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RESTRICTED SHARES AGREEMENT
FOR JOSEPH E. MADIGAN
WHEREAS, Joseph E. Madigan ("Grantee") served as interim Chief
Executive Officer and President of, and currently serves as Chairman of the
Board of Directors (the "Board") of, CARDINAL REALTY SERVICES, INC., heretofore
known as Cardinal Industries, Inc. (the "Company"); and
WHEREAS, the Company's 1992 Incentive Equity Plan was authorized by the
United States Bankruptcy Court for the Southern District of Ohio, Eastern
Division, in connection with its approval of the Plan of Reorganization of the
Company and has been amended from time to time which amendments were approved by
the affirmative vote of a majority of the shares of capital stock present and
entitled to vote at such times (as amended, the "Plan"). The Plan is
administered by the Compensation Committee (the "Committee") of the Board of the
Company; and
WHEREAS, the Board has directed that the Company make certain grants to
Grantee for his services.
NOW, THEREFORE, pursuant to the Plan, as of December 1, 1995 (the "Date
of Grant"), the Company grants to Grantee two thousand (2,000) shares of the
Company's common stock, without par value (the "Shares"), subject to the terms
and conditions of the Plan and the terms, conditions, limitations and
restrictions hereinafter set forth. Terms used herein and not otherwise defined
shall have the meanings assigned to them in the Plan.
1. Issuance of Shares. The Shares covered by this agreement shall be
fully paid and nonassessable and shall be represented by a certificate(s)
registered in the name of Grantee and bearing a legend referring to the
restrictions hereinafter set forth.
2. Restrictions on Transfer of the Shares. The Shares subject to this
agreement may not be transferred, sold, pledged, exchanged, assigned or
otherwise encumbered or disposed of by Grantee, except to the Company, until
they have become nonforfeitable in accordance with Section 3 hereof; provided,
however, that Grantee's interest in the Shares covered by this agreement may be
transferred at any time by will or the laws of descent and distribution. Any
purported transfer, encumbrance or other disposition of the Shares covered by
this agreement that is in violation of this Section 2 shall be null and void,
and the other party to any such purported transaction shall not obtain any
rights to or interest in the Shares covered by this agreement. When and as
permitted by the Plan, the Company may waive the restrictions set forth in this
Section 2 with respect to all or any portion of the Shares covered by this
agreement.
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3. Vesting of the Shares.
(a) One-third of the Shares covered by this agreement, shall
become nonforfeitable on the first, second and third anniversaries of
the Date of Grant (so that 100% of the Shares will be nonforfeitable
on the third anniversary of the Date of Grant), subject to Grantee
remaining as a director of the Company during the applicable vesting
period.
(b) Notwithstanding the vesting provisions of Section 3(a)
hereof, in the event that Grantee's position as a director of the
Company ceases by reason of Grantee's death, all Shares covered by
this agreement shall become immediately vested.
4. Forfeiture of the Shares. In the event of a forfeiture, the
certificates representing all of the Shares covered by this agreement that have
not become nonforfeitable in accordance with Section 3 hereof shall be cancelled
and such Shares shall be deemed to be and to have become authorized but unissued
shares of common stock, without par value, of the Company.
5. Dividend, Voting and Other Rights. Grantee shall, at all times
prior to forfeiture, have all of the rights of a shareholder with respect to the
Shares covered by this agreement, including the right to vote the Shares and
receive any dividends that may be paid thereon; provided, however, that (a) any
cash dividends and other cash distributions that may be paid on any shares
covered by this agreement that have not become nonforfeitable in accordance with
Section 3 hereof shall be automatically sequestered and invested in an
interest-bearing bank account, which shall be subject to the same restrictions
hereunder as the forfeitable Shares on which the cash dividends or other cash
distributions are paid, and (b) any additional Shares that Grantee may become
entitled to receive pursuant to a share dividend or a merger or reorganization
in which the Company is the surviving corporation or any other change in the
capital structure of the Company shall be subject to the same restrictions as
the Shares covered by this agreement.
6. Retention of Share Certificate(s) by the Company. The
certificate(s) representing the Shares covered by this agreement shall be held
in custody by the Company, together with a stock power endorsed in blank by
Grantee with respect thereto, until those shares have become nonforfeitable in
accordance with Section 3 hereof.
7. Adjustments. The Committee shall make any adjustments in the number
or kind of shares of stock or other securities covered by this agreement that
the Committee, in its discretion, may determine to be equitably required to
prevent any dilution or expansion of Grantee's rights under this agreement that
otherwise would result from any (a) stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, (b) merger, consolidation, separation, reorganization or partial or
complete liquidation involving the Company or (c) other transaction or event
having an effect similar to any of those referred to in Section 7(a) or 7(b)
hereof. Furthermore, in the event that any transaction or event described or
referred to in the immediately preceding sentence shall occur, the Committee may
provide in substitution of any or all of Grantee's rights under this agreement
such alternative consideration as the Committee, in its discretion, may
determine to be equitable under the circumstances.
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8. Withholding Taxes. If the Company shall be required to withhold any
federal, state, local or foreign tax in connection with any issuance of
restricted or unrestricted Shares or other securities pursuant to this
agreement, Grantee shall pay the tax or make provisions that are satisfactory to
the Company for the payment thereof.
9. Right to Terminate Employment. No provision of this agreement shall
limit in any way whatsoever any right that the Company or a subsidiary may
otherwise have to terminate the employment of Grantee at any time.
10. Relation to Other Benefits. Any economic or other benefit to
Grantee under this agreement or the Plan shall not be taken into account in
determining any benefits to which Grantee may be entitled under any
profit-sharing, retirement or other benefit or compensation plan maintained by
the Company or a subsidiary and shall not affect the amount of any life
insurance coverage available to any beneficiary under any life insurance plan
covering employees of the Company or a subsidiary.
11. Amendments. Any amendment to the Plan shall be deemed to be an
amendment to this agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment shall adversely affect the rights
of Grantee with respect to the Shares or other securities covered by this
agreement without Grantee's consent.
12. Severability. In the event that one or more of the provisions of
this agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
13. Governing Law. This agreement is made under, and shall be construed
in accordance with, the laws of the State of Ohio.
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This agreement is executed by the Company as of the 1st day of
December, 1996
CARDINAL REALTY SERVICES, INC.
By: /s/ John B. Bartling, Jr.
---------------------------
John B. Bartling, Jr.
Its: President
The undersigned Grantee hereby acknowledges receipt of an executed
original of this agreement and accepts the right to receive the Shares or other
securities covered hereby, subject to the terms and conditions of the Plan and
the terms and conditions hereinabove set forth.
Grantee acknowledges that he has been advised that the Shares covered
by this agreement have not been registered under the Securities Act of 1933 (the
"Act") and agrees that he will not make any disposition of such shares unless
either (a) such shares have been registered under said Act or (b) an exemption
from the registration provisions of said Act is applicable to Grantee's proposed
disposition of such shares. Grantee understands that the certificates for such
shares may bear a legend substantially as follows:
The shares evidenced by this Certificate have not been registered
under the Securities Act of 1933. Such shares may not be sold or
otherwise transferred until the same have been registered under said
Act or until the Company shall have received an opinion of legal
counsel or a copy of a letter from the staff of the Division of
Corporation Finance of the Securities and Exchange Commission, in
either case satisfactory to the Company, that such shares may legally
be sold or otherwise transferred without such registration.
/s/ Joseph E. Madigan
-----------------------------------
JOSEPH E. MADIGAN
Date: December 5, 1996
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