Unassociated Document


    
      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 Sarbanes-Oxley 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,
        980 North Michigan Avenue, Suite 1620, Chicago, Illinois 60611, 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]