STOCK OPTION AGREEMENT
THIS
STOCK OPTION AGREEMENT
("Agreement"),
dated
as of ____________, 2005 ("Grant
Date"),
is
entered into between NovaMed, Inc., a Delaware corporation (the "Company"),
and
_________________, an employee of _________________, a wholly owned subsidiary
of the Company ("Participant").
RECITALS:
WHEREAS,
the
Company desires to afford the Participant an option ("Option")
to
purchase shares of Common Stock, $0.01 par value, in the Company ("Shares")
as
provided in this Agreement, effective as of the Grant Date;
WHEREAS,
the
Company has adopted the NovaMed, Inc. 2005 Stock Incentive Plan
(the
"Plan")
and
desires that the Options granted to the Participant under this Agreement
be
governed by the terms and conditions of the Plan; and
WHEREAS,
the
Committee has duly made all determinations necessary or appropriate to the
grants hereunder.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants set forth in this
Agreement and for other good and valuable consideration, the receipt of which
is
hereby acknowledged, the parties agree as follows:
1. Definitions.
Any
capitalized term used in this Agreement that is not defined in this Agreement
will have the same meaning as that given to it in the Plan. As used in this
Agreement:
"Cause"
shall
have the meaning set forth for such term in any written employment agreement
with Participant, or if no such term appears in the employment agreement,
or if
no employment agreement exists, as provided in the Plan.
"Vested
Option"
means
an Option which has become vested in accordance with Sections
2(c)
and
2(d)
hereof.
2. Grant
of Option, Option Price and Term.
(a)
The
Company hereby grants to Participant, as a matter of separate agreement and
not
in lieu of salary or any other compensation for services, Options to purchase
______________ (___________) Shares of the Company on the terms and conditions
set forth in this Agreement.
(b) For
each
Share purchased, Participant will pay to the Company an Option Price of
$_________ per Share. Accordingly, the aggregate Option Price to exercise
all of
the Options is $_______.
(c) Except
as
provided in Section
2(d),
until
the Participant incurs a Termination of Employment, (i) one-eighth (1/8)
of the
Options will become Vested Options on the date six months after the Grant
Date and
(ii)
an additional one-forty-eighth (1/48th) of the Options will become Vested
Options on the last day of each month thereafter. From the date of a Termination
of Employment of the Participant for any reason, no further Options shall
become
Vested Options.
(d) Notwithstanding
Section
2(c),
all of
the Options shall become Vested Options immediately upon a Change in Control
if
the Participant is employed by the Company at the time of such Change in
Control.
(e) Subject
to Section
3,
Vested
Options shall be exercisable at any time during the Option Period beginning
on
the vesting date of such Options and ending on the ten-year anniversary of
the
Grant Date. Options that are not Vested Options may not be exercised in any
circumstances.
(f) The
Options granted hereunder are designated as Nonqualified Stock
Options.
3. Cancellation
of Options.
All
Vested Options will be fully exercisable during the Option Period unless
earlier
cancelled as provided below:
(a) If
the
Participant has an involuntary (on the part of Participant) Termination of
Employment for reasons other than Cause, Disability or death (e.g.,
employee is terminated without Cause), all Vested Options shall terminate
and be
cancelled on the earlier of (i) ninety (90) days after such Termination
of
Employment or (ii) the expiration of the remaining Option
Period.
(b) If
the
Termination of Employment is on account of the Disability or death of the
Participant, all Vested Options will terminate and be cancelled on the earlier
of (i) the one-year anniversary of the occurrence of the Disability
or
death or (ii) the expiration of the remaining Option Period.
(c) If
Participant has a Termination of Employment for Cause or a Voluntary Termination
of Employment, all Vested Options will automatically terminate and be cancelled
on the date of such Termination of Employment.
(d) All
Options which are not Vested Options will terminate and be cancelled on the
date
of Participant's Termination of Employment for any reason.
(e) No
Options, whether or not vested, may be exercised after cancellation or after
expiration of the Option Period.
(f) If,
at
the time Participant has a Termination of Employment other than for Cause
or
Voluntary Termination of Employment, Participant is subject to Section 16
of the
Exchange Act, any time period provided for in this Section
3
will be
suspended or delayed during the period the Participant would be subject to
liability for engaging in "short-swing" transactions under Section 16 of
the
Exchange Act, but such suspension or delay will not extend such time period
more
than six months and one day.
4. Manner
of Exercise.
Vested
Options will be exercisable during the Participant's lifetime only by
Participant (or the Participant's Representative), and after Participant's
death
only by a Representative. Vested Options may be exercised only by the delivery
to the Company of a properly completed written exercise notice, in form
satisfactory to the Committee, which notice must specify the number of Shares
to
be purchased and the aggregate Option Price for such Shares, together with
payment in full of such aggregate Option Price. No Shares will be issued
until
full payment therefor has been made and the Participant has executed any
stockholder agreement or any other agreements in effect at such time which
the
Company may require its shareholders to execute. Payment may be made
only:
| (i) |
in
cash or by check;
|
|
(ii)
|
by
the transfer to the Company of Shares already owned by the Participant
for
a period of at least six (6) months prior to such
transfer;
|
|
(iii)
|
to
the extent permitted by the Xxxxxxxx-Xxxxx Act of 2002 and other
applicable laws, by the execution and delivery of a full recourse
promissory note or other evidence of indebtedness (and any security
agreement thereunder) satisfactory to, and in the discretion of,
the
Committee;
|
|
(iv)
|
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); or
|
|
(v)
|
in
any combination of (i), (ii), (iii) or
(iv).
|
If
any
part of the payment of the Option Price is made through the transfer of Shares,
such Shares will be valued by using their Fair Market Value as of their date
of
transfer.
Vested
Options may not be exercised unless there has been compliance with all the
preceding provisions of this Section
4
and, for
all purposes of this Agreement, the date of the exercise will be the date
upon
which there is compliance with all such requirements; provided,
however,
that
the Participant's rights hereunder will not be adversely affected by the
Participant's failure to so comply due solely to an act or omission of the
Company.
5. Payment
of Withholding Taxes.
If the
Company is obligated to withhold an amount on account of any tax imposed
as a
result of the exercise of the Option, the Participant will be required
to pay such amount to the Company, as provided in the Plan.
6. Plan.
Participant hereby acknowledges receipt of a copy of the Plan. Notwithstanding
any other provision of this Agreement, the Options are granted pursuant to
the
Plan, as in effect on the date of the Agreement, and are subject to the terms
and conditions of the Plan, as the same may be amended from time to time;
provided, however, that no amendment to either the Plan or this Agreement
will
deprive the Participant, without the Participant's consent, of any Options
or of
any of Participant's rights under this Agreement, except an amendment which
is
permitted under the Plan for purposes other than reducing the Participant's
rights hereunder. The interpretation and construction by the Committee of
the
Plan, this Agreement, the Options, and such rules and regulations as may
be
adopted by the Committee for the purpose of administering the Plan, will
be
final and binding upon the Participant. Until the Options expire, terminate,
are
cancelled, or are exercised in full, the Company will, upon written request
therefor, send a copy of the Plan, in its then current form, to the Participant
or any other person or entity then entitled to exercise the
Options.
7. No
Shareholder Rights.
Until
the Options have been duly exercised to purchase Shares and such Shares have
been officially recorded as issued on the Company's official records, no
person
will be entitled to vote or receive distributions or will be deemed for any
purpose the holder of any Shares, and adjustments for distributions or otherwise
will be made only if the record date therefor is subsequent to the date such
Shares are recorded and after the date of exercise and without duplication
of
any adjustment.
8. No
Employment Rights.
No
provision of this Agreement or of the Options will give Participant any right
to
continue in the employ of the Company or any of its Affiliates, create
any
inference as to the length of employment of the Participant, affect the right
of
the Company or its Affiliates to Terminate the Employment of the Participant,
with or without Cause, or give Participant any right to participate in any
employee welfare or benefit plan or other program (other than the Plan) of
the
Company or any of its Affiliates.
9. No
Disclosure Rights.
The
Company will have no duty or obligation to affirmatively disclose to the
Participant or a Representative, and the Participant or a Representative
will
have no right to be advised of, any material information regarding the Company
or an Affiliate at any time prior to, upon, or in connection with the exercise
of a Vested Option or the Company's purchase of Shares in accordance with
the
terms of this Agreement and the Plan.
10. Investment
Representation and Agreement.
If
prior to the issuance of any Shares upon the exercise of any Options, in
the
opinion of counsel for the Company, a particular representation by the
Participant is required under the Securities Act or any other applicable
federal
or state law, or any regulation or rule of any governmental agency, the Company
may require the Participant to make such investment representations and such
other representations as the Company reasonably may determine to be necessary
which representations shall be evidenced in an agreement in such form as
the
Company may specify.
11. Changes
in Company's Capital or Organizational Structure.
The
existence of the Options shall not affect in any way the right or authority
of
the Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company,
or any
issue of preferred Shares ahead of or affecting the Shares or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other act or
proceeding, whether of a similar character or otherwise.
12. Delays.
In
accordance with the terms of the Plan, the Company shall have the right to
suspend or delay any time period described in this Agreement or the Plan
if the
Committee shall determine that the action may constitute a violation of any
law
or result in any 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.
13. Governing
Law; Construction.
This
Agreement and the Options will be governed by, and construed and enforced
in
accordance with, the laws of the State of Illinois without regard to conflicts
of law principles. Common nouns and pronouns shall be deemed to refer to
the
masculine, feminine, neuter, singular and plural, as the context so
requires.
14. Entire
Agreement.
This
Agreement, together with the Plan and any other agreements incorporated herein
by reference, constitutes the entire obligation of the parties with respect
to
the subject matter of this Agreement and supersedes any prior written or
oral
expressions of intent or understanding with respect to such subject
matter.
15. Amendment.
Any
amendment to this Agreement must be in writing and signed by the
Company.
16. Waiver;
Cumulative Rights.
The
failure or delay of either party to require performance by the other party
of
any provision of this Agreement will not affect its right to require performance
of such provision unless and until such performance has been waived in writing.
Each right under this Agreement is cumulative and may be exercised in part
or in
whole from time to time.
17. Counterparts.
This
Agreement may be signed in two counterparts, each of which will be an original,
but both of which will constitute one and the same instrument.
18. Notices.
Any
notices required or permitted under this Agreement must be in writing and
may be
delivered personally or by mail, postage prepaid, addressed to (a) the Company,
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention:
General Counsel and (b) the Participant at the Participant's address as shown
on
the Company's payroll records, or to such other address as the Participant,
by
notice to the Company, may designate in writing from time to time.
19. Headings.
The
headings in this Agreement are for reference purposes only and will not affect
the meaning or interpretation of this Agreement.
20. Severability.
If any
provision of this Agreement is for any reason held to be invalid or
unenforceable, such invalidity or unenforceability will not affect any other
provision of this Agreement, and this Agreement will be construed as if such
invalid or unenforceable provision were omitted.
21. No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen
by the
parties to express their mutual intent, and no rule of strict construction
will
be applied against any party.
22. Remedies.
Each of
the parties to this Agreement will be entitled to enforce its rights under
this
Agreement specifically, to recover damages by reason of any breach of any
provision of this Agreement, and to exercise all other rights existing in
its
favor. The Participant agrees and acknowledges that money damages will not
be an
adequate remedy for any breach of the provisions of this Agreement and that
the
Company will be entitled to specific performance and injunctive relief in
order
to enforce or prevent any violations of the provisions of this
Agreement.
23. Successors
and Assigns.
This
Agreement will inure to the benefit of and be binding upon each successor
and
assign of the Company. All obligations imposed upon the Participant or a
Representative, and all rights granted to the Company under this Agreement,
will
be binding upon the Participant's or the Representative's heirs, legal
representatives and successors.
24. Tax
Consequences. The
Participant agrees to undertake to determine and be responsible for any and
all
tax consequences to the Participant with respect to the Options and the
Shares.
*
* * *
IN
WITNESS WHEREOF,
the
Company and the Participant have executed this Agreement as of the date first
written above.
COMPANY:
NOVAMED,
INC.
By: _________________________________
[Name]
[Title]
PARTICIPANT:
_________________________________________
[NAME]
