<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CORRPRO COMPANIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
[CORRPRO LOGO]
1090 Enterprise Drive, Medina, Ohio 44256
Tel 330/723-5082, Fax 330/723-0694
June 16, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to
be held at Medina Country Club, 5588 Wedgewood Road, Medina, Ohio, at 10:00 a.m.
on Wednesday, July 23, 1997. We hope that you will be able to attend.
This Notice of Annual Meeting of Shareholders and Proxy Statement describes
the matters to be acted upon at the meeting. Regardless of the number of shares
you own, your vote is important. Whether or not you plan to attend the meeting,
we urge you to complete the enclosed proxy card and to sign, date and return it
in the envelope provided. You may revoke your proxy at any time prior to the
Annual Meeting.
We appreciate your interest and your investment in our Company, and we look
forward to seeing you at the meeting.
Sincerely,
/s/ Joseph W. Rog
Joseph W. Rog
Chairman of the Board, President and
Chief Executive Officer
<PAGE> 3
[CORRPRO LOGO]
1090 Enterprise Drive, Medina, Ohio 44256
Tel 330/723-5082, Fax 330/723-0694
CORRPRO COMPANIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 23, 1997
The Annual Meeting of Shareholders (the "Annual Meeting") of Corrpro
Companies, Inc. (the "Company") will be held at Medina Country Club, 5588
Wedgewood Road, Medina, Ohio at 10:00 a.m. Eastern Daylight time on Wednesday,
July 23, 1997, to consider and act on the following matters:
1. The election of four directors of the Company for terms expiring in
1999.
2. The approval of the 1997 Long-Term Incentive Plan of Corrpro Companies,
Inc.
3. The approval of the 1997 Non-Employee Directors' Stock Option Plan of
Corrpro Companies, Inc.
4. Such other business that may properly come before the Annual Meeting.
The Board of Directors has fixed the close of business on May 23, 1997 as
the record date for determining shareholders entitled to notice of, and to vote
at, the Annual Meeting.
By Order of the Board of Directors
/s/ Neal R. Restivo
Neal R. Restivo
Senior Vice President,
Chief Financial Officer,
Secretary and Treasurer
June 16, 1997
<PAGE> 4
CORRPRO COMPANIES, INC.
PROXY STATEMENT
The accompanying Proxy is solicited by the Board of Directors of Corrpro
Companies, Inc. (the "Company") for use at the Annual Meeting of Shareholders to
be held on Wednesday, July 23, 1997, and at any adjournments of that meeting.
If you attend the meeting, you may vote your shares by ballot. If you do
not attend, your shares may still be voted at the meeting if you sign and return
the enclosed Proxy. Common Shares represented by a properly signed card will be
voted in accordance with the instructions marked on the Proxy. If no
instructions are marked, the shares will be voted to elect the nominees listed
below and in favor of the proposed actions to adopt the 1997 Non-Employee
Directors' Stock Option Plan and 1997 Long-Term Incentive Plan. You may revoke
your proxy before it is voted by giving notice to the Secretary of the Company
in writing or orally at the meeting.
This Proxy Statement and the enclosed Proxy are being mailed to
shareholders on or about June 16, 1997.
I.
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into two classes, each of whose
members serve for a two-year term. Shareholder approval is sought to elect
Joseph W. Rog, David H. Kroon, C. Richard Lynham, and Robert E. Hodge to the
class of Directors whose terms expire in 1999. If any Director nominee becomes
unable to accept nomination or election, the persons voting the shares
represented by the Proxies will vote the shares in accordance with their best
judgment. The Board of Directors has no reason to believe that any nominee will
be unable to serve.
Under the terms of an employment agreement with Joseph W. Rog, the Company
has agreed to cause him to be nominated as a Director of the Company for so long
as such agreement remains in effect. This agreement expires on March 31, 1998.
NOMINEES FOR ELECTION AS DIRECTORS FOR TERMS EXPIRING IN 1999
JOSEPH W. ROG, 57, has served as a Director of the Company since 1984, as
Chairman of the Board of Directors since June 1993, and as President of the
Company since June 1995 and from January 1984 until June 1993. Mr. Rog has
served as Chief Executive Officer of the Company since its formation in
1984. Mr. Rog has over thirty years of industry experience in various
technical and management capacities and has broad, first-hand experience in
corrosion analysis and the design and implementation of corrosion control
systems. Mr. Rog is a graduate of Kent State University with a Bachelor of
Science degree in Geology, and has also completed the Graduate School of
Business course at Stanford University.
DAVID H. KROON, 47, has served as a Director of the Company since 1984, and as
an Executive Vice President since April 1993. Mr. Kroon served as Senior
Vice President of the Company from its formation in 1984 until April 1993.
Mr. Kroon has over twenty-five years of engineering and consulting
experience in the corrosion control market. Mr. Kroon is widely published
in water and waste treatment, electrical power, oil and gas, and
environmental journals worldwide. Mr. Kroon has management experience in
the areas of business planning, policies and procedures, and professional
development. Mr. Kroon is a graduate of Yale University with a Bachelor of
Science degree in Chemistry.
C. RICHARD LYNHAM, 55, has served as a Director of the Company since June 1992.
Mr. Lynham is presently the owner and Chief Executive Officer of Harbor
Castings, Inc., an investment casting foundry located in North Canton,
Ohio. Prior to assuming this position in 1992, Mr. Lynham served as Group
Vice President, Ceramics, for Ferro Corporation (1984-1992), a Fortune 500
manufac-
3
<PAGE> 5
turer of industrial specialty products. Mr. Lynham is a graduate of Cornell
University with a Bachelor's of Mechanical Engineering degree and has also
received a Master of Business Administration from Harvard University.
ROBERT E. HODGE, 59, has served as a Director of the Company since November
1993. Mr. Hodge retired in January 1993 from his position as Senior Vice
President of Gas Supply, Natural Gas Pipeline Company of America, a unit of
MidCon Corp., which is a subsidiary of Occidental Petroleum Corporation.
Mr. Hodge joined Natural Gas Pipeline Company of America in 1960 and became
Senior Vice President in 1989. A graduate of the University of Missouri,
Rolla, with a degree in electrical engineering, Mr. Hodge also holds a
Master of Business Administration from the University of Illinois.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF EACH OF THE NOMINEES
FOR DIRECTOR.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 1998
BARRY W. SCHADECK, 46, has served as a Director of the Company since April 1993
and as Executive Vice President since July 1995. Mr. Schadeck has served as
President of Corrpro Canada, Inc., a wholly-owned subsidiary of the
Company, since its formation in May 1994. Mr. Schadeck served as President
of the Company's Commonwealth Seager Group subsidiary ("CSG") since April
1993 and Chief Financial Officer of CSG since 1979. Prior to joining CSG,
Mr. Schadeck served as Chief Financial Accountant of Associated Engineering
Services Ltd. for seven years. Mr. Schadeck is a graduate of Northern
Alberta Institute of Technology with a degree in accounting, and received
his designation as a Certified General Accountant in 1978.
WARREN F. ROGERS, 67, is president of Warren Rogers Associates, Inc., a Newport,
Rhode Island firm which provides underground storage tank management and
consulting services including mathematical and statistical modeling. He has
held this position since 1979. In addition, Dr. Rogers served as a Vice
President of the Center for Naval Analysis in Alexandria, Virginia from
1982 to 1989. Dr. Rogers earned a Ph.D. in statistics from Stanford
University and has an M.S. in Operations Research from the U.S. Naval
Post-Graduate School.
WALTER W. WILLIAMS, 63, retired in November 1992 from his position as Chairman
and Chief Executive Officer of Rubbermaid Incorporated, a position he had
held since May 1991. Prior to that time, Mr. Williams served as President
and Chief Operating Officer of Rubbermaid Incorporated commencing in
September 1987 and Vice Chairman commencing in October 1990. Prior to
joining Rubbermaid, Mr. Williams spent 31 years with The General Electric
Company in a wide variety of domestic and international consumer marketing,
sales and general management positions. Mr. Williams serves on the Board of
Directors for The Stanley Works and PAXAR Corporation. Mr. Williams is a
graduate of Utica College of Syracuse University with a degree in Finance.
COMMITTEES OF THE BOARD OF DIRECTORS; ATTENDANCE
The present members of the Audit Committee are Messrs. Hodge, Lynham,
Rogers and Williams. The Audit Committee approves the appointment of the
independent public accountants to serve as auditors in examining the corporate
accounts of the Company. The Audit Committee meets with appropriate Company
financial personnel and independent public accountants to review the internal
controls of the Company and the objectivity of its financial reporting. The
Audit Committee had four meetings during the last fiscal year.
The present members of the Compensation Committee are Messrs. Hodge,
Lynham, Rogers and Williams. The Compensation Committee is responsible for
establishing the compensation package-base salary, cash bonuses, and equity
incentive awards for the Chief Executive Officer. The Compensation Committee is
also responsible for establishing the equity incentive awards for the remaining
executive officers. The Compensation Committee has delegated to the Chief
Executive Officer the decision-making authority regarding the base salary and
cash bonuses for the remaining executive officers; however, the
4
<PAGE> 6
Chief Executive Officer is required to review his compensation recommendations
with the Compensation Committee before a final decision is made. The
Compensation Committee had four meetings during the last fiscal year. The Stock
Option subcommittee, which administers and authorizes awards under certain of
the Company's compensation plans, is comprised of Messrs. Hodge, Lynham and
Williams.
The Board of Directors had eleven meetings during the last fiscal year.
During the last fiscal year, each incumbent Director attended at least 75% of
all the meetings of the Board of Directors and of Committees on which he served.
The Board of Directors does not maintain a separate nominating committee.
COMPENSATION OF DIRECTORS
Effective until March 31, 1997, Directors not employed by the Company or
its subsidiaries were paid $2,200 for each Board of Directors' meeting attended
in person, $900 for each Committee meeting attended in person, and $550 for each
telephonic Board of Directors' meeting or Committee meeting. Effective April 1,
1997, the Board of Directors modified the compensation payable to provide such
non-employee Directors a retainer of $12,000, on an annual basis, and $1,000
($1,200 for Committee Chairperson) for each Board of Directors' or Committee
meeting attended in person and $350 ($550 for Committee Chairperson) for each
Board of Directors' or Committee meeting attended telephonically.
Pursuant to the terms of the Deferred Compensation Plan for Outside
Directors, eligible Directors may elect to defer payment of all or any part of
the compensation received as a Director. Participating Directors elect to have
the return on their deferred funds based upon the rate of return on various
investment options, including the Company's Common Shares. Deferred portions are
payable in a lump sum, over a period of five years or over a period of ten
years. Payments under the plan commence at a future date previously specified by
the Director, or upon the death or disability of the Director.
Under the 1994 Corrpro Outside Directors' Stock Option Plan (the "1994
Plan"), automatic grants of options to purchase 1,500 Common Shares were granted
annually to each incumbent director at a price equal to 130% of the fair market
value of the Common Shares on the date of grant. The 1994 Plan has been
terminated subject to shareholder approval of the 1997 Non-Employee Directors'
Stock Option Plan as described in Proposal III.
OWNERSHIP OF COMMON SHARES
The following table shows the number and percent of the Common Shares
beneficially owned on May 23, 1997 by each of the Directors, by the Chief
Executive Officer, by the four other most highly compensated executive officers,
by all Directors and executive officers as a group and by each person or entity
who is known to the Company to be the beneficial owner of more than 5% of the
Company's outstanding Common Shares.
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES (1)(2) PERCENT
----- ------------ ------
<S> <C> <C>
Michael K. Baach 78,723 1.1%
David M. Hickey 69,058 1.0%
Robert E. Hodge 3,750 *
David H. Kroon 216,122 3.1%
C. Richard Lynham 11,750 *
Neal R. Restivo 25,200 *
Joseph W. Rog 260,636 3.8%
Warren F. Rogers 200 *
Barry W. Schadeck 91,348 1.3%
Walter W. Williams 35,000 *
13 Directors and executive officers as a group 884,510 12.9%
David L. Babson & Company Incorporated (3) 692,000 10.5%
</TABLE>
5
<PAGE> 7
*Less than 1%
(1) The named shareholders have sole voting and investment power of shared
voting and investment power with their spouse with respect to all shares
shown as being beneficially owned by them, except as otherwise indicated.
(2) Includes with respect to each of the following individuals and group the
following number of Common Shares which may be acquired upon the exercise of
options within 60 days: Mr. Baach (19,000 shares); Mr. Hickey (47,333
shares); Mr. Hodge (3,750 shares); Mr. Kroon (19,000 shares); Mr Lynham
(9,750 shares); Mr. Restivo (24,000 shares); Mr. Rog (49,334 shares); Mr.
Schadeck (22,666 shares); and all Directors and executive officers as a
group (284,167 shares).
(3) Includes 473,200 shares subject to sole voting power, and 219,600 shares
subject to shared voting power. All such shares are subject to sole
dispositive power. The information provided with respect to David L. Babson
Company Incorporated, One Memorial Drive, Cambridge, Ma. 02142, is based
upon a Schedule 13G/A filed by it with the Securities and Exchange
Commission on March 10, 1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's
officers, directors, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership on forms 3, 4, and 5 with the Securities and Exchange
Commission and the New York Stock Exchange. The Company believes that during
fiscal 1997, all Section 16(a) filing requirements applicable to the Company's
officers, directors and ten percent shareholders were complied with.
EXECUTIVE COMPENSATION
The following tables set forth compensation received for the three years
ended March 31, 1997 by the persons who were at March 31, 1997 the Company's
Chief Executive Officer and the four other most highly paid executive officers
(the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION ALL OTHER
FISCAL OTHER ANNUAL AWARDS STOCK COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS (1) (2)
------------------------- ----- ----- ----- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Joseph W. Rog 1997 $235,000 $79,000 $ 0 40,000 $ 1,084
Chairman of the Board, 1996 208,750 0 0 0 1,026
President, and Chief 1995 205,000 0 0 30,000 893
Executive Officer
David M. Hickey (3) 1997 165,000 39,000 0 12,000 908
Executive Vice President - 1996 162,000 36,300 83,516(4) 50,000 409
Manufacturing and 1995 87,746 34,000 12,500 532
International Operations 0
Neal R. Restivo (5) 1997 152,360 39,000 0 12,000 914
Senior Vice President,
Chief 1996 75,008 35,000 0 30,000 152
Financial Officer,
Secretary and Treasurer
Michael K. Baach 1997 140,000 39,000 0 12,000 385
Executive Vice President 1996 140,000 35,000 0 0 385
Sales and Marketing 1995 130,000 0 0 10,000 392
David H. Kroon 1997 145,000 39,000 0 12,000 1,111
Executive Vice President 1996 134,462 35,000 0 0 524
Central Region 1995 140,000 0 0 8,000 629
</TABLE>
(1) On June 30, 1995, Messrs. Rog, Kroon, and Baach voluntarily forfeited the
stock options granted to each of them during fiscal 1995.
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<PAGE> 8
(2) Amounts represent Company matching contributions to the Corrpro Companies,
Inc. Profit Sharing Plan and Trust, a qualified salary deferral plan under
Section 401(k) of the Internal Revenue Code.
(3) Mr. Hickey became an employee of the Company in August 1994. Amounts for
fiscal 1995 relate to the eight month period from August 1994 to March 1995.
He became an executive officer of the Company during June 1995. During
fiscal 1996, the Company advanced Mr. Hickey $156,000 in connection with his
relocation to the Company's Corporate headquarters in Ohio. Interest in the
advance was at a rate of 10% per annum. The entire advance has been repaid
as of the date of this filing.
(4) Includes $73,614 of moving expenses paid by the Company.
(5) Mr. Restivo became an employee of the Company in October 1995. Amounts for
fiscal 1996 related to the six month period from October 1995 to March 1996.
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
----------------------------------------------------------------------------- OF STOCK PRICE
% OF TOTAL APPRECIATION FOR OPTION
OPTIONS GRANTED EXERCISE OR TERM(2)
OPTIONS TO EMPLOYEES IN BASE PRICES EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR ($/SH)(1) DATE 5% 10%
----- ------ -------------- --------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Joseph W. Rog 40,000 26.5% $8.46 4-01-06 $ 162,707 $ 459,529
David M. Hickey 12,000 8.0% 9.69 5-22-06 55,909 157,902
Neal R. Restivo 12,000 8.0% 9.69 5-22-06 55,909 157,902
Michael K. Baach 12,000 8.0% 9.69 5-22-06 55,909 157,902
David H. Kroon 12,000 8.0% 9.69 5-22-06 55,909 157,902
</TABLE>
(1) The exercise price is based on 110% of the fair market value of the
Company's Common Shares on the date of grant.
(2) Potential Realizable Value is based on certain assumed rates of appreciation
pursuant to rules prescribed by the Securities and Exchange Commission.
Actual gains, if any, on stock option exercises are dependent on the future
performance of the Stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING OPTIONS IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END AT FISCAL YEAR-END(1)
ACQUIRED VALUE ----------------------------- ---------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE(2) EXERCISABLE UNEXERCISABLE
--------- ------- --------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Joseph W. Rog 30,000 $168,225 49,334 26,666 $ 278,154 $31,066
David M. Hickey 0 0 47,333 27,167 76,825 32,925
Neal R. Restivo 0 0 24,000 28,000 57,700 28,850
David H. Kroon 18,000 106,560 19,000 8,000 109,425 0
Michael K. Baach 18,000 102,060 19,000 8,000 109,425 0
</TABLE>
(1) This value is calculated based on the difference between $9.625, the closing
price of the Company's Common Shares on March 31, 1997, and the exercise
price of the options.
EMPLOYMENT AGREEMENTS
In July 1996, the Company entered into an employment agreement with Mr. Rog
which superseded the five-year employment agreement entered into in June 1993.
Pursuant to this agreement, Mr. Rog serves as the Company's Chairman of the
Board, Chief Executive Officer and President. In addition, the Company has
agreed to cause Mr. Rog to be nominated as a Director of the Company for so long
as such agreement remains in effect. The current term of this agreement expires
on March 31, 1998.
This employment agreement provides for the payment of base salary, subject
to annual adjustments, and such other compensation, whether in the form of
bonuses, stock options, incentive compensation, or otherwise, as determined by
the board of Directors from time-to-time. The Board of Directors has delegated
its authority to set compensation pursuant to these agreements to its
Compensation Committee. At April 1, 1997 the base salary for Mr. Rog was
$249,000.
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<PAGE> 9
This employment agreement precludes Mr. Rog from competing with the Company
during the term of the agreement and for as long as Mr. Rog receives payments
pursuant to the agreement. The employment agreement permits the Company to
terminate Mr. Rog's employment for good cause. If the Company terminates Mr. Rog
for good cause, which includes acts resulting in or intended to result in
significant gain or personal enrichment at the expense of the Company, failure
substantially to perform his duties resulting in demonstrably material injury to
the Company, indictment of a felony and the willful wanton or reckless failure
properly to perform his duties, the Company will pay Mr. Rog his base salary
earned through termination and will have no further obligation to him.
Mr. Rog will be eligible to receive retirement income with a lifetime
survivor benefit to his spouse in an amount equal to 50% of his base salary,
payable monthly, provided that certain conditions are satisfied including that
he remains in employment of the Company through the current term of his
employment agreement; that his employment is terminated without good cause; that
he resigns due to the Company's failure to honor its obligations under the
agreement; or that he dies or becomes disabled while an employee of the Company.
If Mr. Rog's employment is terminated without good cause within twelve
months after a change in control, as defined, or if Mr. Rog is terminated
without good cause or resigns due to the Company's failure to honor its
obligations under the agreement, the Company must pay Mr. Rog his salary earned
through the termination or resignation date and a severance payment equal to his
base salary for one year at the rate in effect at the time of termination plus a
payment equal to full year's participation in any short-term incentive bonus
plan at the 100% level. In addition, the Company must maintain any medical or
other insurance coverage in effect at the time of termination until age 65.
Further, all of Mr. Rog's unvested stock options will become vested immediately
and he will receive any payments due under any long-term incentive plans within
ten days of termination. The amount of the payments due to a change in control
are required to be funded, within ten days following such change in control,
pursuant to a grantor trust conforming to Internal Revenue Procedure 92-64.
In the event of Mr. Rog's disability, he will continue to receive his base
salary and other compensation and benefits during the first ninety business days
after the date of such disability. If the Board of Directors determines that no
reasonable accommodation can be made, the Company may terminate Mr. Rog's
employment in which case the Company shall pay Mr. Rog's salary earned through
the termination date, an amount equal to a full year's participation in the
short-term bonus plans then in effect, any payment due under other incentive
plans then in effect and the retirement income provided in the agreement. In
addition, benefits will continue for his spouse and eligible dependents in
accordance with Company policy.
The Company amended the employment agreements previously entered into with
Messrs. Kroon, Hickey and Baach pursuant to which each shall serve as an
Executive Vice President of the Company and entered into an employment agreement
with Mr. Restivo pursuant to which he shall serve as Senior Vice President and
Chief Financial Officer. These agreements provide for the payment of base
salaries, subject to adjustment. In general, these agreements provide similar
severance arrangements as the employment agreement with Mr. Rog described above,
except that no retirement income will be paid, that no severance is provided
thereunder in the event of termination in connection with a change in control,
and that medical and other insurance coverage shall continue for a period of
twelve months rather than to age 65 if the employee is terminated without good
cause or if the employee resigns due to the Company's failure to honor its
obligations under the agreement. The current terms of these agreements each
expire on March 31, 1998.
8
<PAGE> 10
REPORT OF THE COMPENSATION COMMITTEE AND
THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors was responsible for
establishing the compensation package -- base salary, cash bonuses, and equity
incentive awards -- for the Chief Executive Officer. The Compensation Committee
was also responsible for establishing, upon consultation with the Chief
Executive Officer, the equity incentive awards for the remaining executive
officers. In establishing compensation levels, the Committee takes into account
the tax deductibility limitations imposed under Section 162 (m) of the Internal
Revenue Code.
BASE SALARIES
An independent executive compensation consultant engaged by the Company
reviewed the Compensation Committee's recommended base salary for Mr. Rog, the
Chief Executive Officer, taking into consideration the consulting firm's data
base of competitive information from domestic industrial companies of similar
size and the proxy statements of those companies comprising the peer group
utilized in the performance graph on page 10 for comparing total returns to
shareholders. The Compensation Committee believed it was necessary to consider
not only the peer group of companies but also the broader group of domestic
industrial companies of similar size for its salary comparisons since this
broader group of companies competes for the talent of the executive officers.
The Compensation Committee established, effective April 1, 1997, the base salary
level for Mr. Rog at $249,000.
The base salary levels for all of the remaining executive officers were as
determined by the Chief Executive Officer following a review of these
recommended base salary levels with the Compensation Committee. These salary
levels were subjectively established based upon the performance of the executive
and his level of responsibility.
INCENTIVE COMPENSATION
CASH INCENTIVES. The Company maintains a cash bonus program pursuant to
which cash bonuses may be paid to key employees, including the executive
officers. Bonuses are determined based on performance measures approved by the
Board and management's discretion. The performance measures used for fiscal 1997
were based on the Company's consolidated earnings before taxes. Eighty-five key
employees, including the executive officers, received cash bonus awards for
fiscal 1997.
In determining the size of target awards, the Committee, for the Chief
Executive Officer and the President, and the Board, for all other executive
officers, subjectively reviewed the performance of each executive relative to
his individual goals.
EQUITY INCENTIVES. The Compensation Committee granted stock options to the
five named executive officers during fiscal 1997. The options were designed to
provide incentives to manage the Company in the best interests of the
shareholders, and to remain employed by the Company on a long-term basis. In
granting these awards, the Compensation Committee's determination was based upon
the level of the executive's responsibility with the Company, his performance,
and the importance of his retention to the Company. These factors were weighted
subjectively by the Compensation Committee.
Respectfully submitted,
<TABLE>
<S> <C>
Compensation Committee: Other Board Members:
Robert E. Hodge David H. Kroon
C. Richard Lynham Joseph W. Rog
Warren F. Rogers Barry W. Schadeck
Walter W. Williams
</TABLE>
9
<PAGE> 11
COMPANY STOCK PERFORMANCE
Following is a graph which compares the cumulative return from investing
$100, and the reinvestment of dividends, at September 30, 1993, the date the
Company's Common Shares began to trade on the New York Stock Exchange, with the
S&P 500 index, and with an index of peer companies (the "Peer Group"). The
companies selected to form the Peer Group index are companies with revenues
generally in the range of $40 to $150 million that offer a broad range of
engineering, environmental, and construction services. They include Astrotech
International, Baker (Michael) Corp., Failure Group Inc., Harding Associates
Inc., and Tanknology Environmental Inc.
<TABLE>
<CAPTION>
TOTAL RETURN TO SHAREHOLDERS
SEPTEMBER 30, 1993 TO MARCH 31, 1997
MEASUREMENT PERIOD CORRPRO
(FISCAL YEAR COVERED) COMPANIES S&P 500 PEER GROUP(1)
<S> <C> <C> <C>
1992 100 100 100
1993 100 100 100
1994 180 98 87
1995 155 113 59
1996 69 149 74
1997 88 179 82
</TABLE>
(1) The peer group data prior to fiscal 1997 includes the results of Greiner
Engineering, Inc. No results for Greiner Engineering, Inc. were available
for fiscal 1997.
10
<PAGE> 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dr. Warren F. Rogers, a member of the Compensation Committee, is president
of Warren Rogers Associates, Inc. (WRA). WRA currently conducts, on behalf of
the Company, statistical evaluation of corrosion data, relating to the Company's
customers, primarily in the underground storage tank market. The Company has
worked with WRA since 1985. During fiscal 1997, fees paid to WRA totaled
$488,848. WRA paid the Company $162,460 for services the Company performed as a
subcontractor. The Company believes that the terms of all transactions and
arrangements with WRA are no less favorable to the Company than similar
transactions and arrangements which might have been entered into with unrelated
parties.
II.
ADOPTION OF THE 1997 LONG-TERM INCENTIVE PLAN OF
CORRPRO COMPANIES, INC.
The Board of Directors of the Company adopted the Company's 1997 Long-Term
Incentive Plan (the "Incentive Plan") on April 28, 1997 subject to approval by
the shareholders of the Company at the Annual Meeting. The Incentive Plan is
intended to encourage ownership of Company's Common Stock by officers, other key
employees and consultants of the Company, to encourage continued employment with
the Company and to provide them with additional incentives to promote the
success of the Company. On April 28, 1997 the Board of Directors of the Company
terminated the 1994 Corrpro Stock Option Plan (the "1994 Option Plan") subject
to shareholder approval of the Incentive Plan and no more awards may be granted
under the 1994 Option Plan. On such date there were 552,000 shares subject to
outstanding awards. All outstanding awards under the 1994 Option Plan shall
continue in full force and effect according to the terms and conditions of the
awards and the 1994 Option Plan.
The following is a brief description of the material features of the
Incentive Plan; such description is qualified in its entirety by reference to
the full text of the Incentive Plan which is attached hereto as Exhibit A.
The Incentive Plan authorizes the grant to officers, other key employees
and consultants of awards ("Awards") consisting of non-qualified stock options,
stock appreciation rights ("SAR's"), and restricted stock and stock bonus
awards. There will be up to 375,000 new shares of Company's Common Stock
available for granting Awards under the Incentive Plan. Shares which may be
exercised, forfeited, or otherwise terminated under previously granted stock
option awards, other than awards under the directors' 1994 Plan, will also be
available for the granting of Awards under the Incentive Plan. Such previously
granted awards totaled 653,590. The Stock Option Committee, which is a
subcommittee of the Compensation Committee of the Board of Directors of the
Company, (the "Committee") will administer the Incentive Plan and will have sole
discretion to determine those persons to whom Awards will be granted, the number
of Awards granted, the provisions applicable to each Award and the time periods
during which Awards may be exercisable.
The Committee may grant non-qualified stock options. Unless the Committee
determines otherwise, the option price per share of any non-qualified stock
option shall be the fair market value of the shares of Company's Common Stock on
the date the option is granted. Under the Incentive Plan, fair market value is
generally the closing price of the Company's Common Stock on the New York Stock
Exchange on the last business day prior to the date on which the value is to be
determined. Options granted under the Incentive Plan will be exercisable for a
term of not more than ten years from the date of grant.
SAR's are rights to receive an amount in cash or shares of Common Stock of the
Company of a combination thereof as determined by the Committee, no greater than
the excess of the fair market value of the Common Stock of the Company on the
date the SAR is exercised over the fair market value of the Common Stock of the
Company on the date the SAR is granted (or in the case of SAR's granted in
tandem with options, in the Committee's sole discretion, the option price of the
shares subject to the option).
11
<PAGE> 13
The Committee may, in its sole discretion, grant SAR's in tandem with
options or on a stand alone basis. SAR's granted in tandem with options may only
be exercisable to the extent the related option is exercisable and shall be for
a term as determined by the Committee. The term may not exceed 10 years and may
expire prior to the term of the related option. Each SAR granted on a stand
alone basis shall be exercisable to the extent and for such term as may be
approved by the Committee. In no event shall any amounts paid pursuant to an SAR
exceed the difference between the fair market value of the underlying shares on
the date of exercise and the option price of the related option.
Restricted stock awards are rights granted by the Committee to receive
shares of Company's Common Stock subject to forfeiture and other restrictions
determined by the Committee. Until the restrictions with respect to any
restricted stock awards lapse, the shares will be held by the Company and may
not be sold or otherwise transferred by the employee. Except as otherwise
determined by the Committee, until the restrictions lapse, the shares will be
forfeited if the employee's employment is terminated for any reason other than
death, disability, retirement or the employee's attainment of 65 years of age
and all restrictions shall lapse upon the earliest of the death, disability or
retirement of the recipient employee, or the employee's attainment of 65 years
of age. Unless the Committee determines otherwise, one-third of the shares
subject to a restricted stock award will vest on each anniversary of the date of
grant. The Committee may require participants to whom restricted stock awards
are granted to pay the Company an amount equal to the aggregate par value, if
any, of the shares issued.
Stock bonus awards may also be granted under the Incentive Plan, on such
terms and conditions as the Committee may, in its sole discretion, determine.
The committee may require participants to whom stock bonus awards are granted to
pay the Company an amount equal to the aggregate par value, if any, of the
shares issued.
Awards granted under the Incentive Plan may be subject to adjustment upon a
stock dividend, stock split, reclassification, recapitalization, merger,
consolidation, combination, or exchange of shares, separation, reorganization,
liquidation or similar events affecting the Company's Common Stock. An Award
will not be transferable, other than to Permitted Transferees (as defined), by
will or the laws of descent and distribution or, in certain circumstances,
pursuant to a qualified domestic relations order, and an Award may be exercised,
during the lifetime of the holder of the Award, only by the holder, or the
holder's personal representative in the event of disability.
In the case of "change in control" (as defined) of the Company, the Board
of Directors of the Company may, in its sole discretion, determine, on a case by
case basis, taking into account the purposes of the Incentive Plan, that each
Award granted under the Incentive Plan will terminate 90 days after occurrence
of such "change in control," but, in the event of any such termination (i) an
option or SAR holder will generally have the right, commencing at least five
days prior to the "change in control" and subject to any other limitation on the
exercise of the option in effect on date of exercise, to immediately exercise
any options in full to the extent they previously have not been exercised, and
(ii) restricted stock awards will vest.
The Incentive Plan will terminate on April 28, 2007, and Awards shall not
be granted under the Incentive Plan after that date although the terms of any
Awards may be amended in accordance with the Incentive Plan at any date prior to
the end of the term of such Awards. Any Awards outstanding at the time of
termination of the Incentive Plan will continue in full force and effect
according to the terms and conditions of the Award and the Incentive Plan.
The Incentive Plan may be amended by the Board of Directors of the Company,
provided that shareholder approval will be necessary as required under Rule
16b-3 of the regulations of the Securities Exchange Act of 1934, as amended,
(the "Exchange Act"), and provided further that no amendment may impair any
rights of any holder of an Award previously granted under the Incentive Plan
without the holder's consent.
Certain of the federal income tax consequences to the Company and
participants in the Incentive Plan of the grant and the exercise of Awards under
currently applicable provisions of the Internal Revenue Code are as described
below. For persons subject to Section 16 of the Exchange Act
12
<PAGE> 14
("Section 16") the calculation and timing of income recognition is generally
deferred until such time as the employee is no longer subject to suit for "short
swing profit".
FEDERAL INCOME TAX CONSEQUENCES -- NON-QUALIFIED STOCK OPTIONS. The
issuance of a non-qualified stock option under the Incentive Plan will not
result in any taxable income to the recipient or a tax deduction to the Company
at the time of grant. Generally, an employee to whom a non-qualified stock
option has been granted will recognize ordinary income at the time the employee
exercises the option and receives shares of Company's Common Stock in an amount
equal to the excess of the fair market value of such shares on the date of
exercise over the option price.
The Company is generally entitled to a tax deduction corresponding to the
amount of income recognized by the employee as a result of the exercise of a
non-qualified stock option for the year in which the employee recognizes such
income for federal income tax purposes.
FEDERAL INCOME TAX CONSEQUENCES -- SAR'S. A participant will not recognize
taxable income upon the grant of an SAR. The participant will generally
recognize ordinary income for federal income tax purposes in an amount equal to
the amount of cash and/or the fair market value of the shares of Common Stock
received upon exercise of the SAR, in the tax year in which payment is made in
respect of an SAR, and the Company will normally be entitled to a tax deduction
for an equivalent amount for the same year.
FEDERAL INCOME TAX CONSEQUENCES -- RESTRICTED STOCK AWARDS AND STOCK BONUS
AWARDS. Generally, an employee to whom a restricted stock award or stock bonus
award is made will recognize ordinary income for federal income tax purposes in
an amount equal to the excess of the fair market value of the shares of
Company's Common Stock received at the time the shares first become transferable
or are no longer subject to a substantial risk of forfeiture over the purchase
price, if any, paid by the employee for such Company's Common Stock, and such
amount will generally then be deductible for federal income tax purposes by the
Company. Alternatively, if the recipient of a restricted stock award or stock
bonus Award so elects, the recipient will recognize ordinary income on the date
of grant in an amount equal to the excess of the fair market value of the shares
of Company's Common Stock (without taking into account any lapse restrictions)
on such date, over the purchase price, if any, paid by the employee for such
Company's Common Stock, and such amount will generally then be deductible by the
Company. In the event of the forfeiture of the Company's Common Stock included
in a restricted stock award or stock bonus award, the employee will not be
entitled to any deduction except to the extent the employee paid for such
company's Common Stock. Upon a sale of the Company's Common Stock included in
the restricted stock award or stock bonus award, the participant will recognize
capital gain or loss, as the case may be, equal to the difference between the
amount realized from such sale and the employee's tax basis for such shares of
Company's Common Stock.
VOTE REQUIRED FOR APPROVAL OF THE 1997 LONG-TERM INCENTIVE PLAN. Approval
of the 1997 Long-Term Incentive Plan requires the affirmative vote of the
holders of a majority of the voting securities of the Company represented and
voting at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE INCENTIVE
PLAN.
III.
APPROVAL OF THE 1997 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
OF CORRPRO COMPANIES, INC.
The Board of Directors of the Company adopted the 1997 Non-Employee
Directors' Stock Option Plan (the "Directors' Plan") on April 28, 1997, subject
to approval by the shareholders of the Company at the Annual Meeting. On April
28, 1997 the Board of Directors terminated the 1994 Non-Employee Directors Plan
(the "1994 Plan") subject to shareholder approval of the Directors' Plan and no
more awards may be granted under the 1994 Plan. All outstanding awards under the
1994 Plan shall continue in full force and effect according to the terms and
conditions of the awards and 1994 Plan.
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<PAGE> 15
The following is a brief description of the material features of the
Directors' Plan; such description is qualified in its entirety by reference to
the full text of the Directors' Plan, which is attached hereto as Exhibit B.
The Directors' Plan is intended to encourage non-employee directors of the
Company to acquire or increase their ownership of Company's Common Stock on
reasonable terms, and to foster a strong incentive to put forth maximum effort
for the continued success and growth of the company. The Directors' Plan
provides for the granting of non-qualified stock options to purchase an
aggregate of 50,000 shares of the Company's Common Stock to current and future
non-employee directors of the Company. The non-employee directors eligible to
receive stock options under the Directors' Plan are Messrs. Hodge, Lynham,
Rogers and Williams.
On the 30th day of September of each calendar year (or the date of initial
election as a director) during the term of the Directors' Plan commencing on
September 30, 1997 each eligible director will be granted an option to purchase
2,000 shares of Company's Common Stock. If the number of shares available to
grant under the Directors' Plan on a scheduled date of grant is insufficient to
make all the grants, then each eligible director will receive an option to
purchase a pro rata number of the available shares.
The option price for the option grants will be the fair market value of the
shares of Company's Common Stock on the date of grant. Under the Directors'
Plan, fair market value is generally the closing price of the Company's Common
Stock on the New York Exchange on the last business day prior to the date on
which the value is to be determined. The options granted under the Directors'
Plan will be exercisable for a term of ten years from the date of grant, subject
to earlier termination, and may be exercised as follows: one-half after one year
from the date of grant and 100% after two years from the date of grant.
Upon termination as a director (other than for death or disability), the
option may be exercised for three months, but not beyond its term. Upon
termination for death (or upon death within 3 months of termination) or
disability, the option may be exercised for 12 months, but not beyond its term.
Options granted under the Directors' Plan may be subject to adjustment upon
a stock dividend, stock split, reclassification, recapitalization, merger,
consolidation, combination, or exchange of shares, separation, reorganization,
liquidation, extraordinary dividend, or similar events affecting the Company's
Common Stock. Options will not be transferable other than to a Permitted
Transferee (as defined), by will or pursuant to the laws of descent and
distribution or pursuant to a qualified domestic relations order, and will be
exercisable during the lifetime of an option holder only by such holder or his
personal representative in the event of disability.
Upon a "change in control" (as defined) of the Company, each option granted
under the Directors' Plan will terminate 90 days after the occurrence of the
"change in control", and an option holder will have the right, commencing at
least five days prior to the "change in control" and subject to any other
limitations on the exercise of the option in effect on the date of exercise, to
immediately exercise any options in full, to the extent they previously have not
been exercised.
The Directors' Plan will terminate on April 28, 2007 and options may not be
granted under the Directors' Plan after that date, although the terms of any
option may be amended in accordance with the Directors' Plan at any date prior
to the end of the term of that option. Any options outstanding at the time of
termination of the Directors' Plan will continue in full force and effect
according to the terms and conditions of the option and the Directors' Plan.
The Directors' Plan may be amended by the Board of Directors, provided that
shareholder approval will be necessary if required under Rule 16b-3 ("Rule
16b-3") of the Exchange Act, and no amendment may impair any of the rights of
any holder of an option previously granted under the Directors' Plan without the
holder's consent.
The Directors' Plan will be administered by the Compensation Committee. The
principal terms of the option grants are fixed in the Directors' Plan.
Therefore, the Compensation Committee will have no
14
<PAGE> 16
discretion to select which directors receive options, the number of shares of
Company's Common Stock included in any grant, or the exercise price of options.
FEDERAL INCOME TAX CONSEQUENCES -- NON-QUALIFIED STOCK OPTIONS. The tax
consequences are substantially as described under Proposal II, Federal Income
Taxes -- Non-Qualified Stock Options.
VOTE REQUIRED FOR APPROVAL OF THE 1997 DIRECTORS' STOCK OPTION
PLAN. Approval of the 1997 Directors' Stock Option Plan requires the
affirmative vote of the holders of a majority of the voting securities of the
Company represented and voting at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE DIRECTORS'
PLAN.
15
<PAGE> 17
INDEPENDENT AUDITORS
The Company is incorporated under the laws of the State of Ohio, which do
not require approval by shareholders of the selection of independent auditors. A
representative of KPMG Peat Marwick LLP ("KPMG") is expected to be present at
the meeting. KPMG acted as independent auditors for the Company for the fiscal
year ended March 31, 1997. The Audit Committee will select the company's
auditors for fiscal 1998. The representative will be given an opportunity to
make a statement if desired and to respond to questions regarding KPMG's
examination of the Company's financial statements and records for the fiscal
year ended March 31, 1997.
On October 18, 1996, Price Waterhouse LLP ("PW") resigned as the
independent accountants of the Company. The reports of PW on the Company's
financial statements for each of the past two fiscal years contained no adverse
opinions or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principle, except the report of PW on the
financial statement for the fiscal year ended March 31, 1995 included an
explanatory paragraph relating to a material uncertainty regarding litigation.
In connection with its audits for the two most recent fiscal years and
through October 18, 1996, there were no disagreements between the Company and PW
on the matter of accounting principle or practices, financial statement
disclosures, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PW would have caused them to make reference thereto in
their report on the financial statements for such years.
During the fiscal year ended March 31, 1996 and through October 18, 1996,
there have been no reportable events as defined in Regulation S-K Item
304(a)(1)(v). In connection with the audit of the Company's financial statement
for the fiscal year ended March 31, 1995, PW advised the Audit Committee of the
Registrant that it was no longer able to rely upon representations of the
Company's then Chief Financial Officer ("former CFO"). The Audit Committee
immediately caused the former CFO to be placed on leave of absence. The former
CFO was subsequently discharged and replaced.
On November 15, 1996, the Company engaged KPMG as the principal independent
accountants to audit its financial statements.
GENERAL
VOTING AT THE MEETING
Shareholders of record at the close of business on May 23, 1997 are
entitled to vote at the meeting. On that date, a total of 6,597,956 Common
Shares were outstanding. Each Common Share is entitled to one vote. The closing
price of a Common Share on May 23, 1997 was $8.50.
Holders of shares of Common Shares have no cumulative voting rights.
Provided a quorum is present, the affirmative vote of a plurality of the Common
Shares represented and voting, in person or by proxy, at any meeting of
shareholders is required under Ohio law to elect Directors.
Votes may be cast in favor of, or withheld from, each nominee in the
election of directors. Votes that are withheld will not be included in the
number of votes cast although such shares will be counted as present for
purposes of determining the existence of a quorum. The New York Stock Exchange
rules permit brokers who hold shares in street name to vote on certain items
when they have not received instructions from beneficial owners. Brokers who do
not receive instructions are entitled to vote on the election of Directors.
The Board of Directors knows of no other matters that will be presented at
the meeting. However, if other matters do properly come before the meeting, the
persons named in the Proxy will vote on these matters in accordance with their
best judgment.
16
<PAGE> 18
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal to be considered for
inclusion in next year's Proxy Statement should send the proposal to the Company
addressed to the Secretary on or before February 20, 1998.
PROXY SOLICITATION
The Company will bear the expense of the solicitation of proxies. In
addition to requesting proxies by mail, officers and regular employees of the
Company may request proxies by telephone or in person. The Company has retained
Beacon Hill Partners, Inc., 90 Broad Street, New York, New York 10004, to assist
in the solicitation for an estimated fee of $3,500, plus expenses not in excess
of $1,000.
The Company will ask custodians, nominees, and fiduciaries to send proxy
material to beneficial owners in order to obtain voting instructions. The
Company will, upon request, reimburse them for their reasonable expenses for
mailing the proxy material.
The Company's Annual Report for the fiscal year ended March 31, 1997, is
enclosed herewith.
MANAGEMENT RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE NOMINEES TO THE
BOARD OF DIRECTORS NAMED HEREIN, FOR PROPOSAL II (APPROVAL OF THE 1997 LONG-TERM
INCENTIVE PLAN), AND FOR PROPOSAL III (APPROVAL OF THE 1997 NON-EMPLOYEE
DIRECTORS' STOCK OPTION PLAN).
For the Board of Directors
Corrpro Companies, Inc.
/s/ Neal R. Restivo
------------------------------
Neal R. Restivo
Senior Vice President,
Chief Financial Officer,
Secretary and Treasurer
June 16, 1997
17
<PAGE> 19
EXHIBIT A
1997 LONG-TERM INCENTIVE PLAN
OF
CORRPRO COMPANIES, INC.
1. PURPOSE OF THE PLAN. This 1997 Long-Term Incentive Plan of Corrpro
Companies, Inc. adopted on this 28th day of April, 1997, is intended to enable
officers, key employees and consultants of the Company and its Subsidiaries to
acquire or increase their ownership of common stock of the Company on reasonable
terms. The opportunity so provided is intended to foster in participants an
incentive to put forth maximum effort for the continued success and growth of
the Company and its Subsidiaries, to aid in retaining individuals who put forth
such efforts, and to assist in attracting the best available individuals to the
Company and its Subsidiaries in the future.
2. DEFINITIONS. When used herein, the following terms shall have the
meaning set forth below:
2.1 "Award" means an Option, an Option granted in tandem with an SAR,
a Restricted Stock Award, a Restricted Stock Award granted in tandem with
an Option, an SAR or a Stock Bonus Award.
2.2 "Award Agreement" means a written agreement in such form as may
be, from time to time, hereafter approved by the Committee, which shall be
duly executed by the Company and the Participant and which shall set forth
the terms and conditions of an Award under the Plan.
2.3 "Board" means the Board of Directors of Corrpro Companies, Inc.
2.4 "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act (as in
effect on the date the Plan is adopted by the Board), whether or not the
Company is then subject to such reporting requirement; provided, that,
without limitation, a Change in Control shall be deemed to have occurred
if:
(a) any "person" (as defined in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing forty percent (40%) or more of the combined
voting power of the Company's then outstanding securities; provided,
however, that a Change in Control shall not be deemed to occur under
this clause (a) by reason of the acquisition of securities by the
Company or an employee benefit plan (or any trust funding such a plan)
maintained by the Company, or by reason of the new issuance of
securities directly by the Company;
(b) during any period of two (2) consecutive years (not including
any period prior to the adoption of this Plan) or at any time during the
two years after the Effective Date, there shall cease to be a majority
of the Board comprised of Continuing Directors; or
(c) (i) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than fifty-one percent
(51%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation, or (ii) the stockholders of the Company approve
a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all the
Company's assets.
2.5 "Code" means the Internal Revenue Code of 1986, as in effect at
the time of reference, or any successor revenue code which may hereafter be
adopted in lieu thereof, and reference to any
A-1
<PAGE> 20
specific provisions of the Code shall refer to the corresponding provisions
of the Code as it may hereafter be amended or replaced.
2.6 "Committee" means the Stock Option Committee which is a
sub-committee of the Compensation Committee of the Board or any other
committee appointed by the Board which is invested by the Board with
responsibility for the administration of the Plan and whose members meet
the requirements for eligibility to serve as set forth in Rule 16b-3 and in
the Plan and are outside directors within the meaning of Section 162(m) of
the Code.
2.7 "Company" means Corrpro Companies, Inc.
2.8 "Continuing Directors" means individuals who at the beginning of
any period of two (2) consecutive years (not including any period prior to
the adoption of this Plan) or during the first two years after the
Effective Date, individuals who were on the Effective Date, and any new
director(s) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the beginning
of the period (or in the case of the two year period after the Effective
Date those individuals who were directors on the Effective Date) or whose
election or nomination for election was previously so approved.
2.9 "Effective Date" means April 28, 1997.
2.10 "ERISA" means the Employee Retirement Income Security Act of
1974, as in effect at the time of reference, or any successor law which may
hereafter be adopted in lieu thereof, and any reference to any specific
provisions of ERISA shall refer to the corresponding provisions of ERISA as
it may hereafter be amended or replaced.
2.11 "Exchange Act" means the Securities Exchange Act of 1934, as in
effect at the time of reference, or any successor law which may hereafter
be adopted in lieu thereof, and any reference to any specific provisions of
the Exchange Act shall refer to the corresponding provisions of the
Exchange Act as it may hereafter be amended or replaced.
2.12 "Fair Market Value" means, with respect to the Shares, the
closing price of the Shares on the New York Stock Exchange or other
national securities exchange, on the last business day prior to the date on
which the value is to be determined, as reported in the Wall Street Journal
or such other source of quotations for, or report of trading of, the Shares
as the Committee may reasonably select from time to time; provided,
however, if the Shares are not then traded on such an exchange, but are
then traded on the over-the-counter market, Fair Market Value means the
mean between the high and the low bid and asked prices for the Shares on
the over-the-counter market on the last business day prior to the date on
which the value is to be determined (or the next preceding day on which
sales occurred if there were no sales on such date).
2.13 "Option" means the right to purchase the number of Shares
specified by the Committee, at a price and for a term fixed by the
Committee, in accordance with the Plan, and subject to such other
limitations and restrictions as the Plan and the Committee may impose.
2.14 "Parent" means any corporation, other than the employer
corporation, in an unbroken chain of corporations ending with the employer
corporation if, at the time of the granting of the Option, each of the
corporations other than the employer corporation owns stock possessing
fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
2.15 "Participants" means officers (including officers who are
members of the Board) and other key employees or consultants of the Company
or any of its Subsidiaries.
2.16 "Permitted Transferees" means (i) the spouse, children or
grandchildren of any Participant, (ii) any trustees of any trust made by
the Participant primarily for the benefit of any of such person or persons
identified in clause (i) or for the benefit of the Participant, (iii) a
corporation or
A-2
<PAGE> 21
other entity in which the Participant owns a controlling interest, and (iv)
the beneficiaries of any trust described in clause (ii).
2.17 "Plan" means the 1997 Long-Term Incentive Plan of Corrpro
Companies, Inc.
2.18 "Regulation T" means Part 220, chapter II, title 12 of the Code
of Federal Regulations, issued by the Board of Governors of the Federal
Reserve System pursuant to the Exchange Act, as amended from time to time,
or any successor regulation which may hereafter be adopted in lieu thereof.
2.19 "Restricted Stock Award Agreement" means an Award Agreement
executed in connection with a Restricted Stock Award.
2.20 "Restricted Stock Award" means the right to receive Shares, but
subject to forfeiture and/or other restrictions set forth in the related
Restricted Stock Award Agreement and the Plan.
2.21 "Rule 16b-3" means Rule 16b-3 of the General Rules and
Regulations of the Securities and Exchange Commission as in effect at the
time of reference, or any successor rules or regulations which may
hereafter be adopted in lieu thereof, and any reference to any specific
provisions of Rule 16b-3 shall refer to the corresponding provisions of
Rule 16b-3 as it may hereafter be amended or replaced.
2.22 "SAR" means a stock appreciation right, which is a right to
receive an amount in cash, or Shares, or a combination of cash and Shares,
as determined or approved by the Committee, no greater than the excess, if
any, of (i) the Fair Market Value of a Share on the date the SAR is
exercised, over (ii) the SAR Base Price.
2.23 "SAR Base Price" means the Fair Market Value of a Share on the
date an SAR was granted, or if the SAR was granted in tandem with an Option
(whether or not the Option was granted on a different date than the SAR),
in the Committee's discretion, the option price of a Share subject to the
Option.
2.24 "Shares" means shares of the Company's common stock, without par
value, or, if by reason of the adjustment provisions contained herein, any
rights under an Award under the Plan pertain to any other security, such
other security.
2.25 "Stock Bonus Award" means the right to receive Shares as
provided in Section 10 of the Plan.
2.26 "Subsidiary" or "Subsidiaries" means any corporation or
corporations other than the employer corporation in an unbroken chain of
corporations beginning with the employer corporation if each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
2.27 "Successor" means the legal representative of the estate of a
deceased Participant or the person or persons who shall acquire the right
to exercise or receive an Award by bequest or inheritance or by reason of
the death of the Participant.
2.28 "Term" means the period during which a particular Award may be
exercised.
3. STOCK SUBJECT TO THE PLAN. There will be reserved for use, upon the
issuance, vesting or exercise of Awards to be granted from time to time under
the Plan, an aggregate of (i) three hundred seventy-five thousand (375,000) new
Shares, and (ii) six hundred fifty-three thousand five hundred ninety (653,590)
Shares subject to stock options (other than under the 1994 Corrpro Outside
Directors' Stock Option Plan) granted prior to the Effective Date but only to
the extent of the surrender, lapse, expiration, forfeiture, termination or
exercise of such options, which Shares may be, in whole or in part, as the Board
shall from time to time determine, authorized but unissued Shares, or issued
Shares which shall have been reacquired by the Company. Any Shares (a) issued
upon exercise of Awards under the Plan, or (b) subject to issuance upon exercise
of Awards under the Plan, but which are not issued because of a
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surrender, lapse, expiration, forfeiture or termination of any such Award prior
to issuance of the Shares, shall once again be available for issuance in
satisfaction of Awards. Similarly, any Shares issued pursuant to a Restricted
Stock Award which are subsequently forfeited pursuant to the terms of the
related Restricted Stock Award Agreement shall once again be available for
issuance in satisfaction of Awards.
4. ADMINISTRATION OF THE PLAN. The Board may appoint a Committee to
administer the Plan, which Committee shall consist of not less than two (2)
disinterested directors as defined in Rule 16b-3. Subject to the provisions of
the Plan, the Committee or the Board shall have full authority, in its
discretion, to determine the Participants to whom Awards shall be granted, the
number of Shares to be covered by each of the Awards, and the terms of any such
Award; to amend or cancel Awards (subject to Section 21 of the Plan), to
accelerate the vesting of Awards; to require the cancellation or surrender of
any previously granted awards under this Plan or any other plans of the Company
as a condition to the granting of an Award, to interpret the Plan; and to
prescribe, amend, and, rescind rules and regulations relating to the Plan, and
generally to interpret and determine any and all matters whatsoever relating to
the administration of the Plan and the granting of Awards hereunder. The Board
may from time to time appoint members to the Committee in substitution for or in
addition to members previously appointed and may fill vacancies, however caused,
in the Committee. The Committee shall select one of its members as its chairman
and shall hold its meetings at such times and places as it shall deem advisable.
A majority of its members shall constitute a quorum. Any action of the Committee
may be taken by a written instrument signed by all of the members, and any
action so taken shall be fully as effective as if it had been taken by a vote of
a majority of the members at a meeting duly called and held. The Committee shall
make such rules and regulations for the conduct of its business as it shall deem
advisable and shall appoint a Secretary who shall keep minutes of its meetings
and records of all action taken in writing without a meeting. No member of the
Committee shall be liable, in the absence of bad faith, for any act or omission
with respect to his or her service on the Committee. Notwithstanding anything in
the Plan to the contrary any and all rights conferred upon the Committee shall
also be conferred upon the Board.
5. PARTICIPANTS TO WHOM AWARDS MAY BE GRANTED. Awards may be granted in
each calendar year or portion thereof while the Plan is in effect to such of the
Participants as the Committee, in its discretion, shall determine. In
determining the Participants to whom Awards shall be granted and the number of
Shares to be issued or subject to purchase or issuance under such Awards, the
Committee shall take into account the recommendations of the Company's
management as to the duties of the respective Participants, their present and
potential contributions to the success of the Company and its Subsidiaries, and
such other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan. No Award shall be granted to any member
of the Committee so long as his or her membership on the Committee continues or
to any member of the Board who is not also an officer or key employee of the
Company or any Subsidiary.
6. STOCK OPTIONS.
6.1 Types of Options. Options granted under the Plan shall be
Non-Qualified Stock Options. The Award Agreement shall designate an Option
as a Non-Qualified Stock Option.
6.2 Option Price. The option price per Share of any Non-Qualified
Stock Option granted under the Plan shall be the Fair Market Value of the
Shares covered by the Option on the date the Option is granted unless the
Committee, in its sole discretion, determines to set the option price at an
amount less than or greater than the Fair Market Value of the Shares on
such date.
6.3 Term of Options. Options granted hereunder shall be exercisable
for a Term of not more than ten (10) years from the date of grant thereof,
but shall be subject to earlier termination as hereinafter provided. Each
Award Agreement issued hereunder shall specify the Term of the Option,
which shall be determined by the Committee in accordance with its
discretionary authority hereunder.
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7. STOCK APPRECIATION RIGHTS.
7.1 Grant of SAR. The Committee, in its discretion, may grant a
Participant an SAR in tandem with an Option or may grant a Participant an
SAR on a stand alone basis. The Committee, in its discretion, may grant an
SAR in tandem with an Option either at the time the Option is granted or at
any time after the Option is granted. The Committee, in its discretion, may
grant an SAR in tandem with an Option which is exercisable either in lieu
of, or in addition to, the exercise of the related Option.
7.2 Limitations on Exercise. Each SAR granted in tandem with an
Option shall be exercisable to the extent, and only to the extent, the
related Option is exercisable and shall be for such Term as the Committee
may determine (which Term may not to exceed ten (10) years and may expire
prior to the Term of the related Option). Each SAR granted on a stand alone
basis shall be exercisable to the extent, and for such Term, as the
Committee may determine. The SARs shall be subject to such other terms and
conditions as the Committee, in its discretion, shall determine, which are
not otherwise inconsistent with the Plan. The terms and conditions may
include Committee approval of the exercise of the SAR, limitations on the
time within which and the extent to which such SAR shall be exercisable,
limitations, if any, on the amount of appreciation in value which may be
recognized with regard to such SAR, and specification of what portion, if
any, of the amount payable to the Participant upon exercise of such SAR
shall be payable in cash and what portion, if any, shall be payable in
Shares. If, and to the extent, that Shares are issued in satisfaction of
amounts payable on exercise of an SAR, the Shares shall be valued at their
Fair Market Value on the date of exercise.
7.3 Surrender of Option or SAR Granted in Tandem. If the Award
Agreement related to the grant of an SAR in tandem with an Option provides
that the SAR can only be exercised in lieu of the related Option, then,
upon exercise of such SAR, the related Option or portion thereof with
respect to which such SAR is exercised shall be deemed surrendered and
shall not thereafter be exercisable and, similarly, upon exercise of the
Option, the related SAR or portion thereof with respect to which such
Option is exercised shall be deemed surrendered and shall not thereafter be
exercisable. If the Award Agreement related to the grant of an SAR in
tandem with an Option provides that the SAR can be exercised in addition to
the related Option, then, upon exercise of such SAR, the related Option or
portion thereof with respect to which such SAR is exercised shall not be
deemed surrendered and shall continue to be exercisable and, similarly,
upon exercise of the Option, the related SAR or portion thereof with
respect to which such Option is exercised shall not be deemed surrendered
and shall continue to be exercisable.
8. RESTRICTED STOCK AWARDS. Restricted Stock Awards granted under the Plan
shall be subject to such terms and conditions as the Committee may, in its
discretion, determine and set forth in the related Restricted Stock Award
Agreements. The Committee, in its discretion, may grant a Participant a
Restricted Stock Award on a stand alone basis or in tandem with an Option.
Restricted Stock Awards shall be granted in accordance with, and subject to, the
provisions set forth below.
8.1 Issuance of Shares. Each Restricted Stock Award shall be
evidenced by a Restricted Stock Award Agreement which shall set forth the
number of Shares issuable under the Restricted Stock Award. Subject to the
restrictions in Section 8.3 of the Plan, and subject further to such other
restrictions or conditions established by the Committee, in its discretion,
and set forth in the related Restricted Stock Award Agreement (such as
requiring the Participant to pay an amount equal to the aggregate par
value, if any, of the Shares to be issued thereunder), the number of Shares
granted under a Restricted Stock Award shall be issued in the recipient
Participant's name on the date of grant of such Restricted Stock Award or
as soon as reasonably practicable thereafter.
8.2 Rights of Recipient Participants. Shares received pursuant to
Restricted Stock Awards shall be duly issued or transferred to the
Participant, and a certificate or certificates for such Shares shall be
issued in the Participant's name. Subject to the restrictions in Section
8.3 of the Plan, and subject further to such other restrictions or
conditions established by the Committee, in its
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discretion, and set forth in the related Restricted Stock Award Agreement,
the Participant shall thereupon be a stockholder with respect to all the
Shares represented by such certificate or certificates and shall have all
the rights of a stockholder with respect to such Shares, including the
right to vote such Shares and to receive dividends and other distributions
paid with respect to such Shares. In aid of the restrictions in Section 8.3
of the Plan and in the related Restricted Stock Award Agreement, the
certificate or certificates for Shares awarded hereunder, together with a
suitably executed stock power signed by such recipient Participant, shall
be held by the Company in its control, or at the option of the Company, in
a trust established by the Company, for the account of such Participant (i)
until the restrictions in Section 8.3 of the Plan and in the related
Restricted Stock Award Agreement lapse pursuant to the Plan or the
Restricted Stock Award Agreement, at which time a certificate for the
appropriate number of Shares (free of all restrictions imposed by the Plan
or the Restricted Stock Award Agreement) shall be delivered to the
Participant, or (ii) until such Shares are forfeited to the Company and
canceled as provided by the Plan or the Restricted Stock Award Agreement.
8.3 Restrictions. Except as otherwise determined by the Committee in
its sole discretion, each Share issued pursuant to a Restricted Stock Award
Agreement shall be subject, in addition to any other restrictions set forth
in the related Restricted Stock Award Agreement, to the following
restrictions until such restrictions have lapsed pursuant to Section 8.4 of
the Plan:
(a) Disposition. The Shares awarded to a Participant and held by
the Company pursuant to Section 8.2 of the Plan, and the right to vote
such Shares or receive dividends on such Shares, may not be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of;
provided, however, that such Shares may be transferred upon the death of
the Participant to the Participant's Successor. Any transfer or
purported transfer of such Shares in violation of the restrictions
outlined in this Section 8.3 shall be null and void and shall result in
the forfeiture of the Shares transferred or purportedly transferred to
the Company without notice and without consideration.
(b) Forfeiture. The Shares awarded to a Participant and held by
the Company pursuant to Section 8.2 of the Plan shall be forfeited to
the Company without notice and without consideration therefor
immediately upon the termination of the Participant's employment with
the Company and all Subsidiaries of the Company for any reason other
than (i) death, (ii) disability, (iii) retirement, (iv) the
Participant's attainment of age sixty-five (65).
8.4 Lapse of Restrictions. Except as otherwise determined by the
Committee in its sole discretion, the restrictions set forth in Section 8.3
of the Plan on Shares issued under a Restricted Stock Award shall lapse on,
and certificates for the Shares held for the account of the Participant in
accordance with Section 8.2 of the Plan hereof shall be appropriately
distributed to the Participant as soon as reasonably practical after, the
earliest of:
(a) the Participant's death;
(b) the termination of the Participant's employment by reason of
the Participant being "disabled" as defined in Section 22(e)(3) of the
Code;
(c) the Participant's early, normal or late retirement pursuant to
the retirement plans of the Company or any of its Subsidiaries;
(d) the Participant's attainment of age sixty-five (65); or
(e) (i) the first anniversary of the date of grant with respect to
one-third ( 1/3) of the Shares originally awarded,
(ii) the second anniversary of the date of grant with respect to
an additional one-third ( 1/3) of the Shares originally awarded, and
(iii) the third anniversary of the date of grant with respect to
the balance of the Shares originally awarded.
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8.5 Surrender of Options or Restricted Stock Granted in Tandem. If
the Restricted Stock Award Agreement related to the grant of a Restricted
Stock Award in tandem with an Option provides that the Option can only be
exercised in lieu of the scheduled vesting of the Restricted Stock Award,
then, upon vesting of the Shares subject to the Restricted Stock Award, the
related Option or portion thereof with respect to which such Restricted
Stock Award becomes vested shall be deemed surrendered and shall not
thereafter be exercisable and, similarly, upon exercise of the Option, the
Shares subject to the related Restricted Stock Award or portion thereof
with respect to which such Option is exercised shall be deemed forfeited to
the Company and shall be cancelled as provided by the Plan or the
Restricted Stock Award Agreement.
9. STOCK BONUS AWARDS. Stock Bonus Awards may be granted under the Plan
with respect to Shares, and shall be granted, subject to the provisions of the
Plan, upon such terms and conditions as the Committee may determine in its
discretion. The Committee, in its discretion, may require the Participants to
whom Stock Bonus Awards are granted to pay the Company an amount equal to the
aggregate par value, if any, of the Shares to be issued to such Participants.
Subject to the Participant delivering in cash or by check the amounts, if any,
required to be paid pursuant to this Section 9 or pursuant to Section 18 of the
Plan (relating to taxes), a certificate or certificates for such Shares shall be
issued in the Participant's name as soon as reasonably practicable following the
date of grant, or if such payments are required, following the date of such
payments. The Company shall deliver such certificate or certificates to the
Participant and the Participant shall thereupon be a stockholder with respect to
all Shares represented by such certificate or certificates and shall have all
the rights of a stockholder with respect to such Shares.
10. DATE OF GRANT. The date of grant of an Award granted hereunder shall
be the date on which the Committee acts in granting the Award.
11. EXERCISE OF RIGHTS UNDER OPTIONS OR SARS.
11.1 Notice of Exercise. A Participant entitled to exercise an Option
or SAR shall do so by delivery of a written notice to that effect
specifying the number of Shares with respect to which the Option or SAR is
being exercised and any other relevant information the Committee may
require. The notice shall be accompanied by payment in full of the purchase
price of any Shares to be purchased, which payment may be made in cash or,
with the Committee's approval, in Shares valued at Fair Market Value at the
time of exercise or a combination thereof. No Shares shall be issued upon
exercise of an Option until full payment has been made therefor. A
Participant exercising an SAR or an Option granted in tandem with an SAR
may, if the terms and conditions of the Award so provide, state in the
notice of exercise what percentage of the SAR the Participant desires to be
paid in cash or Shares, in which event the Committee may honor the request
so made or satisfy the SAR in cash or Shares or some combination of each,
as the Committee may determine in its sole discretion. All notices or
requests provided for herein shall be delivered to the Company's Secretary,
or such other person as the Committee may designate.
11.2 Cashless Exercise Procedures. The Company, in its sole
discretion, may establish procedures whereby a Participant, subject to the
requirements of Rule 16b-3, Regulation T, federal income tax laws, and
other federal, state and local tax and securities laws, can exercise an
Option or a portion thereof without making a direct payment of the option
price to the Company. If the Company so elects to establish a cashless
exercise program, the Company shall determine, in its sole discretion, and
from time to time, such administrative procedures and policies as it deems
appropriate and such procedures and policies shall be binding on any
Employee wishing to utilize the cashless exercise program.
12. AWARD TERMS AND CONDITIONS. Each Award or each agreement setting forth
an Award shall contain such other terms and conditions not inconsistent herewith
as shall be approved by the Committee.
13. RIGHTS OF AWARD HOLDER. The holder of an Award shall not have any of
the rights of a stockholder with respect to the Shares subject to purchase or
receipt under the Award, except that (a) an
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Award holder's rights with respect to a Restricted Stock Award shall be as
prescribed in Section 8.2 and (b) stockholder rights with respect to any other
Award shall arise at the time and to the extent that one or more certificates
for such Shares shall be delivered to the holder upon the due exercise or grant
of the Award.
14. NONTRANSFERABILITY OF AWARDS. An Award shall not be transferable other
than: (a) by will or the laws of descent and distribution, and an Award subject
to exercise may be exercised, during the lifetime of the holder of the Award,
only by the holder or in the event of death, the holder's Successor, or in the
event of disability, the holder's personal representative, or (b) pursuant to a
qualified domestic relations order, as defined in the Code or ERISA or the rules
thereunder, or (c) with respect to Non-qualified Options only, to Permitted
Transferees.
15. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
all of the outstanding Shares by reason of stock dividends, stock splits,
reclassifications, recapitalizations, mergers, consolidations, combinations, or
exchanges of shares, separations, reorganizations or liquidations, or similar
events, or in the event of extraordinary cash or non-cash dividends being
declared with respect to the Shares, or similar transactions or events, the
number and class of Shares available under the Plan in the aggregate, the number
and class of Shares subject to Awards theretofore granted, applicable purchase
prices and all other applicable provisions, may, subject to the provisions of
the Plan, be equitably adjusted by the Committee (which adjustment may, but need
not, include payment to the holder of an Option or SAR, in cash or in shares, in
an amount equal to the difference between the price at which such Option or SAR
may be exercised and the then current fair market value of the Shares subject to
such Option or SAR as equitably determined by the Committee). Notwithstanding
the foregoing, no adjustment shall be made to the extent the Company would have
to account for such adjustment as additional compensation expense under
generally accepted accounting principals in effect at the time of such
adjustment. The foregoing adjustment and the manner of application of the
foregoing provisions shall be determined by the Committee, in its sole
discretion. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to an Award.
16. CHANGE IN CONTROL. Notwithstanding anything to the contrary in the
Plan or any Award Agreement, in the case of a Change in Control of the Company,
the Committee may, in its discretion, taking into account the purposes of this
Plan, determine, on a case by case basis, that each Award granted under the Plan
shall, subject to the following provisions, terminate ninety (90) days after the
occurrence of such Change in Control but, in the event of any such termination:
(a) An Option or SAR holder shall have the right, commencing at least
five (5) days prior to such Change in Control and subject to any other
limitation on the exercise of such Option or SAR in effect on the date of
exercise (other than vesting), to immediately exercise any Options or
Restricted Stock Awards, including those granted in tandem with SARs, or
SARs in full, without regard to any vesting limitations, to the extent they
shall not have been theretofore exercised; and
(b) All restrictions on Restricted Stock Awards shall immediately
lapse, certificates for the affected Shares shall be appropriately
distributed and any Options in tandem with Restricted Stock Awards will be
deemed to have been surrendered.
17. FORMS OF AWARDS. Nothing contained in the Plan nor any resolution
adopted or to be adopted by the Board or by the stockholders of the Company
shall constitute the granting of any Award. An Award shall be granted hereunder
only by action taken by the Committee in granting an Award. Whenever the
Committee shall designate a Participant for the receipt of an Award, the
Company's Secretary, or such other person as the Committee may designate, shall
forthwith send notice thereof to the Participant, in such form as the Committee
shall approve, stating the number of Shares subject to the Award, its Term, and
the other terms and conditions thereof. The notice shall be accompanied by a
written Award Agreement in such form as may from time to time hereafter be
approved by the Committee, which shall have been duly executed by or on behalf
of the Company. If the surrender of previously issued Awards is made a condition
of the grant, the notice shall set forth the pertinent details
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of such condition. Execution by the Participant to whom such Award is granted of
said Award Agreement in accordance with the provisions set forth in this Plan
shall be a condition precedent to the exercise or receipt of any Award.
18. TAXES.
18.1 Right to Withhold Required Taxes. The Company shall have the
right to require a person entitled to receive Shares pursuant to the
receipt, vesting or exercise of an Award under the Plan to pay the Company,
in cash or Shares, the amount of any taxes which the Company is or will be
required to withhold with respect to such Shares before the certificate for
such Shares is delivered pursuant to the Award. Furthermore, the Company
may elect to deduct such taxes from any other amounts then payable in cash
or in shares or from any other amounts payable any time thereafter to the
Participant. The Company shall also have the right to deduct from any cash
payment payable to a person pursuant to an Award the amount of any taxes
which the Company is required by law to withhold with respect to such cash
payment.
18.2 Participant Election to Withhold Shares. Subject to Committee
approval, a Participant may elect to satisfy the tax liability with respect
to the exercise of an Option by having the Company withhold Shares
otherwise issuable upon exercise of the Option; provided, however, that if
a Participant is subject to Section 16(b) of the Exchange Act at the time
the Option is exercised, such election must satisfy the requirements of
Rule 16b-3.
19. TERMINATION OF THE PLAN. The Plan shall terminate ten (10) years from
the date hereof, and an Award shall not be granted under the Plan after that
date although the terms of any Awards may be amended at any date prior to the
end of its Term in accordance with the Plan. Any Awards outstanding at the time
of termination of the Plan shall continue in full force and effect according to
the terms and conditions of the Award and this Plan.
20. AMENDMENT OF THE PLAN. The Plan may be amended at any time and from
time to time by the Board, but no amendment without the approval of the
stockholders of the Company shall be made if stockholder approval under Rule
16b-3 would be required. Notwithstanding the discretionary authority granted to
the Committee in Section 4 of the Plan, no amendment of the Plan or any Award
granted under the Plan shall impair any of the rights of any holder, without the
holder's consent, under any Award theretofore granted under the Plan.
21. DELIVERY OF SHARES ON EXERCISE OR GRANT. Delivery of certificates for
Shares pursuant to the grant or exercise of an Award may be postponed by the
Company for such period as may be required for it with reasonable diligence to
comply with any applicable requirements of any federal, state or local law or
regulation or any administrative or quasi-administrative requirement applicable
to the sale, issuance, distribution or delivery of such Shares. The Committee
may, in its sole discretion, require a Participant to furnish the Company with
appropriate representations and a written investment letter prior to the
exercise of an Award or the delivery of any Shares pursuant to an Award.
22. FEES AND COSTS. The Company shall pay all original issue taxes on the
issuance or exercise of any Award granted under the Plan and all other fees and
expenses necessarily incurred by the Company in connection therewith.
23. EFFECTIVENESS OF THE PLAN. The Plan shall become effective when
approved by the Board. The Plan shall thereafter be submitted to the Company's
stockholders for approval and unless the Plan is approved by the affirmative
votes of the holders of shares having a majority of the voting power of all
shares either (i) represented at a meeting duly held in accordance with Ohio law
within twelve (12) months after being approved by the Board, or (ii) obtained by
a written consent in accordance with Ohio law within twelve (12) months after
being approved by the Board, the Plan and all Awards made under it shall be void
and of no force and effect. In aid of this provision, any Award granted prior to
the approval of the Plan by the Company's stockholders shall be conditioned upon
receipt of such approval.
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24. OTHER PROVISIONS. As used in the Plan, and in Awards and other
documents prepared in implementation of the Plan, references to the masculine
pronoun shall be deemed to refer to the feminine or neuter, and references in
the singular or the plural shall refer to the plural or the singular, as the
identity of the person or persons or entity or entities being referred to may
require. The captions used in the Plan and in such Awards and other documents
prepared in implementation of the Plan are for convenience only and shall not
affect the meaning of any provision hereof or thereof.
25. OHIO LAW TO GOVERN. This Plan shall be governed by and construed in
accordance with the laws of the State of Ohio.
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EXHIBIT B
1997 NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN OF
CORRPRO COMPANIES, INC.
1. PURPOSE OF THE PLAN. This 1997 Non-Employee Directors' Stock Option
Plan of Corrpro Companies, Inc. adopted on this 28th day of April, 1997, is
intended to encourage directors of the Company who are not officers or key
employees of the Company or any of its subsidiaries to acquire or increase their
ownership of common stock of the Company. The opportunity so provided is
intended to foster in participants an incentive to put forth maximum effort for
the continued success and growth of the Company and its subsidiaries, to aid in
retaining individuals who put forth such efforts, and to assist in attracting
the best available individuals to the Company in the future.
2. DEFINITIONS. When used herein, the following terms shall have the
meaning set forth below:
2.1 "Board" means the Board of Directors of Corrpro Companies, Inc.
2.2 "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act (as in
effect on the date the Plan is adopted by the Board), whether or not the
Company is then subject to such reporting requirement; provided, that,
without limitation, such a change in control shall be deemed to have
occurred if:
(a) any person (as defined in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
representing forty percent (40%) or more of the combined voting power of
the Company's then outstanding securities; provided, however, that a
Change in Control shall not be deemed to occur under this clause (a) by
reason of the acquisition of securities by the Company or an employee
benefit plan (or any trust funding such a plan) maintained by the
Company or by reason of the new issuance of securities directly by the
Company;
(b) During any period of two (2) consecutive years (not including
any period prior to the date the Plan is adopted by the Board) or at any
time during the first two years after the Effective Date there shall
cease to be a majority of the Board comprised of Continuing Directors;
or
(c) (i) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than fifty-one percent
(51%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation, or (ii) the stockholders of the Company approve
a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the
Company's assets.
2.3 "Code" means the Internal Revenue Code of 1986, as in effect at
the time of reference, or any successor revenue code which may hereafter be
adopted in lieu thereof, and any reference to any specific provisions of
the Code shall refer to the corresponding provisions of the Code as it may
hereafter be amended or replaced.
2.4 "Committee" means the Compensation Committee of the Board or any
other committee appointed by the Board which is invested by the Board with
responsibility for the administration of the Plan.
2.5 "Company" means Corrpro Companies, Inc.
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2.6 "Continuing Director" means individuals who at the beginning of
any period of two (2) consecutive years (not including any period prior to
the adoption of this Plan) or during the first two years after the
Effective Date, individuals, who were on the Effective Date, and any new
director(s) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the beginning
of the period (or for the first two years after the Effective Date were
directors on the Effective Date) or whose election or nomination for
election was previously so approved.
2.7 "Directors" means directors who serve on the Board and who are
not employees of the Company or any of its 50% or more direct or indirect
subsidiaries.
2.8 "Effective Date" means April 28, 1997.
2.9 "ERISA" means the Employee Retirement Income Security Act of
1974, as in effect at the time of reference, or any successor law which may
hereafter be adopted in lieu thereof, and any reference to any specific
provisions of ERISA shall refer to the corresponding provisions of ERISA as
it may hereafter be amended or replaced.
2.10 "Exchange Act" means the Securities Exchange Act of 1934, as in
effect at the time of reference, or any successor law which may hereafter
be adopted in lieu thereof, and any reference to any specific provisions of
the Exchange Act shall refer to the corresponding provisions of the
Exchange Act as it may be amended or replaced.
2.11 "Fair Market Value" means, with respect to the Shares, the
closing price reported on the New York Stock Exchange or other national
securities exchange, on the last business day prior to the date on which
the value is determined as reported in the Wall Street Journal or such
other source of quotations for, or report of, the Shares as the Committee
may reasonably select from time to time; provided, however, if the Shares
are not then traded on such an exchange, but are then traded on the
over-the-counter market, Fair Market Value means the mean between the high
and the low bid and asked prices for the Shares on the over-the-counter
market on the last business day prior to the date on which the value is to
be determined (or the next preceding day on which sales occurred if there
were no sales on such date).
2.12 "Grant Date" means during the calendar year in which a director
is first elected to the Board of Directors the date the director is so
elected and for each calendar year thereafter the 30th day of each
September 30 of each calendar year.
2.13 "Option" means the right to purchase the number of Shares
specified by the Plan at a price and for a term fixed by the Plan, and
subject to such other limitations and restrictions as the Plan and the
Committee imposes.
2.14 "Option Agreement" means a written agreement in such form as may
be, from time to time, hereafter approved by the Committee, which shall be
duly executed by the Company and the Director and which shall set forth the
terms and conditions of an Option under the Plan.
2.15 "Permitted Transferees" means (i) the spouse, children or
grandchildren of a Director, (ii) any trustees of any trust made by the
Director primarily for the benefit of any of such persons identified in
clause (i) or for the benefit of the Director, (iii) a corporation or other
entity in which the Director owns a controlling interest, and (iv) the
beneficiaries of any trust described in clause (ii).
2.16 "Plan" means the 1997 Non-Employee Directors' Stock Option Plan
of Corrpro Companies, Inc.
2.17 "Regulation T" means Part 220, chapter II, title 12 of the Code
of Federal Regulations, issued by the Board of Governors of the Federal
Reserve System pursuant to the Exchange Act, as amended from time to time.
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2.18 "Rule 16b-3" means Rule 16b-3 of the General Rules and
Regulations under the Exchange Act as in effect at the time of reference,
or any successor rules or regulations which may hereafter be adopted in
lieu thereof, and any reference to any specific provisions of Rule 16b-3
shall refer to the corresponding provisions of Rule 16b-3 as it may
hereafter be amended or replaced.
2.19 "Shares" means shares of the Company's common stock, without par
value, or, if by reason of the adjustment provisions contained herein, any
rights under an Option under the Plan pertain to any other security, such
other security.
2.20 "Successor" means the legal representative of the estate of a
deceased Director or the person or persons who shall acquire the right to
exercise or receive an Option by bequest or inheritance or by reason of the
death of the Director.
2.21 "Term" means the period during which a particular Option may be
exercised.
3. STOCK SUBJECT TO THE PLAN. There will be reserved for use, upon the
exercise of Options to be granted from time to time under the Plan, an aggregate
of fifty thousand (50,000) Shares, which Shares may be, in whole or in part, as
the Board shall from time to time determine, authorized but unissued Shares, or
issued Shares which shall have been reacquired by the Company. Any Shares
subject to issuance upon exercise of Options but which are not issued because of
a surrender, lapse, expiration or termination of any such Option prior to
issuance of the Shares shall once again be available for issuance in
satisfaction of Options.
4. ADMINISTRATION OF THE PLAN. The Board may select a Committee to
administer the Plan. Subject to the provisions of the Plan, the Committee or the
Board shall have full authority, in its discretion, to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan, and
generally to interpret and determine any and all matters whatsoever relating to
the administration of the Plan and the granting of Options hereunder. The Board
may, from time to time, appoint members to the Committee in substitution for or
in addition to members previously appointed and may fill vacancies, however
caused, in the Committee. The Committee shall select one of its members as its
chairman and shall hold its meetings at such times and places as it shall deem
advisable. A majority of its members shall constitute a quorum. Any action of
the Committee may be taken by a written instrument signed by all of the members,
and any action so taken shall be fully as effective as if it had been taken by a
vote of a majority of the members at a meeting duly called and held. The
Committee shall make such rules and regulations for the conduct of its business
as it shall deem advisable and shall appoint a Secretary who shall keep minutes
of its meetings and records of all action taken in writing without a meeting. No
member of the Committee shall be liable, in the absence of bad faith, for any
act or omission with respect to his service on the Committee. Notwithstanding
anything in the Plan to the contrary any and all rights conferred upon the
Committee shall also be conferred upon the Board.
5. GRANT OF OPTIONS.
5.1 Grants to Directors. Each Director who is a Director on the Grant
Date shall be granted an Option on such Grant Date to purchase 2,000 Shares
without further action by the Board or the Committee.
5.2 Limitations. If the number of Shares available to grant under the
Plan on a scheduled Grant Date is insufficient to make all automatic grants
required to be made pursuant to the Plan on such date, then each eligible
Director shall receive an Option to purchase a pro rata number of the
remaining Shares available under the Plan; provided further, however, that
if such proration results in fractional Shares, then such Option shall be
rounded down to the nearest number of whole Shares.
6. BASIC STOCK OPTION PROVISIONS.
6.1 Option Price. The option price per share of any Option granted
under the Plan shall be the Fair Market Value of the Shares covered by the
Option on the date the Option is granted.
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6.2 Terms of Options.
(a) Options granted hereunder shall be exercisable for a Term of
ten (10) years from the date of grant thereof, but shall be subject to
earlier termination as hereinafter provided, and
(b) Except as otherwise provided in the Plan, prior to its
expiration or termination, any Option granted hereunder may be exercised
within the following time limitations:
(i) After one (1) year from the date of grant, it may be
exercised as to not more than one-half ( 1/2) of the Shares
originally subject to the Option.
(ii) After two (2) years from the date of grant, it may be
exercised as to any part or all of the Shares originally subject to
the Option.
6.3 Termination of Directorship. In the event a Director ceases to be
a member of the Board (other than by reason of death or disability), then
(a) an Option may be exercised by the Director (to the extent that the
Director was entitled to do so at the termination of his directorship) at
any time within the three (3) months after he ceases to be a member of the
Board, but not beyond the Term of the Option, and (b) the portion of any
Option that has not vested as of the date the Director ceases to be a
member of the Board shall automatically terminate.
6.4 Death or Disability of Director. If a Director dies or becomes
disabled while he is a member of the Board, an Option may be exercised in
full, by his Successor in the event of death, or by him or his personal
representative, as the case may be, in the event of disability, at any time
within twelve (12) months after he ceases to be a member of the Board on
account of such death or disability, but not beyond the Term of the Option.
If a Director, following the termination of his directorship, shall die
within the three (3) months after the date he ceases to be a member of the
Board, an Option may be exercised (to the extent the Director shall have
been entitled to do so at the time of his death), by his Successor, at any
time within twelve (12) months after his death, but not beyond the Term of
the Option.
7. EXERCISE OF RIGHTS UNDER AWARDS.
7.1 Notice of Exercise. A Director entitled to exercise an Option may
do so by delivery of a written notice to that effect specifying the number
of Shares with respect to which the Option is being exercised and any other
information the Committee may require. The notice shall be accompanied by
payment in full of the purchase price of any Shares to be purchased, which
payment shall be made in cash or by certificates of Shares, duly endorsed
in blank, equal in value to the purchase price of the Shares to be
purchased based on their Fair Market Value at the time of exercise or a
combination thereof. No Shares shall be issued upon exercise of an Option
until full payment has been made therefor. All notices or requests provided
for herein shall be delivered to the Company's Secretary, or such other
person as the Committee may designate. No fractional Shares shall be
issued.
7.2 Cashless Exercise Procedures. The Company, in its sole
discretion, may establish procedures whereby a Director, subject to the
requirements of Regulation T, federal income tax laws, and other federal,
state and local tax and securities laws, can exercise an Option or a
portion thereof without making a direct payment of the option price to the
Company. If the Company elects to establish a cashless exercise program, a
Director may utilize such program but only in accordance with such
administrative procedures and policies as the Company deems appropriate and
such procedures and policies shall be binding on any Director wishing to
utilize the cashless exercise program.
8. RIGHTS OF OPTION HOLDER. The holder of an Option shall not have any of
the rights of a stockholder with respect to the Shares subject to purchase or
receipt under his Option, except to the extent that one or more certificates for
such Shares shall be issuable to the holder upon the due exercise of the Option
and the payment in full of the purchase price therefor.
B-4
<PAGE> 33
9. NONTRANSFERABILITY OF OPTIONS. An Option shall not be transferable,
other than: (a) by will or the laws of descent and distribution, and an Option
may be exercised, during the lifetime of the holder of the Option, only by the
holder, or in the event of death, the holder's Successor, or in the event of
disability, the holder's personal representative, or (b) pursuant to a qualified
domestic relation order, as defined in the Code or ERISA or the rules thereunder
or (c) to a Permitted Transferee.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
all of the outstanding Shares by reason of stock dividends, stock splits,
reclassifications, recapitalizations, mergers, consolidations, combinations, or
exchanges of shares, separations, reorganizations or liquidations, or similar
events, or in the event of extraordinary cash or non-cash dividends being
declared with respect to the Shares, or similar transactions or events, the
number and class of Shares available under the Plan in the aggregate, the number
and class of Shares subject to Options theretofore granted, applicable purchase
prices and all other applicable provisions, shall, subject to the provisions of
the Plan, be equitably adjusted by the Committee (which adjustment may, but need
not, include payment to the holder of an Option, in cash or in shares, in an
amount equal to the difference between the price at which such Option may be
exercised and the then current fair market value of the Shares subject to such
Option as equitably determined by the Committee). The foregoing adjustment and
the manner of application of the foregoing provisions shall be determined by the
Committee, in its sole discretion. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an
Option.
11. CHANGE IN CONTROL. Notwithstanding anything to the contrary herein or
in any Option Agreement, in the case of a Change in Control of the Company, each
Option granted under the Plan shall terminate ninety (90) days after the
occurrence of such Change in Control and an Option holder shall have the right,
commencing at least five (5) days prior to such Change in Control and subject to
any other limitation on exercise of an Option in effect on the date of exercise,
to immediately exercise any Option in full, without regard to any vesting
limitations, to the extent it shall not have been previously exercised.
12. FORMS OF OPTIONS. An Option shall be granted hereunder on the date or
dates specified in the Plan. Whenever the Plan provides for the receipt of an
Option by a Director, the Secretary of the Company, or such other person as the
Committee shall appoint, shall forthwith send notice thereof to the Director, in
such form as the Committee shall approve, stating the number of Shares subject
to the Option, its Term, and the other terms and conditions thereof. The notice
shall be accompanied by a written Option Agreement, in such form as may from
time to time hereafter be approved by the Committee, which shall have been duly
executed by or on behalf of the Company. Execution by the Director to whom such
Option is granted of said Option Agreement in accordance with the provisions set
forth in this Plan shall be a condition precedent to the exercise of any Option.
13. TAXES. The Company shall have the right to require a person entitled
to receive Shares pursuant to the exercise of an Option under the Plan to pay
the Company the amount of any taxes which the Company is or will be required to
withhold, if any, with respect to such Shares before the certificate for such
Shares is delivered pursuant to the Option.
14. TERMINATION OF THE PLAN. The Plan shall terminate ten (10) years from
the date the Plan is adopted by the Board, and an Option shall not be granted
under the Plan after that date although the terms of any Option may be amended
at any date prior to the end of its Term in accordance with the Plan. Any Option
outstanding at the time of termination of the Plan shall continue in full force
and effect according to the terms and conditions of the Option and this Plan.
15. AMENDMENT OF THE PLAN. The Plan may be amended at any time and from
time to time by the Board, but no amendment without the approval of the
stockholders of the Company shall be made if stockholder approval under Rule
16b-3 would be required. Notwithstanding any discretionary authority granted to
the Committee in Section 4 of the Plan, no amendment of the Plan or any Option
granted under the Plan shall impair any of the rights of any holder, without the
holder's consent, under any Option theretofore granted under the Plan.
B-5
<PAGE> 34
16. DELIVERY OF SHARES ON EXERCISE. Delivery of certificates for Shares
pursuant to an Option exercise may be postponed by the Company for such period
as may be required for it with reasonable diligence to comply with any
applicable requirements of any federal, state or local law or regulation or any
administrative or quasi-administrative requirement applicable to the sale,
issuance, distribution or delivery of such Shares. The Committee may, in its
sole discretion, require a Director to furnish the Company with appropriate
representations and a written investment letter prior to the exercise of an
Option or the delivery of any Shares pursuant thereto.
17. FEES AND COSTS. The Company shall pay all original issue taxes on the
exercise of any Option granted under the Plan and all other fees and expenses
necessarily incurred by the Company in connection therewith.
18. EFFECTIVENESS OF THE PLAN. The Plan shall become effective when
approved by the Board. The Plan shall thereafter be submitted to the Company's
stockholders for approval and unless the Plan is approved by the affirmative
votes of the holders of shares having a majority of the voting power of all
shares either (i) represented at a meeting duly held in accordance with Ohio law
within twelve (12) months after being approved by the Board, or (ii) obtained by
a written consent in accordance with Ohio law within twelve (12) months after
being approved by the Board, the Plan and all Options made under it shall be
void and of no force and effect. In aid of this provision, any Option granted
prior to the approval of the Plan by the Company's stockholders shall be
conditioned upon receipt of such approval.
19. OTHER PROVISIONS. As used in the Plan, and in Option Agreements and
other documents prepared in implementation of the Plan, references to the
masculine pronoun shall be deemed to refer to the feminine or neuter, and
references in the singular or the plural shall refer to the plural or the
singular, as the identity of the person or persons or entity or entities being
referred to may require. The captions used in the Plan and in such Option
Agreements and other documents prepared in implementation of the Plan are for
convenience only and shall not affect the meaning of any provision hereof or
thereof.
20. OHIO LAW TO GOVERN. This Plan shall be governed by and construed in
accordance with the laws of the State of Ohio.
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<PAGE> 35
PROXY CORRPRO COMPANIES, INC.
BOARD OF DIRECTORS PROXY FOR ANNUAL MEETING, JULY 23, 1997
The undersigned, having received the Notice of Meeting and Proxy
Statement, hereby constitutes and appoints Joseph W. Rog, David H.
Kroon, and Barry W. Schadeck, and each of them (with full power of
substitution respectively), true and lawful attorneys and proxies for
the undersigned to attend the Annual Meeting to be held on July 23,
1997, at 10:00 a.m., at Medina Country Club, 5588 Wedgewood Road,
Medina, Ohio, and any adjournments thereof.
The Proxy when properly executed will be voted in the manner directed;
if no direction is made this Proxy will be voted FOR the Director
Nominees, FOR Proposal II (approval of the 1997 Long-Term Incentive
Plan), and FOR Proposal III (approval of the 1997 Non-Employee
Directors' Stock Option Plan). In their discretion, the parties are
also authorized to vote upon such other matters as may properly come
before the meeting.
1. Election of Directors, Nominees:
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for the nominees listed below
</TABLE>
ROBERT E. HODGE, DAVID H. KROON, C. RICHARD LYNHAM AND JOSEPH W. ROG
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided
below.)
----------------------------------------------------------------------
2. Proposal to approve the 1997 Long-Term Incentive Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the 1997 Non-Employee Directors' Stock Option
Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on the reverse side)
(Continued from other side)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTOR'S RECOMMENDATIONS.
YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN AND RETURN THIS CARD.
Dated:_______________ , 1997
----------------------------
Signature(s)
----------------------------
Signature(s)
Please sign exactly as name
appears hereon. Joint owners
should each sign. When
signing as attorney,
executor, administrator,
trustee, or guardian, please
give full title as such.
[ ] ATTEND MEETING
We would appreciate your
indicating if you are
planning to attend the
Annual Meeting. Your failure
to check this box will not
prejudice you from attending
the meeting.
Proxy Card
