Unassociated Document


    
      


       

      NOVAMED,
        INC.

       

      2005
        STOCK INCENTIVE PLAN

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      


      TABLE
        OF CONTENTS

       

      
        
          	 	 	
                  Page

                
	
                  ARTICLE
                    I

                	
                  ESTABLISHMENT

                	
                  1

                
	 	 	 
	
                  ARTICLE
                    II

                	
                  DEFINITIONS

                	
                  1

                
	 	 	 
	
                  ARTICLE
                    III

                	
                  ADMINISTRATION

                	
                  5

                
	
                  3.1

                	
                  Committee
                    Structure and Authority

                	
                  5

                
	 	 	 
	
                  ARTICLE
                    IV

                	
                  SHARES
                    SUBJECT TO PLAN

                	
                  7

                
	
                  4.1

                	
                  Number
                    of Shares

                	
                  7

                
	
                  4.2

                	
                  Release
                    of Shares

                	
                  7

                
	
                  4.3

                	
                  Restrictions
                    on Shares

                	
                  7

                
	
                  4.4

                	
                  Stockholder
                    Rights

                	
                  8

                
	
                  4.5

                	
                  Anti-Dilution

                	
                  8

                
	 	 	 
	
                  ARTICLE
                    V

                	
                  ELIGIBILITY

                	
                  8

                
	
                  5.1

                	
                  Eligibility

                	
                  8

                
	 	 	 
	
                  ARTICLE
                    VI

                	
                  OPTIONS

                	
                  9

                
	
                  6.1

                	
                  General

                	
                  9

                
	
                  6.2

                	
                  Grant

                	
                  9

                
	
                  6.3

                	
                  Terms
                    and Conditions

                	
                  9

                
	
                  6.4

                	
                  Termination
                    by Reason of Death

                	
                  11

                
	
                  6.5

                	
                  Termination
                    by Reason of Disability

                	
                  11

                
	
                  6.6

                	
                  Other
                    Termination

                	
                  11

                
	
                  6.7

                	
                  Cashing-Out
                    of Options

                	
                  12

                
	 	 	 
	
                  ARTICLE
                    VII

                	
                  STOCK
                    AWARDS

                	
                  12

                
	
                  7.1

                	
                  General

                	
                  12

                
	
                  7.2

                	
                  Grant

                	
                  12

                
	
                  7.3

                	
                  Terms
                    and Conditions

                	
                  12

                
	 	 	 
	
                  ARTICLE
                    VIII

                	
                  PERFORMANCE
                    AWARDS

                	
                  13

                
	
                  8.1

                	
                  Performance
                    Conditions

                	
                  13

                
	
                  8.2

                	
                  Performance
                    Awards Granted to Designated Covered Employees

                	
                  13

                
	
                  8.3

                	
                  Written
                    Determinations

                	
                  14

                
	 	 	 


           

          
            
              i

            

            
               

              
                

              

            

            
               

            

          

           

          
            	
                    ARTICLE
                      IX

                  	
                    CHANGE
                      IN CONTROL PROVISIONS

                  	
                    14

                  
	
                    9.1

                  	
                    Impact
                      of Event

                  	
                    14

                  
	
                    9.2

                  	
                    Definition
                      of Change in Control

                  	
                    15

                  
	
                    9.3

                  	
                    Change
                      in Control Price

                  	
                    15

                  
	 	 	 
	
                    ARTICLE
                      X

                  	
                    MISCELLANEOUS

                  	
                    15

                  
	
                    10.1

                  	
                    Amendments
                      and Termination

                  	
                    15

                  
	
                    10.2

                  	
                    Unfunded
                      Status of Plan

                  	
                    16

                  
	
                    10.3

                  	
                    Limits
                      on Transferability

                  	
                    16

                  
	
                    10.4

                  	
                    General
                      Provisions.

                  	
                    16

                  
	
                    10.5

                  	
                    Mitigation
                      of Excise Tax

                  	
                    18

                  
	
                    10.6

                  	
                    Awards
                      in Substitution for Awards Granted by Other Entities

                  	
                    18

                  
	
                    10.7

                  	
                    Procedure
                      for Adoption

                  	
                    18

                  
	
                    10.8

                  	
                    Procedure
                      for Withdrawal

                  	
                    18

                  
	
                    10.9

                  	
                    Delay

                  	
                    18

                  
	
                    10.10

                  	
                    Headings

                  	
                    19

                  
	
                    10.11

                  	
                    Severability

                  	
                    19

                  
	
                    10.12

                  	
                    Successors
                      and Assigns

                  	
                    19

                  
	
                    10.13

                  	
                    Entire
                      Agreement

                  	
                    19

                  


          

        

         

      

      
        
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      NOVAMED,
        INC.

       

      2005
        STOCK INCENTIVE PLAN

       

      ARTICLE
        I

       

      ESTABLISHMENT

       

      NovaMed,
        Inc. (the “Company”),
        a
        Delaware corporation, hereby establishes the NovaMed, Inc. 2005 Stock Incentive
        Plan (the “Plan”).
        The
        purpose of the Plan is to promote the overall financial objectives of the
        Company, its stockholders and its Affiliates by motivating those persons
        selected to participate in the Plan to achieve long-term growth in the
        stockholder equity in the Company and by retaining the association of those
        individuals who are instrumental in achieving this growth. The Plan is adopted
        as of April 25, 2005 (the “Effective
        Date”),
        subject to approval by the Company’s stockholders within 12 months after such
        adoption date.

       

      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 stockholder of an affiliated
        group
        of which the Company is a common parent corporation as provided in Section
        1504
        of the Code.

       

      “Agreement”
        or
“Award
        Agreement”
        means,
        individually or collectively, any agreement entered into pursuant to the
        Plan
        pursuant to which an Award is granted to a Participant.

       

      “Award”
        means
        an Option or Stock Award.

       

      “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 Awards 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.

       

      “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 Award Agreement with respect to the
        corresponding Award:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (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 Award
        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 9.2 and 9.3, 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.

       

      “Company”
        means
        NovaMed, 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.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      “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
        April 25, 2005.

       

      “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 Award 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.

       

      “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.

       

      “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
        Award 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 Award was originally granted.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      “Performance
        Award”
        means a
        right, granted to a Participant under Article VIII, to receive an Award based
        upon performance criteria specified by the Committee.

       

      “Plan”
        means
        the NovaMed, Inc. 2005 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 Award 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 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.

       

      “Shares”
        means
        shares of Common Stock.

       

      “Stock
        Award”
        means
        an Award, other than a Stock Option, made in Shares or denominated in
        Shares.

       

      “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.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      “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.

       

      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 two
        or
        more members of the Board of Directors, each of whom is a “non-employee
        director” within the meaning of Rule 16b-3 of the Exchange Act 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. 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 stockholders 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 Awards may be granted from time to time;

       

      (b)  to
        determine whether and to what extent Awards are to be granted
        hereunder;

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

         

      

      (c)  to
        determine the number of Shares to be covered by each Award granted
        hereunder;

       

      (d)  to
        determine the terms and conditions of any Award 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 Award and the Shares relating thereto);

       

      (e)  to
        adjust
        the terms and conditions, at any time or from time to time, of any Award,
        subject to the limitations of Section 10.1;

       

      (f)  to
        determine under what circumstances an Award 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, Awards,
        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 Awards;

       

      (l)  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 Award is to be adjusted, modified or purchased, or whether
        an Option 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; 

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      (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.

       

      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 Award 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 Awards 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 Award, may be made at the time of the grant of the Award 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 adjustment under Section 4.5, the total number of Shares reserved and
        available for distribution pursuant to Awards under the Plan shall be 1,400,000
        Shares, 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.
        Subject
        to adjustment under Section 4.5, the maximum number of Shares that may be
        covered by Awards, in the aggregate, granted to any one Participant during
        any
        calendar year shall be 500,000 Shares.

       

      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 Award are forfeited, if any Award 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 Awards
        (other than Incentive Stock Options) under the Plan. If any Shares could
        not
        again be available for Awards to a particular Participant under any applicable
        law, such Shares shall be available exclusively for Awards to Participants
        who
        are not subject to such limitations.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      4.3  Restrictions
        on Shares.
        Shares
        issued under the Plan 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 Award 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 determines to be necessary or advisable, and (iv)
        the
        satisfaction of any applicable withholding obligation. 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 a Participant 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  Stockholder
        Rights.
        No
        person shall have any rights of a stockholder 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 stockholder 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 stockholder 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 stockholder 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 stockholders 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 Awards under the Plan, the number of Shares covered by outstanding
        Awards, the exercise price per Share of outstanding Options, and any other
        characteristics or terms of the Awards 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 Awards 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 Awards shall be those persons who are directors, officers,
        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 Awards and
        shall
        determine the terms and conditions with respect thereto. In making any such
        selection and in determining the form of the Award, 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. To the
        extent approval of the Plan by the Company’s stockholders is necessary for a
        person to participate in the Plan, such person will not participate in the
        Plan
        until such approval is obtained.

       

      
        
           

        

        
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      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, provided that no Incentive Stock Options may be granted if
        the
        Plan is not approved by the Company’s stockholders within twelve (12) months
        after the date the Plan has been adopted. 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.

       

      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 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 stockholders of the Company, whichever is earlier.

       

      
        
           

        

        
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      (b)  Option
        Price.
        The
        Option Price per share of Common Stock purchasable under an Option shall
        be
        determined by the Committee; provided, however, that the Option Price per
        share
        of Common Stock shall not be less than the Fair Market Value per share of
        Common
        Stock on the date the Option is granted. If an Option is intended to qualify
        as
        an Incentive Stock Option to be 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), the Option Price per share of Common
        Stock
        shall be not less than one hundred ten percent (110%) of such Fair Market
        Value
        per share.

       

      (c)  Exercisability.
        Subject
        to Section 9.1, 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 an Option,
        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) to the extent permitted
        by
        the Sarbanes-Oxley Act of 2002 and other applicable law, 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 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 stockholder 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.

       

      
        
           

        

        
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      (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
        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.

       

      
        
           

        

        
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      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

       

      STOCK
        AWARDS

       

      7.1  General.
        The
        Committee shall have authority to grant Stock Awards under the Plan at any
        time
        or from time to time. Stock Awards may be directly issued under the Plan
        subject
        to such terms, conditions, performance requirements, restrictions, forfeiture
        provisions, contingencies and limitations as the Committee shall determine.
        Stock Awards may be issued that are fully and immediately vested upon issuance
        or that vest in one or more installments over the Participant’s period of
        employment or other service to the Company or upon the attainment of specified
        performance objectives, or the Company may issue Stock Awards that entitle
        the
        Participant to receive a specified number of vested Shares upon the attainment
        of one or more performance goals or service requirements established by the
        Committee.

       

      7.2  Grant.
        The
        grant of a Stock Award shall occur as of the date the Committee determines.
        Each
        Stock Award granted under the Plan shall be evidenced by an Agreement, in
        a form
        approved by the Committee, which shall embody the terms and conditions of
        such
        Stock Award 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. Shares representing a Stock Award shall be
        evidenced in such manner as the Committee may deem appropriate, including
        book-entry registration on issuance of one or more certificates (which may
        bear
        appropriate legends referring to the terms, conditions and restrictions
        applicable to such Award). The Committee may require that any such certificates
        be held in custody by the Company until any restrictions thereon shall have
        lapsed and that the Participant deliver a stock power, endorsed in blank,
        relating to the Shares covered by such Award.

       

      7.3  Terms
        and Conditions.
        A Stock
        Award may be issued in exchange for any consideration which the Committee
        may
        deem appropriate in each individual instance, including, without limitation:
        (i)
        cash or cash equivalents; (ii) past services rendered to the Company or any
        Affiliate; or (iii) future services to be rendered to the Company or any
        Affiliate. A Stock Award that is subject to restrictions on transfer and/or
        forfeiture provisions may be referred to as an award of “Restricted
        Stock.”

       

      
        
           

        

        
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      ARTICLE
        VIII

       

      PERFORMANCE
        AWARDS

       

      8.1  Performance
        Conditions.
        The
        right of a Participant to exercise or receive a grant or settlement of any
        Award, and its timing, may be subject to performance conditions specified
        by the
        Committee. The Committee may use business criteria and other measures of
        performance it deems appropriate in establishing any performance conditions,
        and
        may exercise its discretion to reduce or increase amounts payable under any
        Award subject to performance conditions, except as limited under Sections
        8.2
        and 8.3 hereof in the case of a Performance Award intended to qualify under
        Section 162(m) of the Code.

       

      8.2  Performance
        Awards Granted to Designated Covered Employees.
        If the
        Committee determines that a Performance Award to be granted to a person the
        Committee regards as likely to be a Covered Employee should qualify as
“performance-based compensation” for purposes of Section 162(m) of the Code, the
        grant and/or settlement of such Performance Award shall be contingent upon
        achievement of pre-established performance goals and other terms set forth
        in
        this Section 8.2.

       

      (a)  Performance
        Goals Generally.
        The
        performance goals for such Performance Awards shall consist of one or more
        business criteria and a targeted level or levels of performance with respect
        to
        such criteria, as specified by the Committee consistent with this Section
        8.2.
        Performance goals shall be objective and shall otherwise meet the requirements
        of Section 162(m) of the Code, including the requirement that the level or
        levels of performance targeted by the Committee result in the performance
        goals
        being “substantially uncertain.” At the time the performance goals are
        established, the Committee may determine that more than one performance goal
        must be achieved as a condition to settlement of such Performance Awards.
        Performance goals may differ for Performance Awards granted to any one
        Participant or to different Participants.

       

      (b)  Business
        Criteria.
        One or
        more of the following business criteria for the Company, on a consolidated
        basis, and/or for specified subsidiaries or business units of the Company
        (except with respect to the total stockholder return and earnings per share
        criteria), shall be used exclusively by the Committee in establishing
        performance goals for such Performance Awards: (1) total stockholder return;
        (2)
        such total stockholder return as compared to total return (on a comparable
        basis) of a publicly available index; (3) net income; (4) pre-tax earnings;
        (5)
        EBITDA; (6) pre-tax operating earnings after interest expense and before
        business and extraordinary or special items; (7) operating margin; (8) earnings
        per share; (9) return on equity; (10) return on capital; (11) return on
        investment; (12) operating income; (13) earnings per share; (14) working
        capital; and (15) total revenues.

       

      (c)  Performance
        Period; Timing for Established Performance Goals.
        Achievement of performance goals in respect of such Performance Awards shall
        be
        measured over such periods as may be specified by the Committee. Performance
        goals shall be established on or before the dates that are required or permitted
        for “performance-based compensation” under Section 162(m) of the
        Code.

       

      
        
           

        

        
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      (d)  Settlement
        of Performance Awards; Other Terms.
        Settlement of Performance Awards may be in cash or Shares, or other Awards,
        or
        other property, in the discretion of the Committee. The Committee may, in
        its
        discretion, reduce the amount of a settlement otherwise to be made in connection
        with such Performance Awards, but may not exercise discretion to increase
        any
        such amount payable in respect of a Performance Award subject to this Section
        8.2. The Committee shall specify the circumstances in which such Performance
        Awards shall be forfeited or paid in the event of a termination of employment
        or
        a Change in Control prior to the end of a performance period or settlement
        of
        Performance Awards, and other terms relating to such Performance
        Awards.

       

      8.3  Written
        Determinations.
        All
        determinations by the Committee as to the establishment of performance goals
        and
        the potential Performance Awards related to such performance goal and as
        to the
        achievement of performance goals relating to such Awards, shall be made in
        writing in the case of any Award intended to qualify under Section 162(m)
        of the
        Code. The Committee may not delegate any responsibility relating to such
        Performance Awards.

       

      ARTICLE
        IX

       

      CHANGE
        IN CONTROL PROVISIONS

       

      9.1  Impact
        of Event.
        An
        Agreement may provide that in the event of a Change in Control (as defined
        in
        Section 9.2):

       

      (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)  All
        restrictions applicable to any outstanding Stock Awards shall be removed,
        the
        effect of which shall be that the Shares relating to such Awards shall become
        fully vested and transferable.

       

      (c)  Outstanding
        Awards shall be subject to any agreement of merger or reorganization that
        effects such Change in Control, which agreement shall provide for:

       

      (i)  The
        continuation of outstanding Awards by the Company, if the Company is a surviving
        corporation;

       

      (ii)  The
        assumption of outstanding Awards by the surviving corporation or its parent
        or
        subsidiary;

       

      (iii)  The
        substitution by the surviving corporation or its parent or subsidiary of
        equivalent awards for the outstanding Awards; or

       

      (iv)  Settlement
        of each Share subject to an outstanding Award for the Change in Control Price
        (less, to the extent applicable, the per share exercise price), or, if the
        per
        share exercise price equals or exceeds the Change in Control Price, the
        outstanding Award shall terminate and be canceled.

       

      
        
           

        

        
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      (d)  In
        the
        absence of any agreement of merger or reorganization effecting such Change
        in
        Control, each Share subject to an outstanding Award shall be settled for
        the
        Change in Control Price (less, to the extent applicable, the per share exercise
        price), or, if the per share exercise price equals or exceeds the Change
        in
        Control Price, the outstanding Award shall terminate and be
        canceled.

       

      9.2  Definition
        of Change in Control.
        For
        purposes of this Plan, unless otherwise specified in the Agreement with respect
        to the corresponding Award, 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 stockholders of the Company
        approve a plan of liquidation of the Company.

       

      9.3  Change
        in Control Price.
        For
        purposes of the Plan, unless otherwise specified in the Agreement with respect
        to the corresponding Award, “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
        X

       

      MISCELLANEOUS

       

      10.1  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 Award 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 stockholders to the extent such approval is
        required by law or agreement.

       

      
        
           

        

        
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      The
        Committee may amend, alter or discontinue the Plan or an Award 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.

       

      10.2  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. 

       

      10.3  Limits
        on Transferability.
        Unless
        otherwise provided in this Plan or in an Agreement, no Award shall be subject
        to
        the claims of Participant’s creditors and no Award 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.

       

      10.4  General
        Provisions.

       

      (a)  Representation.
        The
        Committee may require each person purchasing or receiving Shares pursuant
        to an
        Award 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 Award,
        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 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 Award 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.

       

      
        
           

        

        
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      (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 Awards 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
        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.

       

      
        
           

        

        
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      (i)  Right
        to Capitalize.
        The
        grant of an Award 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.

       

      10.5  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 10.5),
        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 10.5 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 10.5 and any similar provisions 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).

       

      10.6  Awards
        in Substitution for Awards Granted by Other Entities.
        Awards
        may be granted under the Plan from time to time in substitution for awards
        held
        by employees, directors or service providers of other entities who are about
        to
        become officers, directors, stockholders or employees of the Company or an
        Affiliate. The terms and conditions of the Awards 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 stockholders of the Committee may deem appropriate to conform,
        in whole or in part, to the provisions of the Awards in substitution for
        which
        they are granted.

       

      10.7  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.

       

      10.8  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.

       

      10.9  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. Furthermore, if at any
        time after a Termination of Employment (other than due to Cause or
        a
        Voluntary Termination of Employment) a Participant is precluded from selling
        Shares to fund the exercise of Options under the Plan because of any
        restrictions imposed under the Company’s Insider Trading Compliance Policy, as
        then in effect, any time period provided for under the Plan or an Agreement
        will
        be extended by a number of days equal to the number of days during which
        such
        restrictions applied to such Participant after such Termination of Employment,
        but in no event more than ninety additional days 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.

       

      
        
           

        

        
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      10.10  Headings.
        The
        headings contained in this Plan are for reference purposes only and shall
        not
        affect the meaning or interpretation of this Plan.

       

      10.11  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.

       

      10.12  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.

       

      10.13  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.

       

      
        	Executed
                as of the 25th
                day of April, 2005.	 	 
	 	NovaMed,
                Inc.
	 
 	 
 	 
 
	 	By:  	/s/ Scott
                T. Macomber
	 	
                
Scott
                T. Macomber
	 	
                Executive
                  Vice President and Chief
                  Financial Officer

              


      

       

       

      
        
           

        

        
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