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EXHIBIT 10.18
SYNERGIS TECHNOLOGIES, INC.
1997 LONG-TERM INCENTIVE PLAN
1. DEFINITIONS
In this Plan the following definitions apply:
1.1 "Agreement" means a written agreement implementing a grant of an
Option or an award of Restricted Stock.
1.2 "Board" means the Board of Directors of the Company.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Committee" means the Compensation Committee of the Board.
1.5 "Common Stock" means the common stock of the Company.
1.6 "Company" means SYNERGIS TECHNOLOGIES, INC.
1.7 "Date of Exercise" means the date on which the Company receives
notice of the exercise of an Option in accordance with the terms of Article 8.
1.8 "Date of Grant" means the date on which an Option is granted or
Restricted Stock is awarded by the Committee.
1.9 "Director" means a member of the Board of the Company.
1.10 "Employee" means any person determined by the Committee to be an
employee of the Company or a Subsidiary.
1.11 "Employee Director" means a Director who is an Employee of the
Company.
1.12 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.13 "Fair Market Value" of a Share of Common Stock means the amount
equal to the fair market value of a Share of Common Stock determined pursuant to
a reasonable method adopted by the Committee in good faith. Unless otherwise
provided to the contrary in an Agreement or in resolutions of the Committee, the
Fair Market Value of a Share will be the mean between the highest and lowest
selling price on the date of determination on the Nasdaq National Market, or if
no sales are made on that date, on the most recent prior date for which sales
are reported.
1.14 "Grantee" means an Employee to whom Restricted Stock has been
awarded pursuant to Article 10.
1.15 "Insider" means an officer or other employee of the Company
subject to Section 16(a) of the Exchange Act.
1.16 "Insider Program" means that portion of the Plan under which
grants or awards are made to Insiders, including Employee Directors.
1.17 "Non-Insider Program" means that portion of the Plan under which
grants or awards are made to Employees, excluding Insiders and Employee
Directors.
1.18 "Option" means a nonstatutory stock option granted under the Plan
that does not qualify as an incentive stock option under Section 422 of the
Code.
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1.19 "Option Period" means the period during which an Option may be
exercised.
1.20 "Option Price" means the price per Share at which an Option may be
exercised. The Option Price will be determined by the Committee, but in no event
shall the Option Price of an Option be less than the Fair Market Value per Share
determined as of the Date of Grant.
1.21 "Optionee" means an Employee or Director to whom an Option has
been granted.
1.22 "Outside Director Program" means that portion of the Plan under
which grants are made to Directors, other than Employee Directors.
1.23 "Performance Goals" means performance goals established by the
committee which may be based on earnings or earnings growth, sales, return on
assets, equity or investment, total shareholder return, regulatory compliance,
satisfactory internal or external audits, improvement of financial ratings,
achievement of balance sheet, income statement or other financial statement
objectives, or any other objective goals established by the Committee, and may
be absolute in their terms or measured against or in relationship to other
companies similarly or otherwise situated. Performance goals may be particular
to an employee or the department, branch, Subsidiary or other division in which
he or she works, or may be based on the performance of the Company generally,
and may cover any period specified by the Committee.
1.24 "Plan" means SYNERGIS TECHNOLOGIES, INC. 1997 Long-Term Incentive
Plan.
1.25 "Restricted Stock" means Shares awarded pursuant to Article 10.
1.26 "Share" means a share of authorized but unissued Common Stock or a
reacquired share of issued Common Stock
1.27 "Subsidiary" means a corporation at least 50% of the total
combined voting power of all classes of stock of which is owned by the Company,
either directly or through one or more other Subsidiaries.
2. PURPOSE
The Plan is intended to assist in attracting and retaining Employees
and Directors of outstanding ability and to promote the identification of their
interests with those of the shareholders of the Company.
3. ADMINISTRATION
The Plan will be administered by the Committee. In addition to any
other powers granted to the Committee, it will have the following powers,
subject to the express provisions of the Plan:
3.1 to determine in its discretion the Employees to whom Options will
be granted and to whom Restricted Stock will be awarded, the number of Shares to
be subject to each Option or Restricted Stock award, and the terms upon which
Options may be acquired and exercised and the terms and conditions of Restricted
Stock awards;
3.2 to determine all other terms and provisions of each Agreement,
which need not be identical;
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3.3 without limiting the generality of the foregoing, to provide in its
discretion in an Agreement:
(a) for an agreement by the Optionee or Grantee to render
services to the Company or a Subsidiary upon such terms and conditions as may be
specified in the Agreement, provided that the Committee will not have the power
to commit the Company or any Subsidiary to employ or otherwise retain any
Optionee or Grantee;
(b) for restrictions on the transfer, sale or other
disposition of Shares issued to the Optionee upon the exercise of an Option and
for other restrictions permitted by Article 10 with respect to Restricted Stock;
(c) for an agreement by the Optionee or Grantee to resell to
the Company, under specified conditions, Shares issued upon the exercise of an
Option or awarded as Restricted Stock; and
(d) for the payment of the Option Price upon the exercise by
an Optionee of an Option otherwise than in cash, including without limitation by
delivery (including constructive delivery) of shares of Common Stock (other than
Restricted Stock) valued at Fair Market Value on the Date of Exercise of the
Option, or a combination of cash and shares of Common Stock;
3.4 to construe and interpret the Agreements and the Plan;
3.5 to require, whether or not provided for in the pertinent Agreement,
of any person exercising an Option or acquiring Restricted Stock, at the time of
such exercise or acquisition, the making of any representations or agreements
that the Committee may deem necessary or advisable in order to comply with the
securities laws of the United States or of any state;
3.6 to provide for satisfaction of an Optionee's or Grantee's tax
liabilities rising in connection with the Plan through, without limitation,
retention by the Company of shares of Common Stock otherwise issuable on the
exercise of an Option or through delivery of Common Stock to the Company by the
Optionee or Grantee under such terms and conditions as the Committee deems
appropriate; and
3.7 to make all other determinations and take all other actions
necessary or advisable for the administration of the Plan.
Any determinations or actions made or taken by the Committee
pursuant to this Article shall be binding and final.
4. ELIGIBILITY
Options and Restricted Stock may be granted or awarded only to
Employees and Directors. In no event may any participant receive awards and
grants covering more than 500,000 Shares in the aggregate under this Plan.
5. STOCK SUBJECT TO THE PLAN
5.1 The maximum number of Shares that may be issued under the Plan is
720,000 Shares. The maximum number of Shares that may be awarded as Restricted
Stock under the Plan is 150,000.
5.2 If an Option expires or terminates for any reason without having
been fully exercised or if Shares of Restricted Stock are forfeited, the
unissued or forfeited Shares
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that had been subject to the Agreement relating thereto will become available
for the grant of other Options or for the award of additional Restricted Stock.
6. SPECIAL CONDITIONS TO OUTSIDE DIRECTOR PROGRAM
6.1 The Outside Director Program is a formula plan under which
Directors, excluding Employee Directors, will be granted Options, but only in
accordance with the provisions set forth in this Article 6.
6.2 Options will be granted to Directors as follows:
(a) On the date of the Initial Public Offering of the Common
Stock of the Company, each Director who is or becomes a Director on the date of
the Initial Public Offering shall be granted an Option to purchase 5,000 Shares
at an option price equal to the initial public offering price of the Shares on
that date, which date will be the Date of Grant. Each Director who becomes a
Director after the Initial Public Offering shall receive an Option to purchase
5,000 Shares at an option price equal to the Fair Market Value of the Shares on
the date of his or her election, which date will be the Date of Grant.
(b) In subsequent fiscal years, on the date of the Annual
Meeting of Shareholders, each Director who is a Director after each such Annual
Meeting will be granted an Option to purchase 3,000 Shares at an Option Price
equal to the Fair Market Value of the Shares on that date, which date will be
the Date of Grant; and
(c) One half of each Option granted under this Article 6 shall
vest six months after the Date of Grant and
the remaining half shall vest on the first anniversary date of the Date of Grant
and may be exercised by the Optionee at any time after vesting and prior to the
termination of the Option. These options terminate one year from the date on
which the Optionee ceases to be a member of the Board or 10 years from the Date
of Grant, whichever first occurs. Options granted hereunder are not transferable
other than by will or the laws of descent and distribution.
6.3 If on any Date of Grant there is an insufficient number of Shares
available for a grant, the number of Shares subject to such grant will be
reduced to the greatest whole number of Shares arrived at by dividing the
remaining Shares available for the grant by the number of Directors eligible for
the grant.
7. OPTIONS
7.1 The Committee is authorized to grant Options to Employees,
including Employee Directors. Options also may be granted to Directors,
excluding Employee Directors, only pursuant to Article 6.
7.2 The Option Period for Options granted to Employees, including
Employee Directors, will be determined by the Committee and specifically set
forth in the Agreement. No Option will be exercisable before six months after
the Date of Grant or after ten years from the Date of Grant.
7.3 In no event will the Option Price of an Option be less than the
Fair Market Value of a Share of Common Stock at the time of the grant.
7.4 All other terms of Options granted under the Plan will be
determined by the Committee in its sole discretion.
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8. EXERCISE
An Option may, subject to the provisions of the Agreement under which
it was granted, be exercised in whole or in part by the delivery to the Company
of written notice of the exercise, in such form as the Committee may prescribe,
accompanied, in the case of an Option, by full payment for the Shares with
respect to which the Option is exercised.
9. NON-TRANSFERABILITY
Unless otherwise provided in the Agreement respecting the grant,
Options granted under the Plan will not be transferable otherwise than by will
or the laws of descent and distribution, and an Option may be exercised during
his or her lifetime only by the Optionee or, in the event of his or her legal
disability, by his or her legal representative.
10. RESTRICTED STOCK AWARDS
10.1 The Committee is hereby authorized to award Shares of Restricted
Stock to Employees, including Employee Directors.
10.2 Restricted Stock awards under the Plan will consist of Shares that
are restricted against transfer, subject to forfeiture, and subject to such
other terms and conditions intended to further the purposes of the Plan as may
be determined by the Committee. The terms and conditions may provide, in the
discretion of the Committee, for the vesting of awards to be contingent upon the
achievement of one or more Performance Goals.
10.3 Restricted Stock awards will be evidenced by Agreements containing
provisions setting forth the terms and conditions governing the awards. Each
agreement will contain the following:
(a) prohibitions against the sale, assignment, transfer,
exchange, pledge, hypothecation, or other encumbrance of (i) the Shares awarded
as Restricted Stock under the Plan, (ii) the right to vote the Shares, or (iii)
the right to receive dividends thereon in each case during the restriction
period applicable to the Shares; provided, however, that the Grantee shall have
all the other rights of a shareholder including, but not limited to, the right
to receive dividends and the right to vote the Shares;
(b) at least one term, condition or restriction constituting a
"substantial risk of forfeiture" as defined in Section 83(c) of the Code;
(c) such other terms, conditions and restrictions as the
Committee in its discretion may specify (including, without limitation,
provisions creating additional substantial risks of forfeiture);
(d) a requirement that each certificate representing Shares of
Restricted Stock must be deposited with the Company, or its designee, and will
bear the following legend:
"This certificate and the shares of stock represented hereby
are subject to the terms and conditions (including the risks of forfeiture and
restrictions against transfer) contained in SYNERGIS TECHNOLOGIES, INC. 1997
Long-Term Incentive Plan and an Agreement entered into between the registered
owner and SYNERGIS Technologies, Inc. Release from such terms and conditions
shall be made only in accordance with the provisions of the Plan and the
Agreement, a copy of each of which is on file in the office of the Secretary of
SYNERGIS Technologies, Inc."
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(e) the applicable period or periods of any terms, conditions
or restrictions applicable to the Restricted Stock, provided, however, that the
Committee in its discretion may accelerate the expiration of the applicable
restriction period with respect to any part or all of the Shares awarded to a
Grantee; and
(f) the terms and conditions upon which any restrictions upon
Shares of Restricted Stock awarded under the Plan will lapse and new
certificates free of the foregoing legend will be issued to the Grantee or his
or her legal representative.
10.4 The Committee may include in an Agreement a requirement that in
the event of a Grantee's termination of employment for any reason prior to the
lapse of restrictions, all Shares of Restricted Stock shall be forfeited by the
Grantee to the Company without payment of any consideration by the Company, and
neither the Grantee nor any successors, heirs, assigns or personal
representatives of the Grantee will thereafter have any further rights or
interest in the Shares or certificates.
10.5 The maximum number of Shares of Restricted Stock that may be
awarded to any Employee under this Plan during its term is 75,000 Shares.
11. CAPITAL ADJUSTMENTS
The number and class of Shares subject to each outstanding Option or
Restricted Stock award, the Option Price and the aggregate number and class of
Shares for which grants or awards thereafter may be made, including Options
granted under Article 6, will be subject to such adjustment, if any, as the
Committee in its sole discretion deems appropriate to reflect such events as
stock dividends, stock splits, adoption of stock rights plans,
recapitalizations, mergers, consolidations or reorganizations of or by the
Company.
12. TERMINATION OR AMENDMENT
The Board may amend or terminate this Plan in any respect at any time.
Board approval must be accompanied by (i) shareholder approval in those cases in
which amendment requires shareholder approval under applicable law or
regulations or the requirements of the principal exchange or interdealer
quotation system on which the Common Stock is listed or quoted, and (ii)
affected Optionee or Grantee approval if the amendment or termination would
adversely affect the holder's rights under any outstanding grants or awards.
13. EFFECTIVENESS OF THE PLAN
The Plan and any amendments requiring shareholder approval pursuant to
Article 12 are subject to approval by vote of the shareholders of the Company
within 12 months after their adoption by the Board. Subject to that approval,
the Plan and any amendments are effective on the date on which they are adopted
by the Board. Options and Restricted Stock may be granted or awarded prior to
shareholder approval of the Plan or amendments, but each such Option or
Restricted Stock grant or award are made subject to the approval of the Plan or
amendments by the shareholders. The date on which any Option or Restricted Stock
granted or awarded prior to shareholder approval of the Plan or amendment is
granted or awarded will be the Date of Grant for all purposes as if the Option
or Restricted Stock had not been subject to approval. No Option may be
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exercised prior to shareholder approval, and any Restricted Stock awarded will
be forfeited if shareholder approval is not obtained.
14. TERM OF THE PLAN
Unless sooner terminated by the Board pursuant to Article 12, the Plan
will terminate on the date ten years after its adoption by the Board, and no
Options or Restricted Stock may be granted or awarded after termination. The
termination will not affect the validity of any Option or Restricted Stock
outstanding on the date of termination.
15. INDEMNIFICATION OF COMMITTEE
In addition to any other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee will be
indemnified by the Company against the reasonable expenses, including attorneys'
fees, actually and reasonably incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any Option or Restricted Stock
granted or awarded hereunder, and against all amounts reasonably paid by them in
settlement thereof or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, if such members acted in good faith and in a manner
which they believed to be in, and not opposed to, the best interests of the
Company.
16. GENERAL PROVISIONS
16.1 The establishment of the Plan does not confer upon any Employee or
Director any legal or equitable right against the Company, any Subsidiary or the
Committee, except as expressly provided in the Plan.
16.2 The Plan does not constitute inducement or consideration for the
employment of any Employee or the service of any Director, nor is it a contract
between the Company or any Subsidiary and any Employee or Director.
Participation in the Plan, or the receipt of a grant or award hereunder, does
not give an Employee or Director any right to be retained in the service of the
Company or any Subsidiary.
16.3 The Company and its Subsidiaries may assume options, warrants, or
rights to purchase stock issued or granted by other corporations whose stock or
assets are acquired by the Company or its Subsidiaries, or which is merged into
or consolidated with the Company. The terms and conditions of assumed options
may vary from the terms and conditions contained in this Plan, to the extent
determined by the Committee. Assumed options will not be counted toward the
limit specified in Section 7.3 unless the Committee determines that application
of the limit is necessary for the grants of Options to qualify as
"performance-based compensation" under Section 162(m) of the Code. Neither the
adoption of this Plan, nor its submission to the shareholders, may be taken to
impose any limitations on the powers of the Company or its affiliates to issue,
grant, or assume options, warrants, rights, or restricted stock, otherwise than
under this Plan, or to adopt other long-term incentive plans or to impose any
requirement of shareholder approval upon the same.
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16.4 The interests of any Employee or Director under the Plan are not
subject to the claims of creditors and may not, in any way, be assigned,
alienated or encumbered except as provided in Article 9.
16.5 The Plan will be governed, construed and administered in
accordance with the laws of Ohio.
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