Exhibit 10.16.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), dated as of
January 1, 2012, is entered into by and between GRAYMARK HEALTHCARE, INC., an
Oklahoma corporation (the “Company”) and EDWARD M. CARRIERO, JR. (“Executive”).

WHEREAS, the Company desires to continue to employ the Executive and the
Executive desires to continue to serve the Company, upon the terms and subject
to the conditions contained in this Agreement; and

WHEREAS, the Executive has served as the Company’s Chief Financial Officer
pursuant to the terms and conditions of an employment agreement made effective
October 7, 2010 (the “Prior Employment Agreement”); and

WHEREAS, the parties desire to amend and restate the Prior Employment Agreement
in its entirety.

NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth below, the parties hereby agree as follows:

1. Employment. The Company hereby employs the Executive as an employee and the
Executive hereby accepts such employment subject to the terms and conditions
contained in this Agreement. Subject to the terms of this Agreement, the
employment relationships of the Executive with the Company are “at will” and
either can terminate this Agreement with or without cause as provided in this
agreement. The Executive acknowledges that the Company operates in Minnesota and
Oklahoma City and that he will spend a significant portion of his time in these
locations, however, he will not be required to relocate from his existing
residence in Pembroke Pines, Florida.

2. Executive’s Duties. Executive is employed on a full-time basis. Executive
will serve as Senior Vice President of Corporate Development of the Company.
During the Employment Period, Executive will report directly to the Chief
Executive Officer (the “CEO”). Executive shall perform all services reasonably
required to fully execute the duties and responsibilities associated with the
Company and its affiliates. Executive will devote substantially all of his
working time, attention and energies (other than absences due to illness or
vacation) to the performance of his duties for the Company. Notwithstanding the
above, Executive will be permitted, to the extent such activities do not
interfere with the performance by Executive of his duties and responsibilities
under this Agreement or violate this Agreement, to (i) manage Executive’s
personal, financial and legal affairs, and (ii) serve on industry, civic or
charitable boards or committees.

3. Executive’s Compensation.

(a) Base Salary. During the Employment Period (as defined in Section 4 below),
the Company will pay Executive an annual base salary (“Base Salary”) of not less
than Two Hundred Thousand Dollars ($200,000) in approximate equal installments
in accordance with the Company’s customary payroll practices. Executive’s Base
Salary may be increased, but not decreased, pursuant to annual review by the
Company’s Compensation Committee. In the event Executive’s Base Salary is
increased, the increased amount will then constitute the Base Salary for all
purposes of this Agreement.

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(b) Stock Option Award. Upon execution of the Prior Employment Agreement,
Executive was awarded stock options exercisable for the purchase of Fifty
Thousand (50,000) common stock shares of the Company for the closing sale price
on the date of grant (or, if not available on that date, the most recently
reported closing sale price) in accordance with the Graymark Healthcare, Inc.
2008 Long-Term Incentive Plan (“Long-Term Incentive Plan”) (or a substitute or
successor plan).

(c) Benefits. During the Employment Period, Executive (and his spouse and/or
dependents to the extent provided in the applicable plans and programs) will be
entitled to participate in and be covered under all the welfare benefit plans or
programs maintained by the Company for the benefit of its senior executive
officers pursuant to the terms of such plans and programs including, without
limitation, all medical, life, hospitalization, dental, disability, accidental
death and dismemberment and travel accident insurance plans and programs. In
addition, during the Employment Period, Executive will be eligible to
participate in all pension, retirement, savings and other employee benefit plans
and programs maintained from time to time by the Company for the benefit of its
senior executive officers.

(d) Vacation. Executive shall be entitled to at least twenty (20) business days
of paid vacation for each calendar year during the Employment Period. Executive
may use his vacation in a reasonable manner based upon the business needs of the
Company. Unused vacation days will accrue from year to year without limitation.

(e) Fringe Benefits. During the Employment Period, the Company will provide
Executive with such other fringe benefits as commensurate with Executive’s
position.

(f) Reimbursement. Executive shall be entitled to reimbursement for all
reasonable expenses, including travel and entertainment, incurred by Executive
in the performance of his duties. Executive will maintain records and written
receipt as required by the Company policy and reasonably requested by the
Company to substantiate such expenses.

4. Termination. Notwithstanding any other provision of this Agreement,
Executive’s employment may be terminated at any time by GRMH or the Executive
with or without cause, subject to the terms and conditions of Sections 4, 5 and
6. For purposes of this Agreement, the “Employment Period” is the period that
commences on the date hereof and ends on the date of termination of this
Agreement.

(a) Death. Executive’s employment under this Agreement will terminate upon his
death.

(b) Disability. If, as a result of Executive’s incapacity due to physical or
mental illness, Executive is substantially unable to perform his duties under
this Agreement (with or without reasonable accommodation, as defined under the
Americans With Disabilities Act) for an entire period of six (6) consecutive
months, and within thirty (30) days after a Notice of Termination (as defined in
Section 5(a)) is given after such six (6) month period, and Executive does not
return to the substantial performance of his duties on a full-time basis, the
Company has the right to terminate Executive’s employment under this Agreement
for “Disability,” and such termination will not be a breach of this Agreement by
the Company.

 

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(c) Cause. The Company has the right to terminate Executive’s employment for
Cause, and such termination will not be a breach of this Agreement by the
Company. “Cause” means termination of employment for one of the following
reasons: (i) the conviction of Executive by a federal or state court of
competent jurisdiction or a plea of guilty or no contest to a felony which
relates to the Executive’s employment at the Company;; (ii) an act or acts of
dishonesty taken by Executive and intended to result in substantial personal
enrichment of Executive at the expense of the Company or any affiliate; or
(iii) Executive’s “willful” failure to follow a direct lawful written order from
the CEO, within the reasonable scope of Executive’s duties, which failure is not
cured within thirty (30) days after receipt of written notice specifically
identifying said failure. For purposes of this Subsection (c), no act or failure
to act on Executive’s part shall be deemed “willful” unless done or omitted to
be done by Executive, not in good faith and without reasonable belief that
Executive’s action or omission was in the best interest of the Company.

(d) Good Reason. Executive may terminate his employment with the Company for
“Good Reason.” For purposes of this Agreement, “Good Reason” shall mean the
occurrence without the written consent of Executive, of one of the events set
forth below:

(1) a material diminution in the Executive’s authority, duties or
responsibilities;

(2) the reduction by the Company of Executive’s Base Salary;

(3) any requirement that Executive relocate from his residence in Pembroke
Pines, Florida; or

(4) any other action or inaction that constitutes a material breach by the
Company of this Agreement.

The Executive must provide notice to the Company of the existence of one of the
conditions described above within ninety (90) days of the Executive’s discovery
of the existence of the condition. The Company has a period of thirty (30) days
after receipt of written notice from the Executive to remedy the situation. If
the Company fails to remedy the condition, the Executive may terminate his
employment for Good Reason by providing a Notice of Termination to the Company
within thirty (30) days of the expiration of the Company’s period to remedy the
condition. Termination for Good Reason by the Executive will not be a breach of
this Agreement and will entitle Executive to the Compensation and benefits
described in Section 6(a) hereof.

(e) Without Cause. The Company has the right to terminate Executive’s employment
under this Agreement without Cause by providing Executive with a Notice of
Termination, subject to the obligations set forth in Section 6(a) hereof.

(f) Voluntary Termination. Executive may voluntarily terminate employment with
the Company at any time, and if such termination is not for Good Reason, then
Executive shall only be entitled to compensation and benefits as described in
Section 6(b) hereof.

5. Termination Procedure.

(a) Notice of Termination. Any termination of Executive’s employment by the
Company or by Executive during the Employment Period (other than termination
pursuant to Section 4(a)) will be communicated by written Notice of Termination
to the other party in accordance with Section 10. For purposes of this
Agreement, a “Notice of Termination” means a written notice which indicates the
specific termination provision in this Agreement relied upon and sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment.

 

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(b) Date of Termination. “Date of Termination” shall mean (i) if Executive’s
employment is terminated by his death, the date of his death, (ii) if
Executive’s employment is terminated due to Disability pursuant to Section 4(b),
thirty (30) days after Notice of Termination (provided that Executive has not
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), (iii) if Executive’s employment is
terminated for Good Reason pursuant to Section 4(d), the date on which a Notice
of Termination provided in accordance with such Section is given or any later
date (within thirty (30) days after the giving of such Notice of Termination)
set forth in such Notice of Termination, or (iv) if Executive’s employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such Notice
of Termination) set forth in such Notice of Termination.

6. Compensation Upon Termination or During Disability. In the event of
Executive’s Disability or termination of his employment under this Agreement
during the Employment Period, the Company will provide Executive with the
payments and benefits set forth below.

(a) Termination by Company Without Cause or by Executive for Good Reason. If
Executive’s employment is terminated by the Company without Cause or by
Executive for Good Reason:

(i) the Company will pay to Executive within thirty (30) days of the Date of
Termination in a single lump sum payment (A) his earned but unpaid Base Salary
and accrued vacation pay through the Date of Termination and (B) an amount equal
to his then Base Salary less all applicable federal and state payroll tax
withholdings (if any);

(ii) the Company will maintain in full force and effect, for the continued
benefit of Executive (and his spouse and/or his dependents, as applicable) for a
period of eighteen (18) months following the Date of Termination, the medical,
hospitalization, and dental programs in which Executive (and his spouse and/or
his dependents, as applicable) participated immediately prior to the Date of
Termination, at the level in effect and upon substantially the same terms and
conditions (including, without limitation, contributions required by Executive
for such benefits) as existed immediately prior to the Date of Termination;
provided, if Executive (or his spouse) is eligible for Medicare or a similar
type of governmental medical benefit, such benefit shall be the primary provider
before Company medical benefits are provided. However, if Executive becomes
reemployed with another employer and is eligible to receive medical,
hospitalization and dental benefits under another employer-provided plan, the
medical, hospitalization and dental benefits described herein shall be secondary
to those provided under such other plan during the applicable period;

(iii) the Company will reimburse Executive, pursuant to the Company’s policy,
for reasonable business expenses incurred, but not paid, prior to the Date of
Termination;

(iv) Executive will be entitled to any other rights, compensation and/or
benefits as may be due to Executive following such termination to which he is
otherwise entitled in accordance with the terms and provisions of any plans or
programs of the Company; and

(v) all unvested stock options issued to Executive pursuant to the Long-Term
Incentive Plan shall vest immediately prior to the Date of Termination and be
exercisable by Executive for one (1) year after the Termination Date.

 

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Provided however, no payment under this Section 6(a) shall be due or payable to
Executive after the Termination Date in the event that Executive shall assert or
claim that any part of this Agreement (including but not limited to Sections 8,
9, or 11) is invalid or unenforceable, in whole or in part.

(b) Termination by Company for Cause or by Executive Without Good Reason. If
Executive’s employment is terminated by the Company for Cause or by Executive
(other than for Good Reason):

(i) the Company will pay Executive his earned but unpaid Base Salary and his
accrued vacation pay (to the extent required by law or the Company’s vacation
policy) through the Date of Termination, within thirty (30) days of the Date of
Termination;

(ii) the Company will reimburse Executive, pursuant to the Company’s policy, for
reasonable business expenses incurred, but not paid, prior to the Date of
Termination, unless such termination resulted from a misappropriation of Company
funds; and

(iii) Executive will be entitled to any other rights, compensation and/or
benefits as may be due to Executive following termination to which he is
otherwise entitled in accordance with the terms and provisions of any plans or
programs of the Company.

(c) Disability. During any period that Executive fails to perform his duties
under this Agreement as a result of incapacity due to physical or mental illness
(“Disability Period”), Executive will continue to receive his full Base Salary
set forth in Section 3(a) until his employment is terminated pursuant to
Section 4(b). In the event Executive’s employment is terminated for Disability
pursuant to Section 4(b):

(i) the Company will (A) pay to Executive his earned but unpaid Base Salary and
accrued vacation pay through the Date of Termination, within thirty (30) days of
the Date of Termination, and (B) provide Executive with disability benefits
pursuant to the terms of the Company’s disability programs and/or practices, if
any;

(ii) the Company will reimburse Executive, pursuant to the Company’s policy, for
reasonable business expenses incurred, but not paid, prior to the Date of
Termination; and

(iii) Executive will be entitled to any other rights, compensation and/or
benefits as may be due to Executive following such termination to which he is
otherwise entitled in accordance with the terms and provisions of any plans or
programs of the Company.

(d) Death. If Executive’s employment is terminated by his death, the Company
will pay in a lump sum to Executive’s beneficiary, or personal or legal
representatives or estate, as the case may be, Executive’s earned but unpaid
Base Salary as of the date of death, accrued vacation and unreimbursed business
expenses and amounts due under any plans, programs or arrangements of the
Company through the Date of Termination.

 

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7. Confidential Information; Non-Solicitation.

(a) Nondisclosure of Confidential Information. Executive acknowledges that it is
the policy of the Company to maintain as secret and confidential (i) all
valuable and unique information, (ii) other information heretofore or hereafter
acquired by the Company, or any affiliated entity and deemed by it to be
confidential, and (iii) information developed or used by the Company or any
affiliated entity relating to the business, operations, employees and customers
of the Company or any affiliated entity including, but not limited to, any
customer lists or employee information (all such information described in
clauses (i), (ii) and (iii) above, other than information which is known to the
public or becomes known to the public through no fault of Executive, is
hereinafter referred to as “Confidential Information”). The parties recognize
that the services to be performed by Executive pursuant to this Agreement are
special and unique and that by reason of his employment by the Company after the
date hereof, Executive has acquired and will acquire Confidential Information.
Executive recognizes that all such Confidential Information is the property of
the Company. Accordingly, at any time during or after the Employment Period,
Executive shall not, except in the proper performance of his duties under this
Agreement, directly or indirectly, without the prior written consent of the
Company, disclose to any Person other than the Company, whether or not such
Person is a competitor of the Company, and shall use his best efforts to prevent
the publication or disclosure of any Confidential Information obtained by, or
which has come to the knowledge of, Executive prior or subsequent to the date
hereof. Notwithstanding the foregoing, Executive may disclose to other Persons,
as part of his occupation, information with respect to the Company or any
affiliated entity, which (i) is of a type generally not considered by standards
of the healthcare industry to be proprietary, or (ii) is otherwise consented to
in writing by the Company.

(b) Non-Solicitation. Executive shall not, during the Employment Period or for
two years following his Date of Termination (the “Covered Period”), either
personally or by or through his agent or by letters, circulars or advertisements
and whether for himself or on behalf of any other person, directly or
indirectly, seek to persuade any employee, contractor, customer, vendor or
subcontractor of the Company, or any affiliated entity or any person who was an
employee, contractor, customer, vendor or subcontractor of the Company or any
affiliated entity during the Covered Period, to discontinue, breach or terminate
his or her employment, contract, or relationship with the Company, or such
affiliated entity or to become employed or engaged in a business or activities
likely to be competitive with the Company, or any affiliated entity.

(c) Obligations of Executive Upon Termination. Upon termination of this
Agreement for any reason, Executive shall return to the Company all documents
and copies of documents in his possession relating to any Confidential
Information including, but not limited to, internal and external business forms,
manuals, correspondence, notes and computer programs, and Executive shall not
make or retain any copy or extract of any of the foregoing. In addition,
Executive shall resign from all positions held with the Company or any
affiliated entities.

(d) Remedies. Executive acknowledges and understands that Sections 7(a), 7(b)
and 7(c) and the other provisions of this Agreement are of a special and unique
nature, the loss of which cannot be adequately compensated for in damages by an
action at law, and that the breach or threatened breach of the provisions of
this Agreement would cause the Company irreparable harm. In the event of a
breach or threatened breach by Executive of the provisions of this Agreement,
the Company shall be entitled to an injunction restraining him from such breach.
Nothing contained in this Agreement shall be construed as prohibiting the
Company from pursuing, or limiting the Company’s ability to pursue, any other
remedies available for any breach or threatened breach of this Agreement by
Executive. The provision of this Agreement relating to arbitration of disputes
shall not be applicable to the Company to the extent it seeks an injunction in
any court to restrain Executive from violating Sections 7(a), 7(b) and 7(c)
hereof.

(e) Continuing Operation. Except as specifically provided in this Section 7, the
termination of Executive’s employment or of this Agreement will have no effect
on the continuing operation of this Section 7.

 

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(f) Additional Related Agreements. Executive agrees to sign and to abide by the
provisions of any additional agreements, policies or requirements of the Company
related to the subject of this Section 7 which are in writing and are developed
by the Company in the ordinary course of business, provided, however, that such
agreements, policies or requirements do not expand the scope and/or limitations
of Section 7.

8. Condition. Executive agrees, if his employment is terminated under
circumstances entitling him to payments under Section 6(a) of this Agreement, as
a condition precedent to the right to receive the payments set forth under
Section 6(a), he will execute a waiver and release, through which Executive
releases the Company and its governing body, from any and all claims which the
Executive has or may have, in a form reasonably acceptable to the Company, other
than as to the right to receive payments as provided in Section 6(a).

9. Indemnification and Insurance. Executive shall be indemnified and held
harmless by the Company during the term of this Agreement and following any
termination of this Agreement for any reason whatsoever in the same manner as
would any other key management employee of the Company with respect to acts or
omissions occurring prior to (a) the termination of this Agreement or (b) the
termination of employment of Executive. In addition, during the term of this
Agreement and for a period of five years following the termination of this
Agreement for any reason whatsoever, Executive shall be covered by a Company
held liability insurance policy, with limits no less than those in force during
the term of this Agreement, covering acts or omissions occurring prior to
(i) the termination of this Agreement or (ii) the termination of employment of
the Executive.

10. Arbitration; Legal Fees and Expenses. The parties agree that Executive’s
employment and this Agreement relate to interstate commerce, and that any
disputes, claims or controversies between Executive and the Company which may
arise out of or relate to Executive’s employment relationship or this Agreement
shall be settled by arbitration. This agreement to arbitrate shall survive the
termination of this Agreement. Any arbitration shall be in accordance with the
Rules of the American Arbitration Association and undertaken pursuant to the
Federal Arbitration Act. Arbitration will be held in Oklahoma City, Oklahoma
unless the parties mutually agree on another location. The decision of the
arbitrator(s) will be enforceable in any court of competent jurisdiction. The
parties agree that punitive, liquidated or indirect damages shall not be awarded
by the arbitrator(s) unless such damages would have been awarded by a court of
competent jurisdiction. Nothing in this agreement to arbitrate, however, shall
preclude the Company from obtaining injunctive relief from a court of competent
jurisdiction prohibiting any ongoing breaches by Executive of this Agreement
including, without limitation, violations of Section 7. If any contest or
dispute arises between the Company and Executive regarding any provision of this
Agreement, the arbitrator shall award to the prevailing party, the reasonable
attorney fees, costs and expenses incurred by the prevailing party in connection
with such contest or dispute.

 

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11. Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered either personally or by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed as follows:

If to Executive:

At his last known address evidenced on the Company’s payroll records.

If to the Company:

Graymark Healthcare, Inc.

210 Park Avenue, Ste. 1350

Oklahoma City, Oklahoma 73102

or to such other address as any party may have furnished to the other in writing
in accordance with this Agreement, except that notices of change of address
shall be effective only upon receipt.

12. Assignment. Neither this Agreement nor any of the parties’ rights or
obligations hereunder can be transferred or assigned without the prior written
consent of the other party to this Agreement, except that this Agreement shall
be assignable to any successor in interest of the Company or any successor in
interest to substantially all of the assets of the Company.

13. Withholding. All payments hereunder will be subject to any required
withholding of federal, state and local taxes pursuant to any applicable law or
regulation.

14. Miscellaneous. No provisions of this Agreement may be amended, modified, or
waived unless agreed to in writing and signed by Executive and by a duly
authorized officer of the Company. No waiver by either party of any breach by
the other party of any condition or provision of this Agreement shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. The respective rights and obligations of the parties
under this Agreement shall survive Executive’s termination of employment and the
termination of this Agreement to the extent necessary for the intended
preservation of such rights and obligations. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Oklahoma without regard to its conflicts of law principles.

15. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, which will remain in full force and effect.

16. Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original but all of which together will
constitute one and the same instrument.

17. Section Headings. The section headings in this Agreement are for convenience
of reference only, and they form no part of this Agreement and will not affect
its interpretation.

18. Entire Agreement. Except as provided elsewhere herein and except for the
other documents and agreements contemplated in accordance herewith, this
Agreement sets forth the entire agreement of the parties with respect to its
subject matter and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party to this
Agreement with respect to such subject matter.

19. Further Assurances. The parties hereby agree, without further consideration,
to execute and deliver such other instruments or to take such other action as
may reasonably be required to effectuate the terms and provisions of this
Agreement.

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IN WITNESS WHEREOF, the parties have executed this Agreement effective the date
first above written.

 

    “COMPANY”     GRAYMARK HEALTHCARE, INC.     By:   /s/ Stanton Nelson      
Stanton Nelson, Chairman and       Chief Executive Officer     “EXECUTIVE”    

/s/ Edward M. Carriero, Jr.

    Edward M. Carriero, Jr.

 

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