<PAGE>
As filed with the Securities and Exchange Commission on September 23, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
NOVAMED EYECARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-4116193
(State or other jurisdiction (IRS Employer Identification
of incorporation or organization) Number)
980 North Michigan Avenue, Suite 1620, Chicago, Illinois 60611, (312) 664-4100
(Address of Principal Executive Offices including Zip Code)
NovaMed Eyecare, Inc. 1999 Amended and Restated Stock Purchase Plan
NovaMed Eyecare, Inc. Amended and Restated Stock Incentive Plan
(Full title of plans)
Stephen J. Winjum
Chairman of the Board, President and Chief Executive Officer
980 North Michigan Avenue, Suite 1620, Chicago, Illinois 60611, (312) 664-4100
(Name, address and telephone number of agent for service)
Copies to:
Steven V. Napolitano, Esq.
Jeffrey R. Patt, Esq.
Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661-3693
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed maximum Proposed maximum
offering price aggregate offering Amount of
Title of securities to be registered Amount to be registered (1) per share price registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value
(1999 Stock Purchase Plan).......... 400,000 shares $9.5313 (2) $ 3,812,520 (2) $1,060
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.01 par value
(Stock Incentive Plan)............. 5,023,483 shares $3.5076 (3) $17,620,369 (3) $ 4,899
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.01 par value
(Stock Incentive Plan)............. 1,228,317 shares $9.5313 (2) $11,707,458 (2) $ 3,255
- ------------------------------------------------------------------------------------------------------------------------------------
Total............................... 6,651,800 shares $33,140,347 $ 9,214
====================================================================================================================================
</TABLE>
(1) This registration statement also covers an indeterminate number of shares of
NovaMed Eyecare, Inc. Common Stock that may be issuable by reason of stock
splits, stock dividends or similar transactions. Includes associated rights
(the "Rights") to purchase 1/1000 of a share of Series E Junior
Participating Preferred Stock, par value $.01 per share, of NovaMed Eyecare,
Inc. Common Stock. Rights initially attached to and trade with NovaMed
Eyecare, Inc. Common Stock. The value attributable to such Rights, if any,
is reflected in the market price of the NovaMed Eyecare, Inc. Common Stock.
(2) Based upon the high and low sales prices of NovaMed Eyecare, Inc. Common
Stock as reported on the Nasdaq National Market on September 21, 1999;
these amounts are used solely for the purpose of calculating the
registration fee pursuant to Rule 457(h) and Rule 457(c) under the
Securities Act.
(3) Based upon the weighted average exercise price for the options granted under
such plan; these amounts are used solely for the purpose of calculating the
registration fee pursuant to Rule 457(h) under the Securities Act.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information called for in Part I of this registration statement on Form
S-8 (the "Registration Statement") is currently included in the prospectuses for
the NovaMed Eyecare, Inc. 1999 Amended and Restated Stock Purchase Plan and the
NovaMed Eyecare, Inc. Amended and Restated Stock Incentive Plan, as amended
(collectively, the "Plans"), and is not being filed with or included in this
Form S-8 in accordance with the rules and regulations of the Securities and
Exchange Commission (the "Commission").
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by NovaMed Eyecare, Inc. (the "Company") with
the Commission are incorporated by reference in this Registration Statement:
(a) The Company's prospectus filed pursuant to Rule 424(b) on August 18,
1999.
(b) The description of the common stock and the preferred stock purchase
rights contained in the Company's Registration Statement on Form 8-A
(Registration No. 000-26625) filed on July 8, 1999, pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
all amendments thereto and reports filed for the purpose of updating
such description.
In addition, all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and prior
to the filing of a post-effective amendment indicating that all securities
offered pursuant to this Registration Statement have been sold or deregistering
all such securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
The Company hereby undertakes to provide without charge to each person who
has received a copy of any of the prospectuses to which this Registration
Statement relates, upon the written or oral request of any such person, a copy
of any or all the documents that have been or may be incorporated by reference
into this Registration Statement, other than exhibits to such documents (unless
such exhibits are incorporated therein by reference). Written or telephone
requests for such copies should be directed to the Company's principal executive
office: NovaMed Eyecare, Inc., 980 North Michigan Ave., Suite 1620, Chicago,
Illinois 60611, Attention: John W. Lawrence, Jr., corporate counsel, at (312)
664-4100 or [email protected].
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
The law firm Katten Muchin & Zavis and some of the individual attorneys
of the firm, including Steven V. Napolitano, who serves as one of the Company's
directors, beneficially own shares of the Company's common stock.
Item 6. Indemnification of Directors and Officers.
As permitted by the Delaware General Corporation Law, the Company's
Amended and Restated Certificate of Incorporation contains provisions that
eliminate the personal liability of the Company's directors to the Company or
its stockholders for monetary damages for breach of their fiduciary duty as a
director, except for liability for:
. any breach of their duty or loyalty to the Company or its
stockholders
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<PAGE>
* acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law
* unlawful payments of dividends or unlawful stock repurchases or
redemptions
* any transaction from which the director derived an improper
personal benefit
The Company's Amended and Restated Certificate of Incorporation also
contains provisions that require the Company to indemnify its directors and
permit the Company to indemnify its officers and employees to the fullest extent
permitted by Delaware law, including circumstances where indemnification would
be discretionary. The Company is not obligated to indemnify a person:
* with respect to proceedings, claims or actions initiated or brought
voluntarily by the person and not by way of defense
* for any amounts paid in settlement of an action indemnified against
by the Company without the Company's prior written consent
The Company has obtained directors' and officers' liability insurance and
has entered into indemnity agreements with each of its directors and some of its
officers providing for this indemnification. The Company believes these measures
are essential to attracting and retaining qualified persons as directors and
officers.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.
4.1 NovaMed Eyecare, Inc. 1999 Amended and Restated Stock
Purchase Plan.
4.2 NovaMed Eyecare, Inc. Amended and Restated Stock Incentive Plan.
4.3 Amended and Restated Certificate of Incorporation of the Company,
incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-1, as amended (Registration
Statement No. 333-79271).
4.4 Bylaws of the Company, incorporated by reference to Exhibit 3.2 of
the Company's Registration Statement on Form S-1, as amended
(Registration Statement No. 333-79271).
4.5 Specimen stock certificate representing Common Stock, incorporated
by reference to Exhibit 4.1 of the Company's Registration Statement
on Form S-1, as amended (Registration Statement No. 333-79271).
4.6 Rights Agreement of the Company, incorporated by reference to
Exhibit 4.2 of the Company's Registration Statement on Form S-1, as
amended (Registration Statement No. 333-79271).
5 Opinion of Katten Muchin & Zavis as to the legality of the shares of
Common Stock being offered under the Plans
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Katten Muchin & Zavis (contained in its opinion to be
filed as Exhibit 5 hereto)
II-2
<PAGE>
24 Power of Attorney (included on the signature page of this registration
statement)
Item 9. Undertakings.
1. The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), 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.
(c) 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.
2. The Company hereby undertakes that, for the purpose of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) 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.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company 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
II-3
<PAGE>
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company 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 Chicago, state of Illinois, on this 23rd day of September, 1999.
NOVAMED EYECARE, INC.
By: /S/ STEPHEN J. WINJUM
_________________________________________
Stephen J. Winjum
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Stephen J. Winjum and Ronald G. Eidell, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution, to sign on his
behalf, individually and in each capacity stated below, all amendments and post-
effective amendments to this Registration Statement on Form S-8 and to file the
same, with all exhibits thereto and any other documents in connection therewith,
with the Commission under the Securities Act, granting unto said attorneys-in-
fact and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
and to all intents and purposes as each might or could do in person, hereby
ratifying and confirming each act that said attorneys-in-fact and agents may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on September 23, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ STEPHEN J. WINJUM Chairman of the Board, President and Chief September 23, 1999
- -------------------------- Executive Officer (Principal Executive
Stephen J. Winjum Officer)
/S/ RONALD G. EIDELL Executive Vice President and Chief September 23, 1999
- -------------------------- Financial Officer (Principal Financial
Ronald G. Eidell Officer)
/S/ MARTIN A. KOEHLER
- -------------------------- Vice President of Finance (Principal September 23, 1999
Martin A. Koehler Accounting Officer)
/S/ STEVEN V. NAPOLITANO
- -------------------------- Director September 23, 1999
Steven V. Napolitano
/S/ JOHN D. HUNKELER, M.D.
- -------------------------- Director September 23, 1999
John D. Hunkeler, M.D.
</TABLE>
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<PAGE>
/S/ R. JUDD JESSUP
- ----------------------------- Director* September 23, 1999
R. Judd Jessup
/S/ SCOTT H. KIRK, M.D.
- ----------------------------- Director September 23, 1999
Scott H. Kirk, M.D.
/S/ PETER C. WENDELL
- ----------------------------- Director September 23, 1999
Peter C. Wendell
/S/ JAMES B. TANANBAUM
- ----------------------------- Director* September 23, 1999
James B. Tananbaum
/S/ DOUGLAS P. WILLIAMS, M.D.
- ----------------------------- Director September 23, 1999
Douglas P. Williams, M.D.
_______________
* Member of the committee of the Company's Board of Directors charged with
administering the employee benefit plans being registered pursuant to this
Registration Statement.
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibits Description Page No.
- ---------- -------------------------------------------------------------------------------------------- -----------
<S> <C> <C>
4.1 NovaMed Eyecare, Inc. 1999 Amended and Restated Stock Purchase Plan
4.2 NovaMed Eyecare, Inc. Amended and Restated Stock Incentive Plan
5 Opinion of Katten Muchin & Zavis as to the legality of the shares of Common Stock being
offered under the Plans
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Katten Muchin & Zavis (contained in its opinion to be filed as Exhibit 5 hereto)
24 Power of Attorney (included on the signature page of this registration statement)
</TABLE>
<PAGE>
Exhibit 4.1
NOVAMED EYECARE, INC.
AMENDED AND RESTATED
1999 STOCK PURCHASE PLAN
(Original Plan adopted effective May 24, 1999)
(Amended and Restated Plan adopted effective August 1, 1999)
<PAGE>
NOVAMED EYECARE, INC.
AMENDED AND RESTATED
1999 STOCK PURCHASE PLAN
(Original Plan adopted effective May 24, 1999)
(Amended and Restated Plan adopted effective August 1, 1999)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I ESTABLISHMENT AND PURPOSE.................................... - 1 -
1.1 Purpose...................................................... - 1 -
ARTICLE II DEFINITIONS.................................................. - 1 -
2.1 "Account..................................................... - 1 -
2.2 "Agreement" or "Option Agreement............................. - 1 -
2.3 "Board of Directors" or "Board............................... - 1 -
2.4 "Code" or "Internal Revenue Code............................. - 1 -
2.5 "Committee................................................... - 2 -
2.6 "Common Stock................................................ - 2 -
2.7 "Company..................................................... - 2 -
2.8 "Continuous Service.......................................... - 2 -
2.9 "Contribution Rate........................................... - 2 -
2.10 "Disability.................................................. - 2 -
2.11 "Eligible Employee........................................... - 2 -
2.12 "ERISA....................................................... - 3 -
2.13 "Exercise Date............................................... - 3 -
2.14 "Exchange Act................................................ - 3 -
2.15 "Fair Market Value........................................... - 3 -
2.16 "Grant Date.................................................. - 3 -
2.17 "Option...................................................... - 3 -
2.18 "Option Period............................................... - 3 -
2.19 "Option Price................................................ - 4 -
2.20 "Participant................................................. - 4 -
2.21 "Plan........................................................ - 4 -
2.22 "Plan Year................................................... - 4 -
2.23 "Representative.............................................. - 4 -
2.24 "Retirement.................................................. - 4 -
2.25 "Securities Act.............................................. - 4 -
2.26 "Subsidiary.................................................. - 4 -
2.27 "Termination of Employment................................... - 4 -
ARTICLE III ADMINISTRATION............................................... - 5 -
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
3.1 Committee Structure and Authority............................. - 5 -
ARTICLE IV STOCK PROVISIONS............................................. - 7 -
4.1 Number of Shares Subject to the Plan.......................... - 7 -
4.2 Release of Shares............................................. - 7 -
4.3 Restrictions on Shares........................................ - 8 -
4.4 Stockholder Rights............................................ - 8 -
4.5 Stock Valuation............................................... - 8 -
4.6 Custodian..................................................... - 8 -
ARTICLE V ELIGIBILITY; OPTION PROVISIONS................................ - 9 -
5.1 Eligibility................................................... - 9 -
5.2 Grant of Options.............................................. - 9 -
5.3 Option Period.................................................- 10 -
5.4 Option Price..................................................- 10 -
5.5 Contribution Rate.............................................- 10 -
5.6 Purchase of Shares............................................- 11 -
5.7 Cancellation of Options.......................................- 11 -
5.8 Terminated Employees..........................................- 11 -
5.9 Deceased Employees............................................- 12 -
5.10 Disabled or Retired Employees.................................- 12 -
5.11 Limitations...................................................- 12 -
5.12 Nonassignability..............................................- 12 -
ARTICLE VI GENERAL PROVISIONS APPLICABLE TO THE PLAN....................- 13 -
6.1 Termination of Plan...........................................- 13 -
6.2 Investment Representation.....................................- 13 -
6.3 Effect of Certain Changes.....................................- 13 -
6.4 Withholding...................................................- 16 -
6.5 No Company Obligation.........................................- 17 -
6.6 Committee Discretion..........................................- 17 -
ARTICLE VII MISCELLANEOUS...............................................- 17 -
7.1 Indemnification of the Board and Committee....................- 17 -
7.2 Mitigation of Excise Tax......................................- 17 -
7.3 Interpretation................................................- 18 -
7.4 Governing Law.................................................- 18 -
7.5 Limitations on Liability......................................- 18 -
7.6 Validity......................................................- 18 -
7.7 Assignment....................................................- 18 -
7.8 Captions......................................................- 19 -
7.9 Amendments....................................................- 19 -
7.10 Entire Agreement..............................................- 19 -
7.11 Rights with Respect to Continuance of Employment..............- 19 -
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
7.12 Options for Shares in Substitution for Stock Options Granted by Other
Corporations................................................- 19 -
7.13 Procedure for Adoption........................................- 19 -
7.14 Procedure for Withdrawal......................................- 20 -
7.15 Expenses......................................................- 20 -
</TABLE>
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<PAGE>
NOVAMED EYECARE, INC.
AMENDED AND RESTATED
1999 STOCK PURCHASE PLAN
ARTICLE I
---------
ESTABLISHMENT AND PURPOSE
-------------------------
1.1 Purpose. The NovaMed Eyecare, Inc. Amended and Restated 1999 Stock
Purchase Plan (the "Plan") is hereby established effective August 1, 1999 by
NovaMed Eyecare, Inc. The adoption of the Plan is expressly conditioned upon
the Plan's approval by the stockholders of NovaMed Eyecare, Inc. within twelve
(12) months after the date the Plan was originally adopted. The purpose of the
Plan is to promote the overall financial objectives of the Company and its
stockholders by motivating participants in the Plan to achieve long-term growth
in stockholder equity in the Company. The Plan is intended as an "employee stock
purchase plan" within the meaning of Section 423 of the Code, and Options
granted hereunder are intended to constitute options granted under such a plan,
and the Plan document and all actions taken in connection with the Plan shall be
constructed consistently with such intent.
ARTICLE II
-----------
DEFINITIONS
-----------
The following sections of this Article II provide basic definitions of
terms used throughout the Plan, and whenever used therein in the capitalized
form, except as otherwise expressly provided, the terms shall be deemed to have
the following meanings:
2.1 "Account" shall mean the bookkeeping account established on behalf of
a Participant to which shall be credited all contributions paid for the purpose
of purchasing Common Stock under the Plan, and to which shall be charged all
purchases of Common Stock pursuant to the Plan. The Company shall have custody
of such Account.
2.2 "Agreement" or "Option Agreement" means, individually or collectively,
any enrollment and withholding agreement entered into pursuant to the Plan. An
Agreement shall be the right of the Company to withhold from payroll amounts to
be applied to purchase Common Stock.
2.3 "Board of Directors" or "Board" means the Board of Directors of the
Company.
2.4 "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, and any subsequent Internal Revenue Code. If there is a
subsequent Internal Revenue
<PAGE>
Code, any references herein to Internal Revenue Code sections shall be deemed to
refer to comparable sections of any subsequent Internal Revenue Code.
2.5 "Committee" means the person or persons appointed by the Board of
Directors to administer the Plan, as further described in the Plan.
2.6 "Common Stock" means the shares of the Common Stock of the Company,
$1.00 par value per share, whether presently or hereafter issued, and any other
stock or security resulting from adjustment thereof as described in Section 6.3.
2.7 "Company" means NovaMed Eyecare, Inc. and includes any successor or
assignee corporation or corporations into which the Company may be merged,
changed or consolidated; any corporation for whose securities the securities of
the Company shall be exchanged; and any assignee of or successor to
substantially all of the assets of the Company.
2.8 "Continuous Service" shall mean, subject to modification by the
Committee, an Eligible Employee's number of full years and completed months of
continuous employment with the Company or a Subsidiary from his last hiring date
to his date of Termination of Employment for any reason. The Committee may
provide rules from time to time regarding the calculation of Continuous Service
and the method for crediting such service.
2.9 "Contribution Rate" means the rate determined under Section 5.5.
2.10 "Disability" means a mental or physical illness that entitles the
Participant to receive benefits under the long-term disability plan of the
Company or a Subsidiary, or if the Participant is not covered by such plan, a
mental or physical illness that renders a Participant permanently and totally
incapable of performing his duties as an employee of the Company or a
Subsidiary. Notwithstanding the foregoing, a Disability shall not qualify under
this Plan if it is the result of (a) a willfully self-inflicted injury or
willfully self-induced sickness; or (b) an injury or disease contracted,
suffered, or incurred, while participating in a criminal offense. The
determination of Disability shall be made by the Committee. The determination
of Disability for purposes of this Plan shall not be construed to be an
admission of disability for any other purpose.
2.11 "Eligible Employee" means each employee of the Company or a
Subsidiary (if the Subsidiary has adopted the Plan) on a Grant Date except that
the Committee in its sole discretion may exclude:
(a) any employee who has accrued less than a minimum period of Continuous
Service established by the Committee (but not to exceed 2 years).
(b) any employee whose customary employment is 20 hours or less per week;
-2-
<PAGE>
(c) any employee whose customary employment is for not more than 5 months
in any calendar year;
(d) any employee who would directly or indirectly own or hold (applying
the rules of Section 424(d) of the Code to determine stock ownership)
immediately following the grant of an Option hereunder an aggregate of five
percent (5%) or more of the total combined voting power or value of all
outstanding shares of all classes of stock of the Company or any Subsidiary; and
(e) any employee who is a highly compensated employee of the Company or
Subsidiary within the meaning of Section 414(q) of the Code.
Any period of service described in the preceding sentence may be decreased in
the discretion of the Committee.
2.12 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
2.13 "Exercise Date" means such one or more dates determined by the
Committee on which the accumulated value of the Account shall be applied to
purchase Common Stock. The Committee may accelerate an Exercise Date in order
to satisfy the employment period requirement of Section 423(a)(2).
2.14 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.15 "Fair Market Value" means the value determined on the basis of
the good faith determination of the Committee pursuant to the applicable method
described in Section 4.5 and as adjusted, averaged or otherwise modified by the
Committee.
2.16 "Grant Date" means the date or dates established by the Committee
on which one or more Options are granted pursuant to the Plan. The Committee
may determine for any Plan Year that there shall be no Grant Date, in which case
no Options shall be granted for that Plan Year. The terms and conditions of any
Option granted on a particular Grant Date shall be independent of and have no
effect on the terms and conditions of any Option granted on another Grant Date.
2.17 "Option" means the right to purchase Common Stock pursuant to the
Plan and any Agreement.
2.18 "Option Period" means the period beginning on the Grant Date and
expiring on the Exercise Date as determined by the Committee, subject to the
limitations of Section 5.3.
-3-
<PAGE>
2.19 "Option Price" means the price at which the Company's Common
Stock granted as of a specific Grant Date may be purchased under an Option. The
price shall be subject to the limitation set forth in Section 5.4.
2.20 "Participant" means an Eligible Employee who satisfies the
eligibility conditions of the Plan and to whom an Option has been granted by the
Committee under the Plan, and in the event a Representative is appointed for a
Participant, then the term "Participant" shall mean such appointed
Representative, or successor Representative(s) appointed, as the case may be,
provided that "Termination of Employment" shall mean the Termination of
Employment of the Participant.
2.21 "Plan" means the NovaMed Eyecare, Inc. 1999 Stock Purchase Plan,
as herein set forth and as may be amended from time to time.
2.22 "Plan Year" means, for the first Plan Year, the period starting
on the effective Date of the Plan, and ending on December 31, 1999; and for all
subsequent Plan Years, the twelve (12) consecutive month period starting on
January 1 and ending on the following December 31. The Committee may at any
time in its discretion designate another period as the Plan Year.
2.23 "Representative" means (a) the person or entity acting as the
executor or administrator of a Participant's estate pursuant to the last will
and testament of a Participant or pursuant to the laws of the jurisdiction in
which the Participant had his primary residence at the date of the Participant's
death; (b) the person or entity acting as the guardian or temporary guardian of
a Participant's estate; or (c) the person or entity which is the beneficiary of
the Participant upon or following the Participant's death. A Participant may
file a written designation of his Representative with the Committee. Such
designation of his Representative may be changed by the Participant at any time
by written notice given in accordance with rules and procedures established by
the Committee.
2.24 "Retirement" means the Participant's Termination of Employment
after attaining either the normal retirement age or the early retirement age as
defined in the principal (as determined by the Committee) tax-qualified plan of
the Company or a Subsidiary, if the Participant is covered by such plan, and if
the Participant is not covered by such a plan, then age 65, or age 55 with the
accrual of 10 years of service.
2.25 "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated pursuant thereto.
2.26 "Subsidiary" means any corporation, as currently defined in
Section 424(f) of the Code. Unless otherwise indicated the term "Company" shall
hereinafter be deemed to include all Subsidiaries of the Company which have
adopted the Plan.
2.27 "Termination of Employment" means the latest date on which a
person ceases, for whatever reason, to be an employee of the Company or a
Subsidiary. For determining whether
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<PAGE>
and when a Participant has incurred a Termination of Employment for cause,
"cause" shall mean any act or omission which permits the Company or a Subsidiary
to terminate the employment agreement or arrangement between the Participant and
the Company or a Subsidiary for cause as defined in such agreement or
arrangement, or in the event there is no such employment agreement or
arrangement or the agreement or arrangement does not define the term "cause,"
then "cause" shall mean (a) any act or omission which the Company or a
Subsidiary believes is of a criminal nature, and the result of which the Company
or a Subsidiary believes is detrimental to the interests of the Company or a
Subsidiary; (b) the material breach of a fiduciary duty owing to the Company or
a Subsidiary, including without limitation, fraud and embezzlement; or (c)
conduct or the omission of conduct on the part of the Participant which
constitutes a material breach of any statutory or common-law duty of loyalty to
the Company or a Subsidiary.
ARTICLE III
-----------
ADMINISTRATION
--------------
3.1 Committee Structure and Authority. The Plan shall be administered by
the Committee. The Committee shall be comprised of two or more disinterested
members of the Board of Directors selected by the Board. A majority of the
Committee shall constitute a quorum at any meeting thereof (including telephone
conference) and the acts of a majority of the members present, or acts
unanimously approved in writing by the entire Committee without a meeting, shall
be the acts of the Committee. A person shall be considered disinterested for
this purpose only if, at the time he exercises discretion in administering the
Plan, he is a "disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act. The Board shall have the authority to remove, replace or fill any
vacancy of any member of the Committee upon notice to the Committee and the
affected member. Any member of the Committee may resign upon notice to the
President of the Company or to the Board. The Committee may allocate among one
or more of its members, or may delegate to one or more of its agents, such
duties and responsibilities as it determines. Subject to the provisions of this
Plan, the Committee shall have full and final authority in its discretion to:
(a) determine from time to time whether a person is an Eligible
Employee as of any Grant Date;
(b) determine the Option Price;
(c) determine the number of shares of Common Stock available as
of any Grant Date or subject to each Option;
(d) determine any Grant Date, Exercise Date and Option Period,
and provide for all aspects of payroll deduction, suspension or withdrawal;
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(e) determine, subject to the Plan, the time or times and the
manner when each Option shall be exercisable and the duration of the Option
Period;
(f) provide for the acceleration of the right to exercise an
Option (or portion thereof);
(g) prescribe additional terms, conditions and restrictions in
the Agreement and to provide for the forms of Agreement to be utilized in
connection with this Plan;
(h) determine whether a Participant has incurred a Disability;
(i) determine what securities laws requirements are applicable
to the Plan, Options, and the issuance of shares of Common Stock hereunder
and request of a Participant that appropriate action be taken;
(j) cancel, with the consent of the holder or as otherwise
provided in the Plan or an Agreement, outstanding Options;
(k) require as a condition of the exercise of an Option or the
issuance or transfer of a certificate of Common Stock, the withholding from
a Participant of the amount of any federal, state or local taxes as may be
necessary in order for the Company or Subsidiary to obtain a deduction and
as may be otherwise required by law;
(l) determine whether and for what reason an individual has
incurred a Termination of Employment or an authorized leave of absence;
(m) treat all or any portion of any period during which a
Participant is on an approved leave of absence as a period of employment
for purposes of accrual of his rights under an Option;
(n) determine whether the Company or any other person has a
right or obligation to purchase Common Stock from a Participant and, if so,
the terms and conditions on which such Common Stock is to be purchased;
(o) determine the restrictions or limitations on the transfer of
Common Stock issued upon exercise of an Option;
(p) determine whether an Option is to be adjusted, modified or
purchased, or become fully exercisable, under Section 6.3 of the Plan or
the terms of an Agreement;
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(q) adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of this Plan;
(r) appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties;
(s) correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Agreement relating to an Option, in
such manner and to the extent the Committee shall determine in order to
carry out the purposes of the Plan; and
(t) construe and interpret this Plan, any Agreement, and take
all other actions, and make all other determinations and take all other
actions deemed necessary or advisable for the administration of this Plan.
In the absence of the appointment of a Committee, the two or more members
of the Board who have served the longest period of time as members of the Board
and who are disinterested persons within the meaning of Rule 16b-3 of the
Exchange Act shall be the Committee. No member of the Committee, while serving
as such, shall be eligible to receive any Option hereunder, although membership
on the Committee shall not affect or impair any such member's rights under any
Option granted to him at a time when he was not a member of the Committee. A
member of the Committee shall not exercise any discretion respecting himself
under the Plan.
ARTICLE IV
----------
STOCK PROVISIONS
----------------
4.1 Number of Shares Subject to the Plan. The stock subject to the
Options granted under this Plan shall be the Company's Common Stock. Unless
otherwise amended by the Board and approved by the stockholders of the Company
to the extent required by law, a maximum number of 400,000 shares of Common
Stock of the Company (or such number as may result following any adjustment
pursuant to Section 6.3) shall be reserved and available for Options granted
under the Plan. The shares issued with respect to Options under the Plan may be
authorized and unissued shares, or shares issued and reacquired by the Company.
4.2 Release of Shares. If any shares of Common Stock available for
subscription are unsubscribed, or if any Option granted hereunder shall be
canceled, forfeited, expire or terminate for any reason without having been
exercised or realized in full, any shares of Common Stock subject to
subscription or subject to such Option shall again be available and may
thereafter be granted or otherwise applied under this Plan.
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4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise
of an Option shall be subject to the terms and conditions specified herein and
to such other terms, conditions and restrictions as the Committee in its
discretion may determine or provide in the Agreement. The Company shall not be
required to issue or deliver any certificates for shares of Common Stock prior
to (1) the listing of such shares on any stock exchange (or other public market)
on which the Common Stock may then be listed (or regularly traded), (2) the
completion of any registration or qualification of such shares under federal or
state law, or any ruling or regulation of any governmental body which the
Committee, in its sole discretion, determines to be necessary or advisable, and
(3) the tendering to the Company of such documents and/or payments as the
Committee may deem necessary, including documents the Committee deems necessary
to satisfy any applicable withholding obligation in order for the Company or
another entity to obtain a deduction on its federal, state or local tax return
with respect to the exercise of an Option. The Company may cause any certificate
for any share of Common Stock to be delivered to be properly marked with a
legend or other notation reflecting the limitations on transfer of such Common
Stock as provided in this Plan or as the Committee may otherwise require. The
Company has no obligation to register shares of Common Stock issued pursuant to
the Plan. Fractional shares shall not be delivered, but shall be rounded to the
next lower whole number of shares.
4.4 Stockholder Rights. No person shall have any rights of a stockholder
as to shares of Common Stock subject to an Option until, after proper exercise
of the Option or other action required, such shares shall have been recorded on
the Company's official stockholder records as having been issued or transferred.
No adjustment shall be made for cash dividends or other rights for which the
record date is prior to the date such shares are recorded as issued or
transferred in the Company's official stockholder records, except as provided in
Section 6.3.
4.5 Stock Valuation. If and when the value of Common Stock shall be
required to be determined, it shall be determined in accordance with the
following provisions by the Committee, as applicable:
(a) if the Common Stock is listed on a national securities exchange
or on the Nasdaq National Market ("NNM") the closing price of the Common
Stock on the relevant date, as reported on the composite tape or by NNM, as
the case may be;
(b) if the Common Stock is not listed on a national securities
exchange or quoted on NNM, but is traded in the over-the-counter market,
the average of the closing bid and asked prices for the Common Stock on the
relevant date, or the most recent preceding day for which such quotations
are available; and
(c) if, on the relevant date, the Common Stock is not publicly traded
or reported as described in (i) or (ii), on the basis of the good faith
determination of the Committee.
4.6 Custodian. Shares of Common Stock purchased pursuant to the Plan may
be delivered to and held in the custody of such investment or financial firm as
shall be appointed by
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the Committee. The custodian may hold in nominee or street name certificates for
shares purchased pursuant to the Plan, and may commingle shares in its custody
pursuant to the Plan in a single account without identification as to individual
Participants. By appropriate instructions to the custodian on forms to be
provided for the purpose, a Participant may from time to time obtain (a)
transfer into the Participant's own name or into the name of the Participant and
another individual as joint tenants with the right of survivorship of all or
part of the whole shares held by the custodian for the Participant's account and
delivery of such shares to the Participant; (b) transfer of all or part of the
whole shares held for the Participant's account by the custodian to a regular
individual brokerage account in the Participant's own name or in the name of the
Participant and another individual as joint tenants with the right of
survivorship, either with the firm then acting as custodian or with another
firm, or (c) sale of all or part of the whole shares held by the custodian for
the Participant's account at the market price at the time the order is executed
and remittance of the net proceeds of the sale to the Participant. Upon
termination of participation in the Plan, and upon receipt of instructions from
the Participant, the shares held by the custodian for the account of the
Participant will be transferred and delivered to the Participant in accordance
with (a) above, transferred to a brokerage account in accordance with (b), or
sold in accordance with (c), above.
ARTICLE V
---------
ELIGIBILITY; OPTION PROVISIONS
------------------------------
5.1 Eligibility. Except as herein provided, the persons who shall be
eligible to participate in the Plan as of any Grant Date shall be those persons
(and only those persons) who are Eligible Employees of the Company (including a
Subsidiary that has adopted the Plan) on a Grant Date. Employees of any entity
related to the Company other than a corporation shall not be eligible to
participate in the Plan.
5.2 Grant of Options. The Committee shall have authority to grant Options
under the Plan at any time or from time to time to all Eligible Employees as of
a Grant Date. (To the extent an Option is granted to any Eligible Employee of an
entity on a relevant date, all Eligible Employees of the entity shall be granted
an Option to the extent required by law.) An Option shall entitle the
Participant to receive shares of Common Stock at the conclusion of the Option
Period, subject to the Participant's satisfaction in full of any conditions,
restrictions or limitations imposed in accordance with the Plan or an Agreement,
including without limitation, payment of the Option Price. Each Option granted
under this Plan shall be evidenced by an Agreement, in a form approved by the
Committee, which shall embody the terms and conditions of such Option and which
shall be subject to the express terms and conditions set forth in this Plan and
to such other terms and conditions as the Committee may deem appropriate. The
grant and exercise of Options hereunder shall be subject to all applicable
federal, state and local laws, rules and regulations and to such approvals by
any governmental or regulatory agency as may be required. As of any Grant Date,
each Eligible Employee shall be granted Options with the same rights and
privileges as any
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other Eligible Employee on that Grant Date, except the amount of the Common
Stock which may be purchased by any Participant under any Option may bear a
uniform relationship to the total compensation, or the basic or regular rate of
compensation, (as determined by the Committee) of all Eligible Employees on that
Grant Date, and the Option may establish a maximum amount of Common Stock which
may be purchased.
5.3 Option Period. Each Agreement shall specify the period for which the
Option thereunder is granted, which shall be determined by the Committee. In no
event shall the Option Period extend beyond the period permitted under Section
423(b)(7) of the Code.
5.4 Option Price. Subject to the limits stated herein, the Option Price
per share at which shares of Common Stock may be acquired upon exercise of an
Option shall be determined by the Committee. Unless otherwise specified by the
Committee, with respect to any Exercise Date, the Option Price shall not be less
than the lesser of eighty-five percent (85%) of the Fair Market Value of a share
of Common Stock (averaged over such period as the Committee may determine and as
permitted by law) on the applicable Grant Date and eighty-five percent (85%) of
the Fair Market Value of a share of Common Stock (averaged over such period as
the Committee may determine and as permitted by law) on the applicable Exercise
Date. The Committee reserves the right to increase the Option Price by the
value of any accretion to the amounts credited to an Account if the Participant
is credited with such accretion regardless of the method of accounting for such
accretion.
5.5 Contribution Rate. If an Eligible Employee elects to participate, the
Participant shall file an Agreement with the Committee within the time period
designated by the Committee. The Committee may provide that the Agreement shall
specify a dollar amount determined by the Participant to be deducted each pay
period, or the Committee may permit only a specified amount. Such amount when
deducted shall be credited to the Account and shall be the Participant's
Contribution Rate. Such deductions shall begin as of the first regularly
scheduled payroll date on or after the later of the Grant Date and the date
specified by the Committee. The Committee may establish minimum and maximum
amounts to be contributed and a date by when such Agreement must be filed with
the Committee. Notwithstanding the foregoing, in no event may more than $20,000
(or such other amount as may be determined from time to time by the Committee)
be deducted from the Participant's compensation (as defined by the Committee)
for each Option Period and the maximum number of shares which can be purchased
by a Participant during the Option Period shall not exceed such amount divided
by eighty-five percent of the Fair Market Value of a share of Common Stock on
the applicable Grant Date (as determined under Section 5.4). Such contributions
will be held in the general funds of the Company, and no interest shall accrue
on any amounts held under this Plan, unless expressly determined by the
Committee. If payroll deductions are made by a Subsidiary, that corporation
will promptly remit the amount of the deduction to the Company. A Participant's
Contribution Rate, once established, shall remain in effect during the Option
Period unless the Committee decides, in its sole discretion, to allow
Participants to modify their Contribution Rate; provided, however, that
contributions shall be suspended or fully discontinued in order to comply with
Section 401(k) of the Code or for such
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other reasons as the Committee in its sole discretion may determine, or if the
Participant shall request suspension or discontinuance. If a Participant
requests to suspend payroll deductions, the Participant may do so at such times
and in such manner as the Committee may permit, and previously deducted amounts
shall be retained until the earlier of the Exercise Date and the date the
Participant totally discontinues payroll deductions and requests a distribution
of the Account. A Participant who has suspended contributions may recommence
payroll deductions at such time, if at all, as determined by the Committee. If a
Participant requests to totally discontinue payroll deductions, the Participant
may do so by providing written notice to the Committee. There shall be paid to
the Participant the value of the Participant's Account as soon as
administratively possible and the Participant shall not receive any shares as of
the Exercise Date.
5.6 Purchase of Shares. Subject to Sections 5.7, 5.8, 5.9, 5.10 and 5.11
on each Exercise Date, a Participant who has previously executed an Agreement
with respect to a specific Grant Date and made one or more payments described in
Section 5.5 shall be deemed to have exercised the Option to the extent of the
value of the Account, subject to the limit set forth in Section 5.5 with respect
to the Option being exercised, and shall be deemed to have purchased such number
of full shares of Common Stock as set forth below, subject to the limits of
Sections 423(b)(3) and 423(b)(8) of the Code. The number of shares of Common
Stock to be purchased as of any Exercise Date shall be determined by dividing
the Account value by the Option Price per share of the Common Stock and the
value of the shares so purchased shall be charged to the Account. If the total
number of shares to be purchased as of any Exercise Date by all Participants
exceeds the number of shares authorized under this Plan or made available by the
Committee as to any Exercise Date, a pro rata allocation of the available shares
will be made among all Participants authorizing such payroll deductions based on
their Account Value on the Exercise Date. The Company shall not be required to
issue any fractional share hereunder. Any value remaining in an Account of the
Participant shall be returned to the Participant and not applied to purchase
Common Stock. Certificates of Common Stock purchased hereunder may be held by
the custodian as provided in Section 4.6. Any Common Stock issued to the
Participant who is subject to reporting under Section 16 of the Exchange Act
must be held for six (6) months to the extent required by law to avoid liability
under the Exchange Act. The Committee may amend the Plan or any Agreement or
provide in operation for Participants to dispose of shares of Common Stock
received upon the Exercise Date on or immediately thereafter (which time may
include any period during which the Option is held) to the extent such change
would not result in liability under Section 16 of the Exchange Act.
5.7 Cancellation of Options. Except as otherwise provided in an
Agreement, an Option shall cease to be exercisable and shall be canceled on or
after the expiration of the Option Period.
5.8 Terminated Employees. Except as otherwise provided by the Committee
or in an Agreement, any Participant who incurs a Termination of Employment for
any reason, except death, Disability or Retirement, during the Option Period
shall cease to be a Participant, the Option shall be null and void on the date
of the Termination of Employment without notice to the
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Participant and the balance of the Account of the Participant shall be
distributed to him as soon as administratively possible.
5.9 Deceased Employees. If a Participant shall die during an Option
Period while an Eligible Employee, no further contributions by deduction from
regularly scheduled payments on behalf of the deceased Participant shall be
made, except that the Representative may make a single sum payment with respect
to the Option at any time on or before the Exercise Date equal to the amount the
Participant would have contributed as determined by the Committee for the
payroll periods remaining to the Exercise Date. The Representative may at any
time prior to the Exercise Date request a distribution of the Account. If the
Representative does not request a distribution, the balance accumulated in the
deceased Participant's Account shall be used to purchase shares of the Common
Stock on the previously mentioned Exercise Date.
5.10 Disabled or Retired Employees. If a Participant incurs a
Termination of Employment due to Disability, or if a Participant incurs a
Termination of Employment due to Retirement, during an Option Period, no further
contributions by deduction from regularly scheduled payments on behalf of the
disabled or retired Participant shall be made, except that the Participant may
make a single sum payment with respect to the Option at any time on or before
the Exercise Date equal to the amount the Participant would have contributed as
determined by the Committee for the payroll periods remaining to the Exercise
Date. The Participant may at any time prior to the Exercise Date request a
distribution of the Account. If the Participant does not request a distribution
of the Account, the balance accumulated in the disabled or retired Participant's
Account shall be used to purchase shares of the Common Stock on the previously
mentioned Exercise Date.
5.11 Limitations. Notwithstanding any other provision of this Plan,
in no event may a Participant (i) purchase under the Plan during a calendar year
Common Stock having a fair market value (determined at Grant Date) of more than
$25,000 or (ii) receive any rights to purchase stock hereunder if he or she
beneficially owns, immediately after such receipt, five percent (5%) or more of
the total voting power or value of all classes of stock of the Company.
5.12 Nonassignability. Neither the Option nor the Account shall be
assigned, transferred (except as herein provided), pledged, or hypothecated in
any way (whether by operation of law or otherwise), other than by will or the
laws of descent and distribution or pursuant to a domestic relations order which
would be a qualified domestic relations order as defined in the Code or ERISA
(if the Plan were described in the relevant Sections) but only to the extent
consistent with Section 423 of the Code. Except as provided herein, the Option
is exercisable during a Participant's lifetime only by the Participant or the
appointed guardian or legal representative of the Participant, and neither the
Option nor the Account shall be subject to execution, attachment, or similar
process. Any attempted assignment, transfer, pledge, hypothecation, or other
disposition contrary to the provisions hereof, and the levy of any attachment or
similar process upon the Option or the Account shall be null and void and
without effect. The Company shall have the right to terminate the Option or the
Account in the event of any such assignment,
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transfer, pledge, hypothecation, other disposition of the Option or the Account,
or levy of attachment or similar process, by notice to that effect to the person
then entitled to exercise the Option; provided, however, that termination of the
Option hereunder shall not prejudice any rights or remedies which the Company
may have under an Agreement or otherwise.
ARTICLE VI
-----------
GENERAL PROVISIONS APPLICABLE TO THE PLAN
-----------------------------------------
6.1 Termination of Plan. To the extent required by law, this Plan shall
terminate on the last day of the ten (10) year period commencing with the
effective date or at such earlier time as the Board may determine, and no
Options shall be granted under the Plan after that date. Any Options
outstanding under the Plan at the time of its termination shall remain in effect
until they shall have been exercised, expired or otherwise canceled, settled or
terminated as provided herein or in an Agreement, and such outstanding Options
shall not be affected by such termination of the Plan. The provisions of the
Plan in respect to the full and final authority of the Committee under the Plan,
other than the authority to grant Options, and in respect of a Participant's
obligations respecting shares of Common Stock received pursuant to the exercise
of an Option shall continue notwithstanding the termination of the Plan.
6.2 Investment Representation. In the event the disposition of Common
Stock acquired upon the exercise of any Option is not covered by a then current
registration statement under the Securities Act and is not otherwise exempt from
such registration, the Common Stock so acquired shall be restricted against
transfer to the extent required by the Securities Act or regulations thereunder,
and each Agreement shall contain a requirement that, upon demand by the Company
for such representation, the individual exercising an Option shall state in
writing, as a condition precedent to each exercise of the Option, in whole or in
part, that the Common Stock acquired by such exercise is acquired for investment
purposes only and not for resale or with a view to distribution. The Committee
may set forth in an Agreement such other terms and conditions relating to the
registration or qualification of the Common Stock under federal or state
securities laws as it desires, including, in its discretion, the imposition of
an obligation on the Company to cause the Common Stock issued to a Participant
to be registered under the Securities Act.
6.3 Effect of Certain Changes.
(a) Anti-Dilution. In the event of any Company stock dividend, stock
split, combination or exchange of shares, recapitalization or other change
in the capital structure of the Company, corporate separation or division
of the Company (including, but not limited to, a split-up, spin-off, split-
off or distribution to Company stockholders other than a normal cash
dividend), sale by the Company of all or a substantial portion of its
assets (as measured on either a stand-alone or consolidated basis),
reorganization, rights offering, partial or complete liquidation, or any
other corporate transaction or event involving the
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Company and having an effect similar to any of the foregoing, then the
Committee may adjust or substitute, as the case may be, the number of
shares of Common Stock available for Options under the Plan, the number of
shares of Common Stock covered by outstanding Options, the exercise price
per share of outstanding Options, and any other characteristics or terms of
the Options as the Committee shall deem necessary or appropriate to reflect
equitably the effects of such changes to the Participants; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated by rounding to the next lower whole number of shares with
appropriate payment for such fractional share as shall reasonably be
determined by the Committee.
(b) Change in Control. If there is a Change in Control of the Company
(as defined herein) or the Committee reasonably anticipates that a Change
in Control is likely to occur, then (1) the Committee may cause each Option
to be immediately exercised; (2) the Committee may provide that any Option
exercisable on the date of any such Change in Control may be purchased by
the Company in an amount equal to the excess, if any, of the aggregate fair
market value per share of Common Stock subject to the Option (or portion
thereof) over the aggregate Option Price of the shares subject to the
Option (or portion thereof) which the Committee determines to purchase; or
(3) the Company may provide for any combination of (1) and (2) above. For
purposes of this Section 6.3(b), the aggregate fair market value per share
of Common Stock subject to the Option that the Committee determines to
purchase shall be determined by the Committee by reference to the cash or
fair market value, determined by the Committee, of the securities,
property or other consideration receivable pursuant to the Change in
Control described in this Section 6.3(b). The aggregate Option Price of
the Common Stock shall be determined by multiplying the number of such
shares by the Option Price. If the event of a Change in Control described
in Section 6(c)(iii), and if the Option is unexercised and the Committee
does not exercise its discretion hereunder to purchase the Option, then the
Option shall be regarded as the right to receive the securities, property,
cash or other consideration receivable by stockholders of the Company
immediately prior to the Change in Control described in Section 6(c)(iii).
The provisions of this Section 6.3(b) shall be construed consistently with
the terms or conditions of any regulation or ruling respecting the status
of Options under Section 423 of the Code and the receipt of cash or other
consideration coincident with the cancellation of such Options, and in
order to provide the Participant the economic benefit of the Option without
incurring liability under Section 16(b) of the Exchange Act.
(c) "Change in Control" shall be deemed to have occurred on the first
to occur of any of the following events:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of fifty percent (50%) or more of
either (A) the then outstanding
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shares of common stock of the Company (the "Outstanding Company Common
Stock") or (B) 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 in Control of the Company: (1) any acquisition
directly from the Company (excluding an acquisition by virtue of the
exercise of a conversion privilege unless such convertible securities
were acquired directly from the Company), (2) any acquisition by the
Company, (3) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (4) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the conditions described
in clauses (A) and (B) of subsection (iii) of this Section are
satisfied; or
(ii) Individuals who, as of the effective date of this Plan,
constitute the Board of Directors of the Company (the "Incumbent Board
of the Company") cease for any reason to constitute at least a
majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's
stockholders, was recommended or approved by a vote of at least a
majority of the directors then comprising the Incumbent Board of the
Company shall be considered as though such individual were a member of
the Incumbent Board of the Company, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as
contemplated by Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors
of the Company; or
(iii) The consummation by the Company of a reorganization,
merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (A) more than fifty percent
(50%) of, respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, and (B) at least a
majority of the members of the board of directors of the
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corporation resulting from such reorganization, merger or
consolidation were members of the Board of Directors of the Company at
the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(iv) The consummation by the Company of the sale or other
disposition of all or substantially all of the assets of the Company,
other than to a corporation with respect to which, following such sale
or other disposition, (A) more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, and (B) at least a majority of the members of the board of
directors of such corporation were members of the Board of Directors
of the Company at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition of
assets of the Company.
(d) The Committee may, in its discretion, grant to the Participant,
in exchange for the surrender and cancellation of the Option, a new Option
on such terms and conditions as may be determined by the Committee in
accordance with the Plan.
6.4 Withholding. Notwithstanding any other provision hereof, as a
condition of delivery or transfer of shares of Common Stock, the Committee in
its sole discretion may require the Participant to pay to the Company, or the
Committee may at its election withhold from any wages, salary, or stock to be
issued to a Participant pursuant to the exercise of an Option, or other payment
due to the Participant, an amount sufficient to satisfy all present or estimated
future federal, state and local withholding tax requirements related thereto.
The Participant may satisfy any requirement under the Plan or an Agreement with
respect to the Company's federal, state or local tax withholding obligation by
requesting that the Committee withhold and not transfer or issue shares of
Common Stock with a Fair Market Value equal to such withholding obligation,
otherwise issuable or transferable to him pursuant to the exercise of that
portion of the Option. An Agreement may provide for shares of Common Stock to be
delivered or withheld having a Fair Market Value in excess of the minimum amount
required to be withheld, but not in excess of the amount determined by applying
the Participant's maximum marginal tax rate. Any right or election of the
Participant under this Section 6.4 shall be subject to the approval of the
Committee and shall be in compliance with Section 16 of the Exchange Act. The
amount of required withholding shall, at the election of the Participant, be at
a specified rate not less than the statutory minimum federal and state
withholding rate and not greater than the maximum federal, state and
-16-
<PAGE>
local marginal tax rate applicable to the Participant and to the particular
option exercise transaction.
6.5 No Company Obligation. The Company shall have no duty or obligation
to affirmatively disclose to a record or beneficial holder of an Option, and
such holder shall have no right to be advised of, any material information
regarding the Company at any time prior to, upon or in connection with the
exercise of an Option.
6.6 Committee Discretion. The Committee may in its sole discretion
include in any Agreement an obligation that the Company purchase a Participant's
shares of Common Stock received upon the exercise of an Option (including the
repurchase of any unexercised Options which have not expired), or may obligate a
Participant to sell shares of Common Stock to the Company upon such terms and
conditions as the Committee may determine and set forth in an Agreement. The
provisions of this Article VI shall be construed by the Committee in its sole
discretion, and shall be subject to such other terms and conditions as the
Committee may from time to time determine.
ARTICLE VII
-----------
MISCELLANEOUS
-------------
7.1 Indemnification of the Board and Committee. In addition to such other
rights of indemnification as they may have and to the extent permitted by law,
the Company shall indemnify, defend and hold harmless the Board, the Committee,
the members of the Committee, the officers of the Company, and any agent or
representative selected by the Board or Committee (collectively "indemnified
party") against the reasonable expenses, including, without limitation,
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or any threat thereof, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any act or omission in connection with the Plan or any Option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by legal counsel selected by the Company)
or paid by them in satisfaction of a judgment in any action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such indemnified party is liable for gross negligence or
gross misconduct in the performance of his duties; provided that within sixty
(60) days after institution of any such action, suit or proceeding the
indemnified party may in writing elect to defend the same at its sole expense,
and if such election is made, the Company shall have no further liability or
obligations to the indemnified party under this Section. The provisions of this
Section 7.1 shall in no way limit any other obligation or arrangements the
Company may have with regard to indemnifying an indemnified party.
7.2 Mitigation of Excise Tax. Subject to any agreement with a
Participant, if any payment or right accruing to a Participant under this Plan
(without the application of this Section
-17-
<PAGE>
7.2), either alone or together with other payments or rights accruing to the
Participant from the Company or an Affiliate ("Total Payments") would constitute
a "parachute payment" (as defined in Section 280G of the Code and regulations
thereunder), such payment or right shall be reduced to the largest amount or
greatest right that will result in no portion of the amount payable or right
accruing under the Plan being subject to an excise tax under Section 4999 of the
Code or being disallowed as a deduction under Section 280G of the Code. The
determination of whether any reduction in the rights or payments under this Plan
is to apply shall be made by the Committee in good faith after consultation with
the Participant, and such determination will be conclusive and binding on the
Participant. The Participant shall cooperate in good faith with the Committee in
making such determination and providing the necessary information for this
purpose. The provisions of this Section 7.2 shall apply with respect to any
Participant only if, after reduction for any applicable federal excise tax
imposed by Section 4999 of the Code and other federal income tax imposed by the
Code, the Total Payments accruing to such Participant would be less than the
amount of the Total Payments as reduced (i) if applicable, pursuant to the
provisions of this Section 7.2 and any similar provisions under any other plans
of the Company or any Affiliate to mitigate the applicable federal excise tax,
and (ii) by federal income taxes (other than such excise tax).
7.3 Interpretation. Whenever necessary or appropriate in this Plan and
where the context so requires, the singular term and the related pronouns shall
include the plural and the masculine and feminine gender.
7.4 Governing Law. The Plan and any Agreement shall be governed by the
laws of the State of Delaware (other than its laws respecting choice of law).
7.5 Limitations on Liability. No liability whatever shall attach to or be
incurred by any past, present or future stockholders, officers or directors,
merely as such, of the Company under or by reason of any of the terms,
conditions or agreements contained in this Plan, in an Agreement or implied from
either thereof, and any and all liabilities of, and any and all rights and
claims against the Company, or any shareholder, officer or director, merely as
such, whether arising at common law or in equity or created by statute or
constitution or otherwise, pertaining to this Plan or to an Agreement, are
hereby expressly waived and released by every Participant as a part of the
consideration for any benefits provided by the Company under this Plan. A
person who shall claim a right or benefit under this Plan shall be entitled only
to claim against the Company for such benefit.
7.6 Validity. If any provision of this Plan shall for any reason be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereof, and this Plan shall be construed as if such
invalid or unenforceable provision were omitted.
7.7 Assignment. This Plan shall inure to the benefit of and be binding
upon the parties hereof and their respective successors and permitted assigns.
-18-
<PAGE>
7.8 Captions. The captions and headings to this Plan are for convenience
of reference only and in no way define, limit or describe the scope or the
intent of this Plan or any part hereof, nor in any way affect this Plan or any
part hereof.
7.9 Amendments. The Board of Directors may at any time amend, waive,
discharge or terminate the Plan even with prejudice to a Participant. The Board
or the Committee may amend, waive, discharge, terminate, modify, extend, replace
or renew an outstanding Option Agreement even with prejudice to a Participant;
provided such a change does not cause the Plan to fail to be a plan as described
in Section 423 of the Code.
7.10 Entire Agreement. This Plan and the Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and the Agreement, the terms
and conditions of this Plan shall control.
7.11 Rights with Respect to Continuance of Employment. Nothing contained
herein or in an Agreement shall be deemed to alter the at-will employment
relationship between the Company or a Subsidiary and a Participant. Nothing
contained herein or in an Agreement shall be construed to constitute a contract
of employment between the Company or a Subsidiary and a Participant. The Company
or, as applicable, the Subsidiary and the Participant each continue to have the
right to terminate the employment relationship at any time for any reason. The
company or Subsidiary shall have no obligation to retain the Participant in its
employ as a result of this Plan. There shall be no inference as to the length of
employment hereby, and the Company or Subsidiary reserves the same rights to
terminate the Participant's employment as existed prior to the individual
becoming a Participant in this Plan.
7.12 Options for Shares in Substitution for Stock Options Granted by Other
Corporations. Options may be granted under the Plan from time to time in
substitution for stock options or stock appreciation rights held by employees,
directors or service providers of other corporations who are about to become
employees of the Company or a Subsidiary as the result of a merger or
consolidation of the employing corporation with the Company or a Subsidiary, or
the acquisition by the Company or a Subsidiary of the assets of the employing
corporation, or the acquisition by the Company or a Subsidiary of the stock of
the employing corporation, as the result of which it becomes a designated
employer under the Plan. The terms and conditions of the Options so granted may
vary from the terms and conditions set forth in this Plan at the time of such
grant as the majority of the members of the Committee may deem appropriate to
conform, in whole or in part, to the provisions of the Options in substitution
for which they are granted.
7.13 Procedure for Adoption. Any Subsidiary of the Company may by
resolution of such Subsidiary's board of directors, with the consent of the
Board of Directors and subject to such conditions as may be imposed by the Board
of Directors, adopt the Plan for the benefit of its employees as of the date
specified in the board resolution. The Board shall have the power to make such
designation before or after the Plan is approved by stockholders.
-19-
<PAGE>
7.14 Procedure for Withdrawal. Any Subsidiary which has adopted the
Plan may, by resolution of the board of directors of such Subsidiary, with the
consent of the Board of Directors and subject to such conditions as may be
imposed by the Board of Directors, terminate its adoption of the Plan; provided
such termination of adoption does not cause the Plan to fail to be a plan
described in Section 423 of the Code.
7.15 Expenses. Expenses of the Plan, including the fees or expenses
incurred by the transfer agent in connection with the transfer of Common Stock
and brokerage fees or expenses incurred in connection with the acquisition of
Common Stock in connection with the Plan or transfer to the Participant, shall
be paid by the Company. Any expense or fee associated with the Common Stock,
including, for example, fees or commissions in connection with the disposition
of shares or the withdrawal of such shares from the custodian, shall be borne by
the Participant.
Executed and effective as of the date first written above.
NOVAMED EYECARE, INC.
By: /s/ Stephen J. Winjum
------------------------------------------
Title: Chairman of the Board, President and Chief
Executive Officer
------------------------------------------
-20-
<PAGE>
Exhibit 4.2
NOVAMED EYECARE INC.
AMENDED AND RESTATED
STOCK INCENTIVE PLAN
(as of September 20, 1999)
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I ESTABLISHMENT............................................................. 1
- --------- -------------
ARTICLE II DEFINITIONS............................................................... 1
- ---------- -----------
3.1 Committee Structure and Authority.................................... 6
ARTICLE III ADMINISTRATION............................................................ 6
- ----------- --------------
ARTICLE IV SHARES SUBJECT TO PLAN.................................................... 8
- ---------- ----------------------
4.1 Number of Shares..................................................... 8
----------------
4.2 Release of Shares.................................................... 8
-----------------
4.3 Restrictions on Shares............................................... 8
----------------------
4.4 Shareholder Rights................................................... 9
------------------
4.5 Anti-Dilution........................................................ 9
-------------
ARTICLE V ELIGIBILITY............................................................... 9
- --------- -----------
5.1 Eligibility.......................................................... 9
-----------
ARTICLE VI OPTIONS................................................................... 10
- ---------- -------
6.1 General.............................................................. 10
-------
6.2 Grant................................................................ 10
-----
6.3 Terms and Conditions................................................. 10
--------------------
6.4 Termination by Reason of Death....................................... 12
------------------------------
6.5 Termination by Reason of Disability.................................. 12
-----------------------------------
6.6 Other Termination.................................................... 12
-----------------
6.7 Cashing-Out of Options............................................... 13
----------------------
ARTICLE VII CHANGE IN CONTROL PROVISIONS.............................................. 13
- ----------- ----------------------------
7.1 Impact of Event...................................................... 13
---------------
7.2 Definition of Change in Control...................................... 14
-------------------------------
7.3 Change in Control Price.............................................. 14
-----------------------
ARTICLE VIII MISCELLANEOUS............................................................. 14
- ------------ -------------
8.1 Amendments and Termination........................................... 14
--------------------------
8.2 Unfunded Status of Plan.............................................. 15
-----------------------
8.3 Limits on Transferability............................................ 15
-------------------------
8.4 Status of Options Under Code Section 162(m).......................... 15
-------------------------------------------
8.5 General Provisions................................................... 15
------------------
8.6 Mitigation of Excise Tax............................................. 17
------------------------
8.7 Options in Substitution for Options Granted by Other Entities........ 17
-------------------------------------------------------------
8.8 Procedure for Adoption............................................... 18
----------------------
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
8.9 Procedure for Withdrawal.............................................. 18
------------------------
8.10 Delay................................................................. 18
-----
8.11 Headings.............................................................. 18
--------
8.12 Severability.......................................................... 18
------------
8.13 Successors and Assigns................................................ 18
----------------------
8.14 Entire Agreement...................................................... 18
----------------
</TABLE>
ii
<PAGE>
NOVAMED EYECARE, INC.
AMENDED AND RESTATED
STOCK INCENTIVE PLAN
ARTICLE I
---------
ESTABLISHMENT
--------------
In May, 1999, NovaMed Holdings Inc., an Illinois corporation, merged with
and into NovaMed Eyecare, Inc., a Delaware corporation (the "Company"). The Plan
(as defined herein) was originally established by NovaMed Holdings Inc. on
December 20, 1996 (i) to replace and substitute for, and assume certain options
granted under, the NovaMed Eyecare Management, LLC Equity Incentive Plan ("LLC
Plan") and (ii) to authorize new stock options, subject to the terms and
conditions of the Plan and any Agreement. In May 1999, the Company amended the
Plan to, among other things, (i) authorize new stock options subject to the
terms and conditions of the Plan and any Agreement and (ii) provide that, upon
the consummation of an initial public offering of equity securities of the
Company, (a) options previously granted under the Plan to purchase shares of
Series A Preferred Stock and Series B Preferred Stock shall instead represent
options to purchase a like number of shares of Common Stock and (b) there shall
no longer be reserved and available for distribution pursuant to the Plan any
options to purchase shares of Series A Preferred Stock or Series B Preferred
Stock. This Plan is amended and restated effective September 20, 1999 to (i)
reflect the merger of NovaMed Holdings Inc. with and into NovaMed Eyecare, Inc.,
(ii) reflect the consummation of the Company's initial public offering of equity
securities and (iii) incorporate all prior amendments to the Plan. The purpose
of the Plan is to promote the overall financial objectives of the Company, its
shareholders and its Affiliates by motivating those persons selected to
participate in the Plan (which shall include those persons with outstanding
options under the LLC Plan) to achieve long-term growth in the shareholder
equity in the Company and by retaining the association of those individuals who
are instrumental in achieving this growth.
ARTICLE II
----------
DEFINITIONS
-----------
For purposes of the Plan, the following terms are defined as set forth
below:
"Affiliate" means any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
association or other entity (other than the Company) that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the Company, including, without limitation, any
shareholder of an affiliated group of which the Company is a common parent
corporation as provided in Section 1504 of the Code.
"Agreement" or "Option Agreement" means, individually or collectively, any
agreement entered into pursuant to the Plan pursuant to which an Option is
granted to a Participant.
"Beneficiary" means the person, persons, trust or trusts which have been
designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under the
Plan upon such Participant's death or to which Options are transferred if and to
the extent permitted hereunder. If, upon a Participant's death, there is no
designated Beneficiary or surviving designated Beneficiary, then the term
Beneficiary means person, persons, trust or trust entitled by will or the laws
of descent and distribution to receive such benefits.
<PAGE>
"Board of Directors" or "Board" means the Board of Directors of the
Company.
"Cause" means, for purposes of whether and when a Participant has incurred
a Termination of Employment for Cause, any act or omission which permits the
Company or an Affiliate to terminate the Participant's employment with the
Company or an Affiliate for "cause" as defined in such agreement or
arrangement, or in the event there is no such agreement or arrangement or the
agreement or arrangement does not define the term "cause" or a substantially
equivalent term, then Cause means, unless otherwise defined in the Option
Agreement with respect to the corresponding Option:
(a) any act or failure to act deemed to constitute cause under the
Company's or an Affiliate's established practices, policies or guidelines
applicable to the Participant;
(b) breach of a covenant made by the Participant in conjunction with
the grant of an Option or the transfer of Shares hereunder;.
(c) the Participant's gross negligence in the performance of his
duties or material failure or willful refusal to perform his duties;
(d) the determination by the Committee in the exercise of its
reasonable judgment that Participant has committed an act that (i) negatively
affects the Company's or Affiliate's business or reputation or (ii) indicates
alcohol or drug abuse by Participant that adversely affects his performance
hereunder; or
(e) the determination by the Committee in the exercise of its
reasonable judgment that Participant has committed an act or acts constituting
a felony or other act involving dishonesty, disloyalty or fraud against the
Company or an Affiliate.
"Change in Control" and "Change In Control Price" have the meanings set
forth in Sections 7.2 and 7.3, respectively.
"Code" or "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, any Treasury Regulations (including proposed regulations) thereunder
and any subsequent Internal Revenue Code.
"Commission" means the Securities and Exchange Commission or any successor
agency.
"Committee" means the person or persons appointed to administer the Plan,
as further described herein.
"Common Stock" means the regular voting common stock, $0.01 par value per
share, of the Company, whether presently or hereafter issued, and any other
stock or security resulting from adjustment thereof as described hereinafter or
the equity of any successor to the Company which is designated for the purposes
of this Plan.
2
<PAGE>
"Company" means NovaMed Eyecare, Inc., a Delaware corporation, and includes
any successor or assignee entity or entities into which the Company may be
merged, changed or consolidated; any entity for whose securities the securities
of the Company shall be exchanged; and any assignee of or successor to
substantially all of the assets of the Company.
"Covered Employee" means a Participant who is a "covered employee" within
the meaning of Section 162(m) of the Code.
"Disability" means a mental or physical illness that entitles the
Participant to receive benefits under the long term disability plan of the
Company or an Affiliate, or if the Participant is not covered by such a plan or
the Participant is not an employee of the Company or an Affiliate, a mental or
physical illness that renders a Participant totally and permanently incapable of
performing the Participant's duties for the Company or an Affiliate.
Notwithstanding the foregoing, a Disability will not qualify under this Plan if
it is the result of (i) a willfully self-inflicted injury or willfully self-
induced sickness; or (ii) an injury or disease contracted, suffered, or
incurred, while participating in a criminal offense. The determination of
Disability will be made by the Committee. The determination of Disability for
purposes of this Plan will not be construed to be an admission of disability for
any other purpose.
"Effective Date" means December 20, 1996.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Fair Market Value" means, unless otherwise determined by the Committee,
the closing sale price per share reported on a consolidated basis for stock
listed on the principal stock exchange or market on which Common Stock is traded
on the date as of which such value is being determined or, if there is no sale
on that date, then on the last previous day on which a sale was reported.
"Grant Date" means the date as of which an Option is granted pursuant to
the Plan.
"Incentive Stock Option" means an Option to purchase shares of Common Stock
granted under this Plan which satisfies the requirements of Section 422 of the
Code.
"LLC Plan" means the NovaMed Eyecare Management, LLC Equity Incentive
Plan, which plan was terminated in connection with the establishment of this
Plan.
"Nasdaq" means the Nasdaq Stock Market, including the Nasdaq National
Market.
"Nonqualified Stock Option" means an Option to purchase Shares granted
under this Plan, the taxation of which is pursuant to Section 83 of the Code.
3
<PAGE>
"Option" or "Stock Option" means an option or right granted to a
Participant (under Article VI hereof) to purchase Shares at a specified price
during specified time periods.
"Option Period" means the period during which an Option shall be
exercisable in accordance with the related Agreement and Article VI.
"Option Price" means the price at which Shares may be purchased under an
Option as provided in Section 6.3.
"Participant" means a person who satisfies the eligibility conditions of
Article V and to whom an Option has been granted by the Committee under this
Plan, and in the event a Representative is appointed for a Participant or
another person becomes a Representative, then the term "Participant" shall mean
such Representative. The term shall also include a trust for the benefit of the
Participant, a partnership the interest of which is held by or for the benefit
of the Participant, the Participant's parents, spouse or descendants, or a
custodian under a uniform gifts to minors act or similar statute for the benefit
of the Participant's descendants, to the extent permitted by the Committee and
not inconsistent with the Rule 16b-3 or the status of the Option as an Incentive
Stock Option, to the extent intended. Notwithstanding the foregoing, the term
"Termination of Employment" shall mean the Termination of Employment of the
person to whom the Option was originally granted.
"Plan" means the NovaMed Eyecare, Inc. Amended and Restated Stock Incentive
Plan, as herein set forth and as may be amended from time to time.
"Representative" means (a) the person or entity acting as the executor or
administrator of a Participant's estate pursuant to the last will and testament
of a Participant or pursuant to the laws of the jurisdiction in which the
Participant had the Participant's primary residence at the date of the
Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
Beneficiary of the Participant upon or following the Participant's death; or (d)
any person to whom an Option has been transferred with the permission of the
Committee or by operation of law; provided that only one of the foregoing shall
be the Representative at any point in time as determined under applicable law
and recognized by the Committee. Any Representative shall be subject to all
terms and conditions applicable to the Participant.
"Retirement" means the Participant's Termination of Employment after
attaining either the normal retirement age or the early retirement age as
defined in the principal (as determined by the Committee) tax-qualified plan of
the Company or an Affiliate, if the Participant is covered
4
<PAGE>
by such plan, and if the Participant is not covered by such a plan, then age 65,
or age 55 with the accrual of 10 years of service.
"Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Series A Preferred Stock" means the Series A Convertible Preferred Stock,
$0.01 par value, formerly authorized and designated by the Company for purposes
of the Plan.
"Series B Preferred Stock" means the Series B Convertible Preferred Stock,
$0.01 par value, formerly authorized and designated by the Company for purposes
of the Plan.
"Shares" means shares of Common Stock or shares of Preferred Stock, as the
context shall indicate.
"Termination of Employment" means the occurrence of any act or event,
whether pursuant to an employment agreement or otherwise, that actually or
effectively causes or results in the person's ceasing, for whatever reason, to
be an officer, independent contractor, board member, consultant, director or
employee of the Company or of any Affiliate, or to be an officer, independent
contractor, board member, consultant, director or employee of any entity that
provides services to the Company or an Affiliate, including, without limitation,
death, Disability, dismissal, severance at the election of the Participant,
Retirement, or severance as a result of the discontinuance, liquidation, sale or
transfer by the Company or its Affiliates of all businesses owned or operated by
the Company or its Affiliates. With respect to any person who is not an employee
with respect to the Company or an Affiliate, the Agreement will establish what
act or event shall constitute a Termination of Employment for purposes of the
Plan. A transfer of employment from the Company to an Affiliate, or from an
Affiliate to the Company, shall not be a Termination of Employment, unless
expressly determined by the Committee. A Termination of Employment shall occur
for an employee who is employed by an Affiliate if the Affiliate shall cease to
be an Affiliate and the Participant does not immediately thereafter become an
employee of the Company or an Affiliate.
"Voluntary Termination of Employment" means a Termination of Employment at
the election of the Participant, including, with limitation, resignation by the
Participant, but excluding Retirement.
5
<PAGE>
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
ARTICLE III
-----------
ADMINISTRATION
--------------
3.1 Committee Structure and Authority. The Plan shall be administered by
---------------------------------
the Committee, which shall be composed of one or more members of the Board of
Directors, each of whom is a "non-employee director" within the meanings of Rule
16b-3 and an "outside director" for purposes of the deduction of compensation
under Section 162(m) of the Code. The Committee shall be the Compensation
Committee of the Board of Directors, unless such committee does not exist or the
Board establishes a committee whose purpose is the administration of this Plan.
In the absence of an appointment of a Compensation Committee or another specific
committee, the Board shall constitute the Committee. A majority of the Committee
shall constitute a quorum at any meeting thereof (including by telephone
conference) and the acts of a majority of the members present, or acts approved
in writing by a majority of the entire Committee without a meeting, shall be the
acts of the Committee for purposes of this Plan. The Committee may authorize any
one or more of its shareholders or an officer of the Company to execute and
deliver documents on behalf of the Committee. A member of the Committee shall
not exercise any discretion respecting himself or herself under the Plan. In the
event that the Compensation Committee of the Board no longer is the Committee,
the Board shall have the authority to remove, replace or fill any vacancy of any
member of the Committee upon notice to the Committee and the affected member.
Any member of the Committee may resign upon notice to the Board. The Committee
may allocate among one or more of its members, or may delegate to one or more of
its agents, such duties and responsibilities as it determines.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) to select those persons to whom Options may be granted from time
to time;
(b) to determine whether and to what extent Options are to be granted
hereunder;
(c) to determine the number of Shares to be covered by each Option
granted hereunder;
(d) to determine the terms and conditions of any Option granted
hereunder (including, but not limited to, 'the Option Price, the Option
Period, any exercise restriction or limitation and any exercise
acceleration, forfeiture or waiver regarding any Option and the Shares
relating thereto);
6
<PAGE>
(e) to adjust the terms and conditions, at any time or from time to
time, of any Option, subject to the limitations of Section 8.1;
(f) to determine under what circumstances an Option may be settled in
cash or Shares;
(g) to provide for the forms of Agreement to be utilized in
connection with the Plan;
(h) to determine whether a Participant has a Disability or a
Retirement;
(i) to determine whether and with what effect an individual has
incurred a Termination of Employment;
(j) to determine what securities law requirements are applicable to
the Plan, Options, and the issuance of Shares and to require of a
Participant that appropriate action be taken with respect to such
requirements;
(k) to cancel, with the consent of the Participant or as otherwise
provided in the Plan or an Agreement, outstanding Options;
(1) to interpret and make final determinations with respect to the
remaining number of Shares available under this Plan;
(m) to require as a condition of the exercise of an Option or the
issuance or transfer of a certificate for Shares, the withholding from a
Participant of the amount of any federal, state or local taxes as may be
required by law;
(n) to determine whether the Company or any other person has a right
or obligation to purchase Shares from a Participant and, if so, the terms
and conditions on which such Shares are to be purchased;
(o) to determine the restrictions or limitations on the transfer of
Shares;
(p) to determine whether an Option is to be adjusted, modified or
purchased, or is to become fully exercisable, under the Plan or the terms
of an Agreement;
(q) to determine the permissible methods of Option exercise and
payment, including cashless exercise arrangements;
(r) to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan; and
(s) to appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties.
7
<PAGE>
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Option issued under the Plan (and any Agreement) and to otherwise
supervise the administration of the Plan. The Committee's policies and
procedures may differ with respect to Options granted at different times or to
different Participants.
Any determination made by the Committee pursuant to the provisions of the
Plan shall be made in its sole discretion, and in the case of any determination
relating to an Option, may be made at the time of the grant of the Option or,
unless in contravention of any express term of the Plan or an Agreement, at any
time thereafter. All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company
and Participants. No determination shall be subject to de novo review if
-- ----
challenged in court.
ARTICLE IV
----------
SHARES SUBJECT TO PLAN
----------------------
4.1 Number of Shares. Subject to the adjustment under Section 4.5, the
----------------
total number of Shares reserved and available for distribution pursuant to
Options under the Plan shall be 6,251,800 shares of Common Stock, as authorized
for issuance on the Effective Date and thereafter from time to time. Such Shares
may consist, in whole or in part, of authorized and unissued Shares or shares of
treasury stock. Options previously granted under the Plan to purchase shares of
Series A Preferred Stock and Series B Preferred Stock shall instead represent
options to purchase a like number of shares of Common Stock. There shall no
longer be reserved and available for distribution pursuant to the Plan any
options to purchase shares of Series A Preferred Stock or Series B Preferred
Stock.
4.2 Release of Shares. If any Shares that are subject to an Option cease
-----------------
to be such, if any Shares that are subject to any Option are forfeited, if any
Option otherwise terminates without issuance of Shares being made to the
Participant, or if any Shares are received by the Company in connection with the
exercise of an Option or the satisfaction of a tax withholding obligation, such
Shares, in the discretion of the Committee, may again be available for
distribution in connection with Options (other than Incentive Stock Options)
under the Plan. If any Shares could not again be available for Options to a
particular Participant under any applicable law, such Shares shall be available
exclusively for Options to Participants who are not subject to such limitations.
4.3 Restrictions on Shares. Shares issued upon exercise of an Option shall
----------------------
be subject to the terms and conditions specified herein and to such other
terms, conditions and restrictions as the Committee in its discretion may
determine or provide in an Option Agreement. The Company shall not be required
to issue or deliver any certificates for Shares, cash or other property prior
to: (i) the Participant executing any agreement that the Committee has required
the Participant to execute as a condition for the grant of shares; (ii) the
listing of such shares on any stock exchange or NASDAQ (or other public market)
on which the Shares may then be listed (or regularly traded), (iii) the
completion of any registration or qualification of such Shares under federal or
state law, or any ruling or regulation of any government body which the
Committee
8
<PAGE>
determines to be necessary or advisable, and (iv) the satisfaction of any
applicable withholding obligation in order for the Company or an Affiliate to
obtain a deduction with respect to the exercise of an Option. The Company may
cause any certificate for any Shares to be delivered to be properly marked with
a legend or other notation reflecting the limitations on transfer of such Shares
as provided in this Plan or as the Committee may otherwise require. The
Committee may require any person exercising an Option to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the Shares in compliance with
applicable law or otherwise. Fractional shares shall not be delivered, but shall
be rounded to the next lower whole number of shares.
4.4 Shareholder Rights. No person shall have any rights of a shareholder
------------------
as to Shares subject to an Option until, after proper exercise of the Option or
other action required, such Shares have been recorded on the Company's official
shareholder records as having been issued and transferred. Upon exercise of the
Option or any portion thereof, the Company shall have thirty (30) days in which
to issue the Shares, and the Participant will not be treated as a shareholder
for any purpose whatsoever prior to such issuance. No adjustment shall be made
for cash dividends or other rights for which the record date is prior to the
date such Shares are recorded as issued and transferred in the Company's
official shareholder records, except as provided herein or in an Agreement.
4.5 Anti-Dilution. In the event of any Company stock dividend, stock
-------------
split, reverse stock split, combination or exchange of shares, recapitalization
or other change in the capital structure of the Company, corporate separation or
division of the Company (including, but not limited to, a split-up, spin-off,
split-off or distribution to Company shareholders other than a normal cash
than dividend), sale by the Company of all or a substantial portion of its
assets (measured either on a stand-alone or consolidated basis), reorganization,
rights offering, a partial or complete liquidation, or any other corporate
transaction or event involving the Company and having an effect similar to any
of the foregoing, then the Committee may adjust or substitute, as the case may
be, the number of Shares available for Options under the Plan, the number of
Shares covered by outstanding Options, the exercise price per Share of
outstanding Options, and any other characteristics or terms of the Options as
the Committee shall deem necessary or appropriate to reflect equitably the
effects of such changes to the Participants; provided, however, that the
Committee may limit any such adjustment so as to maintain the deductibility of
the Options under Section 162(m) of the Code, and that any fractional shares
resulting from such adjustment shall be eliminated by rounding to the next lower
whole number of shares with appropriate payment for such fractional share as
shall reasonably be determined by the Committee.
ARTICLE V
---------
ELIGIBILITY
-----------
5.1 Eligibility. Except as herein provided, the persons who shall be
-----------
eligible to participate in the Plan and be granted Options shall be
those persons who are directors, officers,
9
<PAGE>
employees, independent contractors or consultants with respect to the Company or
any Affiliate, who are in a position, in the opinion of the Committee, to make
contributions to the growth, management, protection and success of the Company
and its Affiliates. Of those persons described in the preceding sentence, the
Committee may, from time to time, select persons to be granted Options and shall
determine the terms and conditions with respect thereto. In making any such
selection and in determining the form of the Option, the Committee may give
consideration to the functions and responsibilities of the person's
contributions to the Company and its Affiliates, the value of the individual's
service to the Company and its Affiliates and such other factors deemed relevant
by the Committee. The Committee may designate as ineligible to participate in
the Plan any person who would otherwise be eligible to participate.
ARTICLE VI
----------
OPTIONS
-------
6.1 General. The Committee shall have authority to grant Options under the
-------
Plan at any time or from time to time. Options may be either Incentive Stock
Options or Nonqualified Stock Options. An Option shall entitle the Participant
to receive Shares upon the exercise of such Option, subject to the Participant's
satisfaction in full of any conditions, restrictions or limitations imposed in
accordance with the Plan or an Agreement (the terms and provisions of which may
differ from other Agreements) including without limitation, payment of the
Option Price. During any three-calendar-year period, Options for no more than
1,000,000 shares of Common Stock shall be granted to any Participant.
6.2 Grant. The grant of an Option shall occur as of the date the Committee
-----
determines. Each Option granted under this Plan shall be evidenced by an
Agreement, in a form approved by the Committee, which shall embody the terms and
conditions of such Option and which shall be subject to the express terms and
conditions set forth in the Plan. Such Agreement shall become effective upon
execution by the Company and the Participant. Only a person who is a common-law
employee of the Company, any parent corporation of the Company or a subsidiary
(as such terms are defined in Section 424 of the Code) on the date of grant
shall be eligible to be granted an Option which is intended to be and is an
Incentive Stock Option. To the extent that any Option is not designated as an
Incentive Stock Option or even if so designated does not qualify as an Incentive
Stock Option, it shall constitute a Nonqualified Stock Option.
6.3 Terms and Conditions. Except to the extent determined to be
--------------------
appropriate by the Committee and consented to by the Participant, an Option
granted pursuant to the Plan shall be subject to such terms and conditions as
shall be determined by the Committee, including the following:
(a) Option Period. The Option Period of each Option will be fixed
--------------
by the Committee; provided that the Option Period of a Nonqualified Stock Option
shall not
10
<PAGE>
exceed ten (10) years from the date the Option is granted. In the case of an
Incentive Stock Option, the Option Period shall not exceed ten (10) years from
the date of grant or five (5) years in the case of an individual who owns more
than ten percent (10%) of the combined voting power of all classes of stock of
the Company, a corporation which is a parent corporation of the Company or any
subsidiary of the Company (each as defined in Section 424 of the Code). No
Option which is intended to be an Incentive Stock Option shall be granted more
than ten (10) years from the date this Plan is adopted by the Company or the
date this Plan is approved by the shareholders of the Company, whichever is
earlier.
(b) Option Price. The Option Price per share of Common Stock
------------
purchasable under an Option shall be determined by the Committee. If an Option
is intended to qualify as an Incentive Stock Option, the Option Price per share
of Common Stock shall be not less than the Fair Market Value per share of Common
Stock on the date the Option is granted, or where granted to an individual who
owns or who is deemed to own stock possessing more than ten percent (10%) of
the combined voting power of all classes of stock of the Company, a corporation
which is a parent corporation of the Company or any subsidiary of the Company
(each as defined in Section 424 of the Code), not less than one hundred ten
percent (110%) of such Fair Market Value per share.
(c) Exercisability. Subject to Section 7.1, Options shall be
--------------
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee. If the Committee provides that any Option
is exercisable only in installments, the Committee may at any time waive such
installment exercise provisions, in whole or in part. In addition, the Committee
may at any time accelerate the exercisability of any Option. If the Committee
intends that an Option be an Incentive Stock Option, the Committee may, in its
discretion, provide that the aggregate Fair Market Value (determined at the
Grant Date) of an Incentive Stock Option which is exercisable for the first time
during the calendar year shall not exceed $100,000.
(d) Method of Exercise. Subject to the provisions of this
------------------
Article VI, a Participant may exercise Options, in whole or in part, at any time
during the Option Period by the Participant's giving written notice of exercise
on a form provided by the Committee (if available) to the Company specifying the
number of Shares subject to the Option to be purchased. Such notice shall be
accompanied by payment in full of the purchase price by cash or check or such
other form of payment as the Company may accept. If approved by the Committee,
payment in full or in part may also be made (i) by delivering Shares already
owned by the Participant for a period of at least six (6) months prior to
payment having a total Fair Market Value on the date of such delivery equal to
the Option Price; (ii) by the execution and delivery of a note or other full
recourse evidence of indebtedness (and any security agreement thereunder)
satisfactory to the Committee; (iii) by the delivery of cash or the extension of
credit by a broker-dealer to whom the Participant has submitted a notice of
exercise or otherwise indicated an intent to exercise an Option (in accordance
with Part 220, Chapter II, Title 12 of the Code of Federal Regulations, so-
called "cashless" exercise); (iv) by certifying ownership of shares
11
<PAGE>
owned by the Participant to the satisfaction of the Committee for later delivery
to the Company as expected by the Committee and (v) by any combination of the
foregoing. No Shares will be issued until full payment therefor has been made
and the Participant has executed any and all agreements that the Company may
require the Participant to execute. A Participant will have all of the rights of
a shareholder of the Company holding the Shares that are subject to such Option
(including, if applicable, the right to vote the Shares and the right to receive
dividends), when the Participant has given written notice of exercise, has paid
in full for such Shares, executed all relevant agreements, and such Shares have
been recorded on the Company's official records as having been issued and
transferred.
(e) Non-transferability of Options. Except as provided herein or in
------------------------------
an Agreement, no Option or interest therein shall be transferable by the
Participant other than by will or by the laws of descent and distribution or by
a designation of Beneficiary effective upon the death of the Participant, and
all Options shall be exercisable during the Participant's lifetime only by the
Participant or the Participant's Representative. If and to the extent
transferability is permitted by the Committee as provided by an Agreement, the
Option shall be transferable only if such transfer does not result in liability
under Section 16 of the Exchange Act to the Participant or other Participants
and is consistent with registration of the Option and sale of Common Stock on
Form S-8 (or a successor form) or is consistent with the use of Form S-8 (or the
Committee's waiver of such condition) and consistent with an Option's intended
status as an Incentive Stock Option (if applicable).
6.4 Termination by Reason of Death. Unless otherwise provided in an
------------------------------
Agreement or determined by the Committee, if a Participant incurs a Termination
of Employment due to death, any unexpired and unexercised Option held by such
Participant shall thereafter be fully exercisable for a period of one (1) year
following the date of the appointment of a Representative (or such other period
or no period as the Committee may specify) or until the expiration of the Option
Period, whichever period is the shorter.
6.5 Termination by Reason of Disability. Unless otherwise provided in an
-----------------------------------
Agreement or determined by the Committee, if a Participant incurs a Termination
of Employment due to a Disability, any unexpired and unexercised Option held by
such Participant shall thereafter be fully exercisable by the Participant for
the period of one (1) year (or such other period or no period as the Committee
may specify) immediately following the date of such Termination of Employment or
until the expiration of the Option Period, whichever period is shorter, and the
Participant's death at any time following such Termination of Employment due to
Disability will not affect the foregoing. In the event of Termination of
Employment by reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, such Option will thereafter be treated as a Nonqualified Stock
Option.
6.6 Other Termination. Unless otherwise provided in an Agreement or
-----------------
determined by the Committee, if a Participant incurs a Termination of Employment
due to Retirement, or the
12
<PAGE>
Termination of Employment is involuntary on the part of the Participant (but is
not due to death or Disability or for Cause), any Option held by such
Participant shall thereupon terminate, except that such Option, to the extent
then exercisable, may be exercised for the lesser of the ninety (90)-day period
commencing with the date of such Termination of Employment or until the
expiration of the Option Period, whichever period is shorter. If the Participant
incurs a Termination of Employment which is either (a) for Cause or (b) a
Voluntary Termination of Employment on the part of the Participant, the Option
will terminate immediately. The death or Disability of a Participant after a
Termination of Employment otherwise provided herein will not extend the time
permitted to exercise an Option.
6.7 Cashing-Out of Options. Unless otherwise provided in the Agreement, on
----------------------
receipt of written notice of exercise, the Committee may elect to cash-out all
or part of the portion of any Option to be exercised by paying the Participant
an amount, in cash or Shares, equal to the excess of (a) the Fair Market Value
of the Shares that are subject to the portion of the Option being cashed-out
over (b) the Option Price, such difference multiplied by (c) the number of
Shares subject to the portion of the Option being cashed out, all as of the
effective date of such cash-out.
ARTICLE VII
-----------
CHANGE IN CONTROL PROVISIONS
----------------------------
7.1 Impact of Event. An Agreement may provide that in the event of a
---------------
Change in Control (as defined in Section 7.2):
(a) Any Options outstanding as of the date of such Change in Control and
not then exercisable shall become fully exercisable to the full extent
of the original grant.
(b) Notwithstanding any other provision of the Plan, unless the Committee
shall provide otherwise in an Agreement, in the event of a Change in
Control, a Participant shall have the right, whether or not the Option
is fully exercisable or may be otherwise realized by the Participant,
by giving notice to the Company during the sixty (60)-day period from
and after a Change in Control, to elect to surrender all or part of
the Option to the Company and to receive cash, within thirty (30) days
of such notice, in an amount equal to the amount by which the "Change
in Control Price" (as defined in Section 7.3) per share of the Shares
on the date of such election shall exceed the amount which the
Participant must pay to exercise the Option per share of Shares under
the Option (the "Spread") multiplied by the number of Shares granted
under the Option. Notwithstanding the foregoing, if any right under
this Section would cause a transaction to be ineligible for pooling of
interest accounting that would but for the right hereunder be eligible
for such accounting treatment, the Committee may modify or adjust the
right so that pooling of interest accounting shall be available,
including the substitution of Shares having a Fair Market Value equal
to the cash otherwise payable hereunder for the right which caused the
transaction to be ineligible for pooling of interest accounting.
13
<PAGE>
7.2 Definition of Change in Control. For purposes of this Plan, unless
-------------------------------
otherwise specified in the Agreement with respect to the corresponding Option, a
"Change In Control" shall be deemed to have occurred if (a) any corporation,
person or other entity (other than the Company, a majority-owned subsidiary of
the Company or any of its subsidiaries, or an employee benefit plan (or related
trust) sponsored or maintained by the Company or an Affiliate), including a
"group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, becomes the beneficial owner of Shares representing more than fifty
percent of the combined voting power of the Company's then outstanding
securities; (b)(i) the Company approves, in any transaction or series of related
transactions, a definitive agreement to merge or consolidate the Company with or
into another entity other than a majority-owned subsidiary of the Company, or
to sell or otherwise dispose of all or substantially all of the Company's
assets, and (ii) the persons who were the members of the Board of Directors
prior to such approval do not represent a majority of the Board of Directors of
the surviving, resulting or acquiring entity or the parent thereof; or (c) the
shareholders of the Company approve a plan of liquidation of the Company.
7.3 Change in Control Price. For purposes of the Plan, unless otherwise
-----------------------
specified in the Agreement with respect to the corresponding Option, "Change in
Control Price" means the higher of (a) the highest reported sales price of a
Share in any transaction reported on the principal exchange on which such Shares
are listed or on NASDAQ during the sixty (60)-day period prior to and including
the date of a Change in Control or (b) if the Change in Control is the result of
a tender or exchange offer, merger, consolidation, liquidation or sale of all or
substantially all of the assets of the Company (in each case a "Transaction"),
the highest price per Share paid in such Transaction. To the extent that the
consideration paid in any Transaction consists all or in part of securities or
other non-cash consideration, the value of such securities or other non-cash
consideration shall be determined in the sole discretion of the Committee.
ARTICLE VIII
------------
MISCELLANEOUS
-------------
8.1 Amendments and Termination. The Board may amend, alter or discontinue
----------------------------
the Plan at any time, but no amendment, alteration or discontinuation shall be
made which would impair the rights of a Participant under an Option theretofore
granted without the Participant's consent, except such an amendment (a) made to
avoid an expense charge to the Company or an Affiliate, (b) made to cause the
Plan to qualify for the exemption provided by Rule 16b-3 or (c) made to permit
the Company or an Affiliate a deduction under the Code. In addition, no such
amendment shall be made without the approval of the Company's shareholders to
the extent such approval is required by law or agreement.
The Committee may amend, alter or discontinue the Plan or an Option at any
time on the same conditions and limitations (and exceptions to limitations) as
apply to the Board's authority to amend the Plan and further subject to any
approval or limitations the Board may impose.
14
<PAGE>
Notwithstanding anything in the Plan to the contrary, if any right under
this Plan would cause a transaction to be ineligible for pooling of interest
accounting that would, but for the right hereunder, be eligible for such
accounting treatment, the Committee may modify or adjust the right so that
pooling of interest accounting shall be available, including the substitution of
equity interests having a Fair Market Value equal to the cash otherwise payable
hereunder for the right which caused the transaction to be ineligible for
pooling of interest accounting.
8.2 Unfunded Status of Plan. It is intended that the Plan be an "unfunded"
-----------------------
plan for incentive and deferred compensation. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Shares or make payments; provided, however, that, unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
8.3 Limits on Transferability. Unless otherwise provided in this Plan or
-------------------------
in an Agreement, no Option shall be subject to the claims of Participant's
creditors and no Option may be sold, transferred, assigned, alienated,
encumbered, hypothecated, gifted, conveyed, pledged or disposed of in any way
other than by will or the laws of descent and distribution or to a
Representative upon the death of the Participant.
8.4 Status of Options Under Code Section 162(m). It is the intent of the
-------------------------------------------
Company that Options granted to persons who are Covered Employees within the
meaning of Code Section 162(m) shall constitute "qualified performance-based
compensation" satisfying the requirements of Code Section 162(m). Accordingly,
the provisions of the Plan shall be interpreted in a manner consistent with Code
Section 162(m). If any provision of the Plan or any agreement relating to such
an Option does not comply or is inconsistent with the requirements of Code
Section 162(m), such provision shall be construed or deemed amended to the
extent necessary to conform to such requirements.
8.5 General Provisions.
------------------
(a) Representation. The Committee may require each person purchasing
--------------
or receiving shares pursuant to an Option to represent to and agree with
the Company in writing that such person is acquiring the shares without a
view to the distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
(b) No Additional Obligation. Nothing contained in the Plan shall
------------------------
prevent the Company or an Affiliate from adopting other or additional
compensation arrangements for its employees.
(c) Withholding. No later than the date as of which an amount first
-----------
becomes includable in the gross income of the Participant for income tax
purposes with respect to any Option, the Participant shall pay to the
Company (or other entity identified by the Committee), or make arrangements
satisfactory to the Company or other entity identified by the Committee
regarding the payment of, any Federal, state, local or foreign taxes of
15
<PAGE>
any kind required by law to be withheld with respect to such amount
required in order for the Company or an Affiliate to obtain a current
deduction. Unless otherwise determined by the Committee, withholding
obligations may be settled with Shares, including Shares that are part of
the Option that gives rise to the withholding requirement, provided that
any applicable requirements under Section 16 of the Exchange Act are
satisfied. The obligations of the Company under the Plan will be
conditional on such payment or arrangements, and the Company and its
Affiliates will, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to the Participant. If the
Participant disposes of shares of Common Stock acquired pursuant to an
Incentive Stock Option in any transaction considered to be a disqualifying
transaction under the Code, the Participant must give written notice of
such transfer and the Company shall have the right to deduct any taxes
required by law to be withheld from any amounts otherwise payable to the
Participant. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its
Affiliates shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to the Participant.
(d) Representative. The Committee shall establish such procedures
--------------
as it deems appropriate for a Participant to designate a Representative to
whom any amounts payable in the event of the Participant's death are to be
paid.
(e) Controlling Law. The Plan and all Options made and actions taken
---------------
thereunder will be governed by and construed in accordance with the laws of
the State of Delaware (other than its law respecting choice of law). The
Plan shall be construed to comply with all applicable law and to avoid
liability to the Company, an Affiliate or a Participant or loss of a
deduction, including, without limitation, liability under Section 16(b) of
the Exchange Act.
(f) Offset. Any amounts owed to the Company or an Affiliate by the
------
Participant of whatever nature may be offset by the Company from the value
of any Shares, cash or other thing of value under this Plan or an Agreement
to be transferred to the Participant, and no Shares, cash or other thing of
value under this Plan or an Agreement shall be transferred unless and until
all disputes between the Company and the Participant have been fully and
finally resolved and the Participant has waived all claims to such against
the Company or an Affiliate.
(g) No Rights with Respect to Continuance of Employment. Nothing
---------------------------------------------------
contained herein shall be deemed to alter the relationship between the
Company or an Affiliate and a Participant, or the contractual relationship
between a Participant and the Company or an Affiliate if there is a written
contract regarding such relationship. Nothing contained herein shall be
construed to constitute a contract of employment between the Company or an
Affiliate and a Participant. The Company or an Affiliate and each of the
Participants continue to have the right to terminate the employment or
service relationship at any time for any reason, except as provided in a
written contract. The Company or an Affiliate shall have no obligation to
retain the Participant in its employ or
16
<PAGE>
service as a result of this Plan. There shall be no inference as to the
length of employment or service hereby, and the Company or an Affiliate
reserves the same rights to terminate the Participant's employment or
service as existed prior to the individual's becoming a Participant in this
Plan.
(h) Fail-Safe. With respect to persons subject to Section 16 of the
---------
Exchange Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3, as applicable. To the extent any
provision of the Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee. Moreover, in the event the Plan does not
include a provision required by Rule 16b-3 to be stated herein, such
provision (other than one relating to eligibility requirements or the
price and amount of Options) shall be deemed to be incorporated by
reference into the Plan with respect to Participants subject to Section 16.
(i) Right to Capitalize. The grant of an Option shall in no way
-------------------
affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge,
consolidation, dissolve, liquidate or sell or transfer all or any part of
its business or assets.
8.6 Mitigation of Excise Tax. Subject to any agreement with a Participant,
------------------------
if any payment or right accruing to a Participant under this Plan (without the
application of this Section 8.6), either alone or together with other payments
or rights accruing to the Participant from the Company or an Affiliate ("Total
Payments"), would constitute a "parachute payment" (as defined in Section 280G
of the Code and regulations thereunder), such payment or right shall be reduced
to the largest amount or greatest right that will result in no portion of the
amount payable or right accruing under the Plan being subject to an excise tax
under Section 4999 of the Code or being disallowed as a deduction under Section
280G of the Code. The determination of whether any reduction in the rights or
payments under this Plan is to apply shall be made by the Committee in good
faith after consultation with the Participant, and such determination will be
conclusive and binding on the Participant. The Participant shall cooperate in
good faith with the Committee in making such determination and providing the
necessary information for this purpose. The provisions of this Section 8.6 shall
apply with respect to any Participant only if, after reduction for any
applicable federal excise tax imposed by Section 4999 of the Code and other
federal income tax imposed by the Code, the Total Payments accruing to such
Participant would be less than the amount of the Total Payments as reduced (i)
if applicable, pursuant to the provisions of this Section 8.6 and any similar
provision under any other plan of the Company or any Affiliate to mitigate the
applicable federal excise tax, and (ii) by federal income taxes (other than such
excise tax).
8.7 Options in Substitution for Options Granted by Other Entities. Options
-------------------------------------------------------------
may be granted under the Plan from time to time in substitution for options held
by employees, directors or service providers of other entities who are about to
become officers, directors, shareholders or employees of the Company or an
Affiliate. The terms and conditions of the Options so granted may vary from the
terms and conditions set forth in this Plan at the time of such grant as the
17
<PAGE>
majority of the shareholders of the Committee may deem appropriate to conform,
in whole or in part, to the provisions of the Options in substitution for which
they are granted.
8.8 Procedure for Adoption. Any Affiliate of the Company may by resolution
----------------------
of such Affiliate's board of directors with the consent of the Board of
Directors and subject to such conditions as may be imposed by the Board of
Directors, adopt the Plan for the benefit of its employees as of the date
specified in the resolution.
8.9 Procedure for Withdrawal. Any Affiliate which has adopted the Plan
------------------------
may, by resolution of the board of directors of such Affiliate, with the consent
of the Board of Directors and subject to such conditions as may be imposed by
the Board of Directors, terminate its adoption of the Plan.
8.10 Delay. If at the time a Participant incurs a Termination of Employment
-----
(other than due to Cause) or if at the time of a Change in Control, the
Participant is subject to "short swing" liability under Section 16 of the
Exchange Act, any time period provided for under the Plan or an Agreement to the
extent necessary to avoid the imposition of liability will be suspended and
delayed during the period the Participant would be subject to such liability,
but not more than six months and one day and not to exceed the Option Period.
The Company shall have the right to suspend or delay any time period described
in the Plan or an Agreement if the Committee shall determine that the action may
constitute a violation of any law or result in liability under any law to the
Company, an Affiliate or a shareholder in the Company until such time as the
action required or permitted will not constitute a violation of law or result in
liability to the Company, an Affiliate or a shareholder of the Company. The
Committee shall have the discretion to suspend the application of the provisions
of the Plan required solely to comply with Rule 16b-3 if the Committee
determines that Rule 16b-3 does not apply to the Plan.
8.11 Headings. The headings contained in this Plan are for reference
--------
purposes only and shall not affect the meaning or interpretation of this Plan.
8.12 Severability. If any provision of this Plan is for any reason held to
------------
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Plan, and this Plan will be construed as if
such invalid or unenforceable provision were omitted.
8.13 Successors and Assigns. This Plan shall inure to the benefit of and be
----------------------
binding upon each successor and assign of the Company. All obligations imposed
upon a Participant, and all rights granted to the Company hereunder, shall be
binding upon the Participant's heirs, legal representatives and successors.
8.14 Entire Agreement. This Plan and the Agreement constitute the entire
----------------
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and the Agreement, the terms
and conditions of this Plan shall control.
18
<PAGE>
EXHIBIT 5
KATTEN MUCHIN & ZAVIS
525 W. Monroe, Suite 1600
Chicago, Illinois 60661
(312) 902-5200
September 22, 1999
NovaMed Eyecare, Inc.
980 N. Michigan Avenue
Suite 1620
Chicago, Illinois 60611
Ladies and Gentlemen:
We have acted as counsel for NovaMed Eyecare, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing of a Registration
Statement on Form S-8 (the "Registration Statement") for the registration for
sale under the Securities Act of 1933, as amended, of a total of 6,651,800
shares of the Company's common stock, $.01 par value per share (the "Common
Stock"), which may be issued pursuant to the NovaMed Eyecare, Inc. 1999 Amended
and Restated Stock Purchase Plan (the "Stock Purchase Plan") and the NovaMed
Eyecare, Inc. Amended and Restated Stock Incentive Plan (the "Stock Incentive
Plan") (the Stock Purchase Plan and the Stock Incentive Plan are collectively
referred to herein as the "Plans").
In connection with this opinion, we have examined and relied upon originals
or copies, certified or otherwise identified to our satisfaction, of the
following:
1. The Registration Statement;
2. The Amended and Restated Certificate of Incorporation of the
Company;
3. The By-Laws of the Company;
4. Resolutions duly adopted by the Board of Directors of the Company
relating to the Plans;
5. The Plans;
6. Certificates of public officials, certificates of officers,
representatives and agents of the Company, and we have assumed that
all of the representations contained therein are accurate and
complete; and
<PAGE>
NovaMed Eyecare, Inc.
September 22, 1999
Page 2
7. Such other instruments, documents, statements and records of the
Company and others as we have deemed relevant and necessary to
examine and rely upon for the purpose of this opinion.
In connection with this opinion, we have assumed the accuracy and
completeness of all documents and records that we have reviewed, the genuineness
of all signatures, the authenticity of the documents submitted to us as
originals and the conformity to authentic original documents of all documents
submitted to us as certified, conformed or reproduced copies. We have further
assumed that all natural persons involved in the transactions contemplated by
the Registration Statement (the "Offering") have sufficient legal capacity to
enter into and perform their respective obligations and to carry out their roles
in the Offering.
Based upon the foregoing, we are of the opinion that the 6,651,800 shares
of Common Stock issuable under the Plans, when issued and delivered by the
Company in accordance with the terms of the Plans, will be validly issued, fully
paid and nonassessable securities of the Company.
We hereby consent to the use of this opinion for filing as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ KATTEN MUCHIN & ZAVIS
KATTEN MUCHIN & ZAVIS
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
RE: NovaMed Eyecare, Inc.
Form S-8 for Registration of 6,651,800 Shares of Common Stock
As Independent public accountants, we hereby consent to the use of our
reports (and all references to our Firm) included in or made a part of this
registration statement.
/s/ ARTHUR ANDERSEN LLP
-------------------
ARTHUR ANDERSEN LLP
Chicago, Illinois
September 22, 1999
