EXECUTIVE CASH BONUS PLAN
SECTION 1. PURPOSES OF THE PLAN
The purposes of this Executive Cash Bonus Plan (Plan) of LCA-Vision Inc.
* to stimulate executives' efforts to achieve the Company's short
and long-term goals,
* to link a portion of executive compensation to Company
* to provide a competitive compensation package.
SECTION 2. PERFORMANCE PERIOD
Bonuses shall be determined based upon the Company's performance during
each calendar year (Plan Year).
SECTION 3. PARTICIPANTS; ELIGIBILITY
(a) The following employees shall be participants in the Plan: the
Company's Chairman of the Board, its Chief Executive Officer, its President, its
Chief Financial Officer and its General Counsel. The Compensation Committee of
the Company's Board of Directors (Committee) may select additional participants
from time to time.
(b) In order to be eligible for a bonus, a participant must be employed
by the Company or one of its subsidiaries throughout any Plan Year and as
provided in Section 5. However, the Committee may approve participation in the
Plan and a prorated bonus for an employee who is hired or moves into an eligible
position during a Plan Year.
SECTION 4. BONUS CALCULATION
(a) Bonus amounts shall be calculated as a percent of base salary at the
end of the Plan Year based upon the extent to which threshold, target and
maximum performance goals set annually by the Committee are achieved. Initially,
the performance measure shall be pre-tax income. The Committee may select one or
more additional or different objective performance measures in the future.
Bonuses for achieving the threshold, target and maximum performance goals shall
be 40%, 60% and 80% of base salary, respectively, for the Company's Chairman of
the Board and Chief Executive Officer and 20%, 40% and 60% of base salary,
respectively, for other participants, with linear interpolation between those
percentages unless another method of interpolation is set by the Committee at
the time it establishes the performance goals.
(b) In calculating bonuses for a Plan Year, the Committee may interpret
any performance measure in a way that eliminates the effects of any unusual
financial items or corporate events that have materially affected the performance goals originally established for
that Plan Year (e.g., stock splits and other changes in capitalization, stock
offerings or repurchases, unusual gains or losses or accounting changes).
SECTION 5. BONUS PAYMENT
Bonuses under this Plan will be calculated and paid in cash as soon as
practicable after completion of the year-end audit of the Company's financial
statements by its independent auditors; provided that in no event will bonuses
be paid later than two and one-half months from the end of the taxable year
during which such bonuses are calculated. Notwithstanding a participant's
eligibility for a bonus pursuant to Section 3(b), the participant will forfeit
any bonus for a Plan Year if he or she is not employed by the Company or one of
its subsidiaries on the date that bonuses for that Plan Year are calculated.
SECTION 6. COMMITTEE
(a) This Plan shall be administered by the Committee, which will have
the authority and discretion to interpret the Plan, to establish, amend and
rescind rules relating to the Plan, and to make all other determinations that
may be necessary or advisable for the Plan's administration.
(b) Any interpretation of the Plan by the Committee and any decision by
it relating to the Plan shall be final and binding on all persons.
SECTION 7. AMENDMENT
The Board of Directors of the Company may amend or terminate this Plan
at any time, except that no amendment or termination may materially adversely
affect the rights of any participant with respect to Plan Years ended prior to
the date on which the amendment or termination is adopted by the Board.
SECTION 8. PLAN NOT EXCLUSIVE
This Plan shall not be construed as limiting the ability or discretion
of the Committee to award additional bonuses, separate and apart from this Plan,
to individual participants based upon subjective or other criteria.