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Exhibit 10.25
CONLEY, CANITANO & ASSOCIATES, INC. CORPORATION
1997 EQUITY AND PERFORMANCE INCENTIVE PLAN
1. PURPOSE. The purpose of the 1997 Equity and Performance Incentive
Plan is to attract and retain Directors, consultants, officers and other key
employees for Conley, Canitano & Associates, Inc., an Ohio corporation, and its
Subsidiaries and to provide to such persons incentives and rewards for superior
performance.
2. DEFINITIONS. As used in this Plan,
"Board" means the Board of Directors of the Company.
"Change in Control" means a sale of a majority of the then
issued and outstanding Common Shares of the Company, a sale of substantially all
of the Company's assets, or other similar transactions and events as determined
by the Board.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Common Shares" means the Common Shares, without par value, of
the Company or any security into which such Common Shares may be changed by
reason of any transaction or event of the type referred to in Section 8 of this
Plan.
"Company" means Conley, Canitano & Associates, Inc., an Ohio
corporation.
"Date of Grant" means the date specified by the Board on which
a grant of Option Rights, or a grant or sale of Restricted Shares or Deferred
Shares shall become effective (which date shall not be earlier than the date on
which the Board takes action with respect thereto).
"Deferral Period" means the period of time during which
Deferred Shares are subject to deferral limitations under Section 6 of this
Plan.
"Deferred Shares" means an award made pursuant to Section 6 of
this Plan of the right to receive Common Shares at the end of a specified
Deferral Period.
"Director" means a member of the Board of Directors of the
Company.
"Incentive Stock Options" means Option Rights that are
intended to qualify as "incentive stock options" under Section 422 of the Code
or any successor provision.
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"Market Value per Share" means, as of any particular date, the
fair market value of the Common Shares as determined by the Board.
"Optionee" means the optionee named in an agreement evidencing
an outstanding Option Right.
"Option Price" means the purchase price payable on exercise of
an Option Right.
"Option Right" means the right to purchase Common Shares upon
exercise of an option granted pursuant to Section 4 of this Plan.
"Participant" means a person who is selected by the Board to
receive benefits under this Plan and who is at the time a Director, a
consultant, an officer, or other key employee of the Company or any one or more
of its Subsidiaries, or who has agreed to commence serving in any of such
capacities within 90 days of the Date of Grant.
"Plan" means this Conley, Canitano & Associates, Inc. 1997
Equity and Performance Incentive Plan.
"Public Offering" means a "Qualified Public Offering" as
defined in the Company's Amended and Restated Articles of Incorporation.
"Restricted Shares" means Common Shares granted or sold
pursuant to Section 5 of this Plan as to which neither the substantial risk of
forfeiture nor the prohibition on transfers referred to in such Section 5 has
expired.
"Subsidiary" means a corporation, company or other entity (i)
more than 50 percent of whose outstanding shares or securities (representing the
right to vote for the election of directors or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as may be the case in
a partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company except that for purposes of determining
whether any person may be a Participant for purposes of any grant of Incentive
Stock Options, "Subsidiary" means any corporation in which at the time the
Company owns or controls, directly or indirectly, more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation.
3. SHARES AVAILABLE UNDER THE PLAN. (a) Subject to adjustment as
provided in Section 3(b) and Section 8 of this Plan, the number of Common Shares
that may be issued or transferred (i) upon the exercise of Option Rights, (ii)
as Restricted Shares and released from substantial risks of forfeiture thereof,
(iii) as Deferred Shares or (iv) in payment of dividend equivalents paid with
respect to awards made under the Plan shall not exceed in the aggregate
Seventy-Five Thousand (75,000) Common Shares, plus any shares described in
Section 3(b). Such shares may be shares of original issuance.
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(b) The number of shares available in Section 3(a) above shall
be adjusted to account for shares relating to awards that expire, are forfeited
or are transferred, surrendered or relinquished upon the payment of any Option
Price by the transfer to the Company of Common Shares or upon satisfaction of
any withholding amount. Upon payment in cash of the benefit provided by any
award granted under this Plan, any shares that were covered by that award shall
again be available for issue or transfer hereunder.
(c) Notwithstanding anything in this Section 3, or elsewhere
in this Plan, to the contrary and subject to adjustment as provided in Section 8
of this Plan, the aggregate number of Common Shares actually issued or
transferred by the Company upon the exercise of Incentive Stock Options shall
not exceed 75,000 Common Shares.
4. OPTION RIGHTS. The Board may, from time to time and upon such terms
and conditions as it may determine, authorize the granting to Participants of
options to purchase Common Shares. Each such grant may utilize any or all of the
authorizations, and shall be subject to all of the requirements, contained in
the following provisions:
(a) Each grant shall specify the number of Common Shares to
which it pertains.
(b) Each grant shall specify an Option Price per share, which
may be less than the Market Value per Share on the Date of Grant in the case of
a Stock Option that is not an Incentive Stock Option.
(c) Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Company, (ii) by the actual or
constructive transfer to the Company of Common Shares owned by the Optionee
having a value at the time of exercise equal to the total Option Price and which
have been held by Optionee for at least six months, or (iii) by a combination of
such methods of payment.
(d) Any grant may provide for payment of the Option Price, at
the election of the Optionee, in installments, upon terms determined by the
Board, including without limitation, pursuant to a promissory note.
(e) Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such Participant remain
unexercised.
(f) Each grant shall specify the period or periods of
continuous service by the Optionee with the Company or any Subsidiary that is
necessary before the Option Rights or installments thereof will become
exercisable and shall provide for the earlier exercise of such Option Rights in
the event of a Change in Control.
(g) Any grant of Option Rights may specify management
objectives or goals that must be achieved as a condition to the exercise of such
rights.
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(h) Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that are intended to
qualify under particular provisions of the Code, (ii) options that are not
intended so to qualify, or (iii) combinations of the foregoing.
(i) Any grant (other than Incentive Stock Options) may provide
for the payment of dividend equivalents to the Optionee on either a current or
deferred or contingent basis or may provide that such equivalents shall be
credited against the Option Price.
(j) No Option Right that constitutes an Incentive Stock Option
shall be exercisable more than 10 years from the Date of Grant.
(k) Each grant of Option Rights shall be evidenced by an
agreement executed on behalf of the Company by an officer and delivered to the
Optionee and containing such terms and provisions, consistent with this Plan, as
the Board may approve.
5. RESTRICTED SHARES. The Board may also authorize the grant or sale of
Restricted Shares to Participants. Each such grant or sale may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:
(a) Each such grant or sale shall constitute an immediate
transfer of the ownership of Common Shares to the Participant in consideration
of the performance of services, entitling such Participant to voting, dividend
(subject to Section 5(f) below) and other ownership rights, but subject to the
substantial risk of forfeiture and restrictions on transfer hereinafter referred
to.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall provide that the Restricted
Shares covered by such grant or sale shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code, except (if the Board
shall so determine) in the event of a Change in Control or Public Offering, for
a period of not less than 2 years to be determined by the Board at the Date of
Grant.
(d) Each such grant or sale shall provide that during the
period for which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Shares shall be prohibited or restricted in
the manner and to the extent prescribed by the Board at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any transferee).
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(e) Any grant of Restricted Shares may specify management
objectives or goals that, if achieved, will result in termination or early
termination of the restrictions applicable to such shares. Each grant may
specify in respect of such management objectives or goals a minimum acceptable
level of achievement and may set forth a formula for determining the number of
Restricted Shares on which restrictions will terminate if performance is at or
above the minimum level, but falls short of full achievement of the specified
management objectives or goals.
(f) Any such grant or sale of Restricted Shares may require
that any or all dividends or other distributions paid thereon during the period
of such restrictions be automatically deferred and reinvested in additional
Restricted Shares, which may be subject to the same restrictions as the
underlying award.
(g) Each grant or sale of Restricted Shares shall be evidenced
by an agreement executed on behalf of the Company by any officer and delivered
to and accepted by the Participant and shall contain such terms and provisions,
consistent with this Plan, as the Board may approve. Unless otherwise directed
by the Board, all certificates representing Restricted Shares shall be held in
custody by the Company until all restrictions thereon shall have lapsed,
together with a stock power or powers executed by the Participant in whose name
such certificates are registered, endorsed in blank and covering such Shares.
6. DEFERRED SHARES. The Board may also authorize the granting or sale
of Deferred Shares to Participants. Each such grant or sale may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:
(a) Each such grant or sale shall constitute the agreement by
the Company to deliver Common Shares or their equivalent in value payable in
other property including cash to the Participant in the future in consideration
of the performance of services, but subject to the fulfillment of such
conditions including the achievement of management objectives or goals during
the Deferral Period as the Board may specify.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall be subject to a Deferral
Period of not less than 1 year, as determined by the Board at the Date of Grant
except (if the Board shall so determine) in the event of a Change in Control or
Public Offering.
(d) During the Deferral Period, the Participant shall have no
right to transfer any rights under his or her award and shall have no rights of
ownership in the Deferred Shares and shall have no right to vote them, but the
Board may, at or after the Date of Grant, authorize the payment of dividend
equivalents on such Shares on either a current or deferred or contingent basis,
either in cash or in additional Common Shares.
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(e) Each grant or sale of Deferred Shares shall be evidenced
by an agreement executed on behalf of the Company by any officer and delivered
to and accepted by the Participant and shall contain such terms and provisions,
consistent with this Plan, as the Board may approve.
7. TRANSFERABILITY. (a) Except as otherwise determined by the Board, no
Option Right granted under the Plan shall be transferable by a Participant other
than by will or the laws of descent and distribution. Except as otherwise
determined by the Board, Option Rights shall be exercisable during the
Optionee's lifetime only by him or her or by his or her guardian or legal
representative.
(b) The Board may specify at the Date of Grant that part or
all of the Common Shares that are (i) to be issued or transferred by the Company
upon the exercise of Option Rights or upon the termination of the Deferral
Period applicable to Deferred Shares or (ii) no longer subject to the
substantial risk of forfeiture and restrictions on transfer referred to in
Section 5 of this Plan, shall be subject to further restrictions on transfer.
8. ADJUSTMENTS. The Board may make or provide for such adjustments in
the numbers of Common Shares covered by outstanding Option Rights or Deferred
Shares, and in the kind of shares covered thereby, as the Board, in its sole
discretion, exercised in good faith, may determine is equitably required to
prevent dilution or enlargement of the rights of Participants or Optionees that
otherwise would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, or (b) any merger, consolidation, spin-off, split-off, spin-out,
split-up, reorganization, partial or complete liquidation or other distribution
of assets, issuance of rights or warrants to purchase securities, or (c) any
other corporate transaction or event having an effect similar to any of the
foregoing. Moreover, in the event of any such transaction or event, the Board,
in its discretion, may provide in substitution for any or all outstanding awards
under this Plan such alternative consideration, including, but not limited to
cash, as it, in good faith, may determine to be equitable in the circumstances
and may require in connection therewith the surrender or termination of all
awards so replaced. The Board may also make or provide for such adjustments in
the numbers of shares specified in Section 3 of this Plan as the Board in its
sole discretion, exercised in good faith, may determine is appropriate to
reflect any transaction or event described in this Section 8; provided, however,
that any such adjustment to the number specified in Section 3 shall be made only
if and to the extent that such adjustment would not cause any Option intended to
qualify as an Incentive Stock Option to fail so to qualify.
9. FRACTIONAL SHARES. The Company shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Board may provide for the
elimination of fractions or for the settlement of fractions in cash.
10. WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a
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Participant or other person under this Plan, and the amounts available to the
Company for such withholding are insufficient, it shall be a condition to the
receipt of such payment or the realization of such benefit that the Participant
or such other person make arrangements satisfactory to the Company for payment
of the balance of such taxes required to be withheld, which arrangements (in the
discretion of the Board) may include relinquishment of a portion of such
benefit. The Company and a Participant or such other person may also make
similar arrangements with respect to the payment of any taxes with respect to
which withholding is not required.
11. ADMINISTRATION OF THE PLAN. This Plan shall be administered by the
Board. The interpretation and construction by the Board of any provision of this
Plan or of any agreement, notification or document evidencing the grant of
Option Rights, Restricted Shares or Deferred Shares and any determination by the
Board pursuant to any provision of this Plan or of any such agreement,
notification or document shall be final and conclusive. No member of the Board
shall be liable for any such action or determination made in good faith.
12. AMENDMENTS, ETC. (a) The Board may at any time and from time to
time amend the Plan in whole or in part.
(b) The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral by
the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Company or a Subsidiary to the
Participant.
(c) In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of hardship or other
special circumstances, of a Participant who holds an Option Right not
immediately exercisable in full, or any Restricted Shares as to which the
substantial risk of forfeiture or the prohibition or restriction on transfer has
not lapsed, or any Deferred Shares as to which the Deferral Period has not been
completed, the Board may, in its sole discretion, accelerate the time at which
such Option Right may be exercised or the time at which such substantial risk of
forfeiture or prohibition or restriction on transfer will lapse or the time when
such Deferral Period will end.
(d) This Plan shall not confer upon any Participant any right
with respect to continuance of employment or other service with the Company or
any Subsidiary, nor shall it interfere in any way with any right the Company or
any Subsidiary would otherwise have to terminate such Participant's employment
or other service at any time.
(e) To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as an Incentive Stock
Option from qualifying as such, that provision shall be null and void with
respect to such Option Right. Such provision, however, shall remain in effect
for other Option Rights and there shall be no further effect on any provision of
this Plan.
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13. TERMINATION. No grant constituting Incentive Stock Options shall be
made under this Plan more than 10 years after the date on which this Plan is
first approved by the shareholders of the Company, but all grants made on or
prior to such date shall continue in effect thereafter subject to the terms
thereof and of this Plan.
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