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EXHIBIT 4.1

GRAYMARK HEALTHCARE, INC.

2008 LONG-TERM INCENTIVE PLAN




ARTICLE I

PURPOSE




     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.



 









 





ARTICLE II

DEFINITIONS




     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 substitution, such 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 Stock awarded to
Eligible Directors selected for participation. The Compensation Committee shall administer all
other aspects of the Awards made to Eligible Directors.



     SECTION 3.3 Compensation Committee to Make Rules and Interpret Plan. The Compensation
Committee, subject to Board approval, shall have the authority, subject to the



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provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all such
determinations relating to the Plan, as it may deem necessary or advisable for the
administration of the Plan. The Board’s interpretation of the Plan or any Awards and all
decisions and determinations by the Board with respect to the Plan shall be final, binding, and
conclusive on all parties.



     SECTION 3.4 Section 162(m) Provisions. The Company intends for the Plan and the Awards made
thereunder to qualify for the exception from Section 162(m) of the Code and the applicable Treasury
Regulations for “qualified performance based compensation.” Accordingly, the Compensation Committee
shall make determinations as to performance targets and all other applicable provisions of the Plan
as necessary in order for the Plan and Awards made thereunder to satisfy the requirements of
Section 162(m) of the Code and the applicable Treasury Regulations.



ARTICLE IV

GRANT OF AWARDS




     SECTION 4.1 Grant of Awards. Awards granted under the Plan shall be subject to the following
conditions:



     (a) Subject to Article X, the aggregate number of shares of Common Stock made subject to the
grant of Options or Stock Appreciation Rights to any Eligible Employee in any calendar year may not
exceed 500,000.



     (b) Subject to Article X, the aggregate number of shares of Common Stock made subject to the
grant of Restricted Stock Awards and Performance Unit Awards to any Eligible Employee in any
calendar year may not exceed 250,000.



     (c) The maximum amount made subject to the grant of Performance Bonuses to any Eligible
Employee in any calendar year may not exceed $500,000.



     (d) Any shares of Common Stock related to Awards which (i) terminate by expiration,
forfeiture, cancellation or otherwise, (ii) are used or withheld to pay an Award’s exercise price
or withholding taxes, or (iii) are exchanged in the Committee’s discretion for Awards not involving
Common Stock, shall be available again for grant under the Plan and shall not be counted against
the shares authorized under Section 1.3.



     (e) Common Stock delivered by the Company in payment of an Award authorized under Articles V,
VI and IX of the Plan may be authorized and unissued Common Stock or Common Stock held in the
treasury of the Company.



     (f) The Compensation Committee shall, in its sole discretion, determine the manner in which
fractional shares arising under the Plan shall be treated.



     (g) The Compensation Committee shall from time to time establish guidelines for the Regular
Award Committee regarding the grant of Awards to Eligible Employees.



     (h) Separate certificates or a book-entry registration representing Common Stock shall be
delivered to a Participant upon the exercise of any Option.



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     (i) Without the prior written consent of the Participant, the Committee shall be prohibited
from canceling, reissuing or modifying Awards if such action will have the effect of increasing the
exercise price of an Option or otherwise adversely affecting the Participant’s Award to the
detriment of the Participant.



     (j) Eligible Directors may only be granted Nonqualified Stock Options, Stock Appreciation
Rights or Restricted Stock Awards under the Plan.



     (k) Subject to Article X, the aggregate number of shares of Common Stock made subject to the
grant of Options or Stock Appreciation Rights to any individual Eligible Director in any calendar
year may not exceed 100,000.



     (l) Subject to Article X, in no event shall more than 75,000 shares of Restricted Stock be
awarded to any individual Eligible Director in any calendar year.



     (m) The maximum term of any Award shall be ten years.



ARTICLE V

STOCK OPTIONS




     SECTION 5.1 Grant of Options. The Committee may, from time to time, subject to the provisions
of the Plan and such other terms and conditions as the Compensation Committee may determine
(subject to Board approval), grant Options to Eligible Employees. These Options may be Incentive
Stock Options or Nonqualified Stock Options, or a combination of both. The Board may, subject to
the provisions of the Plan and such other terms and conditions as it may determine, grant
Nonqualified Stock Options to Eligible Directors. Each grant of an Option shall be evidenced by an
Award Agreement executed by the Company and the Participant, and shall contain such terms and
conditions and be in such form as the Committee and Board may from time to time approve, subject to
the requirements of Section 5.2.



     SECTION 5.2 Conditions of Options. Each Option so granted shall be subject to the following
conditions:



     (a) Exercise Price. As limited by Section 5.2(e) below, each Option shall state the exercise
price which shall be set by the Committee, subject to the Board’s approval, at the Date of Grant;
provided, however, that no Option shall be granted at an exercise price that is less than the
Closing Sale Price of the Common Stock on the Date of Grant.



     (b) Form of Payment. The exercise price of an Option may be paid (i) in cash or by check,
bank draft or money order payable to the order of the Company; (ii) by delivering Mature Common
Stock Shares having a Fair Market Value on the date of payment equal to the amount of the exercise
price, but only to the extent such exercise of an Option would not result in an adverse accounting
charge to the Company for financial accounting purposes with respect to the shares used to pay the
exercise price unless otherwise determined by the Company’s Audit Committee; or (iii) a combination
of the foregoing as determined by the Committee and as approved by the Board. In addition to the
foregoing, the Committee may permit an Option granted under the Plan to be



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exercised by a broker-dealer acting on behalf of a Participant through procedures approved by
the Committee.



     (c) Exercise of Options. Options granted under the Plan shall be exercisable, in whole or in
such installments and at such times, and shall expire at such time, as shall be provided in the
Award Agreement. Exercise of an Option shall be by notice to the Company’s Corporate Secretary of
such exercise stating the election to exercise in the form and manner determined by the Committee.
Each share of Common Stock acquired through the exercise of an Option shall be deemed to be fully
paid and non-assessable at the time of exercise and payment of the exercise price in full.



     (d) Other Terms and Conditions. Among other conditions that may be imposed by the Committee
and the Board, if deemed appropriate, are those relating to (i) the period or periods and the
conditions of exercisability of any Option; (ii) the minimum periods during which Participants must
be employed by the Company, its Subsidiaries, or an Affiliated Entity, or must hold Options before
they may be exercised; (iii) the minimum periods during which shares acquired upon exercise must be
held before sale or transfer shall be permitted; (iv) conditions under which such Options or shares
may be subject to forfeiture; (v) the frequency of exercise or the minimum or maximum number of
shares that may be acquired at any one time; (vi) the achievement by the Company of specified
performance criteria; and (vii) non-compete and protection of business matters.



     (e) Special Restrictions Relating to Incentive Stock Options. Options issued in the form of
Incentive Stock Options shall only be granted to Eligible Employees of the Company or a Subsidiary,
and not to Eligible Employees of an Affiliated Entity unless such entity shall be considered as a
“disregarded entity” under the Code and shall not be distinguished for federal tax purposes from
the Company or the applicable Subsidiary.



     (f) Application of Funds. The proceeds received by the Company from the sale of Common Stock
pursuant to Options will be used for general corporate purposes.



     (g) Shareholder Rights. No Participant shall have a right as a shareholder with respect to
any share of Common Stock subject to an Option prior to purchase of such shares of Common Stock by
exercise of the Option.



ARTICLE VI

RESTRICTED STOCK AWARDS




     SECTION 6.1 Grant of Restricted Stock Awards. The Committee may, from time to time, subject
to the provisions of the Plan and such other terms and conditions as it may determine, grant a
Restricted Stock Award to any Eligible Employee. Restricted Stock Awards shall be awarded in such
number and at such times during the term of the Plan as the Committee shall determine. The Board
may, from time to time, subject to the provisions of the Plan and such other terms and conditions
as it may determine, grant a Restricted Stock Award to an Eligible Director. Each Restricted Stock
Award may be evidenced in such manner as the Committee and Board deems appropriate, including,
without limitation, a book-entry registration or issuance of a stock certificate or certificates,
and by an Award Agreement setting forth the terms of such Restricted Stock Award.



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     SECTION 6.2 Conditions of Restricted Stock Awards. The grant of a Restricted Stock Award
shall be subject to the following:



     (a) Restriction Period. Each Restricted Stock Award may require the holder to remain in the
employment of the Company, a Subsidiary, or an Affiliated Entity or continue to serve as an
Eligible Director for a prescribed period (a “Restriction Period”). The Committee and Board shall
determine the Restriction Period or Periods, if any, that shall apply to the shares of Common Stock
covered by each Restricted Stock Award or portion thereof. In addition to any time vesting
conditions determined by the Committee and Board, Restricted Stock Awards may be subject to the
achievement by the Company of specified performance criteria based upon the Company’s achievement
of operational, financial or stock performance criteria more specifically listed in Exhibit A
attached, as established by the Committee and Board. At the end of the Restriction Period,
assuming the fulfillment of any other specified vesting conditions, the restrictions imposed by the
Committee and Board shall lapse with respect to the shares of Common Stock covered by the
Restricted Stock Award or portion thereof.



     (b) Restrictions. The holder of a Restricted Stock Award may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of the shares of Common Stock represented by the
Restricted Stock Award during the applicable Restriction Period. The Committee and Board shall
impose such other restrictions and conditions on any shares of Common Stock covered by a Restricted
Stock Award as the Committee and Board may deem advisable including, without limitation,
restrictions under applicable feceral or state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.



     (c) Rights as Shareholders. During any Restriction Period, the Committee and Board may, in
their discretion, grant to the holder of a Restricted Stock Award all or any of the rights of a
shareholder with respect to the shares, including without limitation the right to vote such shares
and to receive dividends. If any dividends or other distributions are paid in shares of Common
Stock, all such shares shall be subject to the same restrictions on transferability, vesting and
forfeiture as the shares of Restricted Stock with respect to which the dividends or other
distributions are paid.



ARTICLE VII

PERFORMANCE UNITS




     SECTION 7.1 Grant of Awards. The Compensation Committee, subject to Board approval, may, from
time to time, subject to the provisions of the Plan and such other terms and conditions as it may
determine, grant Performance Units to Eligible Employees. Each Award of Performance Units shall be
evidenced by an Award Agreement executed by the Company and Eligible Employee, and shall contain
such terms and conditions and be in such form as the Committee may from time to time approve,
subject to the requirements of Section 7.2.



     SECTION 7.2 Conditions of Awards. Each Award of Performance Units shall be subject to the
terms and conditions established by the Compensation Committee and approved by the Board. Among
other conditions that may be imposed by the Committee, if deemed appropriate, are those relating to
(i) the minimum periods during which Participants must be employed by the Company, its
Subsidiaries, or an Affiliated Entity; (ii) conditions under which the Performance Units may be
subject
to forfeiture; (iii) the achievement by the Company of specified performance criteria; and



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(iv) non-compete and protection of business matters. The performance targets established for each
Award shall be for a period of no less than a year based upon some or all of the performance
criteria listed in Exhibit A attached. The Committee and Board shall also establish such other
terms and conditions as it deems appropriate to such Award. The Award may be paid out in cash or
Common Stock as determined in the sole discretion of the Committee, subject to Board approval.



ARTICLE VIII

PERFORMANCE BONUS




     SECTION 8.1 Grant of Performance Bonus. The Compensation Committee may from time to time,
subject to the provisions of the Plan and such other terms and conditions as the Committee may
determine, grant a Performance Bonus to certain Eligible Employees selected for participation. The
Compensation Committee, subject to Board approval, will determine the amount that may be earned as
a Performance Bonus in any period of one year or more upon the achievement of the established
performance target. The Compensation Committee, subject to Board approval, shall select the
applicable performance target for each period in which a performance bonus is awarded. The
performance target shall be based upon all or some of the operational, financial or performance
criteria more specifically listed in Exhibit A attached.



     SECTION 8.2 Payment of Performance Bonus. In order for a Participant to be entitled to
payment of a Performance Bonus, the applicable performance target must first be obtained. Payment
of a Performance Bonus shall be made within 60 days of the Board’s certification that the
performance target has been achieved unless the Participant has previously elected to defer payment
pursuant to a nonqualified deferred compensation plan adopted by the Company. Payment of a
Performance Bonus may be made in either cash or Common Stock as determined in the sole discretion
of the Committee and the Board.



ARTICLE IX

STOCK APPRECIATION RIGHTS




     SECTION 9.1 Grant of SARs. The Committee, subject to Board and the Company’s Audit Committee
prior approval, may from time to time, subject to the provisions of the Plan and subject to other
terms and conditions as the Committee, Board and the Company’s Audit Committee may determine, grant
a Stock Appreciation Right (“SAR”) to any Eligible Employee or Eligible Director. Any SAR granted
under this Article IX shall be deemed to be an “Award” under the Plan as such term is defined in
Section 2.3. SARs may be granted as an independent Award separate from an Option or granted in
tandem with an Option, subject to the limitations of Section 9.3. Each grant of a SAR shall be
evidenced by an Award Agreement executed by the Company and the Participant and shall contain such
terms and conditions and be in such form as the Committee and Board may from time to time approve,
subject to the requirements of the Plan. The exercise price of the SAR shall not be less than the
Closing Sale Price of a share of Common Stock on the Date of Grant of the SAR.



     SECTION 9.2 Exercise and Payment. SARs granted under the Plan shall be exercisable in whole
or in installments and at such times as shall be provided by the Committee in the Award
Agreement. The amount payable with respect to each SAR shall be equal in value to the excess,
if any, of the Fair Market Value of a share of Common Stock on the exercise date over the exercise



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price of the SAR. Payment of amounts attributable to a SAR shall be made in shares of Common Stock
each share having a value equal to based Closing Sale Price on the exercise date or cash as
established by the Committee in the Award Agreement.



     SECTION 9.3 Tandem Awards. SARs may be granted in tandem with an Option, in which event, the
Participant has the right to elect to exercise either the SAR or the Option. Upon the
Participant’s election to exercise one of these Awards, the other tandem award is automatically
terminated. In the event a SAR is granted in tandem with an Incentive Stock Option, the Committee
shall subject the SAR to restrictions necessary to ensure satisfaction of the requirements under
Section 422 of the Code.



ARTICLE X

STOCK ADJUSTMENTS




     SECTION 10.1 Stock Adjustments. In the event that the shares of Common Stock, as constituted
on the effective date of the Plan, shall be changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or of another corporation (whether by
reason of merger, consolidation, recapitalization, reclassification, stock split, combination of
shares or otherwise), or if the number of such shares of Common Stock shall be increased through
the payment of a stock dividend, or if rights or warrants to purchase securities of the Company
shall be issued to holders of all outstanding Common Stock, then there shall be substituted for or
added to each share available under and subject to the Plan, and each share theretofore
appropriated under the Plan, the number and kind of shares of stock or other securities into which
each outstanding share of Common Stock shall be so changed or for which each such share shall be
exchanged or to which each such share shall be entitled, as the case may be, on a fair and
equivalent basis in accordance with the applicable provisions of Section 424 of the Code; provided,
however, with respect to Options, in no such event will such adjustment result in a modification of
any Option as defined in Section 424(h) of the Code. In the event there shall be any other change
in the number or kind of the outstanding shares of Common Stock, or any stock or other securities
into which the Common Stock shall have been changed or for which it shall have been exchanged, then
if the Committee shall, in its sole discretion, determine that such change equitably requires an
adjustment in the shares available under and subject to the Plan, or in any Award, theretofore
granted, such adjustments shall be made in accordance with such determination, except that no
adjustment of the number of shares of Common Stock available under the Plan or to which any Award
relates that would otherwise be required shall be made unless and until such adjustment either by
itself or with other adjustments not previously made would require an increase or decrease of at
least 1% in the number of shares of Common Stock available under the Plan or to which any Award
relates immediately prior to the making of such adjustment (the “Minimum Adjustment”). Any
adjustment representing a change of less than such minimum amount shall be carried forward and made
as soon as such adjustment together with other adjustments required by this Article X and not
previously made would result in a Minimum Adjustment. Notwithstanding the foregoing, any
adjustment required by this Article X which otherwise would not result in a Minimum Adjustment
shall be made with respect to shares of Common Stock relating to any Award immediately prior to
exercise, payment or settlement of such Award. No fractional shares of Common Stock or units of
other securities shall be issued pursuant to
any such adjustment, and any



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fractions resulting from any such adjustment shall be eliminated
in each case by rounding downward to the nearest whole share or unit.



ARTICLE XI

GENERAL




     SECTION 11.1 Amendment or Termination of Plan. The Board may alter, suspend or terminate the
Plan at any time. In addition, the Board may, from time to time, amend the Plan in any manner, but
may not without shareholder approval adopt any amendment which would (i) increase the aggregate
number of shares of Common Stock available under the Plan (except by operation of Article X), (ii)
materially modify the requirements as to eligibility for participation in the Plan, or (iii)
materially increase the benefits to Participants provided by the Plan.



     SECTION 11.2 Termination of Employment; Termination of Service. If a Participant’s employment
with the Company, a Subsidiary, or an Affiliated Entity terminates for a reason other than death,
disability, retirement, or any approved reason, all unexercised, unearned, and/or unpaid Awards,
including, but not by way of limitation, Awards earned, but not yet paid, all unpaid dividends and
dividend equivalents, and all interest, if any, accrued on the foregoing shall be cancelled or
forfeited, as the case may be, unless the Participant’s Award Agreement provides otherwise. The
Compensation Committee, subject to approval by the Board, shall (i) determine what events
constitute disability, retirement, or termination for an approved reason for purposes of the Plan,
and (ii) determine the treatment of a Participant under the Plan in the event of his death,
disability, retirement, or termination for an approved reason. The Committee shall also determine
the method, if any, for accelerating the vesting or exercisability of any Awards, or providing for
the exercise of any unexercised Awards in the event of a Participant’s death, disability,
retirement, or termination for an approved reason.



     In the event an Eligible Director terminates service as a director of the Company, the
unvested portion of any Award shall be forfeited unless otherwise accelerated pursuant to the terms
of the Eligible Director’s Award Agreement or by the Board. The Eligible Director shall have the
remaining term following the date he ceases to be a director to exercise any Nonqualified Stock
Options or Stock Appreciation Rights that are otherwise exercisable on his or her date of
termination of service.



     SECTION 11.3 Transferability of Awards. The Award may be exercised during the lifetime of the
Participant only by the Participant. More particularly (but without limiting the generality of the
foregoing), the Award shall not be assigned, transferred (except as provided above), pledged or
hypothecated in any way whatsoever, shall not be assigned by operation of law, and shall not be
subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge
hypothecation, or other disposition of the award contrary to the provisions hereof, shall be null
and void and without effect. However, in the event of a Participant’s death, the Award may be
transferred in accordance with the provisions of a Participant’s will, the applicable laws of
descent and distribution or, with respect to Awards other than Incentive Stock Options, a
beneficiary designation that is in a form approved by the Committee and in compliance with the
provisions of the Plan and the applicable Award Agreement. Notwithstanding the foregoing, subject
to the prior written approval of the Board, a Participant may transfer and assign Nonqualified
Stock Options,
Restrictive Stock Awards, Performance Units (unless consisting in part of Incentive Stock
Options),



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Performance Bonuses (unless consisting in part of Incentive Stock Options)s and Stock
Appreciation Rights (unless consisting in part of Incentive Stock Options) (i) to any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of Participant,
include adoptive relationships or (ii) an individual retirement account maintained for the benefit
of the Participant.



     SECTION 11.4 Withholding Taxes. Unless otherwise paid by the Participant, the Company, its
Subsidiaries or any of its Affiliated Entities shall be entitled to deduct from any payment or
share deliver under the Plan, regardless of the form of such payment, the amount of all applicable
income and employment taxes required by law to be withheld with respect to such payment or share
deliver, or may require the Participant to pay to it such tax prior to and as a condition of the
making of such payment or share deliver. In accordance with any applicable administrative
guidelines it establishes, the Committee may allow a Participant to pay the amount of taxes
required by law to be withheld from an Award by (i) directing the Company to withhold from any
payment of the Award a number of shares of Common Stock each share having a value equal to the
Closing Sale Price on the date of payment equal to the amount of the required withholding taxes or
(ii) delivering to the Company previously owned shares of Common Stock each share having a value
equal to the Closing Sale Price on the date of payment equal to the amount of the required
withholding taxes. However, any payment made by the Participant pursuant to either of the
foregoing clauses (i) or (ii) shall not be permitted if it would result in an adverse accounting
charge with respect to such shares used to pay such taxes unless otherwise approved by the
Company’s Audit Committee.



     SECTION 11.5 Change of Control. Notwithstanding any other provision in the Plan to the
contrary, Awards granted under the Plan to any Eligible Employee or Eligible Director may, in the
discretion of the Committee, provide in the Award Agreement that such Awards shall be immediately
vested, fully earned and exercisable upon the occurrence of a Change of Control.



     SECTION 11.6 Amendments to Awards. Subject to the limitations of Article IV, the Committee
and Board may at any time unilaterally amend the terms of any Award Agreement, whether or not then
exercisable or vested, to the extent it deems appropriate. However, amendments which are adverse
to the Participant shall require the Participant’s consent.



     SECTION 11.7 Regulatory Approval and Listings. The Company shall use its best efforts to file
with the Securities and Exchange Commission as soon as practicable following approval by the
shareholders of the Company of the Plan as provided in Section 1.2 of the Plan, and keep
continuously effectively, a Registration Statement on Form S-8 with respect to shares of Common
Stock subject to Awards. Notwithstanding anything contained in the Plan to the contrary, the
Company shall have no obligation to issue shares of Common Stock under the Plan prior to:



     (a) the obtaining of any approval from, or satisfaction of any waiting period or other
condition imposed by, any governmental agency which the Committee shall, in its sole discretion,
determine to be necessary or advisable;



     (b) the admission of such shares to listing on the stock exchange on which the Common Stock
may be listed; and



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     (c) the completion of any registration or other qualification of such shares under any state
or federal law, regulation or ruling of any governmental body which the Committee shall, in its
sole discretion, determine to be necessary or advisable.



     SECTION 11.8 Right to Continued Employment. Participation in the Plan shall not give any
Eligible Employee any right to remain in the employ of the Company, any Subsidiary, or any
Affiliated Entity. The Company or, in the case of employment with a Subsidiary or an Affiliated
Entity, the Subsidiary or Affiliated Entity reserves the right to terminate any Eligible Employee
at any time. Further, the adoption of the Plan shall not be deemed to give any Eligible Employee
or any other individual any right to be selected as a Participant or to be granted an Award.



     SECTION 11.9 Beneficiary Designation. In the event of the death of a Participant, the portion
of the Participant’s Award with respect to which vesting dates have occurred shall be paid to the
then surviving beneficiary designated by the Participant, and if there is no beneficiary then
surviving or designated, then such benefits will automatically be paid to the estate of the
Participant.



     SECTION 11.10 Reliance on Reports. Each member of the Committee and each member of the Board
shall be fully justified in relying or acting in good faith upon any report made by the independent
public accountants of the Company and its Subsidiaries and upon any other information furnished in
connection with the Plan by any person or persons other than himself or herself. In no event shall
any person who is or shall have been a member of the Committee or of the Board be liable for any
determination made or other action taken or any omission to act in reliance upon any such report or
information or for any action taken, including the furnishing of information, or failure to act, if
in good faith.



     SECTION 11.11 Construction. Masculine pronouns and other words of masculine gender shall
refer to both men and women. The titles and headings of the sections in the Plan are for the
convenience of reference only, and in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.



     SECTION 11.12 Governing Law. The Plan shall be governed by and construed in accordance with
the laws of the State of Oklahoma except as superseded or preempted by applicable federal law.



     SECTION 11.13 Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Participant or
Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to the applicable laws, or if it
cannot be construed or deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Participant or Award and the remainder of the Plan and any such Award shall remain in
full force and effect.



     SECTION 11.14 Other Laws. The Board may refuse to issue or transfer any shares of Common
Stock or other consideration under an Award if, acting in its sole discretion, it determines that
the issuance or transfer of such shares or such other consideration might violate any applicable
law or regulation or entitle the Company to recover from the Participant the shares or any gain or



16









 







profit attributable to those shares under Section 16(b) of the Exchange Act, and any payment
tendered to the Company by a Participant, other holder or beneficiary in connection with the
exercise of such Award shall be promptly refunded to the applicable Participant, holder or
beneficiary.



     SECTION 11.15 No Trust or Fund Created. Neither the Plan nor an Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company and a Participant or any other person. To the extent that a Participant acquires the right
to receive payments from the Company pursuant to an Award, such right shall be no greater than the
right of any general unsecured creditor of the Company.




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EXHIBIT A




Graymark Healthcare, Inc.

2008 Long-Term Incentive Plan

Performance Criteria





	•	 	Earnings (Net income, Earnings before interest, taxes, depreciation and amortization (“EBITDA”),
Earnings per share)
	 
	•	 	Cash flow
	 
	•	 	Operating income
	 
	•	 	Debt to equity ratio
	 
	•	 	Debt to cash flow
	 
	•	 	Debt to EBITDA
	 
	•	 	EBITDA to Interest
	 
	•	 	Return on Assets
	 
	•	 	Return on Equity
	 
	•	 	Return on Invested Capital
	 
	•	 	Profit returns/margins
	 
	•	 	Stock price appreciation
	 
	•	 	Total shareholder return
	 
	•	 	Relative stock price performance






18