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CARDINAL REALTY SERVICES, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
ARTICLE I
PURPOSE
The purpose of this Plan is to provide certain key employees with a
deferred compensation benefit measured by the bookkeeping accounts established
and maintained hereunder.
ARTICLE II
DEFINITIONS
2.1 "Allocation Date" means each day as of which investment earnings or
losses are allocated pursuant to the terms of the Trust.
2.2 "Beneficiary" means the executor or administrator of the estate of
the deceased Participant.
2.3 "Benefit Amount" means the account balance of the Participant's
Participant Account, determined at the time of distribution.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Bonus Stock" means the shares of Company Stock that would
otherwise be payable to a Participant as a bonus pursuant to the terms of the
Participant's employment agreement with the Company or otherwise in accordance
with the Company's incentive compensation plan in effect from time to time.
2.6 "Closing Price" means the closing price of the Company Stock on the
Nasdaq National Market System, or if the Company Stock is not listed or admitted
in such system, the principal securities exchange on which the Company Stock is
listed or admitted to trading, on the last trading day preceding the Payment
Event.
2.7 "Committee" means The Compensation Committee of the Board.
2.8 "Company" means Cardinal Realty Services, Inc., an Ohio
corporation.
2.9 "Company Stock" means shares of the Company's common stock.
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2.10 "Effective Date" means April 18, 1996, the date as of which this
Plan has been approved by the Board.
2.11 "Election Date" means the applicable election deadline established
pursuant to Section 4.3.
2.12 "Election Form" means the form completed by a Participant and
submitted to the Company reflecting the Participant's deferral election pursuant
to Section 4.2.
2.13 "Elective Deferral Credits" means the amount credited to a
Participant Account from time to time pursuant to Section 4.2.
2.14 "Investment Credits" means the amount added to or subtracted from
a Participant Account from time to time pursuant to Section 4.4.
2.15 "Market Capitalization Restricted Stock" means the shares of
restricted Company Stock that: (a) would otherwise be provided to the
Participant under the Participant's employment agreement with the Company; and
(b) vests based upon "Market Capitalization" as defined therein.
2.16 "Matching Stock" means the shares of Company Stock that would
otherwise be payable to a Participant as a match to the Participant's purchase
of Company Stock, as determined pursuant to the terms of the Participant's
employment agreement with the Company.
2.17 "Other Restricted Stock" means the shares of restricted Company
Stock that would otherwise be provided to the Participant under the
Participant's employment agreement with the Company, other than Market
Capitalization Restricted Stock.
2.18 "Participant" means each key employee of the Company who is
eligible to participate in this Plan pursuant to Article III and who makes an
election to participate pursuant to Section 4.2.
2.19 "Participant Account" means the bookkeeping account established
and maintained for a Participant pursuant to Section 4.1.
2.20 "Payment Event" means the first to occur of the payment events
described in clauses (a) through (c) of the first sentence of Section 7.1.
2.21 "Plan" means this Cardinal Realty Services, Inc. Executive
Deferred Compensation Plan.
2.22 "Trust" means the Cardinal Realty Services, Inc. Executive
Deferred Compensation Rabbi Trust Agreement.
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2.23 "Trustee" means The Provident Bank, a state chartered bank, or its
successor pursuant to the terms of the Trust.
ARTICLE III
ELIGIBILITY TO PARTICIPATE
3.1 Eligibility. As of the Effective Date, each of Company's key
executives listed on Exhibit A shall be eligible to participate in this Plan.
Thereafter, the Committee, in its sole discretion, may name additional key
employees as eligible for participation.
3.2 Cessation of Participation. The Committee may terminate the
participation of any Participant if the Committee, in its sole discretion,
determines that: (a) such person is no longer a member of "a select group of
management or highly compensated employees" of the Company, within the meaning
of the Employee Retirement Income Security Act of 1974, as amended; or (b) this
Plan or the related Trust results in Federal income tax consequences different
from those anticipated by the Company. A Participant who has terminated
employment with the Company shall cease to be a Participant at the time the
Benefit Amount is paid to the Participant or the Participant's Beneficiary. If
this Plan is terminated pursuant to Section 8.2, a Participant shall cease to be
a Participant at the time the Benefit Amount is paid to the Participant or the
Participant's Beneficiary.
ARTICLE IV
PARTICIPATION AND ACCOUNT CREDITS
4.1 Establishment of Accounts. A Participant Account shall be
established and maintained for each Participant. Each Participant Account shall
be a bookkeeping account reflecting the Elective Deferral Credits and Investment
Credits allocable with respect to a Participant pursuant to this Article. The
balance of each Participant Account as of the last day of each calendar year
shall be communicated in writing to the Participant on or before March 31 of the
following year or on a more frequent basis as may be determined by the
Committee.
4.2 Elective Deferral Credits. A Participant may elect to defer the
receipt of any or all of his or her Bonus Stock, Matching Stock, Market
Capitalization Restricted Stock or Other Restricted Stock to be paid by the
Company by so indicating on the Election Form. In order to be effective, a
Participant's completed Election Form must be submitted to the Company prior to
the applicable Election Date and must relate only to Company Stock to be paid
after the Election Date. A Participant's election hereunder shall become
irrevocable on the applicable Election Date. A Participant's election hereunder
as to Bonus Stock shall remain in effect indefinitely, unless modified by a
subsequent election made in accordance with the foregoing. All amounts deferred
by a Participant hereunder shall be credited to the Participant's Participant
Account as Elective Deferral
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Credits on, or as soon as is reasonably practicable after, the date the Company
Stock would otherwise be paid to the Participant.
4.3 Deadline for Making Elections. The Election Date applicable to a
Participant's Market Capitalization Restricted Stock and Other Restricted Stock
shall be the day such shares are granted. The Election Date applicable to a
Participant's Matching Stock shall be the day prior to the date the Participant
purchases the shares of Company Stock used as the basis for payment of the
Matching Stock. The Election Date applicable to a Participant's Bonus Stock for
a given fiscal year of the Company shall be the last day of the third quarter of
such fiscal year.
4.4 Investment Credits. As of each Allocation Date, each Participant
Account shall be adjusted, positively or negatively, to reflect the deemed
investment performance of the Participant Account since the preceding Allocation
Date. Such investment performance shall be measured by the actual performance of
the Trust investments made with respect to the Participant Account as described
in Article V.
ARTICLE V
INVESTMENT
This Article V describes the general investment mechanics under the
Trust which defines the actual measure of the value of each Participant Account.
Each Participant Account shall be deemed invested in the shares of Company Stock
that would otherwise be paid to the Participant in the absence of an election
under Section 4.2. For such purposes, the number of shares credited as the
deemed investment shall be the gross number of shares payable as Company Stock
without reduction for any income taxes or income tax withholding that would
otherwise apply. Each Participant Account shall be credited with dividends as if
the account were actually invested in Company Stock. Further, all dividends
credited to a Participant Account shall be deemed reinvested in Company Stock,
to the extent practicable under the dividend reinvestment program established
pursuant to the terms of the Trust. Dividends not deemed reinvested under the
preceding sentence shall be credited and deemed invested in the manner
determined under the Trust. In the event that the Company substitutes the assets
of the Trust pursuant to Section 5(b) thereof, this Plan shall automatically
terminate.
ARTICLE VI
TRUST ACCUMULATION AND FUNDING STATUS
Subject to the other terms of this Plan and the terms of the Trust, the
Company shall make contributions to the Trust of an amount equal to the amount
of the aggregate Elective Deferral Credits for the relevant period. Such
contributions shall be made at the time such Credits are credited to the
respective Participant Accounts, or as soon as is reasonably practicable
thereafter. By electing
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to participate hereunder, each Participant accepts the terms of this Plan and
the Trust. Nothing contained in this Plan or the Trust shall vest in any
Participant or any Beneficiary any right, title or interest in or to any assets
of the Trust and the assets of the Trust shall at all times remain subject to
the claims of the Company's general creditors. As such, the obligations of the
Trustee and the Company hereunder are not funded or secured in any way that
gives Participant or a Beneficiary any rights greater than that of a general
creditor of the Company.
ARTICLE VII
PAYMENT OF BENEFITS
7.1 Benefit Amount. A Participant's Benefit Amount, to the extent
vested under Section 7.2, shall be paid to the Participant within Ten (10) days
after the earliest to occur of the following: (a) the date of the Participant's
termination of employment with the Company; (b) the date the Plan is terminated
pursuant to Section 8.2; and (c) the date as of which the Board determines that
the participation of the Participant shall terminate pursuant to clause (b) of
the first sentence of Section 3.2. If the Company is notified of a Participant's
death prior to payment of the vested Benefit Amount, such payment shall be made
to the Participant's Beneficiary. Payment of a Participant's vested Benefit
Amount shall be made by the Trustee from the Trust fund, to the extent the
account can and is used to make such payment. If the account maintained by the
Trustee for the Participant is not used to pay a Participant's full vested
Benefit Amount, the Company shall make the balance of such payment hereunder. A
Participant's vested Benefit Amount shall be paid in a single payment in the
form of Company Stock; provided, however, that: (a) any amount representing a
fractional interest in a share of Company Stock shall be paid in cash; and (b) a
Participant or Beneficiary may elect to have the full vested Benefit Amount paid
in cash, net of any and all expenses incurred to effect such cash distribution.
A Participant's or Beneficiary's election to receive a cash distribution shall
not be effective unless made in writing and submitted to the Committee no more
than five (5) days after the Payment Event. The amount of any cash distribution
hereunder shall be determined using the Closing Price as the measure of the
value of the Common Stock. Notwithstanding the foregoing provisions of this
Section 7.1, the form and timing of distribution of a Participant's interest
under this Plan shall at all times be subject to all restrictions and
limitations imposed by applicable state and federal securities laws and
regulations.
7.2 Vesting. The portion of a Participant's Benefit Amount attributable
to Bonus Stock or Matching Stock shall be fully vested at all times. The portion
of a Participant's Benefit Amount attributable to Market Capitalization
Restricted Stock or Other Restricted Stock shall vest in the manner determined
under the Participant's employment agreement with the Company.
7.3 Taxes and Withholding. If a Participant (or Beneficiary) becomes
entitled to receive cash or recognizes other taxable income under this Plan, the
Company shall have the right to withhold taxes from the Participant's (or
Beneficiary's) payment hereunder or may deduct such taxes from any other amounts
payable to the Participant (or Beneficiary) at any time thereafter in cash or
otherwise. In the event all cash payments due a Participant (or Beneficiary) are
insufficient to provide the
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required amount of withholding taxes, the Participant (or Beneficiary) shall be
required to pay to the Company the amount of required withholding in excess of
all cash payments due. The Company shall bear no responsibility whatsoever for
the taxes or tax effects resulting under this Plan or the Trust as to any
Participant or Beneficiary.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 Amendment. The Board, in its sole discretion, may amend this Plan
at any time; provided, however, that any amendment that could adversely affect a
Participant's rights and interests hereunder (excluding the right to make future
deferrals) will be effective as to such Participant only if the Participant
consents in writing to the amendment.
8.2 Termination. The Board, in its sole discretion, may terminate this
Plan at any time. In addition, this Plan shall automatically terminate as
described in Article V.
ARTICLE IX
MISCELLANEOUS
9.1 Claims Procedure.
(a) Claim. A Participant or other person who believes that he
or she is being denied a claim to which he is entitled (hereinafter
referred to as "Claimant") may file a written request for such benefit
with the Company setting forth the claim. Upon receipt of a claim, the
Company shall advise the Claimant that a reply will be forthcoming
within Thirty (30) days and shall, in fact, deliver such reply within
such period. However, the Company may extend the reply period for an
additional Fifteen (15) days for reasonable cause. If the claim is
denied in whole or in part, the Company will adopt a written statement
using language calculated to be understood by the Claimant setting
forth:
(i) the specific reason or reasons for denial;
(ii) the specific references to pertinent Plan
provisions on which the denial is based;
(iii) a description of any additional material or
information necessary for the Claimant to perfect the claim
and an explanation why such material or such information is
necessary;
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(iv) appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review;
and
(v) the time limits for review under Subsection (b),
below.
(b) Review. Within Sixty (60) days after the receipt by the
Claimant of the written statement described above, the Claimant may
request in writing that the Board review the previous determination.
The Claimant or his duly authorized representative may, but need not,
review the pertinent documents and submit issues and comments in
writing for consideration by the Board. Within Thirty (30) days after
the Board's receipt of a request for review, it will review the
previous determination. After considering all materials presented by
the Claimant, the Board will render a written statement, written in a
manner calculated to be understood by the Claimant setting forth the
specific reasons for the decision and containing specific references to
the pertinent Plan provisions on which the decision is based. If
special circumstances require that the Thirty (30) day time period be
extended, the Board will so notify the Claimant and will render the
decision as soon as possible but not later than Sixty (60) days after
receipt of the request for review.
9.2 No Beneficial Interest. No person or entity shall acquire any
beneficial interest in an amount under this Plan prior to the date on which the
amount becomes payable.
9.3 Spendthrift Clause. No amount provided under this Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, either voluntary or involuntary, and any attempt
to so alienate, anticipate, sell, transfer, assign, pledge, encumber or charge
the same shall be null and void. No such amount shall be liable for or subject
to the debts, contracts, liabilities, engagements or torts of any person to whom
such amount is or may be payable, except as required under applicable law.
9.4 Employment Contract and Other Arrangements. The adoption and
maintenance of this Plan shall neither be deemed to nor shall it be an
employment agreement between Company and the Participant.
9.5 Titles and Headings. The titles or headings of the Articles and
Sections hereof are included solely for convenience and reference and, in the
event of any conflict between such titles or headings and the text, the text
shall control.
9.6 Parties to Agreement. This Plan shall be binding upon and shall
operate for the benefit of the Company, its successors and assigns, and the
Participant and his or her heirs, estate and personal representatives.
9.7 Governing Law. This Plan shall be governed and construed in
accordance with the laws of the State of Ohio, without giving effect to the
principles of conflicts of laws thereof, but subject to preemption of Federal
law.
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9.8 Gender. Where necessary or appropriate to the meaning hereof, the
singular, plural, masculine, feminine and neuter shall be deemed to include each
other.
9.9 Interpretation of Agreement. The Committee shall have full
authority, in its sole discretion, to interpret this Plan and to determine any
and all matters whatsoever relating to the administration of this Plan.
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EXHIBIT A
PARTICIPANTS
John Bram Bartling, Jr.
Mark D. Thompson
Paul R. Selid
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