-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I3fSPt+E3byuwX1437B7Lbb3CuIu5dS1VXdA7EOBL0qHFLKBRHXJC4mMLPAp173N LhycTxMOK/V2PPyX4iDcBA== 0000906318-96-000043.txt : 19960705 0000906318-96-000043.hdr.sgml : 19960705 ACCESSION NUMBER: 0000906318-96-000043 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960703 EFFECTIVENESS DATE: 19960722 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LCA VISION INC CENTRAL INDEX KEY: 0001003130 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-NURSING & PERSONAL CARE FACILITIES [8050] IRS NUMBER: 112882328 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-07621 FILM NUMBER: 96591213 BUSINESS ADDRESS: STREET 1: 7840 MONTGOMERY RD CITY: CINCINNATI STATE: OH ZIP: 45236 BUSINESS PHONE: 5137929292 MAIL ADDRESS: STREET 1: 7840 MONTGOMERY ROAD CITY: CINCINNATI STATE: OH ZIP: 45236 S-8 1 Registration No. _________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - ---------------------------------------------------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 - ----------------------------------------------------------------- LCA-VISION INC. (Exact name of issuer as specified in its Charter) Delaware 11-2882328 (State of Incorporation) (I.R.S. Employer Identification No.) 7840 Montgomery Road, Cincinnati, Ohio 45236 (Address of Principal Executive Offices) (Zip Code) - -------------------------------------------------------------------- LCA-VISION INC. 1995 LONG-TERM STOCK INCENTIVE PLAN and LCA-VISION INC. DIRECTORS' NONDISCRETIONARY STOCK OPTION PLAN (Full Titles of the Plans) - ------------------------------------------------------------------ Stephen N. Joffe, President LCA-Vision Inc. 7840 Montgomery Road Cincinnati, Ohio 45236 (513) 792-9292 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy To: Charles F. Hertlein, Jr., Esq. Dinsmore & Shohl 1900 Chemed Center 255 East Fifth Street Cincinnati, Ohio 45202 - --------------------------------------------------------------- CALCULATION OF REGISTRATION FEE Proposed Title of Maximum Securities Amount Offering Proposed to be to be Price Maximum Amount of Registered Registered Per Share Offering Price Registration fee Common Stock, 3,750,000 $4.75 $17,812,500* $6,142.00 .001 par value - ---------------------------------------------------------------- Approximate date of proposed commencement of sales hereunder: As soon as practicable after the effective date of this Registration Statement * Based pursuant to Rule 457(c) and 457(f)(1), on the average of the high and low prices of the common stock of LCA-Vision Inc. on the Nasdaq SmallCap Market July 1, 1996, a date within 5 days of the date on which this Registration Statement is filed. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The information specified in Part I of Form S-8 is set forth in a single document, entitled "Prospectus," which constitutes a part of the Section 10(a) Prospectus to which this Registration Statement relates but which is not filed herewith. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. LCA-Vision Inc. (the "Registrant") hereby states that the documents listed in (a) through (c) below are incorporated by reference in this Registration Statement, and further states that all documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing such documents. (a) Exhibit 13, 1995 Annual Report to Stockholders, contained in the Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1995. (b) All other reports filed pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act since December 31, 1995. (c) The description of the Registrant's Common Stock contained in the Registration Statement on Form 10-SB filed pursuant to Section 12(g) of the Securities Exchange Act of 1934, which Registration Statement became effective on January 25, 1995. Item 4. Description of Securities. Not Applicable. Item 5. Interests of Named Experts and Counsel. The validity of the shares of Common Stock offered hereby will be passed upon for the Registrant by Dinsmore & Shohl, Cincinnati, Ohio. As of May 31, 1996, partners of Dinsmore & Shohl and attorneys employed thereby, together with their immediate families beneficially owned approximately 1,000 shares of the Registrant's Common Stock and held no options to purchase additional shares of Common Stock. The financial statements of the Registrant as of December 31, 1995 and 1994, and for each of the years in the two-year period ended December 31, 1995, incorporated by reference in this Registration Statement from the Registrant's Annual Report on Form 10-KSB, have been incorporated by reference herein in reliance upon the report of Coopers & Lybrand L.L.P., independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. Item 6. Indemnification of Directors and Officers. The Registrant's amended bylaws provide, subject to the Registrant's certificate of incorporation, that the Registrant shall indemnify each director, officer, employee or agent of the Registrant to the full extent permitted by the General Corporation Law of Delaware. The certificate of incorporation of the Registrant provides that the Registrant shall, to the full extent permitted by Section 145 of the Delaware General Corporation Law, indemnify all persons whom it may indemnify pursuant thereto. In general, under Section 145 of the General Corporation Law of Delaware, a Delaware corporation is permitted to indemnify its present or former officers, directors, employees and agents against liabilities and expenses incurred by such persons in their capacities as such so long as they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter to which a person is adjudged liable to the corporation unless the court in which the action was brought determines, upon application, that such person is entitled to indemnity. Any indemnification provided for by law may be made by a corporation upon a determination by (a) a majority vote of a quorum of directors who are not parties to such suit or action, (b) independent legal counsel, if no quorum of directors who are not parties to the suit or action is available or (c) the stockholders that the person seeking indemnification has met the applicable statutory standard of conduct. The statute also provides that a Delaware corporation may advance attorneys' fees incurred by directors and officers, employees, agents and others prior to the final outcome of a matter. In addition, the Registrant has purchased insurance policies which provide coverage for the acts and omissions of the Registrant's directors and officers in certain situations. Item 7. Exemption From Registration Claimed. Not Applicable. Item 8. Exhibits. Exhibit No. Description 5, 23 (a) Opinion of Dinsmore & Shohl as to the legality of the securities being registered. 4(a)(i) LCA-Vision Inc. 1995 Long-Term Stock Incentive Plan 4(a)(ii) LCA-Vision Inc. Directors' Nondiscretionary Stock Option Plan 23(b) Consent of Coopers & Lybrand L.L.P., independent certified public accountants 24 Power of Attorney* - ------------------------------- * Contained herein on the signature page Item 9. Undertakings. A. The undersigned registrant hereby undertakes: i. To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. ii. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. iii. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefor, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 1995 Long-Term Stock Incentive Plan Directors' Nondiscretionary Stock Option Plan SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cincinnati, State of Ohio on July 2, 1996. LCA-Vision Inc. By: /s/ Stephen N. Joffe Stephen N. Joffe, President POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Stephen N. Joffe, as his true and lawful attorney-in-fact and agent, with full power of substitution, to sign and execute on behalf of the undersigned any amendment or amendments to this Registration Statement on Form S-8, and to perform any acts necessary to be done in order to file such amendment with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, and each of the undersigned does hereby ratify and confirm all that said attorney-in-fact and agent, or his substitutes, shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: Signature Title Date /s/ Stephen N. Joffe President (Principal July 2, 1996 Stephen N. Joffe Executive Officer); Director /s/ Larry P. Rapp Chief Financial Officer July 2, 1996 Larry P. Rapp (Principal Financial and Accounting Officer) Directors: Date /s/ John C. Hassan July 2, 1996 John C. Hassan /s/ Craig P.R. Joffe July 2, 1996 Craig P.R. Joffe /s/ Sandra F.W. Joffe July 2, 1996 Sandra F.W. Joffe /s/ David M. Schneider July 2, 1996 David M. Schneider INDEX TO EXHIBITS Exhibit No. Description Page 5, 23.1 Opinion of Dinsmore & Shohl as to the legality of the securities being registered. 4.1 LCA-Vision Inc. 1995 Long-Term Stock Incentive Plan 4.2 LCA-Vision Inc. Directors' Nondiscretionary Stock Option Plan 23.2 Consent of Coopers & Lybrand L.L.P., independent certified public accountants 24 Power of Attorney * - ----------------------------- * Contained herein on the signature page EX-23.1 2 Exhibit 5, 23.1 (513) 977-8315 Charles F. Hertlein, Jr. July 3, 1996 LCA-Vision Inc. 7840 Montgomery Road Cincinnati, Ohio 45236 Ladies and Gentlemen: This opinion is rendered for use in connection with the Registration Statement on Form S-8, prescribed pursuant to the Securities Act of 1933, to be filed by LCA-Vision Inc. (the "Company") with the Securities and Exchange Commission on July 3, 1996, under which up to 3,750,000 shares of the Company's Common Stock without par value ("Common Stock") are to be registered. We hereby consent to the filing of this opinion as Exhibit 5 and 23.1 to the Registration Statement and to the reference to our name in the Registration Statement. As counsel to the Company, we have examined and are familiar with originals or copies, certified or otherwise identified to our satisfaction, of such statutes, documents, corporate records, certificates of public officials, and other instruments as we have deemed necessary for the purpose of this opinion, including the Company's Amended Articles of Incorporated and Amended Code of Regulations and the record of proceedings of the shareholders and directors of the Company. Based upon the foregoing, we are of the opinion that: 1. The Company has been duly incorporated and is validly existing and in good standing as the corporation under the laws of the State of Delaware. 2. When the Registration Statement shall have been declared effective by order of the Securities and Exchange Commission and up to 3,750,000 shares of the Common Stock to be issued for sale shall have been issued and sold upon the terms set forth in the Registration Statement, such shares will be legally and validly issued and outstanding, fully-paid and nonassessable. Very truly yours, DINSMORE & SHOHL Charles F. Hertlein, Jr. EX-4.1 3 Exhibit 4.1 LCA-VISION INC. 1995 LONG-TERM STOCK INCENTIVE PLAN (Amended as of June 5, 1996) 1. Purposes: The purposes of this Plan are (a) to secure for the Company the benefits of incentives inherent in ownership of Common Stock by Eligible Employees, (b) to encourage Eligible Employees to increase their interest in the future growth and prosperity of the Company and to stimulate and sustain constructive and imaginative thinking by Eligible Employees, (c) to further the identity of interest of those who hold positions of major responsibility in the Company and its Subsidiaries with the interests of the Company's stockholders, (d) to induce the employment or continued employment of Eligible Employees and (e) to enable the Company to compete with other organizations offering similar or other incentives in obtaining and retaining the services of competent employees. 2. Definitions: Unless otherwise required by the context, the following terms when used in this Plan shall have the meanings set forth in this section 2. Board of Directors: The Board of Directors of the Company. Change of Control: The event which shall be deemed to have occurred if either (i) after the date this Plan is adopted by the Company's stockholders, without prior approval of the Board, any "person" becomes a beneficial owner, directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding securities; or (ii) without prior approval of the Board, as a result of, or in connection with, or within two years following, a tender or exchange offer for the voting stock of the Company, a merger or other business combination to which the Company is a party, the sale or other disposition of all or substantially all of the assets of the Company, a reorganization of the Company, or a proxy contest in connection with the election of members of the Board of Directors, the persons who were directors of the Company immediately prior to any of such transactions cease to constitute a majority of the Board of Directors or of the board of directors of any successor to the Company (except for resignations due to death, disability or normal retirement). For purposes of this definition, a person shall be deemed the "beneficial owner" of any securities (i) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; or (ii) which such person or any of its Affiliates or Associates, has directly or indirectly, (1) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (2) the right to vote pursuant to any agreement, arrangement or understanding; or (iii) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any securities. For purposes of this definition, a "person" shall mean any individual, firm, company, partnership, other entity or group, and the terms "Affiliate" or "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as in effect on the date the Plan is approved by the stockholders of the Company and becomes effective. Committee: The Committee of the Board of Directors designated to administer this Plan pursuant to the provisions of section 12. Common Stock: The Common Stock of the Company, par value $.001 per share. Company: LCA-Vision Inc., a Delaware corporation. Eligible Employee: An employee or consultant of the Company or of a Subsidiary who in the opinion of the Committee can contribute significantly to the growth and successful operations of the Company or a Subsidiary. The recommendation of the grant of a Stock Incentive to an employee or consultant by the Committee shall be deemed a determination by the Committee that such employee or consultant is an Eligible Employee. As used herein, "consultant" means an independent contractor performing services for the Company which the Committee believes are material to the Company's business and/or business prospects. For the purposes of this Plan, references to employment of an Eligible Employee shall include the period of retention of a consultant by the Company in cases where an Eligible Employee is a consultant. Fair Market Value: As applied to any date, the mean of the highest bid and the lowest asked prices of a share of Common Stock on the Nasdaq SmallCap Market, Nasdaq National Market System or any exchange on which the Company's Common Stock may be listed in the future for the trading date immediately prior to the date for which the valuation is to be effective; provided, however, that, if the Common Stock is not so quoted, Fair Market Value shall be determined in accordance with the method approved by the Board of Directors, and, provided further, if any of the foregoing methods of determining Fair Market Value shall not be consistent with the regulations of the Secretary of the Treasury or his delegate at the time applicable to a Stock Incentive of the type involved, Fair Market Value in the case of such Stock Incentive shall be determined in accordance with such regulations and shall mean the value as so determined. Incentive Compensation: Bonuses, extra and other compensation payable in addition to a salary or other base amount, whether contingent or discretionary or required to be paid pursuant to an agreement, resolution or arrangement, and whether payable currently, or on a deferred basis, in cash, Common Stock or other property, awarded by the Company or a Subsidiary prior or subsequent to the date of the approval and adoption of this Plan by the stockholders of the Company. Incentive Option: An option granted under this Plan which is designated to be an incentive stock option under the provisions of Section 422 of the Internal Revenue Code of 1986, as amended; and any provisions elsewhere in this Plan or in any such Incentive Option which would prevent such option from being an incentive stock option may be deleted and/or voided retroactively to the date of the granting of such option, by action of the Committee. Nonqualified Option: An option granted under this Plan which is not an incentive stock option under the provisions of Section 422 of the Internal Revenue Code of 1986, as amended; and which is exercisable even though there is outstanding an Incentive Option which was granted before the granting of the Nonqualified Option to the same participant. Such Nonqualified Option shall not be affected by any actions taken retroactively as provided above with respect to Incentive Options. Option: An option to purchase shares of Common Stock. Performance Objectives: Stated criteria which may, but need not be set forth in a Stock Incentive at the discretion of the Committee, the successful attainment of which is specified in the Stock Incentive as a condition precedent to the issuance, transfer or retention of some or all of the shares of Common Stock covered by the Stock Incentive. Performance Objectives may be personal and/or corporate in nature and shall include, but shall not be limited to, objectives determined by reference to or changes in (a) the Fair Market Value, book value or earnings per share of Common Stock, or (b) sales and revenues, income, profits and losses, return on capital employed, or net worth of the Company (on a consolidated or unconsolidated basis) or of any or more of its groups, divisions, Subsidiaries or departments, or (c) a combination of two or more of the foregoing or other factors. Plan: The LCA-Vision Inc. 1995 Long-Term Stock Incentive Plan herein set forth as the same may from time to time be amended. Stock Appreciation Right (SAR): A right to receive cash, shares of Common Stock, or a combination thereof, as the case may be, having an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise of such right over the Fair Market Value of one such share on the date of grant of such right. Stock Award: An issuance or transfer of shares of Common Stock at the time the Stock Incentive is granted or as soon thereafter as practicable, or an undertaking to issue or transfer such shares in the future. Stock Incentive: A stock incentive granted under this Plan in one of the forms provided for in section 3. Subsidiary: A company or other entity designated by the Committee in which the Company has a significant equity interest, except that, with respect to grants of Incentive Options, the term "Subsidiary" shall be deemed to mean a company or other form of business association of which shares (or other ownership interests) having 50% or more of the voting power are owned or controlled, directly or indirectly, by the Company. 3. Grants of Stock Incentives: (a) Subject to the provisions of this Plan, the Committee may at any time, or from time to time, grant Stock Incentives under this Plan to, and only to, Eligible Employees. (b) Stock Incentives may be granted in the following forms: (i) an Option, or (ii) a SAR, or (iii) a Stock Award, or (iv) a combination of an Option, a SAR, and/or a Stock Award. (c) Stock Incentives contingently granted prior to the approval of this Plan by the Company's stockholders but subject to such approval shall be deemed to be granted hereunder as of the date of such stockholder approval. 4. Stock Subject to this Plan: The maximum aggregate number of shares of Common Stock subject to Stock Incentives that may be granted to participants in the Plan shall be 2,500,000. Shares of Common Stock subject to Stock Incentives granted under this Plan may be either authorized but unissued shares or shares held in the Company's treasury, or any combination thereof, in the discretion of the Committee. (a) The initial maximum amount of Common Stock with respect to which Stock Incentives may be granted to any person shall be 500,000 shares and, thereafter, the maximum amount of Common Stock with respect to which Stock Incentives may be granted to any person during any calendar year shall be 250,000 shares. (b) The number of shares of Common Stock which may be granted under the Plan as Stock Awards in any calendar year shall not exceed 1,250,000. 5. Options: Stock Incentives in the form of Options shall be subject to the following provisions: (a) Upon the exercise of an Option, the purchase price shall be paid in cash or, unless otherwise provided by the Committee (and subject to such terms and conditions as are specified in the Option or by the Committee), in shares of Common Stock delivered to the Company by the optionee or by the withholding of shares issuable upon exercise of the Option or in a combination of such payment methods. Shares of Common Stock thus delivered or withheld shall be valued at their Fair Market Value on the date of the exercise. The purchase price per share shall be not less than 100% of the Fair Market Value of a share of Common Stock on the date the Option is granted. (b) Each Option shall be exercisable in one or more installments at such time or times as the Committee shall determine. Unless otherwise provided in the Option, an Option, to the extent it is or becomes exercisable, may be exercised at any time in whole or in part until the expiration or termination of the Option. Any term or provision in any outstanding Option specifying that the Option not be immediately exercisable or that it be exercisable in installments may be modified at any time during the life of the Option by the Committee, provided, however, no such modifications of an outstanding Option shall, without the consent of the optionee, adversely affect any Option theretofore granted to the optionee. (c) Each Option shall be exercisable during the life of the optionee only by the optionee and, after the optionee's death, only by the optionee's estate or by a person who acquired the right to exercise the Option by will or the laws of descent and distribution. An Option, to the extent that it shall not have been exercised, shall terminate at the close of business on the thirtieth day following the date the optionee ceases to be an employee of the Company or a Subsidiary, unless the optionee ceases to be an employee because of resignation with the consent of the Committee (which consent may be given before or after resignation), or by reason of death, incapacity or retirement under a retirement plan of the Company or a Subsidiary. Except as provided in the next sentence, if the optionee ceases to be an employee by reason of such resignation, the Option shall terminate three months after the optionee ceases to be an employee. If the optionee ceases to be an employee by reason of such death, incapacity or retirement, or if the optionee should die during the three-month period referred to in the preceding sentence, the Option shall terminate fifteen months after the optionee ceases to be an employee. Where an Option is exercised more than three months after the optionee ceased to be an employee, the Option may be exercised only to the extent it could have been exercised on the date three months after the optionee ceased to be an employee. A leave of absence for military or governmental service or for other purposes shall not, if approved by the Committee, be deemed a termination of employment within the meaning of this paragraph (c). Notwithstanding the foregoing provisions of this paragraph (c) or any other provisions of this Plan, no Option shall be exercisable after expiration of the term for which the Option was granted, which shall in no event exceed ten years. (d) Options shall be granted for such lawful consideration as the Committee shall determine. (e) No Option nor any right thereunder may be assigned or transferred by the optionee except by will or the laws of descent and distribution. If so provided in the Option or if so authorized by the Committee and subject to such terms and conditions as are specified in the Option or by the Committee, the Company shall have the right, upon or without the request of the holder of the Option and at any time or from time to time, to cancel all or a portion of the Option then subject to exercise and either (i) pay the holder an amount of money equal to the excess, if any, of the Fair Market Value, at such time or times, of the shares subject to the portion of the Option so canceled over the aggregate purchase price of such shares, or (ii) issue or transfer shares of Common Stock to the holder with a Fair Market Value, at such time or times, equal to such excess. (f) Each Option shall be evidenced by a written instrument, which shall contain such terms and conditions (including, without limitation, Performance Objectives), and shall be in such form, as the Committee may determine, provided the Option is consistent with this Plan and incorporates it by reference. Notwithstanding the preceding sentence, an Option if so recommended by the Committee, may include restrictions and limitations in addition to those provided for in this Plan. (g) Any federal, state or local withholding taxes payable by an optionee upon the exercise of an Option shall be paid in cash or, unless otherwise provided by the Committee, by the surrender of shares of Common Stock or the withholding of shares of Common Stock to be issued to the optionee, or in any combination thereof, or in such other form as the Committee may authorize from time to time. All such shares so surrendered or withheld shall be valued at Fair Market Value on the date they are surrendered to the Company or authorized to be withheld. (h) Options may be either Incentive Options or Nonqualified Options at the discretion of the Committee. Options not otherwise designated shall be Nonqualified Options. Notwithstanding any other provisions herein, the following provisions shall apply to Incentive Options: (i) the exercise price of any Incentive Option granted to any person who on the date of grant owns (within the meaning of Section 425(d) of the Internal Revenue Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary shall not be less than 110% of the Fair Market Value of the stock on the date of grant; (ii) the maximum term of any Incentive Option granted hereunder shall be ten years, except that the maximum term of any Incentive Option granted to a person described in section 5(h)(i) above shall be five years; (iii) no Incentive Option may be granted subsequent to the tenth anniversary of the date of stockholder approval of this Plan; (iv) Incentive Options may only be granted to persons who are employees of the Company or any Subsidiary within the meaning of the Internal Revenue Code; and (v) Incentive Options may not be granted with respect to more than an aggregate of 10 million shares of Common Stock under this Plan. 6. Stock Appreciation Rights: Stock Incentives in the form of Stock Appreciation Rights (SAR's) shall be subject to the following provisions: (a) Each SAR shall be evidenced by a written instrument (the "SAR Agreement") specifying the number of shares of Common Stock to which it relates and containing such other terms and conditions (which may, but need not, include Performance Objectives), and shall be in such form as the Committee may determine, provided the SAR is consistent with this Plan and incorporates it by reference. (b) Each SAR Agreement shall specify the period during which the pertinent SAR(s) may be exercised and shall provide that the SAR(s) shall expire at the end of such period (or periods); provided that such expiration date shall not be later than ten years from the date of grant thereof. Except as otherwise provided herein, any SAR must be exercised during the period of the holder's employment with the Company. Each SAR may be exercisable in full or in part in one or more installments at such time or times as the Committee shall determine. Unless otherwise provided in the SAR Agreement, a SAR, to the extent it is or becomes exercisable, may be exercised at any time in whole or in part until the expiration or termination of the SAR. Any term or provisions in any outstanding SAR specifying that the SAR not be immediately exercisable or that it is to be exercisable in installments may be modified at any time during the life of the SAR by the Committee, provided, however, no such modifications of any outstanding SAR shall, without the consent of the grantee adversely affect any SAR theretofore granted the grantee. (c) Each SAR shall be exercisable during the life of the grantee only by the grantee and, after the grantee's death, only by the grantee's estate or by a person who acquired the right to exercise the SAR by will or the laws of descent and distribution. A SAR, to the extent that it shall not have been exercised, shall terminate at the close of business on the thirtieth day following the date the grantee ceases to be an employee of the Company or a Subsidiary, unless the grantee ceases to be an employee because of resignation with the consent of the Committee (which consent may be given before or after resignation), or by reason of death, incapacity or retirement under a retirement plan of the Company or a Subsidiary. Except as provided in the next sentence, if the grantee ceases to be an employee by reason of such resignation, the SAR shall terminate three months after the grantee ceases to be an employee. If the grantee ceases to be an employee by reason of such death, incapacity or retirement, or if the grantee should die during the three-month period referred to in the preceding sentence, the SAR shall terminate fifteen months after the grantee ceases to be an employee. Where a SAR is exercised more than three months after the grantee ceased to be an employee the SAR may be exercised only to the extent it could have been exercised on the date three months after the grantee ceased to be an employee. A leave of absence for military or governmental service or for other purposes shall not, if approved by the Committee, be deemed a termination of employment within the meaning of this paragraph (c). (d) No SAR may be assigned or transferred by the grantee except by will or the laws of descent and distribution. (e) If the form of consideration to be received upon exercise of the SAR is not specified in the agreement governing the SAR, upon the exercise thereof, the holder may request the form of consideration to be received in satisfaction of such SAR, which may be in shares of Common Stock (valued at Fair Market Value on the date of exercise of the SAR), or in cash, or partly in cash and partly in shares of Common Stock, as the holder shall request; provided, however, that the Committee, in its sole discretion, may consent to or disapprove any request of the grantee to receive cash in full or partial settlement of such SAR. (f) Any federal, state or local withholding taxes payable by the grantee upon the exercise of a SAR shall be paid in cash or, unless otherwise provided by the Committee, by the surrender of shares of Common Stock in the case of a SAR to be paid in the form of Common Stock, or by the withholding of shares of Common Stock to be issued to the grantee, or in any combination thereof, or in such other form as the Committee may authorize from time to time. All such shares so surrendered or withheld shall be valued at Fair Market Value on the date they are surrendered to the Company or authorized to be withheld. 7. Stock Awards: Stock Incentives in the form of Stock Awards shall be subject to the following provisions: (a) A Stock Award shall be granted only in payment of Incentive Compensation that has been earned or as Incentive Compensation to be earned, including, without limitation, Incentive Compensation awarded concurrently with or prior to the grant of the Stock Award. (b) For the purposes of this Plan, in determining the value of a Stock Award, all shares of Common Stock subject to such Stock Award shall be valued at not less than 100% of the Fair Market Value of such shares on the date such Stock Award is granted, regardless of whether or when such shares are issued or transferred to the Eligible Employee and whether or not such shares are subject to restrictions which affect their value. (c) Shares of Common Stock subject to a Stock Award may be issued or transferred to the Eligible Employee at the time the Stock Award is granted, or at any time subsequent thereto, or in installments from time to time, as the Committee shall determine. In the event that any such issuance or transfer shall not be made to the Eligible Employee at the time the Stock Award is granted, the Committee may provide for payment to such Eligible Employee, either in cash or in shares of Common Stock from time to time or at the time or times such shares shall be issued or transferred to such Eligible Employee, of amounts not exceeding the dividends which would have been payable to such Eligible Employee in respect of such shares (as adjusted under section 9) if they had been issued or transferred to such Eligible Employee at the time such Stock Award was granted. Any amount payable in shares of Common Stock under the terms of a Stock Award may, at the discretion of the Company, be paid in cash, on each date on which delivery of shares would otherwise have been made, in an amount equal to the Fair Market Value on such date of the shares which would otherwise have been delivered. (d) A Stock Award shall be subject to such terms and conditions, including, without limitation, restrictions on sale or other disposition of the Stock Award or of the shares issued or transferred pursuant to such Stock Award, as the Committee shall determine; provided, however, that upon the issuance or transfer of shares pursuant to a Stock Award, the recipient shall, with respect to such shares, be and become a stockholder of the Company fully entitled to receive dividends, to vote and to exercise all other rights of a stockholder except to the extent otherwise provided in the Stock Award. The Committee may, in its sole discretion, but shall not be required to, specify in any Stock Award that the issuance, transfer and/or retention of some or all of the shares of Common Stock covered by the Stock Award shall be subject to the attainment of Performance Objectives. Each Stock Award shall be evidenced by a written instrument in such form as the Committee shall determine, provided such written instrument is consistent with this Plan and incorporates it by reference. (e) In the event the holder of shares of Common Stock subject to a Stock Award dies prior to the time such shares are no longer subject to forfeiture pursuant to the terms of the Stock Award, the estate of such holder may retain such shares subject to the restrictions set forth in the Stock Award. 8. Combinations of Stock Awards and Options: Stock Incentives authorized by paragraph (b)(iv) of section 3 in the form of combinations of Options, SAR's and/or Stock Awards, shall be subject to the following provisions: (a) A Stock Incentive may be a combination of any form of Option with any form of SAR and/or with any form of Stock Award; provided, however, that the terms and conditions of such Stock Incentive pertaining to an Option are consistent with section 5, the terms and conditions of such Stock Incentive pertaining to a SAR are consistent with section 6, and the terms and conditions of such Stock Incentive pertaining to a Stock Award are consistent with section 7. (b) Such combination Stock Incentive shall be subject to such other terms and conditions as the Committee may determine, including, without limitation, a provision terminating in whole or in part a portion thereof upon the exercise in whole or in part of another portion thereof. Such combination Stock Incentive shall be evidenced by a written instrument in such form as the Committee shall determine, provided it is consistent with this Plan and incorporates it by reference. 9. Adjustment Provisions: In the event that any recapitalization, reclassification, forward or reverse split of shares of Common Stock, or any similar transaction shall be effected, or the outstanding shares of Common Stock are, in connection with a merger or consolidation of the Company or a sale by the Company of all or a part of its assets, exchanged for a different number of class of shares of stock or other securities of the Company or for shares of the stock or other securities of any other company, or a record date for determination of holders of Common Stock entitled to receive a dividend payable in Common Stock shall occur, (a) the number and class of shares or other securities that may be issued or transferred pursuant to Stock Incentives or with respect to which a cash payment pursuant to the Stock Incentive is determinable, (b) the number and class of shares or other securities which have not been issued or transferred under outstanding Stock Incentives, (c) the purchase price to be paid per share or other security under outstanding Options, and (d) the price to be paid by the Company or a Subsidiary for shares or other securities issued or transferred pursuant to Stock Incentives which are subject to a right of the Company or a Subsidiary to reacquire such shares or other securities, shall in each case be equitably adjusted. 10. Acceleration: In the event of a Change of Control, any Stock Incentives which have then been outstanding hereunder for at least six months shall be immediately exercisable (without regard to any limitation imposed by the Plan or the Committee at the time the Stock Incentive was granted, which permits all or any part of the Stock Incentive to be exercised only after the lapse of time or the attainment of Performance Objectives or other conditions to exercise), and will remain exercisable until the expiration of the Stock Incentive. 11. Term: This Plan shall be deemed adopted and shall become effective on the date it is approved and adopted by the stockholders of the Company. This Plan shall remain in effect until such time as it is terminated by the Board of Directors; provided, however, that no Incentive Options may be granted after the tenth anniversary of the effective date of the Plan. 12. Administration: (a) The Plan shall be administered by the Committee, which shall consist of not less than two directors of the Company designated by the Board of Directors in accordance with the Code of Regulations of the Company; provided, however, that no director shall be designated as or continue to be a member of the Committee unless such director shall at the time of designation and service be a "disinterested person" within the meaning of Rule 16b-3 of the Securities and Exchange Commission (or any successor provision at the time in effect). Grants of Stock Incentives may be recommended by the Committee either with or without consultation with employees, but, anything in this Plan to the contrary notwithstanding, the Committee shall have full authority to act in the matter of selection of all Eligible Employees and in recommending Stock Incentives to be granted to them. (b) The Committee may establish such rules and regulations, not inconsistent with the provisions of this Plan, as it deems necessary to determine eligibility to participate in this Plan and for the proper administration of this Plan, and may amend or revoke any rule or regulation so established. The Committee may make such determinations and interpretations under or in connection with this Plan as it deems necessary or advisable. All such rules, regulations, determinations and interpretations shall be binding and conclusive upon the Company, its Subsidiaries, its stockholders and all employees, and upon their respective legal representatives, beneficiaries, successors and assigns and upon all other persons claiming under or through any of them. (c) Members of the Board of Directors and members of the Committee acting under this Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross negligence or willful misconduct in the performance of their duties. 13. Acquisitions: If the Company or any Subsidiary should merge or consolidate with, or purchase stock or assets or otherwise acquire the whole or part of the business of, another company, the Company in connection therewith, upon the recommendation of the Committee and the approval of the Board of Directors, (a) may assume, in whole or in part and with or without modifications or conditions, any stock options granted by the acquired company to its employees, in their capacity as such, or (b) may grant new Options in substitution therefore; provided that the granting of an Option with the terms and conditions of the assumed or substitute options is permissible under either this Plan or a plan approved by the stockholders of the acquired company. For the purposes of the preceding sentence, the permissibility of the granting of an option under a plan shall be determined as of the date of grant of the original option by the acquired company and not as of the date of assumption or substitution by the Company. 14. General Provisions: (a) Nothing in this Plan nor in any instrument executed pursuant hereto shall confer upon any employee any right to continue in the employ of the Company or a Subsidiary, or shall affect the right of the Company or of a Subsidiary to terminate the employment of any employee with or without cause. (b) No shares of Common Stock shall be issued or transferred pursuant to a Stock Incentive unless and until all legal requirements applicable to the issuance or transfer of such shares, in the opinion of counsel to the Company, have been complied with. In connection with any such issuance or transfer the person acquiring the shares shall, if requested by the Company, give assurances, satisfactory to counsel to the Company, that the shares are being acquired for investment and not with a view to resale or distribution thereof and assurances in respect of such other matters as the Company or a Subsidiary may deem desirable to assure compliance with all applicable legal requirements. No employee (individually or as a member of a group), and no beneficiary or other person claiming under or through him, shall have any right, title or interest in or to any shares of Common Stock allocated or reserved for the purposes of this Plan or subject to any Stock Incentive except as to shares of Common Stock, if any, as shall have been issued or transferred to him. (c) The Company or a Subsidiary may, with the approval of the Committee, enter into an agreement or other commitment to grant a Stock Incentive in the future to a person who is or will be an Eligible Employee at the time of grant, and, notwithstanding any other provision of this Plan, any such agreement or commitment shall not be deemed the grant of a Stock Incentive until the date on which the Company takes action to implement such agreement or commitment. (d) In the case of a grant of a Stock Incentive to an employee of a Subsidiary, such grant may, if the Committee so directs, be implemented by the Company issuing or transferring the shares, if any, covered by the Stock Incentive to the Subsidiary, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Subsidiary will transfer the shares to the employee in accordance with the terms of the Stock Incentive specified by the Committee pursuant to the provisions of this Plan. Notwithstanding any other provision hereof, such Stock Incentive may be issued by and in the name of the Subsidiary and shall be deemed granted on the date it is approved by the Committee on the date it is delivered by the Subsidiary or on such other date between said two dates, as the Committee shall specify. (e) The Company or a Subsidiary may make such provisions as it may deem appropriate for the withholding of any taxes which the Company or a Subsidiary determines it is required to withhold in connection with any Stock Incentive. (f) Nothing in this Plan is intended to be a substitute for, or shall preclude or limit the establishment or continuation of, any other plan, practice or arrangement for the payment of compensation or fringe benefits to employees generally, or to any class or group of employees, which the Company or any Subsidiary or other affiliate now has or may hereafter lawfully put into effect, including, without limitation, any retirement, pension, group insurance, stock purchase, stock bonus or stock option plan. 15. Amendments and Discontinuance: (a) This Plan may be amended by the Board of Directors upon the recommendation of the Committee, provided that, without the approval of the stockholders of the Company, no amendment shall be made which (i) increases the maximum aggregate number of shares of Common Stock that may be issued or transferred pursuant to Stock Incentives as provided in section , (ii) withdraws the administration of this Plan from the Committee or amends the provisions of paragraph (a) of section 12 with respect to eligibility and disinterest of members of the Committee, (iii) permits any person who is not at the time an Eligible Employee of the Company or of a Subsidiary to be granted a Stock Incentive, (iv) permits any Option to be exercised more than ten years after the date it is granted, (v) amends section 11 to extend the date set forth therein or (vi) amends this section 15. (b) The Board of Directors may by resolution adopted by a majority of the entire Board of Directors discontinue this Plan. (c) No amendment or discontinuance of this Plan by the Board of Directors or the stockholders of the Company shall, without the consent of the employee, adversely affect any Stock Incentive theretofore granted to such employee. EX-4.2 4 Exhibit 4.2 LCA-VISION INC. DIRECTORS' NONDISCRETIONARY STOCK OPTION PLAN (Amended as of June 5, 1996) 1. Name and Purpose. The purpose of this Plan, which shall be known as the "LCA-Vision Inc. Directors' Nondiscretionary Stock Option Plan" (hereafter referred to as the "Plan") is to advance the interests of the Company by providing material incentive for the continued services of the Non-Employee Directors and by enhancing the Company's ability to attract, and thereafter to retain, qualified individuals to serve on the Company's Board of Directors. 2. Definitions. For purposes of this Plan, the following terms when capitalized shall have the meaning designated herein unless a different meaning is plainly required by the context. Where applicable, the masculine pronoun shall mean or include the feminine and the singular shall include the plural. (a) "Board" shall mean the Board of Directors of the Company. (b) "Company" shall mean LCA-Vision Inc. (c) "Effective Date" shall mean the date on which this Plan shall become effective, as provided in Paragraph 16 below. (d) "Fair Market Value" of the Company's common stock on a certain date shall be the mean of the highest bid and lowest asked quoted selling prices of such stock on the Nasdaq SmallCap Market, Nasdaq National Market System or any stock exchange, as the case may be, on the trading date immediately prior to the date specified, or if the Company's common stock was not traded on such market or exchange on such date, on the next preceding date on which the common stock was traded. (e) "Non-Employee Director" shall mean a Director who is not also an employee of the Company. (f) "Optionee" shall mean a Non-Employee Director who receives stock options granted under this Plan. (g) "Plan" shall mean the LCA-Vision Inc. Directors' Nondiscretionary Stock Option Plan. (h) "Subsidiary" shall mean an affiliated employer during any period that 50% or more of its common stock or, in the case of a partnership, 50% or more of the capital interest thereof is owned directly or indirectly by the Company or during any period that it is a member with the Company in a controlled group of corporations or is otherwise under common control with the Company within the meaning of Section 414(b) and (c) of the Internal Revenue Code of 1986, as amended. 3. Administration. (a) The Plan shall be administered by the Board. (b) The Company shall issue to the Non-Employee Directors stock options under, and in accordance with, the provisions of the Plan. Each option issued shall be evidenced by a stock option agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Board from time to time shall approve. (c) The Board shall have authority to construe and interpret such option agreements; to impose such limitations and restrictions as are deemed necessary or advisable by counsel for the Company so that compliance with the federal securities laws and with the securities laws of the various states may be assured; and to make all other determinations necessary or advisable for administering this Plan. A decision by a majority of the Board shall govern all actions of the Board; such decision may be made either at a meeting of the Board at which a majority of the members are present or without a meeting by a writing signed by a majority of the Board. All decisions and interpretations made by the Board shall be binding and conclusive on all Optionees, their legal representatives and beneficiaries. (d) The Board may designate any officers or employees of the Company or its Subsidiaries to assist the Board in the administration of this Plan and to execute documents on its behalf, and the Board may delegate to them such other ministerial and limited discretionary duties, as it sees fit. 4. Shares Subject to the Plan. (a) The shares to be issued and delivered by the Company upon exercise of options issued under this Plan are shares of the Company's common stock, par value $.001 per share, which may be either authorized but unissued shares or treasury shares, in the discretion of the Board. (b) The aggregate number of shares of the Company's common stock which may be issued under this Plan shall not exceed 1,250,000 shares; subject, however, to the adjustment provided in Paragraph 10 in the event of stock splits, stock dividends, exchanges of shares, or the like occurring after the Effective Date. No stock option may be granted under this Plan which could cause such maximum limit to be exceeded. (c) Shares covered by an option which is no longer exercisable with respect to such shares shall again be available for grant of options under this Plan. 5. Terms of Options. Options issued under this Plan shall contain the following terms and conditions: (a) Option price: The option price per share of common stock shall be equal to of the Fair Market Value of the Company's common stock on the date of the issuance of such option. (b) Time and amount of option issuances: Upon election or appointment to the Board Non-Employee Directors shall automatically be issued an option to purchase 75,000 shares of the Company's common stock. In addition, at every annual organizational meeting of directors following the annual meeting of stockholders commencing in 1996, the Non-Employee Directors then serving on the Board shall receive an automatic issuance of an option to purchase 1,250 shares of the Company's common stock; provided that, the number of shares subject to options issued to Non-Employee Directors who have not yet served a full year on the Board shall be prorated such that those Non-Employee Directors shall receive an option to purchase only a percentage of 1,250 shares commensurate with the actual portion of the year that such director served on the Board. (c) Period within which option may be exercised: Each option issued to Optionees under the Plan shall terminate at the expiration of five years from the date of the issuance of such option. In addition, the option shares covered by an option issued to an Optionee shall be exercisable at a rate of 20% of the shares covered by option at the end of each of the first five years following the issuance of the option and shall remain exercisable thereafter until the expiration of the option. (d) Non-transferability; Termination of Service as a Non-Employee Director. No option issued under this Plan shall be assignable or transferable. In the event a Non-Employee Director ceases to serve the Company as such, then the former Non-Employee Director shall have the following time periods within which to exercise unexercised options or parts thereof, held by him or her in the following described circumstances: (i) In the event of death, the representative or representatives of the former Non-Employee Director's estate may, subject to the prescribed schedule in Paragraph 5(c) above, exercise at any time and from time to time up to and including the option expiration date, any of the unexercised options or parts thereof. (ii) In the event of resignation by a Non-Employee Director by reason of disability or ill-health, the former Non-Employee Director may, subject to the prescribed schedule in Paragraph 5(c) above, exercise at any time and from time to time up to and including the option expiration date, any of the unexercised options or parts thereof. (iii) In the event of resignation for reasons other than disability or ill-health, or failure to be reelected other than by a change-of-control as defined in Paragraph 12, the former Non-Employee Director may exercise all or any part of his or her options which have become exercisable as of the date of resignation or non re-election at any time or from time to time with the period of 60 days following the resignation or non re-election date. (e) Partial exercise: Unless otherwise provided in the option agreement, any exercise of an option issued under this Plan may be made in whole or in part. 6. Period for Issuing Options. No option shall be issued under this Plan subsequent to the tenth anniversary of the Effective Date. 7. Method of Exercise. An option issued under this Plan may be exercised by written notice to the Company, signed by the Optionee, or by such other person as is entitled to exercise such option. The notice of exercise shall state the number of shares in respect of which the option is being exercised, and shall be accompanied by payment of the full option price for such shares, made in one of the following manners: (a) cash; (b) free and clear shares of the Company's common stock, which shall be valued at the Fair Market Value of such shares on the date of such transfer; or (c) any combination of (a) and (b). A certificate or certificates for the shares of common stock of the Company purchased through the exercise of an option shall be issued as soon as practical after the exercise of the option and payment therefor. 8. Rights as a Stockholder. During the option period no person entitled to exercise any option granted under this Plan shall have any of the rights or privileges of a stockholder with respect to any shares of stock issuable upon exercise of such option until certificates representing such shares shall have been issued and delivered. 9. Implied Consent of Optionees. Every Optionee, by his or her acceptance of an option under this Plan, shall be deemed to have consented to be bound, on his or her own behalf and on behalf of his or her heirs, assigns, and legal representatives, by all of the terms and conditions of this Plan. 10. Adjustments to Reflect Capital Changes: The following adjustments shall be made to reflect changes in the capitalization of the Company: (A) Recapitalization. The number and kind of shares subject to outstanding stock options, the exercise price for such shares, and the number and kind of shares available or options subsequently granted under the Plan shall be appropriately adjusted to reflect any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other change in capitalization with a similar substantive effect upon the Plan or the options granted under the Plan. The Board shall have the power to determine the amount of the adjustment to be made in each case. (B) Certain Reorganizations. After any reorganization, merger or consolidation in which the Company is the surviving corporation, each Optionee shall, at no additional cost, be entitled upon any exercise of an option to receive (subject to any required action by stockholders), in lieu of the number of shares of the Company common stock exercisable pursuant to such option, the number and class of shares of stock or other securities to which such Optionee would have been entitled pursuant to the terms of the reorganization, merger or consolidation if, at the time of such reorganization, merger or consolidation, such Optionee had been the holder of record of a number of shares of stock equal to the total number of shares covered by such option. Comparable rights shall accrue to each Optionee in the event of successive reorganizations, mergers or consolidations of the character described above. (C) Options to Purchase Stock of Acquired Companies. After any reorganization, merger or consolidation in which the Company or a Subsidiary of the Company shall be a surviving corporation, the Board shall issue substituted options under the provisions of the Plan, pursuant to section 425 of the Internal Revenue Code, replacing old options granted under a Plan of another party to the reorganization, merger or consolidation whose stock subject to the old options may no longer be issued following such merger or consolidation. The foregoing adjustments and manner of application of the foregoing provisions shall be determined by the Board in its sole discretion. Any such adjustments may provide for the elimination of any fractional shares which might otherwise become subject to any options. Shares of common stock underlying such substituted options shall be in addition to and shall not diminish the number of shares of common stock available for stock option grants. 11. Acceleration. In the event of change of control as defined in paragraph 12, any options which have then been outstanding for at least six months held by an Optionee shall be immediately exercisable (without regard to any limitation imposed by the Plan or the Board at the time the option is granted, which permits all or any part of the option to be exercised only after the lapse of time), and will remain exercisable until the end of the period specified in paragraph 5(b) as determined by the Board on the date of grant, or such earlier date as specified in paragraph 5. 12. Change of Control. (A) A "change of control" shall be deemed to have occurred if: (i) without prior approval of the Board, any "person" becomes a beneficial owner, directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding securities; or (ii) without prior approval of the Board, as a result of, or in connection with, or within two years following, a tender or exchange offer for the voting stock of the Company, a merger or other business combination to which the Company is a party, the sale or other disposition of all or substantially all of the assets of the Company, a reorganization of the Company, or a proxy contest in connection with the election of members of the Board, the persons who were directors of the Company immediately prior to any of such transactions cease to constitute a majority of the Board or of the board of directors of any successor to the Company (except for resignations due to death, disability or normal retirement). (B) A person shall be deemed the "beneficial owner" of any securities: (i) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; or (ii) which such person or any of its Affiliates or Associates has, directly or indirectly, (1) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (2) the right to vote pursuant to any agreement, arrangement or understanding; or (iii) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any securities. (C) A "person" shall mean any individual, firm, company, partnership, other entity or group. (D) The terms "Affiliate" or "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as in effect on the date the Plan is approved by the stockholders of the Company and becomes effective. 13. Company Responsibility. All expenses of this Plan, including the cost of maintaining records, shall be borne by the Company. The Company shall have no responsibility or liability (other than under applicable securities laws) for any act or thing done or left undone with respect to the price, time, quantity, or other conditions and circumstances of the purchase of shares under the terms of the Plan, so long as the Company acts in good faith. 14. Securities Laws. The Board shall take all necessary or appropriate actions to ensure that all option issuances and all exercises thereof under this Plan are in full compliance with all Federal and state securities laws. 15. Amendment and Termination. The Board of Directors of the Company may terminate this Plan at any time, and may amend the Plan at any time or from time to time, without obtaining any approval of the Company's stockholders; except that the Plan may not be amended without stockholder approval (1) to increase the aggregate number of shares issuable under the Plan (excepting proportionate adjustments made under Paragraph 10 to give effect to stock splits, etc.); (2) to change the number of shares which may be granted to Optionees under the provisions of paragraph 5(b) (excepting proportionate adjustments made under Paragraph 10); (3) to change the option price of optioned stock (excepting proportionate adjustments made under paragraph 10); (4) to change the required option price per share of common stock covered by an option granted under this Plan pursuant to subparagraph 5(a); (5) to extend the time within which options may be granted or the time within which a granted option may be exercised; or (6) to change, without the consent of the Participant (or his, or his estate's, legal representative), any option previously granted to him under the Plan; and such amendments shall not be made more than once every six months other than to comport with changes in the Internal Revenue Code or the rules thereunder. If the Plan is terminated, any unexercised option shall continue to be exercisable in accordance with its terms. 16. Effective Date. This Plan shall become effective as of the date it is approved and adopted by majority vote of the stockholders of the Company; provided that such adoption and approval must occur prior to June 1, 1996. If not so approved and adopted, this Plan shall be of no force and effect. EX-23.2 5 Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this registration statement on Form S-8 of our report dated February 23, 1996 on our audits of the consolidated financial statements of LCA-Vision Inc. as of December 31, 1995 and 1994, and for the years ended December 31, 1995, 1994 and 1993, which report is included in the Company's 1995 Annual Report to Stockholders. /s/ Coopers & Lybrand L.L.P. Cincinnati, Ohio June 28, 1996 -----END PRIVACY-ENHANCED MESSAGE-----