EMPLOYMENT AGREEMENT
BETWEEN
STV GROUP, INC., Employer
AND
XXXXX X. XXXXX, Employee
Made on July 9, 1999
Effective on June 1, 1999
TABLE OF CONTENTS
Employment and Duties..........................................................1
Employment and Duties.................................................1
Term and Termination of Term...................................................2
Term..................................................................2
Termination of Term...................................................2
Compensation...................................................................2
Salary................................................................2
Annual Incentive......................................................2
Long Term Incentives..................................................2
Benefits..............................................................2
Retirement Benefits...................................................2
Termination....................................................................3
Notice of Termination.................................................3
Grounds for Termination...............................................3
Termination upon Death.......................................3
Termination upon Disability..................................3
Termination for Cause........................................3
Termination Other Than For Cause.............................4
Termination For Good Reason Upon a Change of Control.........4
Termination Upon Retirement..................................4
Procedure Upon Termination............................................4
Employee's Covenants...........................................................5
Nondisclosure.........................................................5
Noncompetition........................................................5
Enforcement...........................................................5
Consideration.........................................................6
Scope.................................................................6
Miscellaneous..................................................................6
Notices...............................................................6
Entire Understanding..................................................7
Modification..........................................................7
Prior Agreements......................................................7
Termination of Prior Employment Agreements............................7
Parties in Interest...................................................7
Assignment............................................................8
Severability..........................................................8
Counterparts..........................................................8
Section Headings......................................................8
References............................................................8
Controlling Law.......................................................8
EMPLOYMENT AGREEMENT
THIS AGREEMENT made on July 9, 1999, but effective as of June 1, 1999 by
and between Xxxxx X. Xxxxx ("Employee") and STV Group, Inc., a Pennsylvania
corporation ("Employer").
BACKGROUND
WHEREAS, Employer is engaged in the business of providing consulting
engineering, architectural, interior design, planning, construction management
and management consulting services to its customers; and
WHEREAS, Employer and Employee acknowledge that Employer is engaged in a
highly competitive business and wishes to protect its competitive position in
its industry; and
WHEREAS, Employer desires to continue to retain the services of Employee
under specific terms and conditions of employment; and
WHEREAS, Employee desires to continue to work for Employer under the
specific terms and conditions of employment which include terms to protect
Employer's competitive position in the industry; and
WHEREAS, Employee and Employer have freely negotiated their respective
terms and conditions of employment, and have had the opportunity to consult with
counsel of their choice, and have reached agreement thereon;
NOW THEREFORE, in consideration of the promises, covenants and agreements
of the parties contained herein, and intending to be legally bound, the parties
hereby covenant and agree as follows:
1. Employment and Duties.
1.1. Employment and Duties. Employer shall employ Employee throughout
the term of employment set forth in Section 2 hereof as Senior Vice President of
Finance. Employee shall also have such other responsibilities and duties,
consistent with his positions and expertise, as may from time to time be
prescribed by the Employer's Chief Executive Officer. Employee shall devote his
full time, energy, skill and best efforts to the business and affairs of
Employer. Nothing in this Agreement shall preclude Employee from serving as a
director, trustee, officer of, or partner in, any other firm, trust, corporation
or partnership or from pursuing personal investments, as long as such activities
do not interfere with Employee's performance of his duties hereunder.
2. Term and Termination of Term.
2.1. Term. The term of Employee's employment under this Agreement
shall be a period of two years commencing on June 1, 1999, and ending on May 31,
2001, unless further extended or sooner terminated in accordance with the other
provisions hereof (the "Term"). Subject to Section 2.2, and if the Term has not
been terminated pursuant to Section 4, on June 1, 2000 and on each June 1
thereafter (each such June 1, an "Extension Date") the Term shall be extended
for an additional period of one year.
2.2. Termination of Term. The Employee or the Employer may elect to
terminate the automatic extension of the Term set forth in Section 2.1
("Automatic Extension") by giving written notice of such election. Any notice
given hereunder must be given not less than 180 days prior to the applicable
Extension Date.
3. Compensation.
3.1. Salary. Employer shall pay to Employee for services rendered
hereunder an annual base salary of $140,000 per year ("Salary"), payable in
accordance with Employer's normal payroll practices for employees. Employer
shall deduct or cause to be deducted from the Salary all taxes and amounts
required by law to be withheld. Employee's Salary shall be reviewed by the
Employer's Chief Executive Officer no less frequently than annually and may be
increased, but not deceased, as a result thereof.
3.2. Annual Incentive. During the Term, and subject to the other
provisions of this Agreement, Employee shall be entitled to participate in and
shall be included in Employer's Annual Incentive Plan established by the
Compensation Committee and ratified by the Board.
3.3. Long Term Incentives. During the Term, and subject to the other
provisions of this Agreement, Employee shall be entitled to participate in and
shall be included in all of Employer's long term incentive plans ("Long Term
Incentives") generally available to officers to the extent Employee is eligible
under the general provisions thereof, including, but not necessarily limited to
stock option plans, restricted stock plan, stock appreciation rights, and
performance units.
3.4. Benefits. During the Term, and subject to the other provisions of
this Agreement, Employee shall be entitled to participate and shall be included
in benefit plans of the Employer generally available to officers.
3.5. Retirement Benefits. Employee shall be entitled to continue to
participate and shall continue to be included in Employer's ESOP and 401(K)
plans on the same terms and conditions as other employees of Employer ("General
Retirement Benefits").
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4. Termination.
4.1. Notice of Termination. Any termination by Employer or by
Employee, other than due to death of Employee, shall be communicated by written
Notice of Termination to the other party hereto. As used in this Agreement,
"Notice of Termination" means a notice specifying the termination provision in
this Agreement relied upon and setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision specified. As used in this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination.
4.2. Grounds for Termination.
4.2.1. Termination upon Death. Employee's employment with
Employer and all of Employee's rights to compensation and benefits hereunder
shall automatically terminate upon his death, except that Employee's heirs,
personal representatives or estate shall be entitled to any unpaid portion of
his Salary and benefits accrued up to the Date of Termination and shall also be
entitled to reimbursement for any expenses incurred by Employee hereunder.
4.2.2. Termination upon Disability. This Agreement shall
terminate immediately in the event that Employee becomes disabled. Employee will
be deemed to be disabled at the end of any period of six consecutive months
during which, by reason of physical or mental injury or disease, Employee has
been unable to perform substantially the Employee's usual and customary duties
under this Agreement. In the event of termination as a result of disability,
Employee shall receive compensation and benefits in accordance with the Employer
policy with respect to disability benefits in effect at the time of such
disability.
4.2.3. Termination for Cause. At any time during the Term,
Employer may terminate Employee's employment hereunder for Cause (as defined
herein), effective immediately upon notice to Employee, if the Employee was
given reasonable notice of the event constituting cause and either Employee had
a reasonable opportunity to take remedial action but failed or refused to do so,
or an opportunity to take remedial action would not have been meaningful or
appropriate under the circumstances.
For purposes of this Agreement, Cause shall mean: (1) Employee is
negligent in the performance of his duties under this Agreement resulting in a
material impairment of Employer's performance, and Employee continues to be
negligent after demand for corrective action is delivered by the Employer that
specifically identifies the manner in which the employer believes the Employee
has been grossly negligent under this Agreement (2) Employee is convicted of or
pleads guilty or nolo contendere to a felony or (3) Employee willfully refuses
or continues to fail, without proper cause and, other than by reason of illness,
to follow the lawful directions of the Chief Executive Officer.
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On termination of this Agreement pursuant to this Section 4.2.3, with
the exception that Employee shall be entitled to any unpaid portion of his
Salary and benefits earned prior to the date of termination, all rights to
Salary and benefits of Employee shall cease as of the Date of Termination.
4.2.4. Termination Other Than For Cause. In the event that
Employer terminates Employee's employment hereunder without cause, Employee
shall receive his Salary for the remainder of the term of the Agreement and
shall continue to receive all benefits under the Agreement for the remaining
term of the Agreement. In addition, all Long-Term Incentives will fully and
immediately vest.
4.2.5. Termination For Good Reason Upon a Change of Control.
Employee may terminate his employment hereunder for Good Reason (as defined
herein). For purposes of this Agreement, Good Reason means (1) a significant
reduction in Employee's duties as such duties are contemplated by Section 1
hereof; (2) any termination of Employee, except in connection with termination
of Employee's employment for Cause; (3) a reduction in Employee's Salary or a
material reduction of Employee's other compensation, benefits or perquisites; or
(4) a relocation of Employee's principal place of business to a location which
is more than fifty (50) miles from its current location.
If Employee's employment shall be terminated for Good Reason
after a Change of Control (as defined in Appendix A), Employee shall be paid a
lump-sum payment equal to the sum of (x) three times the Employee's then current
Salary plus (y) the amount of any cash bonus awarded to the Employee for
services in the three most recent fiscal years; and all stock options, stock
awards and similar equity rights, if any, shall vest and become exercisable
immediately prior to the termination of the Term and remain exercisable through
their original terms.
4.2.6 Termination Upon Retirement. Employee may terminate this
Agreement upon retirement in accordance with the Employer's policies for
retirement. Upon such retirement, Employee shall be entitled to all of
Employee's retirement benefits as provided for herein.
4.2.7 Termination Other Than for Good Reason or Retirement. If
Employee terminates his employment, other than for good reason or retirement,
all rights to Salary and benefits hereunder shall automatically cease except
that Employee shall be entitled to any unpaid portion.
4.3. Procedure Upon Termination. On termination of employment
regardless of the reason, Employee shall promptly return to Employer all
documents (including copies) and other property of Employer, including without
limitation, customer lists, manuals, letters, materials, reports, and records in
his possession or control no matter from whom or in what manner acquired.
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5. Employee's Covenants.
5.1. Nondisclosure. At all times during and after the Term, Employee
shall keep confidential and shall not, except with Employer's express prior
written consent, or except in the proper course of his employment with Employer,
directly or indirectly, communicate, disclose, divulge, publish, or otherwise
express, to any Person, or use for his own benefit or the benefit of any Person,
any trade secrets, confidential or proprietary knowledge or information, no
matter when or how acquired, concerning the conduct and details of Employer's
business, including without limitation names of customers and suppliers
(including customer buying and credit information, customer requirements and
preferences and customer ratings), lists of or information pertaining to
prospective customers, pricing information, credit information, gross margin and
cost information, sales and marketing studies, reports, projections and
information, number schedule and methods of delivery of services, finances,
accounting methods, marketing methods, trade secrets, policies, prospects and
financial condition. For purposes of this Section 5.1., confidential information
shall not include any information which is now known by or readily available to
the general public or which becomes known by or readily available to the general
public other than as a result of any improper act or omission of Employee.
5.2 Noncompetition. During the Term hereof, and for a period of one
year thereafter (provided that Employee is receiving compensation for such one
year under Section 4.2.4 of this Agreement) Employee shall not, except with
Employer's express prior written consent, directly or indirectly, in any
capacity, for the benefit of any Person:
(1) Communicate with or solicit any Person who is or during such
period becomes a customer, supplier, employee, salesman, agent or representative
of Employer, in any manner which interferes or might interfere with such
Person's relationship with Employer, or in an effort to obtain such Person as a
customer, supplier, employee, salesman, agent, or representative of or on behalf
of any business in competition with Employer.
(2) Establish, engage, own, manage, operate, join or control, or
participate in the establishment, ownership, management, operation or control
of, or be a director, officer, employee, salesman, agent or representative of,
or be a consultant to, any Person in any business in competition with Employer,
at any location where Employer now conducts or during the Term hereof begins
conducting any material business, or act or conduct himself in any manner which
he would have reason to believe inimical or contrary to the best interests of
Employer; provided, however, that this provision shall not be construed to
prohibit the ownership by Employee of any interest in any business entity doing
business with Employer or of not more than 2% of any class of securities of any
corporation which is engaged in any of the foregoing businesses that has a class
of securities registered pursuant to the Securities Exchange Act of 1934.
5.3. Enforcement. The parties acknowledge that Employer's business is
highly competitive and world-wide in scope and that any breach by either party
of any of the covenants and agreements of this Section 5 ("Covenants") will
result in irreparable injury to the injured
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party for which money damages could not adequately compensate such party, and
therefore, in the event of any material breach of this agreement, the injured
party shall be entitled, in addition to all other rights and remedies which such
party may have at law or in equity, to have an injunction issued by any
competent court enjoining and restraining the party in breach and/or all other
Persons involved therein from continuing such breach. The existence of any claim
or cause of action which either party may have against the other shall not
constitute a defense or bar to the enforcement of any of the Covenants. If a
party is obliged to resort to litigation to enforce any of the Covenants which
has a fixed term, then such term shall be extended for a period of time equal to
the period during which a material breach of such Covenant was occurring,
beginning on the date of a final court order (without further right of appeal)
holding that such a material breach occurred or, if later, the last day of the
original fixed term of such Covenant.
5.4. Consideration. The parties expressly acknowledge that the
Covenants are a result of arms length negotiations between the parties and are a
material part of the consideration bargained for by them and that without the
agreement of each to be bound by the Covenants, neither would have agreed to
enter into this Agreement.
5.5. Scope. If any portion of any Covenant or its application is
construed to be invalid, illegal or unenforceable, then the other portions and
their application shall not be affected thereby and shall be enforceable without
regard thereto. If any of the Covenants is determined to be unenforceable
because of its scope, duration, geographical area or similar factor, then the
court making such determination shall have the power to reduce or limit such
scope, duration, area or other factor, and such Covenant shall then be
enforceable in its reduced or limited form.
6. Miscellaneous.
6.1. Notices. All notices, requests, demands, consents or other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if and when (1) delivered
personally, (2) mailed by first class certified mail, return receipt requested,
postage prepaid, or (3) sent by a nationally recognized express courier service,
postage or delivery charges prepaid, to the parties at their respective
addresses stated below or to such other addresses of which the parties may give
notice in accordance with this Section.
If to Employer, to:
STV Group, Inc.
000 X. Xxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
ATTN: Chief Executive Officer
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With a copy to:
Xxxxxxx X. XxXxxxx, Esquire
Blank Rome Comisky & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
If to Employee to:
Xxxxx X. Xxxxx
0000-00 Xxxxxx Xxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
6.2. Entire Understanding. This Agreement, together with all other
documents, instruments, certificates and agreements executed in connection
herewith, sets forth the entire understanding between the parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous,
written, oral, expressed or implied, communications, agreements and
understandings with respect to the subject matter hereof.
6.3. Modification. This Agreement shall not be amended, modified,
supplemented or terminated except in writing signed by both parties. No action
taken by Employer hereunder, including without limitation any waiver, consent or
approval, shall be effective unless approved by a majority of the Board or the
Chief Executive Officer.
6.4. Prior Agreements. Employee represents to Employer (1) that there
are no restrictions, agreements or understanding whatsoever to which Employee is
a party which would prevent or make unlawful his execution of this Agreement or
his employment hereunder, (2) that his execution of this Agreement and his
employment hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written to which he is a party or by which he is bound
and (3) that he is free and able to execute this Agreement and to enter into
employment by Employer.
6.5. Termination of Prior Employment Agreements. All prior employment
agreements between Employee and Employer (and/or any of its affiliates) are
hereby terminated as of the effective date hereof as fully performed on both
sides, provided that the execution and delivery of this Agreement shall not be
deemed to reduce any compensation or benefits or eliminate any other
entitlements or rights of Employee that were earned, vested or existed prior to
the effective date hereof.
6.6. Parties in Interest. This Agreement all rights of Employee
hereunder shall inure to the benefit of, bind and be enforceable by Employee and
his surviving spouse, and his heirs, personal representatives, estate and
beneficiaries, and Employer and its successors and
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assigns. This Agreement is a personal employment contract of Employer, being for
the personal services of Employee, and shall not be assignable by Employee.
6.7. Assignment. Employer, upon written consent of Employee, may
assign its rights and duties hereunder provided that the assignee is the
successor, by operation of law or otherwise, to the business of Employer, and
the nature of Employee's duties hereunder do not change in any material respect.
Employer will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Employer, by agreement, in form and substance satisfactory to
Employee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to perform it if
no such succession had taken place. Failure of Employer to obtain such agreement
and Employee's consent to the assignment prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Employee to
compensation from Employer in the same amount and on the same terms as he would
be entitled to hereunder if he terminated his employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the date of the termination of this
Agreement. As used in this Agreement, "Employer" shall mean Employer as
hereinabove defined and any successor to its business and/or assets as aforesaid
which executed and delivers the agreement provided for in this Section or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
6.8. Severability. If any provision of this Agreement is construed to
be invalid, illegal or unenforceable, then the remaining provisions hereof shall
not be affected thereby and shall be enforceable without regard thereto.
6.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original
hereof, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one counterpart hereof.
6.10. Section Headings. Section and subsection headings in this
Agreement are inserted for convenience of reference only, and shall neither
constitute a part of this Agreement nor affect its construction, interpretation,
meaning or effect.
6.11. References. All words used in this agreement shall be construed
to be of such number and gender as the context requires or permits.
6.12. Controlling Law. This Agreement is made under, and shall be
governed by, construed and enforced in accordance with, the substantive laws of
Pennsylvania applicable to agreements made and to be performed entirely therein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above mentioned, under Seal, intending to be legally bound
hereby.
EMPLOYER: STV GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxxx X. Xxxxxxxx
(Authorized Officer)
EMPLOYEE: /s/ Xxxxx X. Xxxxx
-------------------------
Xxxxx X. Xxxxx
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APPENDIX A
Definition of Change in Control
For purposes of this Agreement, "change of control" shall mean the
occurrence of one or more of the following: (A) The acquisition, other than from
Employer, by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) (a "Person") or 30% or more of either (i)
the then outstanding shares of Common Stock of Employer (the "Outstanding
Employer Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of Employer entitled to vote generally in the
election of directors (the "Employer Voting Securities"), provided, however,
that any acquisition by (x) Employer or any of its subsidiaries, or any employee
benefit plan (or related trust) sponsored or maintained by Employer or any of
its subsidiaries or (y) any Person that is eligible, pursuant to Rule 13d-1(b)
under the Exchange Act, to file a statement on Schedule 13G with respect to its
beneficial ownership of Employer Voting Securities, whether or not such Person
shall have filed a statement on Schedule 13G, unless such Person shall have
filed a statement on Schedule 13D with respect to beneficial ownership of 30% or
more of Employer Voting Securities or (z) any corporation with respect to which,
following such acquisition, more than 60% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Employer Common Stock
and Employer Voting Securities immediately prior to such acquisition in
substantially the same proportion as their ownership, immediately prior to such
acquisition, of the Outstanding Employer Common Stock and Employer Voting
Securities, as the case may be, shall not constitute a Change of Control, or (B)
Individuals who, as of the date hereof, constitute the Board of Directors of
Employer (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to the date hereof whose election or nomination for election by
Employer's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of Employer (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or (C) Approval by the shareholders of
Employer of a reorganization, merger or consolidation (a "Business
Combination"), in each case, with respect to which all or substantially all of
the individuals and entities who were the respective beneficial owners of the
Outstanding Employer Common Stock and Employer Voting Securities immediately
prior to such Business
Combination do not, following such Business Combination, beneficially own,
directly or indirectly, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of Employer resulting from Business Combination in
substantially the same proportion as their ownership immediately prior to such
Business Combination of the Outstanding Employer Common Stock and Employer
Voting Securities, as the case may be; or (D) (i) a complete liquidation or
dissolution of Employer or of (ii) sale or other disposition of all or
substantially all of the assets of Employer other than to a corporation with
respect to which, following such sale or disposition, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors is then owned beneficially, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, all of the Outstanding Employer Common
Stock and Employer Voting Securities immediately prior to such sale or
disposition in substantially the same proportion as their ownership of the
Outstanding Employer Common Stock and Employer Voting Securities, as the case
may be, immediately prior to such sale or disposition.
