EXHIBIT 4.1
GRAYMARK HEALTHCARE, INC.
2008 LONG-TERM INCENTIVE PLAN
SECTION 1.1
Purpose. This 2008 Long-Term Incentive Plan (the
“Plan”) is established by Graymark Healthcare, Inc.
(the “Company”) to create incentives that are designed
to motivate Participants to put forth maximum effort toward the
success and growth of the Company and to enable the Company to
attract and retain experienced individuals who by their position,
ability and diligence are able to make important contributions to
the Company’s success. Toward these objectives, the Plan
provides for the grant of Options, Restricted Stock Awards,
Performance Units, Performance Bonuses and Stock Appreciation
Rights to Eligible Employees and the grant of Nonqualified Stock
Options, Stock Appreciation Rights and Restricted Stock Awards to
Eligible Directors, subject to the conditions set forth in the Plan
and the applicable Award Agreement. The Plan is designed to provide
flexibility to meet the needs of the Company in a changing and
competitive environment while minimizing dilution to the
Company’s shareholders. The Company does not intend to use
all incentive vehicles at all times for each Participant but will
be selective in the granting of Awards.
SECTION 1.2
Establishment. The Plan is effective as of October 29,
2008, and shall be effective for a period of ten years thereafter.
The Plan shall continue in effect until all matters relating to the
payment of Awards and administration of the Plan have been
settled.
The Plan shall be
approved by the holders of at least a majority of the voting power
of outstanding shares of Common Stock, par value $0.0001 per share,
present, or represented, and entitled to vote at a meeting called
for such purpose, which approval must occur within the period
ending twelve months after the date the Plan is adopted by the
Board. Pending approval by the Company’s
shareholdersshareholder, Awards under the Plan may be granted, but
no Incentive Stock Option Awards may be exercised prior to receipt
of shareholdershareholder approval. In the event shareholder
approval is not obtained within such twelve-month period, all such
Awards shall be void.
SECTION 1.3
Shares Subject to the Plan. Subject to the limitations set
forth in the Plan, Awards may be made under the Plan for a total of
3,000,000 shares of Common Stock. Provided further, that a maximum
of 1,000,000 shares of the total authorized under this
Section 1.3 may be granted as Incentive Stock Options. The
limitations of this Section 1.3 shall be subject to adjustment
pursuant to Article X. The number of shares that are subject
to Options or other Awards outstanding at any time under the Plan
shall not exceed the number of shares which then remain available
for issuance under the Plan. The Company, during the term of the
Plan, shall at all times reserve and keep available sufficient
shares to satisfy the requirements of the Plan.
SECTION 2.1
“Account” means the recordkeeping account
established by the Company to which will be credited an Award of
Performance Units to a Participant.
SECTION 2.2
“Affiliated Entity” means any partnership or
limited liability company in which a majority of the partnership or
other similar interest thereof is owned or controlled, directly or
indirectly, by the Company or one or more of its Subsidiaries or
Affiliated Entities or a combination thereof. For purposes hereof,
the Company, a Subsidiary or an Affiliated Entity shall be deemed
to have a majority ownership interest in a partnership or limited
liability company if the Company, such Subsidiary or Affiliated
Entity shall be allocated a majority of partnership or limited
liability company gains or losses or shall be or control a managing
director or a general partner of such partnership or limited
liability company.
SECTION 2.3
“Award” means, individually or collectively, any
Option, Restricted Stock Award, Performance Unit, Performance Bonus
or Stock Appreciation Right granted under the Plan to an Eligible
Employee by the Committee or any Nonqualified Stock Option, Stock
Appreciation Right or Restricted Stock Award granted under the Plan
to an Eligible Director by the Board pursuant to such terms,
conditions, restrictions, and/or limitations, if any, as the
Committee may establish by the Award Agreement or
otherwise.
SECTION 2.4
“Award Agreement” means any written instrument
that establishes the terms, conditions, restrictions, and/or
limitations applicable to an Award in addition to those established
by the Plan and by the Committee’s exercise of its
administrative powers.
SECTION 2.5
“ Board” means the Board of Directors of the
Company.
SECTION 2.6
“Change of Control” shall mean:
(a) The date
that any one person, or more than one person acting as a group (as
defined in §1.409A-3(i)(5)(v)(B) of the Treasury Regulations),
acquires ownership of stock during a twelve-month period that,
together with stock held by such person or group, constitutes more
than 50% of either (i) the then outstanding shares of common
stock of the Company (the “Outstanding Company Common
Stock”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that the
following acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, or
(iv) any acquisition of additional stock by a person or group
already considered to own more than 50% of the Outstanding Company
Common Stock or Outstanding Company Voting Securities;
or
(b) The date
a majority of the individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”) are
replaced during any 12-month period; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, appointment or nomination for election by the
Company’s shareholders was approved by a vote of at least a
majority
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of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for purposes of this definition, any such individual
whose initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board; or
(c) The date
any one person, or more than one person acting as a group (as
defined in §1.409A-3(i)(5)(v)(B) of the Treasury Regulations)
acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons)
ownership of stock of the Company possessing thirty percent (30%)
or more of the total voting power of the stock of the Company other
than one or more persons appointed by the Board to act as the
proxies for one or more shareholders of the Company; provided,
however, that any acquisition of additional control by a person or
group already considered to have caused a Change of Control under
this subsection will not be considered to cause a Change of Control
under either this subsection or subsection (a) above.
(d) The date
that any one person, or more than one person acting as a group (as
defined in §1.409A-3(i)(5)(v)(B) of the Treasury Regulations)
acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) all
or substantially all of the assets of the Company, unless such
assets are transferred to:
(i) A
shareholder of the Company (immediately before the asset transfer)
in exchange for or with respect to its stock;
(ii) An
entity, more than 50% of the total value or voting power of which
is owned, directly or indirectly, by the Company;
(iii) A
person, or more than one person acting as a group, that owns,
directly or indirectly, more than 50% of the total value or voting
power of all the outstanding stock of the Company; or
(iv) An
entity, more than 50% of the total value or voting power of which
is owned, directly or indirectly, by a person described in
Section 2.6(d)(iii) herein.
For purposes of
subsection (d) and except as otherwise provided in paragraph
(i), a person’s status is determined immediately after the
transfer of the assets.
SECTION 2.7
“Closing Sale Price” means the closing sale
price of the Common Stock (i) as reported by the New York
Stock Exchange, American Stock Exchange or another established
stock exchange, NASDAQ Global Market, NASDAQ Capital Market, or OTC
Bulletin Board, whichever shall be applicable, on the day for which
such closing sale price is to be determined, or, if no sale of the
Common Stock shall have been made on that day, on the next
preceding day on which there was a sale of the Common Stock, or
(ii) the average of the closing highest reported bid and
lowest reported ask price as quoted in the “pink
sheets” published by the National Daily Quotation Bureau on
the day for which such value is to be determined, or
(iii) during any such time as the Common Stock closing sale
price cannot be determined pursuant to (i) or (ii) above,
the value as determined by the Board considering all relevant
information including, by example and not by
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limitation, the
services of an independent appraiser. In the event the Common Stock
shall be listed, quoted or reported on more than one of the New
York Stock Exchange, American Stock Exchange, NASDAQ Global Market,
NASDAQ Capital Market, OTC Bulletin Board or the “pink
sheets,” whichever of those shall have the greatest volume of
sales of the Common Stock during the preceding ten “trading
days” shall be utilized for determining Closing Sale Price of
the Common Stock.
SECTION 2.8
“Code” means the Internal Revenue Code of 1986,
as amended, as may be amended from time to time and the applicable
Treasury Regulations promulgated thereunder.
SECTION 2.9
“Committee” shall have the meaning set forth in
Section 3.1.
SECTION 2.10
“Common Stock” means the common stock, par value
$0.0001 per share, of the Company, and after subs titution,
s uch other stock as shall be substituted therefore as provided
in Article X.
SECTION 2.11
“Compensation Committee” means the Compensation
Committee chartered and appointed by the Board, provided that, it
is within the discretion of the full Board to assume the role of
the Compensation Committee and exercise any of the authority or
power granted to the Compensation Committee in the Plan.
SECTION 2.12
“Date of Grant” means the date on which the
grant of an Award is authorized by the Committee or the Board, or
such later date as may be specified by the Committee or the Board
in such authorization.
SECTION 2.13
“Eligible Employee” means any employee of the
Company, a Subsidiary, or an Affiliated Entity as approved by the
Committee (or the Board).
SECTION 2.14
“Eligible Director” means any member of the
Board who is not an employee of the Company or any
Subsidiary.
SECTION 2.15
“Exchange Act” means the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated
thereunder.
SECTION 2.16
“Executive Officer Participants” means
Participants who are subject to the provisions of Section 16
of the Exchange Act.
SECTION 2.17
“ Fair Market Value ” means (A) during such
time as the Common Stock is listed upon the New York Stock Exchange
or American Stock Exchange, the closing sale price of the Common
Stock as reported by that stock exchange on the day for which such
value is to be determined, or, if no sale of the Common Stock shall
have been made on any that stock exchange that day, on the next
preceding day on which there was a sale of the Common Stock, or
(B) during such time as the Common Stock is listed on the
NASDAQ Global Market or NASDAQ Capital Market, the average of the
closing sale price of the Common Stock as reported by NASDAQ Global
Market or NASDAQ Capital Market for the ten Trading Days preceding
the day for which such value is to be determined, or, if no sale of
the Common Stock shall have been made on that day, on the next
preceding day on which there was a sale of the Common Stock, or
(C) during such time as
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the Common
Stock is listed upon an established stock exchange, other than the
New York Stock Exchange and American Stock Exchange, during such
time as the Common Stock is quoted on such stock exchange, the
average of the closing sale price of the Common Stock as reported
and quoted on such stock exchange for the ten Trading Days
preceding the day for which such value is to be determined, or, if
no sale of the Common Stock shall have been made on any that stock
exchange that day, on the next preceding day on which there was a
sale of the Common Stock, or (D) during such time as the
Common Stock is quoted on the OTC Bulletin Board, the average of
the closing sale price of the Common Stock as reported and quoted
on the OTC Bulletin Board for the ten Trading Days preceding the
day for which such value is to be determined, or, if no sale of the
Common Stock shall have been made on that day, on the next
preceding day on which there was a sale of the Common Stock, or
(E) during any such time as the Common Stock is not listed
upon an established stock exchange, the NASDAQ Global Market or
NASDAQ Capital Market or OTC Bulletin Board, the average of the
closing highest reported bid and lowest reported ask price as
quoted in the “pink sheets” published by the National
Daily Quotation Bureau for the ten Trading Days preceding the day
for which such value is to be determined, or (F) during any
such time as the Common Stock cannot be valued pursuant to (A),
(B), (C), (D) or (E) above, the fair market value shall
be as determined by the Board considering all relevant information
including, by example and not by limitation, the services of an
independent appraiser. In the event the Common Stock shall be
listed, quoted or reported on more than one of the New York Stock
Exchange, American Stock Exchange, NASDAQ Global Market, NASDAQ
Capital Market, OTC Bulletin Board or the “pink
sheets,” whichever of those shall have the greatest volume of
sales of the Common Stock during the preceding ten “trading
days” shall be utilized for determining Fair Market Value of
the Common Stock.
SECTION 2.18
“Incentive Stock Option” means an Option within
the meaning of Section 422 of the Code.
SECTION 2.19
“Mature Common Stock Shares” Common Stock that
has been held by the Participant for not less than six months and
during such period has not been subject to any type of forfeiture
or restriction on transfer (other than restrictions under
applicable securities laws) on the applicable date of delivery to
the Company in payment, in whole or in part, of an exercise price
of an Award.
SECTION 2.20
“Non-Executive Officer Participants” means
Participants who are not subject to the provisions of
Section 16 of the Exchange Act.
SECTION 2.21
“Nonqualified Stock Option” means an Option
which is not an Incentive Stock Option.
SECTION 2.22
“Option” means an Award granted under
Article V of the Plan and includes both Nonqualified Stock
Options and Incentive Stock Options to purchase shares of Common
Stock.
SECTION 2.23
“Participant” means an Eligible Employee of the
Company, a Subsidiary, or an Affiliated Entity to whom an Award has
been granted by the Committee or an Eligible Director to whom an
Award has been granted by the Board under the Plan.
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SECTION 2.24
“Performance Bonus” means the cash bonus which
may be granted to Eligible Employees under Article VIII of the
Plan.
SECTION 2.25
“Performance Units” means those monetary units
that may be granted to Eligible Employees pursuant to
Article VII hereof.
SECTION 2.26
“Plan” means Graymark Healthcare, Inc. 2008
Long-Term Incentive Plan.
SECTION 2.27
“Regular Award Committee” means a committee
comprised of the individual who is the Company’s chief
executive officer and such additional members, if any, as shall be
appointed by the Compensation Committee.
SECTION 2.28
“Restricted Stock Award” means an Award granted
to an Eligible Employee or Eligible Director under Article VI
of the Plan.
SECTION 2.29
“Secretary” means the corporate secretary of the
Company duly elected by the Board.
SECTION 2.30
“Subsidiary” shall have the same meaning set
forth in Section 424 of the Code.
SECTION 2.31
“Trading Day” means any day that securities are
traded and reported on the New York Stock Exchange.
ARTICLE III
ADMINISTRATION
SECTION 3.1
Administration of the Plan by the Committee. For purposes of
administration, the Plan shall be deemed to consist of three
separate stock incentive plans, a “Non-Executive Officer
Participant Plan” which is limited to Non-Executive Officer
Participants, an “Executive Officer Participant Plan”
which is limited to Executive Officer Participants and a
“Non-Employee Director Participant Plan” which is
limited to Eligible Directors. Except for administration and the
category of Eligible Employees eligible to receive Awards, the
terms of the Non-Executive Officer Participant Plan and the
Executive Officer Participant Plan are identical. The Non-Employee
Director Plan has other variations in terms and only permits the
grant of Nonqualified Stock Options and Restricted
Stock.
The Non-Executive
Officer Participant Plan shall be administered by the Compensation
Committee. The Compensation Committee may, at its discretion,
delegate authority to the Regular Award Committee to administer the
Non-Executive Officer Participant Plan to the extent permitted by
applicable law, rule or regulation. The Regular Award Committee may
only act within guidelines established by the Compensation
Committee. The Executive Officer Participant Plan shall be
administered by the Compensation Committee. With respect to the
Non-Executive Officer Participant Plan and to decisions relating to
Non-Executive Officer Participants, including the grant of Awards,
the term “Committee” shall mean the Compensation
Committee, and refer to the Regular Award Committee as authorized
by the Compensation Committee; and with respect to the Executive
Officer Participant Plan and to decisions relating
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to the
Executive Officer Participants, including the granting of Awards,
the term “Committee” shall mean only the Compensation
Committee.
Unless otherwise
provided in the by-laws of the Company or the resolutions and
charter adopted from time to time by the Board establishing the
Committee, the Board may from time to time remove members from, or
add members to, the Committee. Vacancies on the Committee, however
caused, shall be filled in accordance with the Committee’s
charter or in the absence of such provision by the Board or, with
respect to the Regular Award Committee, by the Compensation
Committee. The Regular Award Committee shall hold meetings at such
times and places as it may determine. A majority of the members of
the Regular Award Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a
quorum is present or acts reduced to or approved in writing by a
majority of the members of the Regular Award Committee shall be the
valid acts of the Regular Award Committee.
Subject to the
provisions of the Plan and approval by the Board, the Committee
shall be authorized to:
(a) Select
Eligible Employees to participate in the Plan;
(b) Determine
the time or times when Awards will be made;
(c) Determine
the form of an Award, whether an Option, Restricted Stock Award,
Performance Unit, Performance Bonus or Stock Appreciation Right,
the number of shares of Common Stock or Performance Units subject
to the Award, the amount and all the terms, conditions (including
performance requirements), restrictions and/or limitations, if any,
of an Award, including the time and conditions of exercise or
vesting, and the terms of any Award Agreement;
(d) Determine
whether Awards will be granted singly or in combination;
(e) Accelerate
the vesting, exercise or payment of an Award or the performance
period of an Award;
(f) Determine
whether and to what extent an Award may be deferred, either
automatically or at the election of the Participant or the
Committee; and
(g) Take any
and all other action it deems necessary or advisable for the proper
operation or administration of the Plan.
SECTION 3.2
Administration of Grants to Eligible Directors. The Board
shall have the exclusive power to select Eligible Directors to
participate in the Plan and to determine the number of Nonqualified
Stock Options, Stock Appreciation Rights or shares of Restricted
Sto
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