EXHIBIT 10.21
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
GMS DENTAL GROUP, INC.
1996 PERFORMANCE STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
GMS Dental Group, Inc., a Delaware corporation (the "Company"), hereby
grants an option to purchase Shares of its common stock to the optionee named
below. The terms and conditions of the option are set forth in this cover sheet,
in the attachment and in the Company's 1996 Performance Stock Option Plan (the
"Plan").
Date of Option Grant: 12-4-96
-------
Name of Optionee: Xxxxxx Xxxxxxxx
---------------
Optionee's Social Security Number: ###-##-####
-----------
Number of Shares of Common Stock Covered by Option: 50,000
------
Exercise Price per Share: $.20
----
Vesting Start Date: 12-4-96
-------
By signing this cover sheet, you agree to all of the terms and conditions
described in the attached Agreement and in the Plan, a copy of which is
also enclosed.
Optionee: Xxxxxx X. Xxxxxxxx /s/ XXXXXX X. XXXXXXXX
---------------------------------------------
(Signature)
Company: Xxxxx X. Xxxxxx /s/ XXXXX X. XXXXXX
---------------------------------------------
(Signature)
Title: President
--------------------------------------
Attachment
----------
EXHIBIT 10.18
GMS DENTAL GROUP, INC.
1996 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE STOCK This Option is intended to be an incentive stock option
OPTION under Section 422 of the Internal Revenue Code and will
be interpreted accordingly.
VESTING The Option Shares shall be unvested and subject to
repurchase by the Company at the Exercise Price paid per
share ($.20 per share). Optionee shall acquire a vested
interest in, and the Company's repurchase right shall
accordingly lapse with respect to, (i) twenty-five percent
(25%) of the Option Shares upon Optionee's completion of
one (1) year of Service measured from the Vesting
Commencement Date and (ii) the balance of the Option
Shares in a series of thirty-six (36) successive equal
monthly installments upon Optionee's completion of each
additional month of Service over the thirty-six (36)-month
period measured from the first anniversary of the Vesting
Commencement Date. In no event shall any additional Option
Shares vest after Optionee's cessation of Service.
TERM Your Option will expire in any event at the close of
business at Company headquarters on the day before the
10th anniversary of the Date of Grant, as shown on the
cover sheet. (It will expire earlier if your Company
service terminates, as described below.)
REGULAR If your Service terminates for any reason except death or
TERMINATION Disability, then your Option will expire at the close of
business at Company headquarters no less than 30 days
after your termination date.
DEATH If you die as an Employee, then your Option will expire at
the close of business at Company headquarters on a day not
less than 6 months after the date of death. During the 6-
month period, your estate or heirs may exercise the vested
portion of your Option.
DISABILITY If your Service terminates because of your Disability,
then your Option will expire at the close of business at
the Company headquarters on the day not less than 6 months
after your termination date.
A-1
LEAVES OF ABSENCE For purposes of this Option, your status as an Employee
does not terminate when you go on a military leave, a sick
leave or another bona fide leave of absence that was
approved by the Company in writing if the terms of the
leave provide for continued service crediting, or when
continued service crediting is required by applicable law.
Your status as an Employee terminates in any event when
the approved leave ends, unless you immediately return to
active work.
The Company determines which leaves count for this
purpose, whether your Option continues to vest during a
leave and when your service terminates for all purposes
under the Plan.
NOTICE OF EXERCISE When you wish to exercise this Option, you must notify the
Company by filing the proper "Notice of Exercise" form at
the address given on the form. The Company may prescribe a
minimum number of shares of Common Stock which may be
purchased. Your notice must specify how many shares of
Common Stock you with to purchase. Your notice must also
specify how your Common Stock should be registered (in
your name only or in your and your spouse's names as
community property or as joint tenants with right of
survivorship). The notice will be effective when it is
received by the Company.
If someone else wants to exercise this Option after your
death, that person must prove to the Company's
satisfaction that he or she is entitled to do so.
RESTRICTIONS ON The Company will not permit you to exercise this Option if
EXERCISE the issuance of shares of the Company's Common Stock at
that time would violate any law or regulation.
A-2
PERIODS OF Any other provision of this Agreement notwithstanding, the
NONEXERCISABILITY Company shall have the right to designate one or more
periods of time, each of which shall not exceed 180 days
in length, during which this Option shall not be
exercisable if the Company determines (in its sole
discretion) that such limitation on exercise could in any
way facilitate a lessening of any restriction on transfer
pursuant to the Securities Act of 1933 (the "Securities
Act") or any state securities laws with respect to any
issuance of securities by the Company, facilitate the
registration or qualification of any securities by the
Company under the Securities Act or any state securities
laws, or facilitate the perfection of any exemption from
the registration or qualification requirements of the
Securities Act or any applicable state securities laws for
the issuance or transfer of any securities. Such
limitation on exercise shall not alter the vesting
schedule set forth in this Agreement other than to limit
the periods during which this Option shall be exercisable.
*Form of Payment When you submit your notice of exercise, you must include
payment of the Option exercise price for the Option Shares
you are purchasing. Payment may be made in one (or a
combination) of the following forms:
. Promissory Note in favor of the Company, your
personal check, a cashier's check or a money order.
. Shares of the Company's Common Stock which have
already been owned by you for any time period
specified by the Committee and which are surrendered to
the Company. The value of such shares, determined as of
the effective date of the Option exercise, will be
applied to the Exercise Price.
. To the extent that a public market for the Option
Shares exists as determined by the Company, by delivery
(on a form prescribed by the Committee) of an
irrevocable direction to a securities broker to sell
Option Shares and to deliver all or part of the sale
proceeds to the Company in payment of the aggregate
Exercise Price.
WITHHOLDING TAXES You will not be allowed to exercise this Option unless you
make acceptable arrangements to pay any withholding or
other taxes that may be due as a result of the Option
exercise or the sale of Option Shares acquired upon
exercise of this Option.
X-0
XXXXXXXXXXXX XX You agree that the Option Shares may not be sold,
RESALE transferred, pledged or otherwise disposed of until the
repurchase rights with respect to those Option Shares
expire. By signing this Agreement, you agree not to sell
any Option Shares at a time when applicable laws,
regulations or Company or underwriter trading policies
prohibit a sale.
You represent and agree that the Option Shares to be
acquired upon exercising this Option will be acquired for
investment, and not with a view to the sale or
distribution thereof.
In the event that the sale of Option Shares under the Plan
is not registered under the Securities Act of 1933, as
amended, but an exemption is available which requires an
investment representation or other representation, you
shall represent and agree at the time of exercise that the
Option Shares being acquired upon exercising this Option
are being acquired for investment, and not with a view to
the sale or distribution thereof, and shall make such
other representations as are deemed necessary or
appropriate by the Company and its counsel.
THE COMPANY'S In the event that you propose to sell, pledge or otherwise
RIGHT OF FIRST transfer to a third party any Option Shares acquired
REFUSAL under this Agreement, or any interest in such Option
Shares, the Company shall have the "Right of First
Refusal" with respect to all (and not less than all) of
such Option Shares. If you desire to transfer Option
Shares acquired under this Agreement, you must give a
written "Transfer Notice" to the Company describing fully
the proposed transfer, including the number of Option
Shares proposed to be transferred, the proposed transfer
price and the name and address of the proposed transferee.
The Transfer Notice shall be signed both by you and by the
proposed new transferee and must constitute a binding
commitment of both parties to the transfer of the Option
Shares. The Company shall have the right to purchase all,
and not less than all, of the Option Shares on the terms
of the proposal described in the Transfer Notice (subject,
however, to any change in such terms permitted in the next
paragraph) by delivery of a notice of exercise of the
Right of First Refusal within 30 days after the date when
the Transfer Notice was received by the Company. The
Company's rights under this Subsection shall be freely
assignable, in whole or in part.
A-4
If the Company fails to exercise is Right of First Refusal
within 30 days after the date when it received the
Transfer Notice, you may, not later than 90 days following
receipt of the Transfer Notice by the Company, conclude a
transfer of the Option Shares subject to the Transfer
Notice on the terms and conditions described in the
Transfer Notice. Any proposed transfer on terms and
conditions different form those described in the Transfer
Notice, as well as any subsequent proposed transfer by
you, shall again be subject to the Right of First Refusal
and shall require compliance with the procedure described
in the paragraph above. If the Company exercises its Right
of First Refusal, the parties shall consummate the sale of
the Option Shares on the terms set forth in the Transfer
Notice within 60 days after the date when the Company
received the Transfer Notice (or within such longer period
as may have been specified in the Transfer Notice);
provided, however, that in the event the Transfer Notice
provided that payment for the Option Shares was to be made
in a form other than lawful money paid at the time of
transfer, the Company shall have the Option of paying for
the Option Shares with lawful money equal to the present
value of the consideration described in the Transfer
Notice.*
The Company's Right of First Refusal shall inure to the
benefit of its successors and assigns and shall be binding
upon any transferee of the Option Shares.
The Company's Right of First Refusal shall terminate in
the event that the Company's Common Stock is listed on an
established stock exchange or is quoted regularly on the
Nasdaq National Market.
A-5
RIGHT OF Following termination of your Service for any reason, the
REPURCHASE Company shall have the right to repurchase all of those
unvested Option Shares that you have or will acquire under
this Option. If the Company fails to provide you with
written notice of its intention to purchase such Option
Shares before or within 30 days of the date the Company
receives written notice from you of your termination of
Service, the Company's right to purchase such Option
Shares shall terminate. If the Company exercises its right
to purchase such Option Shares, the Company will
consummate the purchase of such Option Shares within 60
days of the date of its written notice to you. The
purchase price for any Option Shares repurchased shall be
equal to the Exercise Price for those Option Shares ($.20
per share) and shall be paid in cash, or by cancellation
of all or a portion of any indebtedness owed by you to the
Company. To secure its repurchase right, the Company shall
retain the certificates representing Option Shares until
such time as the repurchase rights expire as provided
herein. Upon any exercise of repurchase rights, the
Company shall be authorized to transfer or cancel the
Option Shares so repurchased without any further actions
of you.
TRANSFER OF OPTION Prior to your death, only you may exercise this Option.
You cannot transfer or assign this Option. For instance,
you may not sell this Option or use it as security for a
loan. If you attempt to do any of these things, this
Option will immediately become invalid. You may, however,
dispose of this Option in your will or designate a
beneficiary.
Regardless of any marital property settlement agreement,
the Company is not obligated to honor a notice of exercise
from your spouse or former spouse, nor is the Company
obligated to recognize such individual's interest in your
Option in any other way.
RETENTION RIGHTS Neither your Option nor this Agreement give you the right
to be retained by the Company (or any subsidiaries) in any
capacity. The Company (and any subsidiaries) reserve the
right to terminate your Service at any time for any
reason.
SHAREHOLDER RIGHTS You, or your estate or heirs, have no rights as a
shareholder of the Company until a certificate for the
shares of the Company's Common Stock acquired upon
exercise of this Option has been issued. No adjustments
are made for dividends or other rights if the applicable
record date occurs before your stock certificate is
issued, except as described in the Plan.
A-6
ADJUSTMENTS On the event of a stock split, a stock dividend or a
similar change in the outstanding Common Stock of the
Company, the number of shares of the Company's Common
Stock covered by this Option and the exercise price per
share may be adjusted pursuant to the Plan. Your Option
shall be subject to the terms of the agreement of merger,
liquidation or reorganization in the event the Company is
subject to such corporate activity.
AMENDMENTS AND This Agreement may be amended in writing signed by both
ADMINISTRATION parties. The Committee shall have the sole discretion to
interpret and administer this Agreement and to adopt rules
and policies to administer and enforce this Agreement.
LEGENDS All certificates representing the Option Shares issued
upon exercise of this Option shall, where applicable, have
endorsed thereon the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE
SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN
INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE
HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS
CERTIFICATE."
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND
ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED."
APPLICABLE LAW This Agreement will be interpreted and enforced under the
laws of the State of California.
THE PLAN AND The text of the Plan is incorporated in this Agreement by
OTHER AGREEMENTS reference. Certain capitalized terms used in this
Agreement or in the Notice of Grant which are not defined
herein or in the Notice of Grant shall have the meanings
defined in the Plan.
A-7
ENTIRE AGREEMENT This Agreement, that certain employment letter, dated
February 26, 1997, by and between you and the Company,
as amended or superseded from time to time, and the Plan
constitute the entire understanding between you and the
Company regarding this Option and Option Shares. Any
prior agreements, commitments or negotiations concerning
this Option or Option Shares are superseded.
By signing the cover sheet of this Agreement, you agree to all of the terms
and conditions described above and in the Plan.
A-8
