for 120 consecutive business
days, and Employee shall not reasonably be expected to be able to resume
his duties within 60 days of the end of such 120 day period. In the event
of the termination of this Agreement pursuant to this subsection 6(a),
Employee will not be entitled to any Severance Amount (as hereinafter
defined) or other compensation except for any portion of his base salary
accrued but unpaid from the last monthly payment date to the date of
termination and expense reimbursements under Section 5 hereof or for
expenses incurred in the performance of his duties hereunder prior to
termination.
Page 2 of 18
(b) For Cause. The Company may terminate the Employee's employment for
"Cause" immediately upon written notice by the Company to Employee. For
purposes of this Agreement, a termination will be for Cause if: (i)
Employee willfully and continuously fails to perform his duties with the
Company (other than any such failure resulting from incapacity due to
physical or mental illness); (ii) Employee willfully engages in gross
misconduct materially and demonstrably injurious to the Company; or (iii)
Employee has been convicted of a felony which the President reasonably
believes will result in injury to the Company or which would disqualify
employee for coverage by the Company's surety bond. In the event of the
termination of this Agreement pursuant to this sub-section 6(b), Employee
will not be entitled to any Severance Amount (as hereinafter defined) or
further consideration, except for any portion of the base salary accrued
but unpaid from the last monthly payment date to the date of Termination
and expense reimbursements under Section 5 hereof for expenses incurred in
the performance of his duties hereunder prior to termination.
(c) By Company Without Cause. The Company may terminate this Agreement
during the Term at any time for any reason without cause. It shall be
deemed a termination without cause if Company changes the Position of
Employee without Employee's prior written consent. In the event of the
termination of this Agreement pursuant to this subsection, the Company will
pay Employee, as Employee's sole remedy in connection with such
termination, severance in the amount determined by multiplying Employee's
monthly base salary at the rate in effect immediately preceding the
termination of Employee's employment by twelve (12) months (the "Severance
Amount"). The Company will also pay Employee the portion of his base salary
accrued but unpaid from the last monthly payment date to the date of
termination and expense reimbursements under Section 5 hereof for expenses
incurred in the performance of his duties hereunder prior to termination.
The Company will pay the Severance Amount in a lump sum and within thirty
(30) days of the Employee's last day of employment. The Company will not be
entitled to offset or mitigate the amount due under this subsection by any
other amounts payable to Employee, including amounts payable or paid to
Employee by third parties for Employee's services after the date of
termination, except as provided for otherwise in Section 10(b) hereinafter.
(d) CHANGE OF CONTROL. Notwithstanding anything to the contrary
contained in this Section 6, in the event Employee's employment with the
Company terminates for any reason (other than death or disability) within
the twelve (12) month period following a Change of Control (as defined
hereafter), then the Company will pay Employee a lump sum payment (the
"Termination Payment") in cash equal to the amount of the Severance Amount;
plus, the amount of Employee's base salary accrued but unpaid and any
expense reimbursement for expenses incurred in the performance of the
duties described herein prior to the termination date. A "Change of
Control" shall be deemed to have occurred: (i) when in a single transaction
or a series of transactions a change of stock ownership of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any successor item of a similar nature
has occurred; or (ii) upon the acquisition of beneficial ownership,
directly or indirectly, by any person (as such term is used in Section
13(d) and 14(d)(2) of the Exchange Act of securities of the Company) in a
single transaction or a series of transactions representing 33% or more of
the combined voting power of the Company's then outstanding securities; or
(iii) sale of substantially all of the assets of the Company in a single
transaction or a series of transactions; or (iv) removal by the Company
from the Position identified herein without Employee's prior written
consent; provided that a Change in Control will not be deemed to have
occurred for purposes of clauses (i) and (ii) hereof with respect to any
Page 3 of 18
person meeting the requirements of Rule 13d-1(b)(1) promulgated under the
Securities Exchange Act of 1934, as amended. The Company shall pay the
Termination Payment to Employee upon written notice by Employee. The
Termination Payment due under this Section will not be affected by the
manner in which Employee's employment is terminated and accordingly will be
whether the Change of Control occur after termination of this Agreement and
whether Employee's termination of employment is voluntary, involuntary, for
cause, or without cause.
SECTION 7. EFFECT OF TERMINATION ON OPTIONS. If Employee is terminated "for
cause" under Section 6(b) above, then the effect of the termination of the
Employee's employment on such options shall be determined by the terms of the
option plan under which the options are issued and the option agreement related
to such options, except that Employee shall retain those options which are
already vested and shall have ninety (90) days to exercise those vested options.
Notwithstanding anything to the contrary herein or in any option agreement, in
the event of: (a) a Change of Control, or (b) termination of this Agreement for
any reason (except if "for cause"), then the Options issued and outstanding to
Employee shall immediately vest (100%), and the Employee may exercise his
options at any time during the original term of the option agreement (as defined
therein), and such termination of this Agreement shall not cause termination or
expiration of the options.
SECTION 8. CONFIDENTIAL INFORMATION. Employee recognizes and acknowledges
that certain assets of the Company and its affiliates, including without
limitation information regarding customers, pricing policies, methods of
operation, proprietary computer programs, sales, products, profits, costs,
markets, key personnel, formulae, product applications, technical processes, and
trade secrets (herein called "Confidential Information") are valuable, special
and unique assets of the Company and its affiliates. Employee will not, during
or after the term of his employment, disclose any of the Confidential
Information to any person, firm, corporation, association, or any other entity
for any reason or purpose whatsoever, directly or indirectly, except as may be
required pursuant to his employment hereunder, unless and until such
Confidential Information becomes publicly available other than as a consequence
of the breach by Employee of his confidentiality obligations hereunder. In the
Event of the termination of his employment, whether voluntary or involuntary,
and whether by the Company or Employee, Employee will deliver to the Company all
documents and data pertaining to the Confidential Information and will not take
with him any documents or data of any kind or any reproductions (in whole or in
part) of any items relating to the Confidential Information.
SECTION 9. NONCOMPETITION. Until one year after termination of Employee's
employment with the Company for any reason, whether voluntary or involuntary,
Employee will not: (i) engage directly or indirectly, alone or as a shareholder,
partner, officer, director, employee or consultant of any other business
organization, in any business activities which are directly competitive with the
Company and which were either conducted by the Company at the time of Employee's
termination or "Proposed to be Conducted" (as defined herein) by the Company at
the time of such termination (the "Designated Industry"); (ii) divert to any
competitor of the Company in the Designated Industry any customer of Employee
or, (iii) solicit or encourage any officer, employee, or consultant of the
Company to leave its employ for employment by or with any competitor of the
Company in the Designated Industry. The parties hereto acknowledge that
Employee's non-competition obligations hereunder will not preclude Employee from
(i) owning less than 5% of the common stock of any publicly traded corporation
conducting business activities in the Designated Industry or (ii) serving as an
officer, director, stockholder or employee of an entity engaged in the
healthcare industry whose business operations are not competitive with those of
the Company. "Proposed to be Conducted," as used herein, shall mean those
business activities which are the subject of a formal, written business plan
approved by the Board of Directors prior to termination of Employee's employment
and which the Company takes material action to implement within 12 months of the
Page 4 of 18
termination of Employee's employment. Employee will continue to be bound by the
provisions of this Section 9 until their expiration and will not be entitled to
any compensation from the Company with respect thereto. If at any time the
provisions of this Section 9 are determined to be invalid or unenforceable, by
reason of being vague or unreasonable as to area, duration or scope of activity,
this Section 9 will be considered divisible and will become and be immediately
amended to only such area, duration, scope of activity as will be determined to
be reasonable and enforceable by the court or other body having jurisdiction
over the matter; and Employee agrees that this Section 9 as so amended will be
valid and binding as though any invalid or unenforceable provision had not been
included herein.
SECTION 10. GENERAL.
(a) NOTICES. All notices and other communications hereunder will be in
writing or by written telecommunication, and will be deemed to have been
duly given if delivered personally or if mailed by certified mail, return
receipt requested or by written telecommunication, to the relevant address
set forth below, or to such other address as the recipient of such notice
or communication will have specified to the other party hereto in
accordance with this Section 10(a):
If to the Company, to: With a copy to:
x-xxxxxxx.xxx, Inc. Xxxxxxx Xxxxxx, L.L.P.
0000 X. 00xx Xxxxxx, Xxxxx 000 000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxx 00000
Attn: CHIEF EXECUTIVE OFFICER Attn: Xxxxx X. Xxxx, III
Fax No.: (000) 000-0000 Fax No. (000) 000-0000
If to Employee, to: With a copy to:
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx
0000 X. Xxxxxx Xxxx. #266 0000 X. Xxxxxxx Xx.
Xxxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxx 00000
(b) WITHHOLDING AND OFFSET. All payments required to be made by the
Company under this Agreement to Employee will be subject to the withholding
of such amounts, if any, relating to federal, state and local taxes as may
be required by law. No payment under this Agreement will be subject to
offset or reduction attributable to any amount Employee may owe to the
Company or any other person.
(c) EQUITABLE REMEDIES. Each of the parties hereto acknowledges and
agrees that upon any breach by Employee of his obligations under any of the
Sections 8 and 9 hereof, the Company will have no adequate remedy at law,
and accordingly will be entitled to specific performance and other
appropriate injunctive and equitable relief.
(d) SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision will be fully severable
and this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision never comprised a part hereof; and the
remaining provisions hereof will remain in full force and effect and will
not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
Page 5 of 18
enforceable. Any and all covenants and obligations of either party hereto
which by their terms or by reasonable implication are to be performed, in
whole or in part, after the termination of this Agreement, shall survive
such termination, including specifically the obligations arising under
Sections: 6, 7, 8 and 9.
(e) WAIVERS. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder will impair such right, power or
privilege, nor will any single or partial exercise of any such right, power
or privilege preclude any further exercise thereof or the exercise of any
other right, power or privilege.
(f) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute one and the same instrument.
(g) CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
(h) REFERENCE TO AGREEMENT. Use of the words "herein," "hereof,"
"hereto " and the like in this Agreement refer to this Agreement only as a
whole and not to any particular subsection or provision of this Agreement,
unless otherwise noted.
(i) BINDING AGREEMENT. This Agreement will be binding upon and inure
to the benefit of the parties and will be enforceable by the personal
representatives and heirs of Employee and the successors of the Company. If
Employee dies while any amounts would still be payable to him hereunder,
such amounts will be paid to Employee's estate. This Agreement is not
otherwise assignable by Employee.
(j) ENTIRE AGREEMENT. Except as provided in the benefit plans and
programs referenced herein, this Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and may not be amended
except by a written instrument hereafter signed by each of the parties
hereto.
(k) GOVERNING LAW. This Agreement and the performance hereof will be
construed and governed in accordance with the laws of the State of Arizona,
without regard to its choice of law principles. Any modification of this
Agreement shall be effective only if it is in writing and signed by the
parties hereto.
(l) ATTORNEY'S FEES. If legal action is commenced by either party to
enforce or defend its rights under this Agreement, the prevailing party in
such action shall be entitled to recover its costs and reasonable
attorneys' fees in addition to any other relief granted. If either party
commences legal action or arbitration to enforce or defend its rights under
this Agreement, the prevailing party in such action shall be entitled to
recover its costs, including travel, lodging and meals for itself, counsel
and witnesses, actual witness fees paid and legal fees actually paid,
including costs of associating local counsel with regular counsel, if
actually paid.
SECTION 11. BINDING ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or breach thereof, shall be settled exclusively by
arbitration in Phoenix, Arizona, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect. A sole arbitrator
shall conduct Arbitration and he or she shall render his or her award within
forty-five (45) days of appointment. Judgment upon the award rendered by the
arbitrator may be entered in, and enforced by, any court having jurisdiction
thereof. The award of the arbitrator may grant any relief available to the
parties in law or in equity; and the award may contain a provision for payment
of costs and attorney's fees to the prevailing party, if any.
Page 6 of 18
EXECUTED as of the date and year first written above.
X-XXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Its: President
-------------------------------
EMPLOYEE:
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
Date: February 16, 2001
----------------------------------
Page 7 of 18
Exhibit "A"
Current Form of Management Incentive Compensation Plan
[The remainder of this page intentionally left blank.]
Page 8 of 18
X-XXXXXXX.XXX, INC.
MANAGEMENT INCENTIVE COMPENSATION PLAN
The x-xxxxxxx.xxx, Inc. ("e-dentist") Management Incentive Compensation Plan
(the "Plan") is designed to offer incentive compensation to key employees
("Associates") by rewarding the achievement of corporate goals, specifically
measured individual goals that are consistent with and support the overall
corporate goals. The Management Incentive Compensation Plan will create an
environment which will focus key Associates on the achievement of objectives.
Since cooperation between departments and Associates will be required to achieve
corporate objectives which will represent a significant portion of the
Compensation Plan, the Plan should help xxxxxx improved teamwork and a more
cohesive management team. The Company reserves the right to revise or
discontinue the Plan at any time. Key Associates (as hereinafter defined) who
may be eligible to participate in the plan shall be selected at the sole
discretion of the Company.
PURPOSE OF THE PLAN
The E-dentist Management Incentive Compensation Plan (the "Plan") is designed
to:
>> Provide an incentive program to achieve overall corporate objectives
and to enhance shareholder value
>> Reward those individuals who significantly impact corporate results
>> Encourage increased teamwork among all disciplines within the Company
>> Incorporate an incentive program in E-dentist's overall compensation
program to help attract and retain key Associates
PLAN GOVERNANCE
The Plan will be governed by the Compensation Committee of the Board of
Directors. The President and CEO will be responsible for administration of the
Plan. The Compensation Committee will be responsible for approving any incentive
awards to the President and CEO.
CORPORATE AND INDIVIDUAL PERFORMANCE
Prior to the beginning of the Plan year, the President and CEO will present to
the Board a list of overall corporate objectives for the coming year, which are
subject to approval by the Board. All participants in the Plan will then develop
a list of key individual objectives which will be approved by the responsible
Vice President and by the President and CEO.
The Plan will call for incentive awards based on the achievement of annual
corporate and individual objectives that have been approved as indicated above.
The relative weight between corporate and individual performance factors will
vary based on levels within the organization. The weighing will be reviewed
annually and be adjusted as necessary or appropriate. The weighing for the year
2000 will be as follows:
Page 9 of 18
CORPORATE INDIVIDUAL
--------- ----------
President and CEO 100%
Senior Vice Presidents/Officers 75% 25%
Vice Presidents/Directors &
Corporate Controller 50% 50%
Practice Administrators/Managers/
Practice Advisors/Practice
Consultants (employed) 50% 50%
TARGET AWARDS MULTIPLIER
Incentive awards will be determined by applying an "achievement multiplier" to
the base salary of Associates in the Plan. The following target award
multipliers will be used in implementing the Plan:
POSITION TARGET AWARD MULTIPLIER
-------- -----------------------
President and CEO 35%
Senior Vice Presidents/Officers 25%
Vice Presidents/Directors &
Corporate Controller 15%
Practice Administrators/Managers/
Practice Advisors/Practice
Consultants (employed) 10%
The target award multiplier will be used to establish the target cash award at
the beginning of each year. The target award multiplier will be equal to the
actual award multiplier used at year-end in situations where corporate and
individual objectives have been met for the year.
Page 10 of 18
PERFORMANCE MEASUREMENT
The following scale will be used to determine the actual award multiplier based
upon measurement of corporate and individual performance versus objectives.
Separate payment multipliers will be established for both the individual and the
corporate components of each award. The same payment multiplier for the
corporate component of each participant's annual award shall be used for all
Plan participants in any given year.
Performance Category Award Multiplier
-------------------- ----------------
1. Performance for the year met or exceeded objectives or
was excellent in view of prevailing conditions 100%
2. Performance generally met the year's objectives or was
very acceptable in view of prevailing conditions 75%
3. Performance for the year met some but not all objectives 25%
4. Performance for the year was not acceptable in view of
prevailing conditions 0%
CALCULATION OF AWARD
Example I shows a sample cash award calculation under the Plan. First, a total
target award is calculated by multiplying the Associates base salary by the
target award multiplier. This dollar figure is then divided between its
corporate component and its individual component based on the performance factor
mix for that specific position. This calculation establishes specific dollar
target awards for the performance period for both the individual and corporate
components of the award.
At the end of the performance period, corporate and individual award multipliers
will be established using the criteria described above. The corporate award
multiplier, which is based on overall corporate performance, is used to
calculate actual corporate performance awards for all Plan participants. This is
done by multiplying the target corporate award established for each individual
at the beginning of the performance period by the actual award multiplier. The
individual award multiplier, which is based on an individual's performance
against objectives, is used in the same way to calculate the actual individual
performance award.
EXAMPLE 1: CASH AWARD CALCULATION
Position Vice President
Base salary $100,000
Year 2000 target award multiplier 15%
Year 2000 target award $15,000
Target award components (based on performance factor mix)
Target award based on Corporate performance (50%) 7,500
Target award based on Individual performance (50%) 7,500
Page 11 of 18
ACTUAL YEAR 2000 CASH AWARD CALCULATION:
Assumed payment multipliers based on assessment of Corporate and Individual
performance:
Corporate multiplier 75% - performance generally met year's objectives
Individual multiplier 100% - performance generally exceeded objectives
Year 2000 Cash Award:
Corporate component $5,625 ($7,500 X 75%)
Individual component $7,500 ($7,500 X 100%)
Total 2000 Cash Award $13,125
PAYMENT OF THE AWARD
Annual performance reviews will be completed by May 15th and payment of Awards
will be made after receipt of the Company's audited financial statements and
after review and approval by the President and CEO and the Compensation
Committee of the Board of Directors.
Page 12 of 18
Exhibit "B"
Form of Stock Option Agreement
[The remainder of this page intentionally left blank.]
Page 13 of 18
X-XXXXXXX.XXX, INC.
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement (the "Agreement") is entered into
between x-xxxxxxx.xxx, Inc. ("e-dentist"), a Delaware corporation (the
"Company"), and __________________________(the "Optionee") as of
______________________ (the "Effective Date"). In consideration of the mutual
promises and covenants made herein, the parties hereby agree as follows:
1. GRANT OF OPTION. Under the terms and conditions of the Company's 1997
Stock Compensation Plan, as amended (the "Plan"), the terms of which are
incorporated herein by reference, the Company grants to the Optionee an option
(the "Option") to purchase from the Company all or any part of a total of
____________ (________) shares of the Company's Common Stock, par value $.001
per share, at an exercise price of _______________ ($________) per share (the
"Purchase Price"). The Option is granted as of _________________________ (the
"Date of Grant").
2. CHARACTER OF OPTION. [The Option is an "incentive stock option" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").] [Delete Prior and Insert Language for Non-Qualified Option: This
Option is a non-qualified stock option and is therefore not an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").]
3. TERM. The Option will expire on the day prior to the tenth anniversary
of the Date of Grant, or such earlier date as may be provided in (i) Section
1.16 of the Plan regarding Employee (as defined in the Plan) termination or (ii)
Section 11 below.
4. VESTING. Subject to the provisions of Section 1.12 and Section 1.16 of
the Plan, the Option may be exercised according to the following schedule:
[Example Only: Beginning on _____________, _____ percent (_____%) shall
vest on the first day of each month, from month to month, until fully
vested.]
The unexercised portion of the Option from one period may be carried over
to a subsequent period or periods, and the right of the Optionee to exercise the
Option as to such unexercised portion shall continue for the entire term. Upon
exercise the actual number of shares purchased shall be rounded to the nearest
whole share.
5. PROCEDURE FOR EXERCISE. Exercise of the Option or a portion thereof
shall be effected by the giving of written notice to the Company by the Optionee
in accordance with Section 1.13 of the Plan and payment of the Purchase Price
for the shares to be acquired pursuant to the exercise.
6. PAYMENT OF PURCHASE PRICE. Payment of the Purchase Price for any shares
purchased pursuant to the Option shall be in accordance with the provisions of
Section 1.11(b) of the Plan.
7. TRANSFER OF OPTIONS. This option is not assignable or transferable by
the Optionee otherwise than by will or the laws of descent and distribution and
during the lifetime of the Optionee may only by exercised by the Optionee or his
legally authorized representative.
Page 14 of 18
8. ACCEPTANCE OF THE PLAN. The Option is granted subject to all of the
applicable terms and provisions of the Plan, and such terms and provisions are
incorporated by reference herein. The Optionee hereby accepts and agrees to be
bound by all the terms and conditions of the Plan.
9. AMENDMENT. This Agreement may be amended by an instrument in writing
signed by both the Company and the Optionee.
10. MISCELLANEOUS. This Agreement will be construed and enforced in
accordance with the laws of the State of Arizona and will be binding upon and
inure to the benefit of any successor or assign of the Company and any executor,
administrator, trustee, guarantor or other legal representative of the Optionee.
11. RIGHTS OF OPTIONEE UPON TERMINATION OF EMPLOYMENT. In the event an
Optionee ceases to serve as an Employee by reason of death, retirement,
permanent disability, termination for cause, or resignation by the Optionee (as
hereinafter defined), then the Options may be exercised as follows:
(a) DEATH. If the Optionee dies while serving as an Employee or within
three (3) months after ceasing to become an Employee, the Option shall
become fully vested and exercisable during the period beginning with the
date of the Employee's death and ending twelve (12) months thereafter,
unless by its terms it expires sooner. During such period, the Option may
be fully exercised, to the extent that it remains unexercised on the date
of death, by the Optionee's personal representative or by the distributees
to whom the Optionee's rights under the Option shall pass by will or by the
laws of descent and distribution.
(b) RETIREMENT. If the Optionee ceases to serve as an Employee as a
result of retirement, then (i) the Company's Compensation Committee shall
have the ability to accelerate the vesting of the Option, in its sole
discretion, or (ii) the Option shall be exercisable (to the extent
exercisable and vested on the effective date of such Retirement or, if the
vesting of such Option has been accelerated, to the extent exercisable
following such acceleration) at any time during the period beginning with
the effective date of the retirement and ending three (3) months
thereafter, unless by its terms it expires sooner.
(c) DISABILITY. If the Optionee ceases to serve as an Employee as a
result of permanent disability (as defined in the Plan or the Employee's
employment agreement), the Option shall become fully vested and exercisable
during the period beginning with the date Employee is determined to be
permanently disabled and ending twelve (12) months thereafter, unless by
its terms it expires sooner.
(d) CAUSE. If the Optionee ceases to be employed by the Company
because the Optionee's relationship with the Company is terminated by the
Company for cause (as defined in the employment agreement), the Option
shall be exercisable (to the extent exercisable and vested on the effective
date of such termination) during the period beginning with the date of such
termination and ending three (3) months thereafter, unless by its term the
Option expires earlier. If any facts that would constitute Cause for
termination of an Optionee are discovered after the Optionee's relationship
with the Company has ended, the Options may be immediately terminated by
the Company's Compensation Committee. Notwithstanding the foregoing, if an
Page 15 of 18
Optionee is employed pursuant to a written employment agreement with the
Company, the Optionee's relationship with the Company shall be deemed
terminated for Cause for the purposes of this Agreement only if the
Optionee is considered under the circumstances to have been terminated "for
cause" for purposes of such written agreement or the Optionee voluntarily
ceases to be an employee in breach of such Optionee's employment agreement
with the Company.
(e) VOLUNTARY BREACH. If the Optionee ceases to be an Employee
voluntarily by resignation or in breach of the Optionee's employment
agreement, the Options shall automatically expire on the date of such
termination of the employment relationship.
(f) WITHOUT CAUSE. If the Optionee is terminated as an Employee
Without Cause, the Option shall be exercisable (to the extent exercisable
and vested on the effective date of such termination) at any time within
three (3) months after the effective date of such termination, unless by
its term the Option expires earlier. Without Cause shall be defined as
termination for any reason other than for Cause.
[Signatures on following page.]
Page 16 of 18
Executed as of the ________ day of _________________, 2001.
X-XXXXXXX.XXX, INC.
By:
------------------------------------
Xxxxx X. Xxxxxx,
President
ACKNOWLEDGED AND AGREED:
THE OPTIONEE:
----------------------------------------
----------------------------------------
Optionee's Social Security Number
Page 17 of 18
Exhibit "C"
RELOCATION EXPENSES
Upon relocation to offices outside of the Phoenix, Arizona area, Employee
shall be entitled to receive reimbursement of all reasonable moving and
relocation expenses associated with Employee's relocation outside of Phoenix,
Arizona. The term "reasonable moving and relocation expenses" shall mean the
following:
1. Expenses in the form of closing costs incurred by Employee in connection
with the purchase by Employee of a new principal residence in the new location;
2. Expenses incurred by Employee for the packing and moving of personal
property and automobiles of Employee located in the present principal residence
to the Employee's new residence;
3. Expenses incurred by Employee for a period of up to three (3) months, as
housing reimbursement, if necessary, to provide temporary housing while Employee
locates and obtains permanent housing;
4. Expenses incurred by Employee for up to two (2) trips to the relocation
area for Employee and Employee's spouse in connection with Employee's efforts to
locate a new residence (with those expenses to be consistent with reasonable
travel and expenses related to Executive business travel);
5. Expenses incurred in the re-registration and re-licensing of Employee's
automobiles in the new jurisdiction; and,
6. Payments of subparagraphs (1) - (5) above shall be paid net of
withholding for taxes and grossed up in an amount calculated to negate the
adverse income tax consequences to Employee of the reimbursement of the
relocation expenses.
Provided however that the total expenses to be reimbursed by Company to
Employee as set forth in this exhibit shall not exceed the total sum of $40,000.
Page 18 of 18