EXHIBIT 10.3
APPLE ORTHODONTIX, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (the "Agreement") is entered into
between Apple Orthodontix, Inc., a ___________ corporation (the "Company"), and
_________________ (the "Optionee") as of the ___ day of __________, 19___. 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 1996
Stock Option Plan (the "Plan"), which is 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 $_____ per share, at a price of $____ per share. The
Option is granted as of _________, 19__ (the "Date of Grant").
2. CHARACTER OF OPTION. The Option is 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, in the event of the Optionee's termination of service
as an employee or a director of the Company, on such earlier date as may be
provided in the Plan.
4. VESTING. Subject to any provisions of the Plan concerning
exercisability of options, the Option may be exercised according to the
following schedule:
PERCENTAGE
EXERCISABLE PERIOD
----------- ------
25% After the Date of Grant
50% One year after the Date of Grant
75% Two years after the Date of Grant
100% Three years after the Date of Grant
The unexercised portion of the Option from one period may be carried over to a
subsequent period or periods, and the right of the Option to exercise the option
as to such unexercised portion shall continue for the entire term.
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 SECTION 1.13 of the Plan and payment of the purchase price
prescribed in SECTION 1 above 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. The Option may not be transferred except (i) by
will or the laws of descent and distribution or (ii) pursuant to the terms of a
qualified domestic relations order, as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, and, during the
lifetime of the Optionee, may be exercised only by the Optionee or by the
Optionee's legally authorized representative.
8. TERMINATION. The Option shall terminate on the earlier of (i) the
expiration date set forth in SECTION 3 above or, (ii) in the event of the
termination of the Optionee's service as an employee or director of the Company,
the date provided in the Plan.
9. 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.
10. AMENDMENT. This Agreement may be amended by an instrument in writing
signed by both the Company and the Optionee.
11. MISCELLANEOUS. This Agreement will be construed and enforced in
accordance with the laws of the State of Texas 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.
Executed as of the ___ day of ___________, 19__.
APPLE ORTHODONTIX, INC.
By:______________________________
Its:______________________________
__________________________________
__________________________________
__________________________________
Social Security Number of Optionee
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