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CONSULTING AGREEMENT
THIS IS A CONSULTING AGREEMENT (hereinafter referred to as
"Agreement") made as of this 7th day of April, 1997, by and between CDI
Corp., a Pennsylvania corporation (hereinafter referred to as "CDI"; as
the context requires in this Agreement, "CDI" will also refer to CDI
Corp.'s subsidiary, CDI Corporation) and Xxxxxx X. Xxxxxxxx (hereinafter
referred to as "Xxxxxxxx").
Background
X. Xxxxxxxx currently serves as chairman of CDI Corp.'s Board of
Directors, as its Chief Executive Officer and President and as a
director and/or officer of numerous CDI subsidiaries; and
X. Xxxxxxxx and CDI entered into an employment agreement on May 1,
1973 (hereinafter referred to as the "Employment Agreement"), which
governs the terms of Xxxxxxxx'x employment with CDI; and
X. Xxxxxxxx will retire from CDI and its subsidiaries as of April
7, 1997 and the Employment Agreement will terminate at that time; and
X. Xxxxxxxx and CDI desire to set forth in writing the consulting
arrangement to which Xxxxxxxx and CDI have agreed, Xxxxxxxx'x agreement
not to compete with CDI, and Xxxxxxxx'x release and waiver of claims
against CDI.
Agreement
NOW, THEREFORE, for and in consideration of the mutual promises and
undertakings set forth below, the sufficiency of which is hereby
acknowledged by both parties, and intending to be legally bound hereby,
CDI and Xxxxxxxx agree as follows:
1. Term; Termination of Employment Agreement.
(a) The consulting term of this Agreement (the "Consulting
Term") shall commence as of April 7, 1997 (the "Effective Date") and,
unless sooner terminated in accordance with Section 8, shall terminate
on the third anniversary of the Effective Date.
(b) Effective as of the Effective Date, Xxxxxxxx will retire
from employment with CDI, and will resign as Chief Executive Officer and
President of CDI and as a director and officer of all direct and
indirect subsidiaries of CDI (but not as a director of CDI Corp.).
Xxxxxxxx will remain an employee of CDI through April 6, 1997 under
the current terms and conditions of the Employment Agreement. CDI and
Xxxxxxxx agree that Xxxxxxxx'x employment under the Employment Agreement
will terminate on 12:01 a.m. April 7, 1997.
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(c) CDI shall pay to Xxxxxxxx on or before June 6, 1997, the
bonus to which he is entitled under Section 5(a) of the Employment
Agreement. For purposes of such Section 5(a), the last complete
accounting period shall be the period ending on March 31, 1997. In
addition, CDI shall pay to Xxxxxxxx on or before June 6, 1997, an amount
equal to two and three-quarters percent (2.75%) of twenty percent (20%)
of Earnings (as defined in the Employment Agreement) for the month of
April 1997.
(d) Following Xxxxxxxx'x termination of employment from CDI,
Xxxxxxxx, with such assistance from CDI as he may reasonably request,
may choose supplemental Medicare coverage (the "Insurance Policy") at a
cost that is reasonably acceptable to CDI. During the Consulting Term,
CDI will reimburse Xxxxxxxx for the same portion of the premiums for the
Insurance Policy that CDI contributed toward Xxxxxxxx'x medical
insurance coverage under the CDI group health insurance plan in effect
for CDI's active employees immediately prior to his termination of
employment from CDI.
2. Consulting Services. During the Consulting Term, Xxxxxxxx will
render up to sixty (60) days of consulting services to CDI during the
first year of the Consulting Term, and up to forty-five (45) days of
consulting services to CDI during each of the second and third years of
the Consulting Term. These services will be rendered at the request of
the then Chief Executive Officer of CDI at times reasonably convenient
to Xxxxxxxx. In consideration for the consulting services and for
Xxxxxxxx'x agreement not to compete contained in Section 5(b) of this
Agreement, CDI will pay Xxxxxxxx $450,000 per year during the Consulting
Term, such amount to be payable in equal monthly installments with such
payments to begin on or about May 7, 1997.
To aid in the provision of these consulting services, during
the Consulting Term CDI will arrange for both adequate office space for
Xxxxxxxx at Pennsylvania Institute of Technology ("PIT") and secretarial
support for Xxxxxxxx. All costs of the office space at PIT and the
secretarial support provided to Xxxxxxxx pursuant to this Section 2
shall be borne by CDI. CDI will reimburse Xxxxxxxx for his necessary
and reasonable out of pocket expenses incurred in connection with his
performance of these consulting services. Through April 6, 2002,
Xxxxxxxx also will attend World Presidents Organization ("WPO"),
Philadelphia Presidents Organization ("PPO") and World Affairs Council
("WAC") conferences and seminars on CDI's behalf as he did while
employed by CDI and will give reports to CDI regarding these conferences
and seminars as reasonably requested by CDI. CDI also will reimburse
his WPO, PPO and WAC membership fees and his travel (business class for
travel outside the United States), lodging, meals and related expenses
associated with attendance at WPO, PPO and WAC conferences and seminars
in accordance with CDI's past practice of reimbursing such expenses to
Xxxxxxxx.
3. Board Service. Xxxxxxxx agrees to continue to serve as a
director of CDI Corp. for the term to which he has been elected. Should
Xxxxxxxx be elected to serve on the Board of Directors of CDI Corp. at
any time during the Consulting Term, Xxxxxxxx agrees to serve
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on the Board of Directors of CDI Corp. for the term for which elected
and for no compensation other than the compensation provided by this
Agreement. Days of service with the Board of Directors or any
committee of the Board of Directors shall count as days of consulting
service for purposes of Section 2.
4. Confidentiality. Xxxxxxxx acknowledges that during his term of
employment with CDI he has had access to confidential information of
both a technical nature and of a sensitive nature relating to CDI and
its customers and will continue to have such access during the term of
this Agreement. Xxxxxxxx acknowledges that such confidential
information is proprietary, material and important to CDI and its non-
disclosure is essential to the effective and successful conduct of CDI's
business. Xxxxxxxx agrees that during and after the term of this
Agreement he will hold all of this confidential information in the
strictest confidence and will not use any of it for any purpose and will
not publish, disseminate, disclose or otherwise make any such
confidential information available to any third party, except as may be
required in connection with the performance of the consulting
contemplated under Section 2 of this Agreement, or if CDI gives Xxxxxxxx
prior written consent to use such confidential information. Xxxxxxxx
further agrees to return to CDI upon request all CDI property and any
other items that in any way incorporate, embody or reflect any
confidential information.
5. Non-Competition. Xxxxxxxx represents and warrants that his
experience and capabilities are such that the provisions of this Section
5 will not prevent him from earning his livelihood, and acknowledges
that it would cause CDI serious and irreparable injury and cost if
Xxxxxxxx were to use his ability and knowledge in competition with CDI
or to otherwise breach the obligations contained in this Section 5.
(a) Xxxxxxxx acknowledges that, it is essential for CDI's
protection that Xxxxxxxx be restrained following the termination of
Xxxxxxxx'x employment with and consulting for CDI from soliciting or
inducing any of CDI's officers and management employees to leave CDI's
employ, hiring or attempting to hire any of CDI's officers or management
employees, soliciting CDI's customers and suppliers for a competitive
purpose, and competing against CDI for a reasonable period of time.
(b) For a period of time from the Effective Date to the fifth
anniversary of the Effective Date, Xxxxxxxx agrees not to:
(i) own, manage, operate, finance, join, control, or
participate in the ownership, management, operation, financing or
control of, or be connected, directly or indirectly, as proprietor,
partner, shareholder, director, officer, executive, employee, agent,
creditor, consultant, independent contractor, joint venturer, investor,
representative, trustee or in any other capacity or manner whatsoever
with, any entity that engages or intends to engage in any Competing
Business anywhere in the world; but ownership of not more than one-
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tenth of one percent (.1%) of the outstanding stock of any publicly
traded company will not constitute a violation of this provision.
"Competing Business" means any business or other enterprise which
engages in any business conducted by CDI now or at any time during the
Consulting Term; and
(ii) directly or indirectly, solicit, interfere with or
attempt to entice away from CDI, any officer or management employees of
CDI or anyone who was one of CDI's officers or management employees
within 12 months prior to such contact, solicitation, interference or
enticement; and
(iii) contact, solicit, interfere with or attempt to
entice away from CDI, any customer on behalf of a Competing Business.
(c) References in this Section 5 to CDI shall include CDI, its
subsidiaries, divisions and affiliates.
(d) Xxxxxxxx acknowledges that in the event of a breach or
threat of a breach of any portion of this Section 5, CDI's remedies at
law will be inadequate, and in any such event CDI will be entitled to an
injunction to prevent breaches of this Agreement and to enforce
specifically the provisions hereof, in addition to any other remedy to
which CDI may be entitled at law or equity.
6. Release. Xxxxxxxx hereby, on behalf of himself, his
descendants, ancestors, dependents, heirs, executors, administrators,
assigns and successors, covenants not to make any claim or initiate any
lawsuit, and fully and forever releases and discharges CDI and its
subsidiaries, affiliates, divisions, successors, and assigns, together
with its past and present directors, officers, agents, attorneys,
insurers, employees, stockholders, and representatives (hereinafter
collectively referred to as the "CDI Group"), from any and all claims,
wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders or liabilities of whatsoever
kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected which Xxxxxxxx now owns or holds or
has at any time heretofore owned or held against the CDI Group, arising
out of or in any way connected with Xxxxxxxx'x employment or consulting
relationship with CDI, or the cessation of that employment or consulting
relationship, or any other transactions, occurrences, acts or omissions
or any loss, damage or injury whatsoever, known or unknown, suspected or
unsuspected, resulting from any act or omission by or on the part of the
CDI Group committed or omitted prior to the date of this Agreement,
including, but not limited to claims under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, any other
federal, state or local statute or ordinance which deals with
discrimination or any claim for severance pay, bonus, salary, sick
leave, holiday pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit or disability benefit. This
release and waiver of claims will not
apply with respect to (i) amounts payable to Xxxxxxxx with respect to
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his employment through April 6, 1997 under the Employment Agreement,
(ii) any vested benefits due Xxxxxxxx under any CDI Corp. benefit plan,
or (iii) any amounts payable to Xxxxxxxx under this Agreement.
7. Taxes. The parties agree that Xxxxxxxx will perform the
consulting services contemplated by Section 2 of this Agreement as an
independent contractor, and that the parties will not take a position on
their tax returns (both federal and state, income and employment)
inconsistent with this position. Xxxxxxxx warrants and agrees that he
is responsible for any federal, state, and local taxes which may be owed
by him by virtue of the receipt of any portion of the consideration paid
hereunder and agrees to fully indemnify CDI from and against any and all
claims by any governmental authority relating to Xxxxxxxx'x failure to
fully pay such taxes.
8. Termination. The Consulting Term shall automatically
terminate upon Xxxxxxxx'x death or his inability to perform the
consulting services requested of him due to his complete or partial
disability. CDI shall also have the right to terminate this Agreement,
by the vote of CDI's Board of Directors to so terminate, if Xxxxxxxx
breaches the provisions of this Agreement in any material respect;
provided, however, that a termination of this Agreement by CDI shall not
be effective unless CDI provides written notice to Xxxxxxxx of its
intention to terminate this Agreement due to Xxxxxxxx'x breach and
Xxxxxxxx fails, to the reasonable satisfaction of CDI, to cure the
defects stated in such written notice within thirty (30) days after the
notice was given to Xxxxxxxx.
9. Legal Advice. Xxxxxxxx acknowledges that he has been
encouraged to seek the advice of an attorney of his choice in regard to
this Agreement. Xxxxxxxx hereby acknowledges that he understands the
significance and consequences of this Agreement and represents that the
terms of this Agreement are fully understood and voluntarily accepted by
him.
10. Drafting. Both Xxxxxxxx and CDI have cooperated in the
drafting and preparation of this Agreement. Hence, in any construction
to be made of this Agreement, the same shall not be construed against
any party on the basis that the party was the drafter.
11. Revocation Period. Xxxxxxxx acknowledges that he was given at
least twenty-one (21) days to consider (while remaining free to execute
the Agreement at an earlier point in time) the terms of this Agreement
prior to his signing it. Xxxxxxxx further understands that he may
revoke this Agreement any time up to seven (7) days following the date
he signs the Agreement by giving written notice of such revocation to
CDI. Such notice must be dated no later than the seventh (7th) day
following the date on which he signed the Agreement and must be received
promptly thereafter by CDI.
12. Counterparts; Section Headings. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to
be an original, but all of which together shall constitute one and the
same instrument. The section headings of this Agreement are for
convenience of reference only.
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13. Entire Agreement. This Agreement constitutes the entire
agreement concerning all subject matters addressed herein. This
Agreement supersedes and replaces all prior negotiations. All
agreements, proposed or otherwise, whether written or oral, concerning
all subject matters covered herein are incorporated into this Agreement.
If any provision of this Agreement is determined by any court of
competent jurisdiction to be unenforceable by reason of its extending
for too long a period of time or over too large a geographical area or
by reason of its being too extensive in any other respect, it will be
deemed reformed to extend only over the longest period of time for which
it may be enforceable, and/or over the largest geographical area as to
which it may be enforceable and/or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such
court in such action. Any such determination of unenforceability or
subsequent reformation will not affect any other provision or
application of this Agreement which can be given effect without the
unenforceable or reformed provision and will not invalidate, render
unenforceable or require the reformation of such provision in any other
jurisdiction. The time period for Xxxxxxxx'x obligations contained in
Section 5 of this Agreement will be extended beyond the time period
specified therein by the length of time, if any, during which he has
been in breach (as determined by a court of competent jurisdiction in a
final, nonappealable judgment, ruling or order or by an arbitration) of
the provisions in Section 5.
14. Notices. All notices required or permitted hereunder shall be
made in writing by hand-delivery, certified or registered first-class
mail or air courier guaranteeing overnight delivery to the other party
at the following addresses:
To CDI: CDI Corp.
Xxxx Atlantic Tower - 35th Floor
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
To Xxxxxxxx: Xx. Xxxxxx X. Xxxxxxxx
000 Xxxxxxxx Xxxxx Xxxx
Xxxx Xxxx, XX 00000
or to such other address as either of such parties may designate in a
written notice served upon the other party in the manner provided
herein. All notices required or permitted hereunder shall be deemed
duly given and received when delivered by hand, if personally delivered;
on the fourth (4th) day next succeeding the date of mailing if sent by
certified or registered first-class mail, and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
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15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania.
WITNESS CDI CORP.
By:
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Dated: Dated:
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Xxxxxx X. Xxxxxxxx
Dated: Dated:
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