Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
PURSUANT
TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
Date
of
Report (Date of earliest event reported): October
27, 2005
NOVAMED,
INC.
(Exact
name of registrant as specified in its charter)
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DELAWARE
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0-26625
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36-4116193
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(State
or other jurisdiction of
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(Commission
File
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(I.R.S.
Employer
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incorporation
or organization)
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Number)
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Identification
No.)
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980
North Michigan Avenue, Suite 1620, Chicago,
Illinois
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60611
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (312) 664-4100.
NOT
APPLICABLE
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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ITEM
1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Descriptions
of the material terms of (i) Mr. Thomas S. Hall’s employment agreement,
restricted stock award agreement and stock option agreement and (ii) the
NovaMed, Inc. 2005 Restricted Stock Plan are set forth in Item 5.02 below and
are incorporated herein by this reference.
ITEM
5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
On
October 27, 2005, NovaMed, Inc. (the “Company”) announced that its board of
directors named Mr. Hall as President and Chief Executive Officer, effective
as
of November 14, 2005 (the “Effective Date”). The Company also announced that Mr.
Hall will join the Company’s board of directors on the Effective Date. A copy of
the press release announcing the employment of Mr. Hall and certain other
matters referred to herein is filed as Exhibit 99.1 to this Form 8-K
and
incorporated herein by reference.
Mr.
Hall,
age 45, previously served as President and Chief Operating Officer of Matria
Healthcare, Inc. (Nasdaq: MATR) since April 2003, after having joined Matria
in
October 2002 as Executive Vice President and Chief Operating Officer. Matria
provides comprehensive disease management programs to health plans and
employers. From 2000 to 2002, Mr Hall was President and Cheif Executive Officer
of TSH & Associates, an independent consulting and management services
company. Prior to that, Mr. Hall was President of ADP TotalSource, a division
of
Automated Data Processing, Inc. Mr. Hall also served in senior management
positions with Riscorp, Inc., an insurance holding company, and USAir
Express/Chautauqua Airlines. Mr. Hall earned a BA in business from Goshen
College and a MBA from Clarkson University.
In
connection with the appointment by the Company of Mr. Hall as its President
and
Chief Executive Officer, NovaMed Management Services, LLC, a wholly-owned
subsidiary of the Company, and Mr. Hall entered into an Employment Agreement
(the “Employment Agreement”), dated as of October 27, 2005 and effective as of
the Effective Date, regarding the terms of Mr. Hall’s employment.
The
Employment Agreement provides that Mr. Hall will receive an annual base salary
of $500,000 and is eligible to receive an annual discretionary bonus based
on
performance targets established by the compensation committee pursuant to the
Company’s executive incentive compensation plan. Mr. Hall’s initial target bonus
for the 2006 calendar year shall be 50% of his annual base salary. Mr. Hall
will
also be awarded a one-time bonus of $142,500 within one (1) week of the
Effective Date, which represents one-half of the bonus earned, but not received,
by Mr. Hall while employed by his former employer during 2005.
The
Employment Agreement has a term of four (4) years, with the agreement
automatically renewable for successive one year terms unless either party gives
written notice not less than sixty (60) days prior to expiration that it/he
does
not wish to renew. If the Company gives such notice, Mr. Hall shall be entitled
to severance benefits upon termination of employment on the same basis as
provided for a termination without “Cause” (as defined below). If Mr. Hall gives
such notice, the Company shall have no further obligations under the Employment
Agreement with respect to Mr. Hall’s employment from and after the expiration of
the employment term.
The
Company may terminate the Employment Agreement with or without Cause or upon
Mr.
Hall’s disability. If the Company terminates Mr. Hall for disability or Cause,
Mr. Hall is not entitled to receive any salary or other severance after the
date
of termination. The Company may terminate Mr. Hall for “Cause” under the
Employment Agreement if he: (i)
materially breaches any term or condition of the Employment Agreement and fails
to cure such breach within a reasonable time; (ii) fails to comply with any
of
the Company’s written guidelines that it has furnished to Mr. Hall and fails to
cure such failure within a reasonable time; (iii) materially fails or willfully
refuses to substantially perform his duties and fails to cure such failure
or
refusal within a reasonable time; or (iv) has committed an act constituting
a
felony or other act involving dishonesty, disloyalty or fraud against the
Company, as reasonably determined by the Company's board of
directors.
If
the
Company terminates Mr. Hall without Cause (including a termination resulting
from the Company’s election not to renew the Employment Agreement), Mr. Hall
receives severance compensation in a fixed amount equal to his then-current
annual base salary for a period of twelve (12) months and a pro rata cash bonus
payment, plus health benefits for such period. If Mr. Hall’s employment is
terminated following a change in control of the Company by Mr. Hall for good
reason or by the Company without Cause (including a termination resulting from
the Company’s election not to renew the Employment Agreement), Mr. Hall would
receive an amount equal to two (2) times the sum of (i) his annual base salary
and (ii) the Target Bonus (equal to the amount of bonus that would have been
payable to Mr. Hall based on him attaining 100% of the applicable target measure
or, if greater, 50% of his annual base salary) plus health benefits for
twenty-four (24) months. If Mr. Hall, for any reason or no reason, terminates
his employment within the thirty (30) day period following the one-year
anniversary of a change in control, Mr. Hall would receive an amount equal
to
the sum of (i) his annual base salary and (ii) the Target Bonus, plus health
benefits for twelve (12) months.
The
Employment Agreement also provides for Mr. Hall’s right to participate in the
Company’s employee benefit programs. These programs include hospitalization,
disability, life and health insurance. The Employment Agreement imposes on
Mr.
Hall non-competition restrictions that survive termination of employment and
post-termination confidentiality obligations.
In
connection with his appointment, Mr. Hall is entitled to participate in the
Company’s 2005 Stock Incentive Plan (the “Stock Incentive Plan”). On October 27,
2005, the Company and Mr. Hall entered into a stock option agreement pursuant
to
which Mr. Hall will be granted, as of the Effective Date, options to purchase
250,000 shares of common stock of the Company (“Common Stock”). Such stock
options will be granted under the Stock Incentive Plan on terms and conditions
substantially similar to those contained in the form of stock option agreement
previously filed by the Company with the Securities and Exchange Commission
(“SEC”).
On
October 27, 2005, the Company's board of directors adopted the NovaMed, Inc.
2005 Restricted Stock Plan (the “Restricted Stock Plan”). The terms and
conditions of the Restricted Stock Plan are similar to the Stock Incentive
Plan,
but under which Thomas S. Hall is the only participant and pursuant to which
only an award of 250,000 restricted shares of Common Stock may be made. A copy
of the Restricted Stock Plan was included in the registration statement on
Form
S-8 filed by the Company with the SEC on October 27, 2005.
On
October 27, 2005, the compensation committee of the Company’s board of directors
approved the grant to Mr. Hall of 250,000 restricted shares of Common Stock,
as
of the Effective Date, under the Restricted Stock Plan and pursuant to a
Restricted Stock Award Agreement (the “Restricted Stock Agreement”). The grant
of restricted shares in recruiting Mr. Hall is made in reliance on Section
4350(i)(1)(A)(iv) of the Nasdaq Marketplace Rules. Unless Mr. Hall’s employment
with the Company is terminated (at which time no further restricted shares
will
vest), (i) one-eighth (1/8th) of the restricted shares will vest on the date
six
(6) months after the Effective Date and (ii) an additional one-forty-eight
(1/48th) of the restricted shares will vest on the last day of each month
thereafter. However, all of the restricted shares will vest immediately upon
a
change in control of the Company if Mr. Hall is employed by the Company or
its
subsidiaries at the time of such change in control.
In
addition, on the first anniversary of the Effective Date, Mr. Hall will be
granted options to purchase 125,000 shares of Common Stock. During 2007,
contemporaneous with the determination of stock awards for the Company’s other
senior management, Mr. Hall shall be granted options to purchase shares of
Common Stock up to an amount not to exceed 250,000. The amount of this 2007
grant will be based on the Company’s performance in 2006 relative to the
performance criteria jointly established by the compensation committee and
Mr.
Hall, subject to the final review and approval of the board of directors. The
grant of the awards specified in this paragraph shall be contingent on Mr.
Hall
being employed by the Company or its subsidiaries as of the respective grant
dates.
The
foregoing descriptions of the Employment Agreement, the Restricted Stock Plan
and the Restricted Stock Agreement are qualified in their entirety by reference
to the Employment Agreement, the Restricted Stock Plan and the Restricted Stock
Agreement filed as Exhibits 10.41, 10.42 and 10.43 hereto, which are hereby
incorporated by reference herein.
The
Company also announced that its board of directors has appointed Robert J.
Kelly
to serve as its non-executive Chairman. Mr. Kelly has served as Presiding
Director of the Company since March 29, 2005.
ITEM
8.01. OTHER EVENTS.
A
copy of
the press release announcing the employment of Mr. Hall and certain other
matters referred to in Item 5.02 above is filed as Exhibit 99.1 to this
Form 8-K and incorporated herein by reference.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS
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Exhibit
No.
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Description
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10.41
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Employment
Agreement, dated as of October 27, 2005, by and between NovaMed Management
Services LLC and Thomas S. Hall.
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10.42
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NovaMed,
Inc. 2005 Restricted Stock Plan (incorporated by reference to Exhibit
4.2
to NovaMed Inc.’s Registration Statement on Form S-8 filed October 27,
2005 (Registration Statement No. 333-129250)).
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10.43
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Restricted
Stock Award Agreement, dated as of October 27, 2005, between NovaMed,
Inc.
and Thomas S. Hall.
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99.1
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Press
Release of NovaMed, Inc., dated October 27,
2005.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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NOVAMED,
INC. |
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| Dated: November
2, 2005 |
By: |
/s/ Scott
T. Macomber |
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Scott
T. Macomber |
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Executive Vice
President and Chief Financial
Officer |
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Exhibit
No.
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Description
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10.41
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Employment
Agreement, dated as of October 27, 2005, by and between NovaMed Management
Services LLC and Thomas S. Hall.
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10.42
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NovaMed,
Inc. 2005 Restricted Stock Plan (incorporated by reference to Exhibit
4.2
to NovaMed Inc.’s Registration Statement on Form S-8 filed October 27,
2005 (Registration Statement No. 333-129250)).
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10.43
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Restricted
Stock Award Agreement, dated as of October 27, 2005, between NovaMed,
Inc.
and Thomas S. Hall.
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99.1
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Press
Release of NovaMed, Inc., dated October 27,
2005.
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