Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LCA-VISION INC.
(Exact name of issuer as specified in its Charter)
Delaware 11-2882328
(State of Incorporation) (I.R.S. Employer Identification No.)
7840 Montgomery Road, Cincinnati, Ohio 45236
(Address of Principal Executive Offices) (Zip Code)
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LCA-VISION INC.
1995 LONG-TERM STOCK INCENTIVE PLAN
and
LCA-VISION INC.
DIRECTORS' NONDISCRETIONARY STOCK OPTION PLAN
(Full Titles of the Plans)
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Stephen N. Joffe, President
LCA-Vision Inc.
7840 Montgomery Road
Cincinnati, Ohio 45236
(513) 792-9292
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy To:
Charles F. Hertlein, Jr., Esq.
Dinsmore & Shohl
1900 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
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CALCULATION OF REGISTRATION FEE
Proposed
Title of Maximum
Securities Amount Offering Proposed
to be to be Price Maximum Amount of
Registered Registered Per Share Offering Price Registration fee
Common Stock, 3,750,000 $4.75 $17,812,500* $6,142.00
.001 par value
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Approximate date of proposed commencement of sales hereunder:
As soon as practicable after the effective date of this Registration
Statement
* Based pursuant to Rule 457(c) and 457(f)(1), on the average of the
high and low prices of the common stock of LCA-Vision Inc. on the
Nasdaq SmallCap Market July 1, 1996, a date within 5 days of the
date on which this Registration Statement is filed.<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information specified in Part I of Form S-8 is set forth in a
single document, entitled "Prospectus," which constitutes a part of
the Section 10(a) Prospectus to which this Registration Statement
relates but which is not filed herewith.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
LCA-Vision Inc. (the "Registrant") hereby states that the documents
listed in (a) through (c) below are incorporated by reference in
this Registration Statement, and further states that all documents
subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to
the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated
by reference in this Registration Statement and to be a part hereof
from the date of filing such documents.
(a) Exhibit 13, 1995 Annual Report to Stockholders, contained in
the Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Securities and Exchange Act since December 31, 1995.
(c) The description of the Registrant's Common Stock contained in
the Registration Statement on Form 10-SB filed pursuant to Section
12(g) of the Securities Exchange Act of 1934, which Registration
Statement became effective on January 25, 1995.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Common Stock offered hereby will be
passed upon for the Registrant by Dinsmore & Shohl, Cincinnati,
Ohio. As of May 31, 1996, partners of Dinsmore & Shohl and
attorneys employed thereby, together with their immediate families
beneficially owned approximately 1,000 shares of the Registrant's
Common Stock and held no options to purchase additional shares of
Common Stock.
The financial statements of the Registrant as of December 31, 1995
and 1994, and for each of the years in the two-year period ended
December 31, 1995, incorporated by reference in this Registration
Statement from the Registrant's Annual Report on Form 10-KSB, have
been incorporated by reference herein in reliance upon the report of
Coopers & Lybrand L.L.P., independent certified public accountants,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers.
The Registrant's amended bylaws provide, subject to the Registrant's
certificate of incorporation, that the Registrant shall indemnify
each director, officer, employee or agent of the Registrant to the
full extent permitted by the General Corporation Law of Delaware.
The certificate of incorporation of the Registrant provides that the
Registrant shall, to the full extent permitted by Section 145 of the
Delaware General Corporation Law, indemnify all persons whom it may
indemnify pursuant thereto.
In general, under Section 145 of the General Corporation Law of
Delaware, a Delaware corporation is permitted to indemnify its
present or former officers, directors, employees and agents against
liabilities and expenses incurred by such persons in their
capacities as such so long as they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification may be
made in respect of any claim, issue or matter to which a person is
adjudged liable to the corporation unless the court in which the
action was brought determines, upon application, that such person is
entitled to indemnity. Any indemnification provided for by law may
be made by a corporation upon a determination by (a) a majority vote
of a quorum of directors who are not parties to such suit or action,
(b) independent legal counsel, if no quorum of directors who are not
parties to the suit or action is available or (c) the stockholders
that the person seeking indemnification has met the applicable
statutory standard of conduct. The statute also provides that a
Delaware corporation may advance attorneys' fees incurred by
directors and officers, employees, agents and others prior to the
final outcome of a matter.
In addition, the Registrant has purchased insurance policies which
provide coverage for the acts and omissions of the Registrant's
directors and officers in certain situations.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Exhibit No. Description
5, 23 (a) Opinion of Dinsmore & Shohl as to the legality of
the securities being registered.
4(a)(i) LCA-Vision Inc. 1995 Long-Term Stock Incentive Plan
4(a)(ii) LCA-Vision Inc. Directors' Nondiscretionary Stock
Option Plan
23(b) Consent of Coopers & Lybrand L.L.P., independent
certified public accountants
24 Power of Attorney*
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* Contained herein on the signature page
Item 9. Undertakings.
A. The undersigned registrant hereby undertakes:
i. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
ii. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
iii. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefor, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.<PAGE>
1995 Long-Term Stock Incentive Plan
Directors' Nondiscretionary Stock Option Plan
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cincinnati,
State of Ohio on July 2, 1996.
LCA-Vision Inc.
By: /s/ Stephen N. Joffe
Stephen N. Joffe, President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Stephen N. Joffe, as
his true and lawful attorney-in-fact and agent, with full power of
substitution, to sign and execute on behalf of the undersigned any
amendment or amendments to this Registration Statement on Form S-8,
and to perform any acts necessary to be done in order to file such
amendment with exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission, and each of
the undersigned does hereby ratify and confirm all that said
attorney-in-fact and agent, or his substitutes, shall do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
Signature Title Date
/s/ Stephen N. Joffe President (Principal July 2, 1996
Stephen N. Joffe Executive Officer);
Director
/s/ Larry P. Rapp Chief Financial Officer July 2, 1996
Larry P. Rapp (Principal Financial
and Accounting Officer)
Directors: Date
/s/ John C. Hassan July 2, 1996
John C. Hassan
/s/ Craig P.R. Joffe July 2, 1996
Craig P.R. Joffe
/s/ Sandra F.W. Joffe July 2, 1996
Sandra F.W. Joffe
/s/ David M. Schneider July 2, 1996
David M. Schneider
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Page
5, 23.1 Opinion of Dinsmore & Shohl as to
the legality of the securities being
registered.
4.1 LCA-Vision Inc. 1995 Long-Term Stock
Incentive Plan
4.2 LCA-Vision Inc. Directors' Nondiscretionary
Stock Option Plan
23.2 Consent of Coopers & Lybrand L.L.P.,
independent certified public accountants
24 Power of Attorney *
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* Contained herein on the signature page
<PAGE>
Exhibit 5, 23.1
(513) 977-8315
Charles F. Hertlein, Jr.
July 3, 1996
LCA-Vision Inc.
7840 Montgomery Road
Cincinnati, Ohio 45236
Ladies and Gentlemen:
This opinion is rendered for use in connection with the Registration
Statement on Form S-8, prescribed pursuant to the Securities Act of
1933, to be filed by LCA-Vision Inc. (the "Company") with the
Securities and Exchange Commission on July 3, 1996, under which up
to 3,750,000 shares of the Company's Common Stock without par value
("Common Stock") are to be registered.
We hereby consent to the filing of this opinion as Exhibit 5 and
23.1 to the Registration Statement and to the reference to our name
in the Registration Statement.
As counsel to the Company, we have examined and are familiar with
originals or copies, certified or otherwise identified to our
satisfaction, of such statutes, documents, corporate records,
certificates of public officials, and other instruments as we have
deemed necessary for the purpose of this opinion, including the
Company's Amended Articles of Incorporated and Amended Code of
Regulations and the record of proceedings of the shareholders and
directors of the Company.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing
and in good standing as the corporation under the laws of the State
of Delaware.
2. When the Registration Statement shall have been declared
effective by order of the Securities and Exchange Commission and up
to 3,750,000 shares of the Common Stock to be issued for sale shall
have been issued and sold upon the terms set forth in the
Registration Statement, such shares will be legally and validly
issued and outstanding, fully-paid and nonassessable.
Very truly yours,
DINSMORE & SHOHL
Charles F. Hertlein, Jr.<PAGE>
Exhibit 4.1
LCA-VISION INC.
1995 LONG-TERM STOCK INCENTIVE PLAN
(Amended as of June 5, 1996)
1. Purposes: The purposes of this Plan are (a) to secure for the
Company the benefits of incentives inherent in ownership of Common
Stock by Eligible Employees, (b) to encourage Eligible Employees to
increase their interest in the future growth and prosperity of the
Company and to stimulate and sustain constructive and imaginative
thinking by Eligible Employees, (c) to further the identity of
interest of those who hold positions of major responsibility in the
Company and its Subsidiaries with the interests of the Company's
stockholders, (d) to induce the employment or continued employment
of Eligible Employees and (e) to enable the Company to compete with
other organizations offering similar or other incentives in
obtaining and retaining the services of competent employees.
2. Definitions: Unless otherwise required by the context, the
following terms when used in this Plan shall have the meanings set
forth in this section 2.
Board of Directors: The Board of Directors of the Company.
Change of Control: The event which shall be deemed to have occurred
if either (i) after the date this Plan is adopted by the Company's
stockholders, without prior approval of the Board, any "person"
becomes a beneficial owner, directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of
the Company's then outstanding securities; or (ii) without prior
approval of the Board, as a result of, or in connection with, or
within two years following, a tender or exchange offer for the
voting stock of the Company, a merger or other business combination
to which the Company is a party, the sale or other disposition of
all or substantially all of the assets of the Company, a
reorganization of the Company, or a proxy contest in connection with
the election of members of the Board of Directors, the persons who
were directors of the Company immediately prior to any of such
transactions cease to constitute a majority of the Board of
Directors or of the board of directors of any successor to the
Company (except for resignations due to death, disability or normal
retirement). For purposes of this definition, a person shall be
deemed the "beneficial owner" of any securities (i) which such
person or any of its Affiliates or Associates beneficially owns,
directly or indirectly; or (ii) which such person or any of its
Affiliates or Associates, has directly or indirectly, (1) the right
to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (2) the right to vote
pursuant to any agreement, arrangement or understanding; or (iii)
which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any securities. For
purposes of this definition, a "person" shall mean any individual,
firm, company, partnership, other entity or group, and the terms
"Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as in effect on the date
the Plan is approved by the stockholders of the Company and becomes
effective.
Committee: The Committee of the Board of Directors designated to
administer this Plan pursuant to the provisions of section 12.
Common Stock: The Common Stock of the Company, par value $.001 per
share.
Company: LCA-Vision Inc., a Delaware corporation.
Eligible Employee: An employee or consultant of the Company or of
a Subsidiary who in the opinion of the Committee can contribute
significantly to the growth and successful operations of the Company
or a Subsidiary. The recommendation of the grant of a Stock
Incentive to an employee or consultant by the Committee shall be
deemed a determination by the Committee that such employee or
consultant is an Eligible Employee. As used herein, "consultant"
means an independent contractor performing services for the Company
which the Committee believes are material to the Company's business
and/or business prospects. For the purposes of this Plan,
references to employment of an Eligible Employee shall include the
period of retention of a consultant by the Company in cases where an
Eligible Employee is a consultant.
Fair Market Value: As applied to any date, the mean of the highest
bid and the lowest asked prices of a share of Common Stock on the
Nasdaq SmallCap Market, Nasdaq National Market System or any
exchange on which the Company's Common Stock may be listed in the
future for the trading date immediately prior to the date for which
the valuation is to be effective; provided, however, that, if the
Common Stock is not so quoted, Fair Market Value shall be determined
in accordance with the method approved by the Board of Directors,
and, provided further, if any of the foregoing methods of
determining Fair Market Value shall not be consistent with the
regulations of the Secretary of the Treasury or his delegate at the
time applicable to a Stock Incentive of the type involved, Fair
Market Value in the case of such Stock Incentive shall be determined
in accordance with such regulations and shall mean the value as so
determined.
Incentive Compensation: Bonuses, extra and other compensation
payable in addition to a salary or other base amount, whether
contingent or discretionary or required to be paid pursuant to an
agreement, resolution or arrangement, and whether payable currently,
or on a deferred basis, in cash, Common Stock or other property,
awarded by the Company or a Subsidiary prior or subsequent to the
date of the approval and adoption of this Plan by the stockholders
of the Company.
Incentive Option: An option granted under this Plan which is
designated to be an incentive stock option under the provisions of
Section 422 of the Internal Revenue Code of 1986, as amended; and
any provisions elsewhere in this Plan or in any such Incentive
Option which would prevent such option from being an incentive stock
option may be deleted and/or voided retroactively to the date of the
granting of such option, by action of the Committee.
Nonqualified Option: An option granted under this Plan which is not
an incentive stock option under the provisions of Section 422 of the
Internal Revenue Code of 1986, as amended; and which is exercisable
even though there is outstanding an Incentive Option which was
granted before the granting of the Nonqualified Option to the same
participant. Such Nonqualified Option shall not be affected by any
actions taken retroactively as provided above with respect to
Incentive Options.
Option: An option to purchase shares of Common Stock.
Performance Objectives: Stated criteria which may, but need not be
set forth in a Stock Incentive at the discretion of the Committee,
the successful attainment of which is specified in the Stock
Incentive as a condition precedent to the issuance, transfer or
retention of some or all of the shares of Common Stock covered by
the Stock Incentive. Performance Objectives may be personal and/or
corporate in nature and shall include, but shall not be limited to,
objectives determined by reference to or changes in (a) the Fair
Market Value, book value or earnings per share of Common Stock, or
(b) sales and revenues, income, profits and losses, return on
capital employed, or net worth of the Company (on a consolidated or
unconsolidated basis) or of any or more of its groups, divisions,
Subsidiaries or departments, or (c) a combination of two or more of
the foregoing or other factors.
Plan: The LCA-Vision Inc. 1995 Long-Term Stock Incentive Plan
herein set forth as the same may from time to time be amended.
Stock Appreciation Right (SAR): A right to receive cash, shares of
Common Stock, or a combination thereof, as the case may be, having
an aggregate value equal to the excess of the Fair Market Value of
one share of Common Stock on the date of exercise of such right over
the Fair Market Value of one such share on the date of grant of such
right.
Stock Award: An issuance or transfer of shares of Common Stock at
the time the Stock Incentive is granted or as soon thereafter as
practicable, or an undertaking to issue or transfer such shares in
the future.
Stock Incentive: A stock incentive granted under this Plan in one
of the forms provided for in section 3.
Subsidiary: A company or other entity designated by the Committee
in which the Company has a significant equity interest, except that,
with respect to grants of Incentive Options, the term "Subsidiary"
shall be deemed to mean a company or other form of business
association of which shares (or other ownership interests) having
50% or more of the voting power are owned or controlled, directly or
indirectly, by the Company.
3. Grants of Stock Incentives:
(a) Subject to the provisions of this Plan, the Committee may at any
time, or from time to time, grant Stock Incentives under this Plan
to, and only to, Eligible Employees.
(b) Stock Incentives may be granted in the following forms:
(i) an Option, or
(ii) a SAR, or
(iii) a Stock Award, or
(iv) a combination of an Option, a SAR, and/or a Stock Award.
(c) Stock Incentives contingently granted prior to the approval of
this Plan by the Company's stockholders but subject to such approval
shall be deemed to be granted hereunder as of the date of such
stockholder approval.
4. Stock Subject to this Plan:
The maximum aggregate number of shares of Common Stock subject to
Stock Incentives that may be granted to participants in the Plan
shall be 2,500,000. Shares of Common Stock subject to Stock
Incentives granted under this Plan may be either authorized but
unissued shares or shares held in the Company's treasury, or any
combination thereof, in the discretion of the Committee.
(a) The initial maximum amount of Common Stock with respect to which
Stock Incentives may be granted to any person shall be 500,000
shares and, thereafter, the maximum amount of Common Stock with
respect to which Stock Incentives may be granted to any person
during any calendar year shall be 250,000 shares.
(b) The number of shares of Common Stock which may be granted under
the Plan as Stock Awards in any calendar year shall not exceed
1,250,000.
5. Options: Stock Incentives in the form of Options shall be
subject to the following provisions:
(a) Upon the exercise of an Option, the purchase price shall be paid
in cash or, unless otherwise provided by the Committee (and subject
to such terms and conditions as are specified in the Option or by
the Committee), in shares of Common Stock delivered to the Company
by the optionee or by the withholding of shares issuable upon
exercise of the Option or in a combination of such payment methods.
Shares of Common Stock thus delivered or withheld shall be valued at
their Fair Market Value on the date of the exercise. The purchase
price per share shall be not less than 100% of the Fair Market Value
of a share of Common Stock on the date the Option is granted.
(b) Each Option shall be exercisable in one or more installments at
such time or times as the Committee shall determine. Unless
otherwise provided in the Option, an Option, to the extent it is or
becomes exercisable, may be exercised at any time in whole or in
part until the expiration or termination of the Option. Any term or
provision in any outstanding Option specifying that the Option not
be immediately exercisable or that it be exercisable in installments
may be modified at any time during the life of the Option by the
Committee, provided, however, no such modifications of an
outstanding Option shall, without the consent of the optionee,
adversely affect any Option theretofore granted to the optionee.
(c) Each Option shall be exercisable during the life of the optionee
only by the optionee and, after the optionee's death, only by the
optionee's estate or by a person who acquired the right to exercise
the Option by will or the laws of descent and distribution. An
Option, to the extent that it shall not have been exercised, shall
terminate at the close of business on the thirtieth day following
the date the optionee ceases to be an employee of the Company or a
Subsidiary, unless the optionee ceases to be an employee because of
resignation with the consent of the Committee (which consent may be
given before or after resignation), or by reason of death,
incapacity or retirement under a retirement plan of the Company or
a Subsidiary. Except as provided in the next sentence, if the
optionee ceases to be an employee by reason of such resignation, the
Option shall terminate three months after the optionee ceases to be
an employee. If the optionee ceases to be an employee by reason of
such death, incapacity or retirement, or if the optionee should die
during the three-month period referred to in the preceding sentence,
the Option shall terminate fifteen months after the optionee ceases
to be an employee. Where an Option is exercised more than three
months after the optionee ceased to be an employee, the Option may
be exercised only to the extent it could have been exercised on the
date three months after the optionee ceased to be an employee. A
leave of absence for military or governmental service or for other
purposes shall not, if approved by the Committee, be deemed a
termination of employment within the meaning of this paragraph (c).
Notwithstanding the foregoing provisions of this paragraph (c) or
any other provisions of this Plan, no Option shall be exercisable
after expiration of the term for which the Option was granted, which
shall in no event exceed ten years.
(d) Options shall be granted for such lawful consideration as the
Committee shall determine.
(e) No Option nor any right thereunder may be assigned or
transferred by the optionee except by will or the laws of descent
and distribution. If so provided in the Option or if so authorized
by the Committee and subject to such terms and conditions as are
specified in the Option or by the Committee, the Company shall have
the right, upon or without the request of the holder of the Option
and at any time or from time to time, to cancel all or a portion of
the Option then subject to exercise and either (i) pay the holder an
amount of money equal to the excess, if any, of the Fair Market
Value, at such time or times, of the shares subject to the portion
of the Option so canceled over the aggregate purchase price of such
shares, or (ii) issue or transfer shares of Common Stock to the
holder with a Fair Market Value, at such time or times, equal to
such excess.
(f) Each Option shall be evidenced by a written instrument, which
shall contain such terms and conditions (including, without
limitation, Performance Objectives), and shall be in such form, as
the Committee may determine, provided the Option is consistent with
this Plan and incorporates it by reference. Notwithstanding the
preceding sentence, an Option if so recommended by the Committee,
may include restrictions and limitations in addition to those
provided for in this Plan.
(g) Any federal, state or local withholding taxes payable by an
optionee upon the exercise of an Option shall be paid in cash or,
unless otherwise provided by the Committee, by the surrender of
shares of Common Stock or the withholding of shares of Common Stock
to be issued to the optionee, or in any combination thereof, or in
such other form as the Committee may authorize from time to time.
All such shares so surrendered or withheld shall be valued at Fair
Market Value on the date they are surrendered to the Company or
authorized to be withheld.
(h) Options may be either Incentive Options or Nonqualified Options
at the discretion of the Committee. Options not otherwise
designated shall be Nonqualified Options. Notwithstanding any other
provisions herein, the following provisions shall apply to Incentive
Options: (i) the exercise price of any Incentive Option granted to
any person who on the date of grant owns (within the meaning of
Section 425(d) of the Internal Revenue Code) stock possessing more
than 10% of the total combined voting power of all classes of stock
of the Company or any Subsidiary shall not be less than 110% of the
Fair Market Value of the stock on the date of grant; (ii) the
maximum term of any Incentive Option granted hereunder shall be ten
years, except that the maximum term of any Incentive Option granted
to a person described in section 5(h)(i) above shall be five years;
(iii) no Incentive Option may be granted subsequent to the tenth
anniversary of the date of stockholder approval of this Plan; (iv)
Incentive Options may only be granted to persons who are employees
of the Company or any Subsidiary within the meaning of the Internal
Revenue Code; and (v) Incentive Options may not be granted with
respect to more than an aggregate of 10 million shares of Common
Stock under this Plan.
6. Stock Appreciation Rights: Stock Incentives in the form of Stock
Appreciation Rights (SAR's) shall be subject to the following
provisions:
(a) Each SAR shall be evidenced by a written instrument (the "SAR
Agreement") specifying the number of shares of Common Stock to which
it relates and containing such other terms and conditions (which
may, but need not, include Performance Objectives), and shall be in
such form as the Committee may determine, provided the SAR is
consistent with this Plan and incorporates it by reference.
(b) Each SAR Agreement shall specify the period during which the
pertinent SAR(s) may be exercised and shall provide that the SAR(s)
shall expire at the end of such period (or periods); provided that
such expiration date shall not be later than ten years from the
date of grant thereof. Except as otherwise provided herein, any SAR
must be exercised during the period of the holder's employment with
the Company. Each SAR may be exercisable in full or in part in one
or more installments at such time or times as the Committee shall
determine. Unless otherwise provided in the SAR Agreement, a SAR,
to the extent it is or becomes exercisable, may be exercised at any
time in whole or in part until the expiration or termination of the
SAR. Any term or provisions in any outstanding SAR specifying that
the SAR not be immediately exercisable or that it is to be
exercisable in installments may be modified at any time during the
life of the SAR by the Committee, provided, however, no such
modifications of any outstanding SAR shall, without the consent of
the grantee adversely affect any SAR theretofore granted the
grantee.
(c) Each SAR shall be exercisable during the life of the grantee
only by the grantee and, after the grantee's death, only by the
grantee's estate or by a person who acquired the right to exercise
the SAR by will or the laws of descent and distribution. A SAR, to
the extent that it shall not have been exercised, shall terminate at
the close of business on the thirtieth day following the date the
grantee ceases to be an employee of the Company or a Subsidiary,
unless the grantee ceases to be an employee because of resignation
with the consent of the Committee (which consent may be given before
or after resignation), or by reason of death, incapacity or
retirement under a retirement plan of the Company or a Subsidiary.
Except as provided in the next sentence, if the grantee ceases to be
an employee by reason of such resignation, the SAR shall terminate
three months after the grantee ceases to be an employee. If the
grantee ceases to be an employee by reason of such death, incapacity
or retirement, or if the grantee should die during the three-month
period referred to in the preceding sentence, the SAR shall
terminate fifteen months after the grantee ceases to be an employee.
Where a SAR is exercised more than three months after the grantee
ceased to be an employee the SAR may be exercised only to the extent
it could have been exercised on the date three months after the
grantee ceased to be an employee. A leave of absence for military
or governmental service or for other purposes shall not, if approved
by the Committee, be deemed a termination of employment within the
meaning of this paragraph (c).
(d) No SAR may be assigned or transferred by the grantee except by
will or the laws of descent and distribution.
(e) If the form of consideration to be received upon exercise of the
SAR is not specified in the agreement governing the SAR, upon the
exercise thereof, the holder may request the form of consideration
to be received in satisfaction of such SAR, which may be in shares
of Common Stock (valued at Fair Market Value on the date of exercise
of the SAR), or in cash, or partly in cash and partly in shares of
Common Stock, as the holder shall request; provided, however, that
the Committee, in its sole discretion, may consent to or disapprove
any request of the grantee to receive cash in full or partial
settlement of such SAR.
(f) Any federal, state or local withholding taxes payable by the
grantee upon the exercise of a SAR shall be paid in cash or, unless
otherwise provided by the Committee, by the surrender of shares of
Common Stock in the case of a SAR to be paid in the form of Common
Stock, or by the withholding of shares of Common Stock to be issued
to the grantee, or in any combination thereof, or in such other form
as the Committee may authorize from time to time. All such shares
so surrendered or withheld shall be valued at Fair Market Value on
the date they are surrendered to the Company or authorized to be
withheld.
7. Stock Awards: Stock Incentives in the form of Stock Awards shall
be subject to the following provisions:
(a) A Stock Award shall be granted only in payment of Incentive
Compensation that has been earned or as Incentive Compensation to be
earned, including, without limitation, Incentive Compensation
awarded concurrently with or prior to the grant of the Stock Award.
(b) For the purposes of this Plan, in determining the value of a
Stock Award, all shares of Common Stock subject to such Stock Award
shall be valued at not less than 100% of the Fair Market Value of
such shares on the date such Stock Award is granted, regardless of
whether or when such shares are issued or transferred to the
Eligible Employee and whether or not such shares are subject to
restrictions which affect their value.
(c) Shares of Common Stock subject to a Stock Award may be issued or
transferred to the Eligible Employee at the time the Stock Award is
granted, or at any time subsequent thereto, or in installments from
time to time, as the Committee shall determine. In the event that
any such issuance or transfer shall not be made to the Eligible
Employee at the time the Stock Award is granted, the Committee may
provide for payment to such Eligible Employee, either in cash or in
shares of Common Stock from time to time or at the time or times
such shares shall be issued or transferred to such Eligible
Employee, of amounts not exceeding the dividends which would have
been payable to such Eligible Employee in respect of such shares (as
adjusted under section 9) if they had been issued or transferred to
such Eligible Employee at the time such Stock Award was granted.
Any amount payable in shares of Common Stock under the terms of a
Stock Award may, at the discretion of the Company, be paid in cash,
on each date on which delivery of shares would otherwise have been
made, in an amount equal to the Fair Market Value on such date of
the shares which would otherwise have been delivered.
(d) A Stock Award shall be subject to such terms and conditions,
including, without limitation, restrictions on sale or other
disposition of the Stock Award or of the shares issued or
transferred pursuant to such Stock Award, as the Committee shall
determine; provided, however, that upon the issuance or transfer of
shares pursuant to a Stock Award, the recipient shall, with respect
to such shares, be and become a stockholder of the Company fully
entitled to receive dividends, to vote and to exercise all other
rights of a stockholder except to the extent otherwise provided in
the Stock Award. The Committee may, in its sole discretion, but
shall not be required to, specify in any Stock Award that the
issuance, transfer and/or retention of some or all of the shares of
Common Stock covered by the Stock Award shall be subject to the
attainment of Performance Objectives. Each Stock Award shall be
evidenced by a written instrument in such form as the Committee
shall determine, provided such written instrument is consistent with
this Plan and incorporates it by reference.
(e) In the event the holder of shares of Common Stock subject to a
Stock Award dies prior to the time such shares are no longer subject
to forfeiture pursuant to the terms of the Stock Award, the estate
of such holder may retain such shares subject to the restrictions
set forth in the Stock Award.
8. Combinations of Stock Awards and Options: Stock Incentives
authorized by paragraph (b)(iv) of section 3 in the form of
combinations of Options, SAR's and/or Stock Awards, shall be subject
to the following provisions:
(a) A Stock Incentive may be a combination of any form of Option
with any form of SAR and/or with any form of Stock Award; provided,
however, that the terms and conditions of such Stock Incentive
pertaining to an Option are consistent with section 5, the terms and
conditions of such Stock Incentive pertaining to a SAR are
consistent with section 6, and the terms and conditions of such
Stock Incentive pertaining to a Stock Award are consistent with
section 7.
(b) Such combination Stock Incentive shall be subject to such other
terms and conditions as the Committee may determine, including,
without limitation, a provision terminating in whole or in part a
portion thereof upon the exercise in whole or in part of another
portion thereof. Such combination Stock Incentive shall be
evidenced by a written instrument in such form as the Committee
shall determine, provided it is consistent with this Plan and
incorporates it by reference.
9. Adjustment Provisions: In the event that any recapitalization,
reclassification, forward or reverse split of shares of Common
Stock, or any similar transaction shall be effected, or the
outstanding shares of Common Stock are, in connection with a merger
or consolidation of the Company or a sale by the Company of all or
a part of its assets, exchanged for a different number of class of
shares of stock or other securities of the Company or for shares of
the stock or other securities of any other company, or a record date
for determination of holders of Common Stock entitled to receive a
dividend payable in Common Stock shall occur, (a) the number and
class of shares or other securities that may be issued or
transferred pursuant to Stock Incentives or with respect to which a
cash payment pursuant to the Stock Incentive is determinable, (b)
the number and class of shares or other securities which have not
been issued or transferred under outstanding Stock Incentives, (c)
the purchase price to be paid per share or other security under
outstanding Options, and (d) the price to be paid by the Company or
a Subsidiary for shares or other securities issued or transferred
pursuant to Stock Incentives which are subject to a right of the
Company or a Subsidiary to reacquire such shares or other
securities, shall in each case be equitably adjusted.
10. Acceleration: In the event of a Change of Control, any Stock
Incentives which have then been outstanding hereunder for at least
six months shall be immediately exercisable (without regard to any
limitation imposed by the Plan or the Committee at the time the
Stock Incentive was granted, which permits all or any part of the
Stock Incentive to be exercised only after the lapse of time or the
attainment of Performance Objectives or other conditions to
exercise), and will remain exercisable until the expiration of the
Stock Incentive.
11. Term: This Plan shall be deemed adopted and shall become
effective on the date it is approved and adopted by the stockholders
of the Company. This Plan shall remain in effect until such time as
it is terminated by the Board of Directors; provided, however, that
no Incentive Options may be granted after the tenth anniversary of
the effective date of the Plan.
12. Administration:
(a) The Plan shall be administered by the Committee, which shall
consist of not less than two directors of the Company designated by
the Board of Directors in accordance with the Code of Regulations of
the Company; provided, however, that no director shall be designated
as or continue to be a member of the Committee unless such director
shall at the time of designation and service be a "disinterested
person" within the meaning of Rule 16b-3 of the Securities and
Exchange Commission (or any successor provision at the time in
effect). Grants of Stock Incentives may be recommended by the
Committee either with or without consultation with employees, but,
anything in this Plan to the contrary notwithstanding, the Committee
shall have full authority to act in the matter of selection of all
Eligible Employees and in recommending Stock Incentives to be
granted to them.
(b) The Committee may establish such rules and regulations, not
inconsistent with the provisions of this Plan, as it deems necessary
to determine eligibility to participate in this Plan and for the
proper administration of this Plan, and may amend or revoke any rule
or regulation so established. The Committee may make such
determinations and interpretations under or in connection with this
Plan as it deems necessary or advisable. All such rules,
regulations, determinations and interpretations shall be binding and
conclusive upon the Company, its Subsidiaries, its stockholders and
all employees, and upon their respective legal representatives,
beneficiaries, successors and assigns and upon all other persons
claiming under or through any of them.
(c) Members of the Board of Directors and members of the Committee
acting under this Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability except
for gross negligence or willful misconduct in the performance of
their duties.
13. Acquisitions: If the Company or any Subsidiary should merge or
consolidate with, or purchase stock or assets or otherwise acquire
the whole or part of the business of, another company, the Company
in connection therewith, upon the recommendation of the Committee
and the approval of the Board of Directors, (a) may assume, in whole
or in part and with or without modifications or conditions, any
stock options granted by the acquired company to its employees, in
their capacity as such, or (b) may grant new Options in substitution
therefore; provided that the granting of an Option with the terms
and conditions of the assumed or substitute options is permissible
under either this Plan or a plan approved by the stockholders of the
acquired company. For the purposes of the preceding sentence, the
permissibility of the granting of an option under a plan shall be
determined as of the date of grant of the original option by the
acquired company and not as of the date of assumption or
substitution by the Company.
14. General Provisions:
(a) Nothing in this Plan nor in any instrument executed pursuant
hereto shall confer upon any employee any right to continue in the
employ of the Company or a Subsidiary, or shall affect the right of
the Company or of a Subsidiary to terminate the employment of any
employee with or without cause.
(b) No shares of Common Stock shall be issued or transferred
pursuant to a Stock Incentive unless and until all legal
requirements applicable to the issuance or transfer of such shares,
in the opinion of counsel to the Company, have been complied with.
In connection with any such issuance or transfer the person
acquiring the shares shall, if requested by the Company, give
assurances, satisfactory to counsel to the Company, that the shares
are being acquired for investment and not with a view to resale or
distribution thereof and assurances in respect of such other matters
as the Company or a Subsidiary may deem desirable to assure
compliance with all applicable legal requirements. No employee
(individually or as a member of a group), and no beneficiary or
other person claiming under or through him, shall have any right,
title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to any Stock
Incentive except as to shares of Common Stock, if any, as shall have
been issued or transferred to him.
(c) The Company or a Subsidiary may, with the approval of the
Committee, enter into an agreement or other commitment to grant a
Stock Incentive in the future to a person who is or will be an
Eligible Employee at the time of grant, and, notwithstanding any
other provision of this Plan, any such agreement or commitment shall
not be deemed the grant of a Stock Incentive until the date on which
the Company takes action to implement such agreement or commitment.
(d) In the case of a grant of a Stock Incentive to an employee of a
Subsidiary, such grant may, if the Committee so directs, be
implemented by the Company issuing or transferring the shares, if
any, covered by the Stock Incentive to the Subsidiary, for such
lawful consideration as the Committee may specify, upon the
condition or understanding that the Subsidiary will transfer the
shares to the employee in accordance with the terms of the Stock
Incentive specified by the Committee pursuant to the provisions of
this Plan. Notwithstanding any other provision hereof, such Stock
Incentive may be issued by and in the name of the Subsidiary and
shall be deemed granted on the date it is approved by the Committee
on the date it is delivered by the Subsidiary or on such other date
between said two dates, as the Committee shall specify.
(e) The Company or a Subsidiary may make such provisions as it may
deem appropriate for the withholding of any taxes which the Company
or a Subsidiary determines it is required to withhold in connection
with any Stock Incentive.
(f) Nothing in this Plan is intended to be a substitute for, or
shall preclude or limit the establishment or continuation of, any
other plan, practice or arrangement for the payment of compensation
or fringe benefits to employees generally, or to any class or group
of employees, which the Company or any Subsidiary or other affiliate
now has or may hereafter lawfully put into effect, including,
without limitation, any retirement, pension, group insurance, stock
purchase, stock bonus or stock option plan.
15. Amendments and Discontinuance:
(a) This Plan may be amended by the Board of Directors upon the
recommendation of the Committee, provided that, without the approval
of the stockholders of the Company, no amendment shall be made which
(i) increases the maximum aggregate number of shares of Common Stock
that may be issued or transferred pursuant to Stock Incentives as
provided in section , (ii) withdraws the administration of this
Plan from the Committee or amends the provisions of paragraph (a) of
section 12 with respect to eligibility and disinterest of members
of the Committee, (iii) permits any person who is not at the time an
Eligible Employee of the Company or of a Subsidiary to be granted a
Stock Incentive, (iv) permits any Option to be exercised more than
ten years after the date it is granted, (v) amends section 11 to
extend the date set forth therein or (vi) amends this section 15.
(b) The Board of Directors may by resolution adopted by a majority
of the entire Board of Directors discontinue this Plan.
(c) No amendment or discontinuance of this Plan by the Board of
Directors or the stockholders of the Company shall, without the
consent of the employee, adversely affect any Stock Incentive
theretofore granted to such employee.
<PAGE>
Exhibit 4.2
LCA-VISION INC.
DIRECTORS' NONDISCRETIONARY STOCK OPTION PLAN
(Amended as of June 5, 1996)
1. Name and Purpose. The purpose of this Plan, which shall be
known as the "LCA-Vision Inc. Directors' Nondiscretionary Stock
Option Plan" (hereafter referred to as the "Plan") is to advance the
interests of the Company by providing material incentive for the
continued services of the Non-Employee Directors and by enhancing
the Company's ability to attract, and thereafter to retain,
qualified individuals to serve on the Company's Board of Directors.
2. Definitions. For purposes of this Plan, the following terms
when capitalized shall have the meaning designated herein unless a
different meaning is plainly required by the context. Where
applicable, the masculine pronoun shall mean or include the feminine
and the singular shall include the plural.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Company" shall mean LCA-Vision Inc.
(c) "Effective Date" shall mean the date on which this Plan shall
become effective, as provided in Paragraph 16 below.
(d) "Fair Market Value" of the Company's common stock on a certain
date shall be the mean of the highest bid and lowest asked quoted
selling prices of such stock on the Nasdaq SmallCap Market, Nasdaq
National Market System or any stock exchange, as the case may be, on
the trading date immediately prior to the date specified, or if the
Company's common stock was not traded on such market or exchange on
such date, on the next preceding date on which the common stock was
traded.
(e) "Non-Employee Director" shall mean a Director who is not also an
employee of the Company.
(f) "Optionee" shall mean a Non-Employee Director who receives stock
options granted under this Plan.
(g) "Plan" shall mean the LCA-Vision Inc. Directors'
Nondiscretionary Stock Option Plan.
(h) "Subsidiary" shall mean an affiliated employer during any period
that 50% or more of its common stock or, in the case of a
partnership, 50% or more of the capital interest thereof is owned
directly or indirectly by the Company or during any period that it
is a member with the Company in a controlled group of corporations
or is otherwise under common control with the Company within the
meaning of Section 414(b) and (c) of the Internal Revenue Code of
1986, as amended.
3. Administration.
(a) The Plan shall be administered by the Board.
(b) The Company shall issue to the Non-Employee Directors stock
options under, and in accordance with, the provisions of the Plan.
Each option issued shall be evidenced by a stock option agreement
in such form and containing such provisions not inconsistent with
the provisions of the Plan as the Board from time to time shall
approve.
(c) The Board shall have authority to construe and interpret such
option agreements; to impose such limitations and restrictions as
are deemed necessary or advisable by counsel for the Company so that
compliance with the federal securities laws and with the securities
laws of the various states may be assured; and to make all other
determinations necessary or advisable for administering this Plan.
A decision by a majority of the Board shall govern all actions of
the Board; such decision may be made either at a meeting of the
Board at which a majority of the members are present or without a
meeting by a writing signed by a majority of the Board. All
decisions and interpretations made by the Board shall be binding and
conclusive on all Optionees, their legal representatives and
beneficiaries.
(d) The Board may designate any officers or employees of the Company
or its Subsidiaries to assist the Board in the administration of
this Plan and to execute documents on its behalf, and the Board may
delegate to them such other ministerial and limited discretionary
duties, as it sees fit.
4. Shares Subject to the Plan.
(a) The shares to be issued and delivered by the Company upon
exercise of options issued under this Plan are shares of the
Company's common stock, par value $.001 per share, which may be
either authorized but unissued shares or treasury shares, in the
discretion of the Board.
(b) The aggregate number of shares of the Company's common stock
which may be issued under this Plan shall not exceed 1,250,000
shares; subject, however, to the adjustment provided in Paragraph 10
in the event of stock splits, stock dividends, exchanges of shares,
or the like occurring after the Effective Date. No stock option may
be granted under this Plan which could cause such maximum limit to
be exceeded.
(c) Shares covered by an option which is no longer exercisable with
respect to such shares shall again be available for grant of options
under this Plan.
5. Terms of Options. Options issued under this Plan shall contain
the following terms and conditions:
(a) Option price: The option price per share of common stock shall
be equal to of the Fair Market Value of the Company's common stock
on the date of the issuance of such option.
(b) Time and amount of option issuances: Upon election or
appointment to the Board Non-Employee Directors shall automatically
be issued an option to purchase 75,000 shares of the Company's
common stock. In addition, at every annual organizational meeting
of directors following the annual meeting of stockholders commencing
in 1996, the Non-Employee Directors then serving on the Board shall
receive an automatic issuance of an option to purchase 1,250 shares
of the Company's common stock; provided that, the number of shares
subject to options issued to Non-Employee Directors who have not yet
served a full year on the Board shall be prorated such that those
Non-Employee Directors shall receive an option to purchase only a
percentage of 1,250 shares commensurate with the actual portion of
the year that such director served on the Board.
(c) Period within which option may be exercised: Each option issued
to Optionees under the Plan shall terminate at the expiration of
five years from the date of the issuance of such option.
In addition, the option shares covered by an option issued to an
Optionee shall be exercisable at a rate of 20% of the shares covered
by option at the end of each of the first five years following the
issuance of the option and shall remain exercisable thereafter until
the expiration of the option.
(d) Non-transferability; Termination of Service as a Non-Employee
Director. No option issued under this Plan shall be assignable or
transferable. In the event a Non-Employee Director ceases to serve
the Company as such, then the former Non-Employee Director shall
have the following time periods within which to exercise unexercised
options or parts thereof, held by him or her in the following
described circumstances:
(i) In the event of death, the representative or representatives of
the former Non-Employee Director's estate may, subject to the
prescribed schedule in Paragraph 5(c) above, exercise at any time
and from time to time up to and including the option expiration
date, any of the unexercised options or parts thereof.
(ii) In the event of resignation by a Non-Employee Director by
reason of disability or ill-health, the former Non-Employee Director
may, subject to the prescribed schedule in Paragraph 5(c) above,
exercise at any time and from time to time up to and including the
option expiration date, any of the unexercised options or parts
thereof.
(iii) In the event of resignation for reasons other than disability
or ill-health, or failure to be reelected other than by a change-of-control
as defined in Paragraph 12, the former Non-Employee Director
may exercise all or any part of his or her options which have become
exercisable as of the date of resignation or non re-election at any
time or from time to time with the period of 60 days following the
resignation or non re-election date.
(e) Partial exercise: Unless otherwise provided in the option
agreement, any exercise of an option issued under this Plan may be
made in whole or in part.
6. Period for Issuing Options. No option shall be issued under this
Plan subsequent to the tenth anniversary of the Effective Date.
7. Method of Exercise. An option issued under this Plan may be
exercised by written notice to the Company, signed by the Optionee,
or by such other person as is entitled to exercise such option. The
notice of exercise shall state the number of shares in respect of
which the option is being exercised, and shall be accompanied by
payment of the full option price for such shares, made in one of the
following manners: (a) cash; (b) free and clear shares of the
Company's common stock, which shall be valued at the Fair Market
Value of such shares on the date of such transfer; or (c) any
combination of (a) and (b). A certificate or certificates for the
shares of common stock of the Company purchased through the exercise
of an option shall be issued as soon as practical after the exercise
of the option and payment therefor.
8. Rights as a Stockholder. During the option period no person
entitled to exercise any option granted under this Plan shall have
any of the rights or privileges of a stockholder with respect to any
shares of stock issuable upon exercise of such option until
certificates representing such shares shall have been issued and
delivered.
9. Implied Consent of Optionees. Every Optionee, by his or her
acceptance of an option under this Plan, shall be deemed to have
consented to be bound, on his or her own behalf and on behalf of his
or her heirs, assigns, and legal representatives, by all of the
terms and conditions of this Plan.
10. Adjustments to Reflect Capital Changes: The following
adjustments shall be made to reflect changes in the capitalization
of the Company:
(A) Recapitalization. The number and kind of shares subject to
outstanding stock options, the exercise price for such shares, and
the number and kind of shares available or options subsequently
granted under the Plan shall be appropriately adjusted to reflect
any stock dividend, stock split, combination or exchange of shares,
merger, consolidation or other change in capitalization with a
similar substantive effect upon the Plan or the options granted
under the Plan. The Board shall have the power to determine the
amount of the adjustment to be made in each case.
(B) Certain Reorganizations. After any reorganization, merger or
consolidation in which the Company is the surviving corporation,
each Optionee shall, at no additional cost, be entitled upon any
exercise of an option to receive (subject to any required action by
stockholders), in lieu of the number of shares of the Company common
stock exercisable pursuant to such option, the number and class of
shares of stock or other securities to which such Optionee would
have been entitled pursuant to the terms of the reorganization,
merger or consolidation if, at the time of such reorganization,
merger or consolidation, such Optionee had been the holder of record
of a number of shares of stock equal to the total number of shares
covered by such option. Comparable rights shall accrue to each
Optionee in the event of successive reorganizations, mergers or
consolidations of the character described above.
(C) Options to Purchase Stock of Acquired Companies. After any
reorganization, merger or consolidation in which the Company or a
Subsidiary of the Company shall be a surviving corporation, the
Board shall issue substituted options under the provisions of the
Plan, pursuant to section 425 of the Internal Revenue Code,
replacing old options granted under a Plan of another party to the
reorganization, merger or consolidation whose stock subject to the
old options may no longer be issued following such merger or
consolidation. The foregoing adjustments and manner of application
of the foregoing provisions shall be determined by the Board in its
sole discretion. Any such adjustments may provide for the
elimination of any fractional shares which might otherwise become
subject to any options. Shares of common stock underlying such
substituted options shall be in addition to and shall not diminish
the number of shares of common stock available for stock option
grants.
11. Acceleration. In the event of change of control as defined in
paragraph 12, any options which have then been outstanding for at
least six months held by an Optionee shall be immediately
exercisable (without regard to any limitation imposed by the Plan or
the Board at the time the option is granted, which permits all or
any part of the option to be exercised only after the lapse of
time), and will remain exercisable until the end of the period
specified in paragraph 5(b) as determined by the Board on the date
of grant, or such earlier date as specified in paragraph 5.
12. Change of Control.
(A) A "change of control" shall be deemed to have occurred if:
(i) without prior approval of the Board, any "person" becomes a
beneficial owner, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the
Company's then outstanding securities; or
(ii) without prior approval of the Board, as a result of, or in
connection with, or within two years following, a tender or exchange
offer for the voting stock of the Company, a merger or other
business combination to which the Company is a party, the sale or
other disposition of all or substantially all of the assets of the
Company, a reorganization of the Company, or a proxy contest in
connection with the election of members of the Board, the persons
who were directors of the Company immediately prior to any of such
transactions cease to constitute a majority of the Board or of the
board of directors of any successor to the Company (except for
resignations due to death, disability or normal retirement).
(B) A person shall be deemed the "beneficial owner" of any
securities:
(i) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates has,
directly or indirectly, (1) the right to acquire (whether such right
is exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or options,
or otherwise, or (2) the right to vote pursuant to any agreement,
arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any
securities.
(C) A "person" shall mean any individual, firm, company,
partnership, other entity or group.
(D) The terms "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as in effect
on the date the Plan is approved by the stockholders of the Company
and becomes effective.
13. Company Responsibility. All expenses of this Plan, including
the cost of maintaining records, shall be borne by the Company. The
Company shall have no responsibility or liability (other than under
applicable securities laws) for any act or thing done or left
undone with respect to the price, time, quantity, or other
conditions and circumstances of the purchase of shares under the
terms of the Plan, so long as the Company acts in good faith.
14. Securities Laws. The Board shall take all necessary or
appropriate actions to ensure that all option issuances and all
exercises thereof under this Plan are in full compliance with all
Federal and state securities laws.
15. Amendment and Termination. The Board of Directors of the
Company may terminate this Plan at any time, and may amend the Plan
at any time or from time to time, without obtaining any approval of
the Company's stockholders; except that the Plan may not be amended
without stockholder approval (1) to increase the aggregate number of
shares issuable under the Plan (excepting proportionate adjustments
made under Paragraph 10 to give effect to stock splits, etc.); (2)
to change the number of shares which may be granted to Optionees
under the provisions of paragraph 5(b) (excepting proportionate
adjustments made under Paragraph 10); (3) to change the option price
of optioned stock (excepting proportionate adjustments made under
paragraph 10); (4) to change the required option price per share of
common stock covered by an option granted under this Plan pursuant
to subparagraph 5(a); (5) to extend the time within which options
may be granted or the time within which a granted option may be
exercised; or (6) to change, without the consent of the Participant
(or his, or his estate's, legal representative), any option
previously granted to him under the Plan; and such amendments shall
not be made more than once every six months other than to comport
with changes in the Internal Revenue Code or the rules thereunder.
If the Plan is terminated, any unexercised option shall continue to
be exercisable in accordance with its terms.
16. Effective Date. This Plan shall become effective as of the date
it is approved and adopted by majority vote of the stockholders of
the Company; provided that such adoption and approval must occur
prior to June 1, 1996. If not so approved and adopted, this Plan
shall be of no force and effect.
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 23, 1996 on our
audits of the consolidated financial statements of LCA-Vision Inc.
as of December 31, 1995 and 1994, and for the years ended December
31, 1995, 1994 and 1993, which report is included in the Company's
1995 Annual Report to Stockholders.
/s/ Coopers & Lybrand L.L.P.
Cincinnati, Ohio
June 28, 1996
