APPENDIX A
BIRNER DENTAL MANAGEMENT SERVICES, INC.
1995 EMPLOYEE STOCK OPTION PLAN
AMENDED THROUGH FEBRUARY 28, 2002
PURPOSE
The purpose of the Birner Dental Management Services, Inc. 1995
Employee Stock Option Plan (the "Plan") is to further the growth and development
of Birner Dental Management Services, Inc. (the "Company") by affording an
opportunity for stock ownership to selected employees, directors and consultants
of the Company and its subsidiaries who are responsible for the conduct and
management of its business or who are involved in endeavors significant to its
success.
DEFINITIONS
Unless otherwise indicated, the following words when used herein shall
have the following meanings:
"Affiliate" shall mean, with respect to any person or entity, a
person or entity that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such person or
entity.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Change in Control" shall be deemed to have occurred:
At such time as a third person, including a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the
beneficial owner of shares of the Company having 50% or more of the total number
of votes that may be cast for the election of Directors of the Company; or
On the date on which the stockholder(s) of the Company
approve: (i) any agreement for a merger or consolidation of the Company with
another corporation, provided that there shall be no change of control if the
persons and entities who were the stockholders of the Company immediately before
such merger or consolidation continue to own, directly or indirectly, more than
two-thirds of the outstanding voting securities of the corporation resulting
from such merger or consolidation in substantially the same proportion as their
ownership of the voting securities of the Company outstanding immediately before
such merger or consolidation; or (ii) any sale, exchange or other disposition of
all or substantially all of the Company's assets; or
on the effective date of any sale, exchange or other
disposition of greater than 50% in fair market value of the Company's assets,
other than in the ordinary course of business, whether in a single transaction
or a series of related transactions.
In determining whether clause (1) of the preceding sentence has been
satisfied, the third person owning shares must be someone other than a
person or an Affiliate of a person that, as of October 30, 1995, was
the beneficial owner of shares of the Company having 20% or more of the
total number of votes that may be cast for the election of Directors of
the Company. The Committee's reasonable determination as to whether
such an event has occurred shall be final and conclusive.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
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"Common Stock" shall mean the Company's common stock (no par value per
share) and any share or shares of the Company's capital stock hereafter issued
or issuable in substitution for such shares.
"Director" shall mean a member of the Board of Directors.
"Incentive Stock Option" shall mean any option granted to an eligible
employee under the Plan, which the Company intends at the time the option is
granted to be an Incentive Stock Option within the meaning of Section 422 of the
Code.
"Nonqualified Stock Option" shall mean any option granted to an
eligible employee, Director or consultant under the Plan which is not an
Incentive Stock Option.
"Option" shall mean and refer collectively to Incentive Stock Options
and Nonqualified Stock Options.
"Option Agreement" means the agreement specified in
Section 7.2.
"Optionee" shall mean any employee, Director or consultant who is
granted an Option under the Plan. "Optionee" shall also mean the personal
representative of an Optionee and any other person who acquires the right to
exercise an Option by bequest or inheritance.
"Parent" shall mean a parent corporation of the Company as defined in
Section 424(e) of the Code.
"Subsidiary" shall mean a subsidiary corporation of the Company as
defined in Section 424(f) of the Code.
EFFECTIVE DATE
The effective date of the Plan is October 30, 1995; provided, however,
that the adoption of the Plan by the Board of Directors is subject to approval
and ratification by the shareholders of the Company within 12 months of the
effective date. Options granted under the Plan prior to approval of the Plan by
the shareholders of the Company shall be subject to approval of the Plan by the
shareholders of the Company.
ADMINISTRATION
Administrative Committee. The Plan shall be administered by a Committee
appointed by and serving at the pleasure of the Board of Directors, consisting
of not less than two Directors (the "Committee"). The Board of Directors may
from time to time remove members from or add members to the Committee, and
vacancies on the Committee, howsoever caused, shall be filled by the Board of
Directors.
Committee Meetings and Actions. The Committee shall hold meetings at
such times and places as it may determine. A majority of the members of the
Committee shall constitute a quorum, and the acts of the majority of the members
present at a meeting or a consent in writing signed by all members of the
Committee shall be the acts of the Committee and shall be final, binding and
conclusive upon all persons, including the Company, its Subsidiaries, its
shareholders, and all persons having any interest in Options which may be or
have been granted pursuant to the Plan.
Powers of Committee. The Committee shall have the full and exclusive
right to grant and determine terms and conditions of all Options granted under
the Plan and to prescribe, amend and rescind rules and regulations for
administration of the Plan. In granting Options, the Committee shall take into
consideration the contribution the Optionee has made or may make to the success
of the Company or its Subsidiaries and such other factors as the Committee shall
determine.
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Interpretation of Plan. The determination of the Committee as to any
disputed question arising under the Plan, including questions of construction
and interpretation, shall be final, binding and conclusive upon all persons,
including the Company, its Subsidiaries, its shareholders, and all persons
having any interest in Options which may be or have been granted pursuant to the
Plan.
Indemnification. Each person who is or shall have been a member of the
Committee or of the Board of Directors shall be indemnified and held harmless by
the Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred in connection with or resulting from any
claim, action, suit or proceeding to which such person may be a party or in
which such person may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid in settlement
thereof, with the Company's approval, or paid in satisfaction of a judgment in
any such action, suit or proceeding against him, provided such person shall give
the Company an opportunity, at its own expense, to handle and defend the same
before undertaking to handle and defend it on such person's own behalf. The
foregoing right of indemnification shall not be exclusive of, and is in addition
to, any other rights of indemnification to which any person may be entitled
under the Company's Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
STOCK SUBJECT TO THE PLAN
Number. The aggregate number of shares of Common Stock which may be
issued under Options granted pursuant to the Plan shall not exceed 329,250
shares. Shares which may be issued under Options may consist, in whole or in
part, of authorized but unissued stock or treasury stock of the Company not
reserved for any other purpose.
Unused Stock. If any outstanding Option under the Plan expires or for
any other reason ceases to be exercisable, in whole or in part, other than upon
exercise of the Option, the shares which were subject to such Option and as to
which the Option had not been exercised shall continue to be available under the
Plan.
Adjustment for Change in Outstanding Shares. If there is any change,
increase or decrease, in the outstanding shares of Common Stock which is
effected without receipt of additional consideration by the Company, by reason
of a stock dividend, recapitalization, merger, consolidation, stock split,
combination or exchange of stock, or other similar circumstances, then in each
such event, the Committee shall make an appropriate adjustment in the aggregate
number of shares of stock available under the Plan, the number of shares of
stock subject to each outstanding Option and the Option prices in order to
prevent the dilution or enlargement of any Optionee's rights. In making such
adjustments, fractional shares shall be rounded to the nearest whole share. The
Committee's determinations in making adjustments shall be final and conclusive.
Reorganization or Sale of Assets. If the Company is merged or
consolidated with another corporation and the Company is not the surviving
corporation, or if all or substantially all of the assets of the Company are
acquired by another entity, or if the Company is liquidated or reorganized,
(each of such events being referred to hereinafter as a "Reorganization Event"),
the Committee shall, as to outstanding Options, either (1) make appropriate
provision for the protection of any such outstanding Options by the substitution
on an equitable basis of appropriate stock of the Company, or of the merged,
consolidated or otherwise reorganized corporation, which will be issuable in
respect of the Common Stock, provided that no additional benefits shall be
conferred upon Optionees as a result of such substitution, and provided further
that the excess of the aggregate fair market value of the shares subject to the
Options immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the shares
subject to such Options immediately before such substitution over the purchase
price thereof, or (2) upon written notice to all Optionees,
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which notice shall be given not less than 20 days prior to the effective date of
the Reorganization Event, provide that all unexercised Options must be exercised
within a specified number of days (which shall not be less than ten) of the date
of such notice or such Options will terminate. In response to a notice provided
pursuant to clause (2) of the preceding sentence, an Optionee may make an
irrevocable election to exercise the Optionee's Option contingent upon and
effective as of the effective date of the Reorganization Event. The Committee
may, in its sole discretion, accelerate the exercise dates of outstanding
Options in connection with any Reorganization Event.
ELIGIBILITY
All full- or part-time employees of the Company and its Subsidiaries
who are responsible for the conduct and management of its business or who are
involved in endeavors significant to its success shall be eligible to receive
both Incentive Stock Options and Nonqualified Stock Options under the Plan.
Directors and consultants who are neither full- nor part-time employees of the
Company or its Subsidiaries but who are involved in endeavors significant to its
success shall be eligible to receive Nonqualified Stock Options, but not
Incentive Stock Options, under the Plan. Any Director who is otherwise eligible
to participate, who makes an election in writing not to receive any grants under
the Plan, shall not be eligible to receive any such grants during the period set
forth in such election.
GRANT OF OPTIONS
Grant of Options. The Committee may from time to time in its discretion
determine which of the eligible employees, Directors and consultants of the
Company or its Subsidiaries should receive Options, the type of Options to be
granted (whether Incentive Stock Options or Nonqualified Stock Options), the
number of shares subject to such Options, and the dates on which such Options
are to be granted. No employee may be granted Incentive Stock Options to the
extent that the aggregate fair market value (determined as of the time each
Option is granted) of the Common Stock with respect to which any such Options
are exercisable for the first time during a calendar year (under all incentive
stock option plans of the Company and its Parent and Subsidiaries) would exceed
$100,000.
Option Agreement. Each Option granted under the Plan shall be evidenced
by a written Option Agreement setting forth the terms upon which the Option is
granted. Each Option Agreement shall designate the type of Options being granted
(whether Incentive Stock Options or Nonqualified Stock Options), and shall state
the number of shares of Common Stock, as designated by the Committee, to which
that Option pertains. More than one Option may be granted to an eligible person.
Option Price. The option price per share of Common Stock under each
Option shall be determined by the Committee and stated in the Option Agreement.
The option price for Incentive Stock Options granted under the Plan shall not be
less than 100% of the fair market value (determined as of the day the Option is
granted) of the shares subject to the Option. The option price for Nonqualified
Stock Options granted under the Plan shall not be less than 100% of the fair
market value (determined as of the day the Option is granted) of the shares
subject to the Option.
Determination of Fair Market Value. If the Common Stock is listed upon
an established stock exchange or exchanges, then the fair market value per share
shall be deemed to be the average of the quoted closing prices of the Common
Stock on such stock exchange or exchanges on the day for which the determination
is made, or if no sale of the Common Stock shall have been made on any stock
exchange on that day, on the next preceding day on which there was such a sale.
If the Common Stock is not listed upon an established stock exchange but is
traded in the NASDAQ National Market System, the fair market value per share
shall be deemed to be the closing price of the Common Stock in the National
Market System on the day for which the determination is made, or if there shall
have been no trading of the Common Stock on that day, on the next preceding day
on which there was such trading. If the Common Stock is not listed upon an
established stock exchange and is not traded in the National Market System, the
fair market value per share shall be deemed to be the mean between the dealer
"bid" and "ask" closing prices of the Common Stock on the NASDAQ System on the
day for which the determination is made, or if there shall have been no trading
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of the Common Stock on that day, on the next preceding day on which there was
such trading. If none of these conditions apply, the fair market value per share
shall be deemed to be an amount as determined in good faith by the Committee by
applying any reasonable valuation method.
Duration of Options. Each Option shall be of a duration as specified in
the Option Agreement; provided, however, that the term of each Option shall be
no more than ten years from the date on which the Option is granted and shall be
subject to early termination as provided herein.
Additional Limitations on Grant. No Incentive Stock Option shall be
granted to an employee who, at the time the Incentive Stock Option is granted,
owns stock (as determined in accordance with Section 424(d) of the Code)
representing more than 10% of the total combined voting power of all classes of
stock of the Company or of any Parent or Subsidiary, unless the option price of
such Incentive Stock Option is at least 110% of the fair market value
(determined as of the day the Incentive Stock Option is granted) of the stock
subject to the Incentive Stock Option and the Incentive Stock Option by its
terms is not exercisable more than five years from the date it is granted.
Other Terms and Conditions. The Option Agreement may contain such other
provisions, which shall not be inconsistent with the Plan, as the Committee
shall deem appropriate, including, without limitation, provisions that relate
the Optionee's ability to exercise an Option to the passage of time or the
achievement of specific goals established by the Committee or the occurrence of
certain events specified by the Committee.
EXERCISE OF OPTIONS
Manner of Exercise. Subject to the limitations and conditions of the
Plan or the Option Agreement, an Option shall be exercisable, in whole or in
part, from time to time, by giving written notice of exercise to the Secretary
of the Company, which notice shall specify the number of shares of Common Stock
to be purchased and shall be accompanied by (1) payment in full to the Company
of the purchase price of the shares to be purchased, plus (2) payment in full of
such amount as the Company shall determine to be sufficient to satisfy any
liability it may have for any withholding of federal, state or local income or
other taxes incurred by reason of the exercise of the Option, and (3) a
representation meeting the requirements of Section 12.2 if requested by the
Company, and (4) a Stock Restriction Agreement meeting the requirements of
Section 12.3 if requested by the Company.
Payment of Purchase Price. Payment for shares and withholding taxes
shall be in the form of either (1) cash, (2) a certified or bank cashier's check
to the order of the Company, or (3) shares of the Common Stock, properly
endorsed to the Company, in an amount the fair market value of which on the date
of receipt by the Company (as determined in accordance with Section 7.4) equals
or exceeds the aggregate option price of the shares with respect to which the
Option is being exercised, or (4) in any combination thereof; provided, however,
that no payment may be made in shares of Common Stock unless payment in such
form and upon such exercise has been approved in advance by the Committee. Upon
the exercise of any Option, the Company, in its sole discretion, may make
financing available to the Optionee for the payment of the purchase price on
such terms and conditions as the Committee shall specify.
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CHANGE IN CONTROL
Notwithstanding any vesting requirements contained in any Option
Agreement, upon the occurrence of a Change in Control, all outstanding Options
shall become immediately vested and exercisable prior to the Change in Control.
EFFECT OF TERMINATION OF EMPLOYMENT
Termination of Employment Other Than Upon Death or Disability. Upon
termination of an Optionee's employment with the Company or a Subsidiary other
than upon death or disability (within the meaning of Section 22(e)(3) of the
Code), an Optionee may, at any time within three months after the date of
termination but not later than the date of expiration of the Option, exercise
the Option to the extent the Optionee was entitled to do so on the date of
termination. Any Options not exercisable as of the date of termination and any
Options or portions of Options of terminated Optionees not exercised as provided
herein shall terminate.
Termination By Death of Optionee. If an Optionee shall die while in the
employ of the Company or a Subsidiary or within a period of three months after
the termination of employment with the Company or a Subsidiary under
circumstances to which Section 10.1 apply, the personal representatives of the
Optionee's estate or the person or persons who shall have acquired the Option
from the Optionee by bequest or inheritance may exercise the Option at any time
within the year after the date of death but not later than the expiration date
of the Option, to the extent the Optionee was entitled to do so on the date of
death. Any Options not exercisable as of the date of death and any Options or
portions of Options of deceased Optionees not exercised as provided herein shall
terminate.
Termination By Disability of Optionee. Upon termination of an
Optionee's employment with the Company or a Subsidiary by reason of the
Optionee's disability (within the meaning of Section 22(e)(3) of the Code), the
Optionee may exercise the Option at any time within one year after the date of
termination but not later than the expiration date of the Option, to the extent
the Optionee was entitled to do so on the date of termination. Any Options not
exercisable as of the date of termination and any Options or portions of Options
of disabled Optionees not exercised as provided herein shall terminate.
Termination of Directors and Consultants. For purposes of this Section
10, a termination of employment shall be deemed to include the termination of a
Director's service as a member of the Board of Directors and the termination of
a consulting arrangement in the case of consultants.
Extension of Option Termination Date. The Committee, in its sole
discretion, may extend the termination date of an Option granted under the Plan
without regard to the preceding provisions of this Section 10. In such event,
the termination date shall be a date selected by the Committee in its sole
discretion, but not later than the latest expiration date of the Option
permitted pursuant to Section 7.5. Such extension may be made in the Option
Agreement as originally executed or by amendment to the Option Agreement, either
prior to or following termination of an Optionee's employment. The Committee
shall have no power to extend the termination date of an Incentive Stock Option
beyond the periods provided in Sections 10.1, 10.2 and 10.3 prior to the
termination of the Optionee's employment or without the approval of the
Optionee, which may be granted or withheld in the Optionee's sole discretion.
Any extension of the termination date of an Incentive Stock Option shall be
deemed to be the grant of a new Option for purposes of the Code.
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NON-TRANSFERABILITY OF OPTION
Options granted pursuant to the Plan are not transferable by the
Optionee other than by Will or the laws of descent and distribution and shall be
exercisable during the Optionee's lifetime only by the Optionee. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the
Option contrary to the provisions hereof, or upon the levy of any attachment or
similar process upon the Option, the Option shall immediately become null and
void.
ISSUANCE OF SHARES
Transfer of Shares to Optionee. As soon as practicable after the
Optionee has given the Company written notice of exercise of an Option and has
otherwise met the requirements of Section 8.1, the Company shall issue or
transfer to the Optionee the number of shares of Common Stock as to which the
Option has been exercised and shall deliver to the Optionee a certificate or
certificates therefor, registered in the Optionee's name. In no event shall the
Company be required to transfer fractional shares to the Optionee, and in lieu
thereof, the Company may pay an amount in cash equal to the fair market value
(as determined in accordance with Section 7.4) of such fractional shares on the
date of exercise. If the issuance or transfer of shares by the Company would for
any reason, in the opinion of counsel for the Company, violate any applicable
federal or state laws or regulations, the Company may delay issuance or transfer
of such shares to the Optionee until compliance with such laws can reasonably be
obtained. In no event shall the Company be obligated to effect or obtain any
listing, registration, qualification, consent or approval under any applicable
federal or state laws or regulations or any contract or agreement to which the
Company is a party with respect to the issuance of any such shares.
Investment Representation. Upon demand by the Company, the Optionee
shall deliver to the Company a representation in writing that the purchase of
all shares with respect to which notice of exercise of the Option has been given
by the Optionee is being made for investment only and not for resale or with a
view to distribution, and containing such other representations and provisions
with respect thereto as the Company may require. Upon such demand, delivery of
such representation promptly and prior to the transfer or delivery of any such
shares and prior to the expiration of the option period shall be a condition
precedent to the right to purchase such shares.
Stock Restriction Agreement. Upon demand by the Company, the Optionee
shall execute and deliver to the Company a Stock Restriction Agreement in such
form as the Company may provide at the time of exercise of the Option. Such
Agreement may include, without limitation, restrictions upon the Optionee's
right to transfer shares, including the creation of an irrevocable right of
first refusal in the Company and its designees, and provisions requiring the
Optionee to transfer the shares to the Company or the Company's designees upon a
termination of employment. Upon such demand, execution of the Stock Restriction
Agreement by the Optionee prior to the transfer or delivery of any shares and
prior to the expiration of the option period shall be a condition precedent to
the right to purchase such shares, unless such condition is expressly waived in
writing by the Company.
AMENDMENTS
The Board of Directors may at any time and from time to time alter,
amend, suspend or terminate the Plan or any part thereof as it may deem proper,
except that no such action shall diminish or impair the rights under an Option
previously granted. Unless the shareholders of the Company shall have given
their approval, the total number of shares for which Options may be issued under
the Plan shall not be increased, except as provided in Section 5.3, and no
amendment shall be made which reduces the price at which the Common Stock may be
offered under the Plan below the minimum required by Section 7.3, except as
provided in Section 5.3, or which materially modifies the requirements as to
eligibility for participation in the Plan. Subject to the terms and conditions
of the Plan, the Board of Directors may modify, extend or renew outstanding
Options granted under the Plan, or accept the surrender of outstanding Options
to the extent not theretofore exercised and authorize the granting of new
Options in substitution therefor, except that no such action shall diminish or
impair the rights under an Option previously granted without the consent of the
Optionee.
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TERM OF PLAN
This Plan shall terminate on October 29, 2005; provided, however, that
the Board of Directors may at any time prior thereto suspend or terminate the
Plan.
RIGHTS AS STOCKHOLDER
An Optionee shall have no rights as a stockholder of the Company with
respect to any shares of Common Stock covered by an Option until the date of the
issuance of the stock certificate for such shares.
NO EMPLOYMENT RIGHTS
Nothing contained in this Plan or in any Option granted under the Plan
shall confer upon any Optionee any right with respect to the continuation of
such Optionee's employment by the Company or any Subsidiary or interfere in any
way with the right of the Company or any Subsidiary, subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the Optionee from the
rate in existence at the time of the grant of the Option.
GOVERNING LAW
This Plan, and all Options granted under this Plan, shall be construed
and shall take effect in accordance with the laws of the State of Colorado,
without regard to the conflicts of laws rules of such State.
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INCENTIVE STOCK OPTION AGREEMENT
OPTIONEE:
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DATE OF GRANT:
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AGREEMENT between Birner Dental Management Services, Inc. (the
"Company"), and the above named Optionee ("Optionee"), an
employee of the Company or a Subsidiary thereof.
The Company and Optionee agree as follows:
Grant of Option.
Optionee is hereby granted an Incentive Stock Option, within the
meaning of Section 422 of the Code (the "Option"), to purchase Common Stock of
the Company pursuant to the Birner Dental Management Services, Inc. 1995
Employee Stock Option Plan (the "Plan"). The Option and this Agreement are
subject to and shall be construed in accordance with the terms and conditions of
the Plan, as now or hereinafter in effect. Any terms which are used in this
Agreement without being defined and which are defined in the Plan shall have the
meaning specified in the Plan.
Date of Grant.
The date of the grant of the Option is the date first set forth above,
the date of the action by the Committee which administers the Plan (the
"Committee") in granting the same.
Number and Price of Shares.
The number of shares as to which the Option is granted is the number
set forth in Schedule 3A to this Agreement. The purchase price per share is the
amount set forth in Schedule 3B to this Agreement.
Expiration Date.
Unless sooner terminated as provided in Section 10 of the Plan, the
Option shall expire and terminate on the date set forth in Schedule 4 to this
Agreement, and in no event shall the Option be exercisable after that date.
Manner of Exercise.
Except as provided in this Agreement, the Option shall be exercisable,
in whole or in part, from time to time, in the manner provided in Section 8 of
the Plan.
Time of Exercise.
The Option granted hereby shall become vested in and exercisable by
Optionee in the installments, on the dates and subject to the conditions set
forth in Schedule 6 to this Agreement; provided, however, that Optionee must
have been continuously employed by the Company or a Subsidiary thereof from the
date of grant of the Option until the date specified on Schedule 6 or until the
conditions specified on Schedule 6 have been satisfied.
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Stock Restriction Agreement.
Upon exercise of the Option, the Optionee shall execute and deliver to
the Company a Stock Restriction Agreement in substantially the form attached to
this Agreement as Exhibit A. Execution and delivery of the Stock Restriction
Agreement prior to the transfer or delivery of any shares and prior to the
expiration of the option period shall be a condition precedent to the right to
purchase such shares.
Nontransferability of Option.
The Option is not transferable by Optionee other than by Will or the
laws of descent and distribution, and the Option shall be exercisable during
Optionee's lifetime only by Optionee. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of the Option contrary to the
provisions hereof, or upon the levy of any attachment or similar process upon
the Option, the Option shall immediately become null and void.
Withholding for Taxes.
The Company shall have the right to deduct from Optionee's salary any
federal or state taxes required by law to be withheld with respect to the
exercise of the Option or any disqualifying disposition of the Common Stock
acquired upon exercise of the Option.
Legends.
Certificates representing Common Stock acquired upon exercise of this
Option may contain such legends and transfer restrictions as the Company shall
deem reasonably necessary or desirable, including, without limitation, legends
restricting transfer of the Common Stock until there has been compliance with
federal and state securities laws and until Optionee or any other holder of the
Common Stock has paid the Company such amounts as may be necessary in order to
satisfy any withholding tax liability of the Company resulting from a
disqualifying disposition described in Section 422(a) of the Code.
Employee Benefits.
Optionee agrees that the grant and vesting of the Option and the
receipt of shares of Common Stock upon exercise of the Option will constitute
special incentive compensation that will not be taken into account as "salary"
or "compensation" or "bonus" in determining the amount of any payment under any
pension, retirement, profit sharing or other remuneration plan of the Company.
Amendment.
Subject to the terms and conditions of the Plan, the Committee may
modify, extend or renew the Option, or accept the surrender of the Option to the
extent not theretofore exercised and authorize the granting of new Options in
substitution therefor, except that no such action shall diminish or impair the
rights under the Option without the consent of the Optionee.
Interpretation.
The interpretations and constructions of any provision of and
determinations on any question arising under the Plan or this Agreement shall be
made by the Committee, and all such interpretations, constructions and
determinations shall be final and conclusive as to all parties.
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Receipt of Plan.
By entering into this Agreement, Optionee acknowledges (i) that he or
she has received and read a copy of the Plan and (ii) that this Agreement is
subject to and shall be construed in accordance with the terms and conditions of
the Plan, as now or hereinafter in effect.
Governing Law.
This Agreement shall be construed and shall take effect in accordance
with the laws of the State of Colorado, without regard to the conflicts of laws
rules of such State.
Miscellaneous.
This Agreement constitutes the entire understanding and agreement of
the parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, between the parties with respect hereto. If
any provision of this Agreement, or the application thereof, shall for any
reason and to any extent be invalid or unenforceable, the remainder of this
Agreement and the application of such provision to other circumstances shall be
interpreted so as best to reasonably effect the intent of the parties hereto.
All notices or other communications which are required to be given or may be
given to either party pursuant to the terms of this Agreement shall be in
writing and shall be delivered personally or by registered or certified mail,
postage prepaid, to the address of the parties as set forth following the
signature of such party. Notice shall be deemed given on the date of delivery in
the case of personal delivery or on the delivery or refusal date as specified on
the return receipt in the case of registered or certified mail. Either party may
change its address for such communications by giving notice thereof to the other
party in conformity with this Section 16.
IN WITNESS WHEREOF, the Company by a duly authorized officer of the
Company and Optionee have executed this Agreement on _____________, effective as
of the date of grant.
BIRNER DENTAL MANAGEMENT SERVICES, INC.
By:
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Title:
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Address:
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OPTIONEE
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Address:------------------------------------------
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SCHEDULES
TO
INCENTIVE STOCK OPTION AGREEMENT
Schedule
3A Number of Shares of Stock:
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3B Purchase Price per Share:
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4 Expiration Date:
---------------
6 Vesting Schedule:
----------------
Date Number of Shares
Which Become Exercisable
======== =========
======== =========
======== =========
======== =========
======== =========
Additional Conditions to Vesting: Notwithstanding the foregoing, no
portion of the Option shall be vested and exercisable until the following
conditions have been satisfied:
12
NONQUALIFIED STOCK OPTION AGREEMENT
OPTIONEE: --------------------------------------------
DATE OF GRANT: ---------------------------------------
AGREEMENT between Birner Dental Management Services, Inc. (the
"Company"), and the above named Optionee ("Optionee"), an employee of the
Company or a Subsidiary thereof.
The Company and Optionee agree as follows:
13
1. Grant of Option.
---------------
Optionee is hereby granted a Nonqualified Stock Option (the "Option")
to purchase Common Stock of the Company pursuant to the Birner Dental Management
Services, Inc. 1995 Employee Stock Option Plan (the "Plan"). The Option is not
intended to qualify as an Incentive Stock Option within the meaning of Section
422 of the Code. The Option and this Agreement are subject to and shall be
construed in accordance with the terms and conditions of the Plan, as now or
hereinafter in effect. Any terms which are used in this Agreement without being
defined and which are defined in the Plan shall have the meaning specified in
the Plan.
Date of Grant.
-------------
The date of the grant of the Option is the date first set forth above,
the date of the action by the Committee which administers the Plan (the
"Committee") in granting the same.
Number and Price of Shares.
--------------------------
The number of shares as to which the Option is granted is the number
set forth in Schedule 3A to this Agreement. The purchase price per share is the
amount set forth in Schedule 3B to this Agreement.
Expiration Date.
---------------
Unless sooner terminated as provided in Section 10 of the Plan, the
Option shall expire and terminate on the date set forth in Schedule 4 to this
Agreement, and in no event shall the Option be exercisable after that date.
Manner of Exercise.
------------------
Except as provided in this Agreement, the Option shall be exercisable,
in whole or in part, from time to time, in the manner provided in Section 8 of
the Plan.
Time of Exercise.
----------------
The Option granted hereby shall become vested in and exercisable by
Optionee in the installments, on the dates and subject to the conditions set
forth in Schedule 6 to this Agreement; provided, however, that Optionee must
have been continuously employed by the Company or a Subsidiary thereof from the
date of grant of the Option until the date specified on Schedule 6 or until the
conditions specified on Schedule 6 have been satisfied.
Stock Restriction Agreement.
---------------------------
Upon exercise of the Option, the Optionee shall execute and deliver to
the Company a Stock Restriction Agreement in substantially the form attached to
this Agreement as Exhibit A. Execution and delivery of the Stock Restriction
Agreement prior to the transfer or delivery of any shares and prior to the
expiration of the option period shall be a condition precedent to the right to
purchase such shares.
Nontransferability of Option.
----------------------------
The Option is not transferable by Optionee other than by Will or the
laws of descent and distribution, and the Option shall be exercisable during
Optionee's lifetime only by Optionee. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of the Option contrary to the
provisions hereof, or upon the levy of any attachment or similar process upon
the Option, the Option shall immediately become null and void.
Withholding for Taxes.
---------------------
The Company shall have the right to deduct from Optionee's salary any
federal or state taxes required by law to be withheld with respect to the
exercise of the Option.
14
Legends.
-------
Certificates representing Common Stock acquired upon exercise of this
Option may contain such legends and transfer restrictions as the Company shall
deem reasonably necessary or desirable, including, without limitation, legends
restricting transfer of the Common Stock until there has been compliance with
federal and state securities laws.
Employee Benefits.
-----------------
Optionee agrees that the grant and vesting of the Option and the
receipt of shares of Common Stock upon exercise of the Option will constitute
special incentive compensation that will not be taken into account as "salary"
or "compensation" or "bonus" in determining the amount of any payment under any
pension, retirement, profit sharing or other remuneration plan of the Company.
Amendment.
---------
Subject to the terms and conditions of the Plan, the Committee may
modify, extend or renew the Option, or accept the surrender of the Option to the
extent not theretofore exercised and authorize the granting of new Options in
substitution therefor, except that no such action shall diminish or impair the
rights under the Option without the consent of the Optionee.
Interpretation.
--------------
The interpretations and constructions of any provision of and
determinations on any question arising under the Plan or this Agreement shall be
made by the Committee, and all such interpretations, constructions and
determinations shall be final and conclusive as to all parties.
Receipt of Plan.
---------------
By entering into this Agreement, Optionee acknowledges (i) that he or
she has received and read a copy of the Plan and (ii) that this Agreement is
subject to and shall be construed in accordance with the terms and conditions of
the Plan, as now or hereinafter in effect.
Governing Law.
-------------
This Agreement shall be construed and shall take effect in accordance
with the laws of the State of Colorado, without regard to the conflicts of laws
rules of such State.
Miscellaneous.
-------------
This Agreement constitutes the entire understanding and agreement of
the parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, between the parties with respect hereto. If
any provision of this Agreement, or the application thereof, shall for any
reason and to any extent be invalid or unenforceable, the remainder of this
Agreement and the application of such provision to other circumstances shall be
interpreted so as best to reasonably effect the intent of the parties hereto.
All notices or other communications which are required to be given or may be
given to either party pursuant to the terms of this Agreement shall be in
writing and shall be delivered personally or by registered or certified mail,
postage prepaid, to the address of the parties as set forth following the
signature of such party. Notice shall be deemed given on the date of delivery in
the case of personal delivery or on the delivery or refusal date as specified on
the return receipt in the case of registered or certified mail. Either party may
change its address for such communications by giving notice thereof to the other
party in conformity with this Section 16.
15
IN WITNESS WHEREOF, the Company by a duly authorized officer of the
Company and Optionee have executed this Agreement on _____________, effective as
of the date of grant.
BIRNER DENTAL MANAGEMENT SERVICES, INC.
By:
------------------------------------------
Title:
------------------------------------------
Address:
------------------------------------------
OPTIONEE
------------------------------------------
Address:------------------------------------------
------------------------------------------
------------------------------------------
16
SCHEDULES
TO
NONQUALIFIED STOCK OPTION AGREEMENT
Schedule
3A Number of Shares of Stock:
-------------------------
3B Purchase Price per Share:
------------------------
4 Expiration Date:
---------------
6 Vesting Schedule:
----------------
Date Number of Shares
Which Become Exercisable
======== =========
======== =========
======== =========
======== =========
======== =========
Additional Conditions to Vesting: Notwithstanding the foregoing, no
portion of the Option shall be vested and exercisable until the following
conditions have been satisfied:
17