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CARDINAL REALTY SERVICES, INC.
NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PLAN
1. PURPOSE. The purpose of this Non-Employee Director Restricted Stock
Plan (this "Plan") is to enable Cardinal Realty Services, Inc. ("Cardinal") to
attract and retain qualified non-employee directors and to provide these
non-employee directors an opportunity to increase their ownership interest of
shares of Cardinal common stock, no par value, of Cardinal ("Common Stock").
Cardinal believes that the ownership of shares of Common Stock by non-employee
directors will serve to align the interests of non-employee directors with
Cardinal's other shareholders.
2. SHARES SUBJECT TO THIS PLAN. The aggregate number of shares of
Common Stock reserved and available for issuance under this Plan shall not
exceed 50,000 shares. Shares of Common Stock issued by Cardinal under this Plan
may be authorized and unissued shares or shares purchased on the open market or
in private transactions. If the number of outstanding shares of Common Stock of
Cardinal is changed by reason of split-ups or combinations of shares or
recapitalization or by reason of stock dividends, the number of shares reserved
and available for issuance under this Plan will be appropriately adjusted as
determined by Cardinal's Board of Directors (the "Board") or the Board's
Compensation Committee so as to reflect such change.
3. ELIGIBILITY. Each director of Cardinal is eligible to participate in
this Plan unless such director is an employee of Cardinal or any of its
affiliates or subsidiaries. Non-employee directors participating in this Plan
are referred to herein as "Participants."
4. PARTICIPATION. Each eligible non-employee director may elect to
participate in this Plan by authorizing and instructing Cardinal to reduce all
or any portion of the cash compensation otherwise payable for services to be
rendered by him as a director (including, without limitation, the annual
retainer and any fees payable for attending meetings of the Board or any
committee of the Board) (collectively, "Director Compensation") and to receive
in lieu thereof restricted shares of Common Stock ("Restricted Stock"). Any such
election shall be made by executing and delivering to Cardinal prior to the
commencement of the fiscal year as to which such election shall become
effective, an election form authorizing and instructing Cardinal to issue
Restricted Stock in lieu of all or any portion of the Director Compensation that
the non-employee director is entitled to receive at the end of each fiscal
quarter; provided that with respect to the third and fourth quarters of
Cardinal's 1996 fiscal year eligible non-employee directors may elect to
participate in the Plan by executing and delivering to Cardinal an election form
prior to June 15, 1996. Participants may elect deductions as a percentage of
Director Compensation payable to the Participant at the end of each fiscal
quarter (such percentages to be 25%, 50%, 75% or 100%).
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Restricted Stock issued under this Plan will have a restriction period
of three (3) years. Notwithstanding any other provision of this Plan, Restricted
Stock will be subject to the following terms and conditions:
(a) Prior to the issuance of shares of Restricted Stock, the
Participant will be required to deliver to Cardinal a stock power
signed by the Participant in form and substance satisfactory to
Cardinal. Restricted Stock will be represented by a stock certificate
registered in the name of the holder. The certificate for the
Restricted Stock, together with the executed stock power, will be held
by Cardinal in its control for the account of the Participant until the
restrictions set forth in this Paragraph 4 lapse (at which time the
certificate for the Restricted Stock will be delivered to the
Participant) or, if earlier, until the Restricted Stock is forfeited to
Cardinal and cancelled as set forth in this Paragraph 4. The holder
will have the right to enjoy all shareholder rights during the
restriction period (including the right to vote the shares of
Restricted Stock and the right to receive any cash dividends thereon)
with the exception that:
(i) The holder may not sell, exchange, transfer,
pledge, hypothecate, assign or otherwise dispose of the
Restricted Stock during the restriction period, except by
bequest pursuant to a will or by intestacy; and
(ii) A breach of the terms and conditions during the
restriction period will cause a forfeiture of the Restricted
Stock to Cardinal without notice and without consideration.
(b) All restrictions will lapse and the holder of the
Restricted Stock will be entitled to the delivery of a stock
certificate or certificates upon the earliest of the following:
(i) Three (3) years from the date the applicable
shares of Restricted Stock are issued to the holder;
(ii) The date of the holder's death or disability;
(iii) The date the holder, after being nominated by
the Board, is not elected by the shareholders in an election
for the Board; or
(iv) The date on which the Board determines that the
holder will not be nominated for election to the Board.
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(c) Restricted Stock will be entirely forfeited to Cardinal
without notice and without consideration in the event that during a
restriction period the holder:
(i) Resigns (other than by reason of disability) or
is dismissed for cause from the Board during his election
term;
(ii) Declines to stand for an election to the Board
after having been nominated by the Board; or
(iii) Sells, exchanges, transfers, pledges,
hypothecates, assigns or otherwise disposes of the Restricted
Stock (or purports or attempts to do any of the foregoing),
except by bequest pursuant to a will or by intestacy.
To the extent shares of Restricted Stock are forfeited, any such shares
shall be retired, shall revert to the status of authorized but unissued shares
of Cardinal, and shall again be available for issuance under this Plan.
For purposes of subsection (b) above, "disability" will be deemed to
occur after one hundred twenty (120) days in the aggregate during any twelve
(12) month period, or after ninety (90) consecutive days, during which one
hundred twenty (120) or ninety (90) days, as the case may be, the holder of
Restricted Stock, by reason of his physical or mental disability or illness, has
been unable to discharge his duties as a member of the Board. For purposes of
subsection (c) above, a holder will be considered to have been dismissed for
cause if and only if he is dismissed on account of any act of fraud or
intentional misrepresentation, or embezzlement, misappropriation, or conversion
of assets or opportunities of Cardinal or any of its affiliates or subsidiaries.
5. CHANGE OR SUSPENSION OF DEDUCTION; TERMINATION OF PARTICIPATION.
Once made, elections are irrevocable and may not be changed or suspended so long
as the Participant is a non- employee director of Cardinal. Notwithstanding the
foregoing, if and when permitted under Rule 16b-3 of the General Rules and
Regulations of the Securities Exchange Act of 1934, as amended (whether pursuant
to Rule 16b-3 as adopted in 1991, or pursuant to the adoption of currently
proposed changes or other additional amendments to Rule 16b-3), then each
Participant shall be entitled to change or suspend his deduction for any fiscal
year by executing and delivering to Cardinal a new election form prior to the
commencement of that fiscal year. Participation in this Plan will terminate on
the date a Participant ceases to be eligible to participate in this Plan
pursuant to Paragraph 3 above.
6. NO INTEREST OR VOLUNTARY CONTRIBUTIONS. No interest will be paid on
deductions from Director Compensation. Participants may not make voluntary cash
contributions to this Plan.
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7. ISSUANCE OF SHARES. At the end of each fiscal quarter, each
Participant will automatically be issued the number of shares of Restricted
Stock determined by dividing (x) 125% of the Director Compensation that the
Participant has elected to receive Restricted Stock in lieu of by (y) the Fair
Market Value (as defined below) of the Common Stock. No fractional shares will
be issued. In lieu of fractional shares, Cardinal will pay to the Participant
cash in an amount equal to 80% of the Fair Market Value of any fractional share.
"Fair Market Value" means the average of the daily closing prices per
share of Common Stock for the thirty (30) consecutive trading day period ending
on the business day immediately preceding the date of the end of each fiscal
quarter (as adjusted for any stock dividend, split, combination or
reclassification that took effect during such thirty (30) business day period).
The closing price for each day shall be the last reported sales price regular
way or, in case no such reported sales take place on such day, the average of
the highest bid and the lowest asked prices regular way, in either case quoted
on the NASDAQ National Market System (the "NMS") or, if shares of Common Stock
are no longer traded on the NMS, any other public market on which shares of
Common Stock are traded, as reported in The Wall Street Journal.
8. ADMINISTRATION. This Plan will be administered by the Board's
Compensation Committee (the "Administrator"). The Administrator will maintain
the records of this Plan. The Administrator will have the sole right and
authority to interpret and construe the provisions of this Plan and the
Administrator's decision on disputes arising under this Plan will be binding and
conclusive on the Participants.
9. EFFECTIVE TIME. This Plan will become effective on the date of its
approval by the shareholders of Cardinal.
10. TERMINATION AND AMENDMENT OF THIS PLAN. This Plan may be amended or
terminated by the Board at any time, but no amendment without the approval of
the shareholders of Cardinal will be made to the extent shareholder approval
would be required under Rule 16b-3 of the General Rules and Regulations of the
Securities Exchange Act of 1934, as amended. No amendment of this Plan may,
without the consent of the holder of Restricted Stock, adversely affect his
rights thereunder. In addition, the provisions of this Plan may not be amended
more than once every six (6) months other than to comport with changes in the
Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder. This Plan will
continue until it is terminated by the Board.
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11. ASSIGNMENT AND ALIENATION. No interest under this Plan will be
subject in any manner to anticipation, alienation, sale, transfer, assignment or
pledge, either voluntary or involuntary, and any attempt to do so will be null
and void, except as provided under applicable law. No interest under this Plan
will be liable for, or subject to, the debts, contracts, liabilities,
engagements or torts of any person possessing such interest, except as provided
under law.
12. RESPONSIBILITY. Neither Cardinal, the Administrator, nor any
director, officer, employee or agent of any of them, will have any
responsibility or liability for any act or thing done or left undone, any
mistake of judgment, or for any omission or wrongful act unless resulting from
its own gross negligence, willful misconduct or intentional misfeasance,
including, without limiting the generality of the foregoing, any action taken
with respect to deductions made from Participants and with respect to the price,
time, quantity or other conditions and circumstances of the issuance of the
shares of Common Stock under the terms of this Plan.
13. COMPLIANCE. Delivery of certificates for Restricted Stock may be
postponed by Cardinal for such period as may be required for Cardinal 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 Restricted Stock.
Cardinal may, in its sole discretion, require Participants to furnish Cardinal
with appropriate representations and a written investment letter prior to the
delivery of any Restricted Stock pursuant to this Plan.
14. APPLICABLE LAW. The provisions of this Plan will be governed and
construed in accordance with the laws of State of Ohio.
15. GENDER. When necessary or appropriate to the meaning hereof, the
singular, plural, masculine, feminine and neuter will be deemed to include each
other.
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