55
CDI CORP.
EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
this 29th day of October, 1997 between CDI Corp., a Pennsylvania
corporation (the "Company"), and Xxxx Xxxxxxx ("Executive").
The Company desires to employ Executive, and Executive is willing
to be employed by the Company, upon the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and intending to be legally bound hereby, the parties agree as
follows:
TERMS
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SECTION 1. Employment.
----------
The Company hereby employs Executive, and Executive hereby accepts
such employment and agrees to serve as the Company's Executive Vice
President and Chief Financial Officer, and to render services to the
Company and its subsidiaries, divisions and affiliates, during the
Employment Period set forth in Section 3, subject to the terms and
conditions hereinafter set forth.
SECTION 2. Management & Board Duties.
-------------------------
Executive shall carry out such duties as are customarily
associated with the position of Executive Vice President and Chief
Financial Officer, including but not limited to providing leadership and
direction to the Company s financial functions to ensure effective
accomplishment of both financial and business objectives. Executive
will direct the Company s treasury, control, financial planning and
reporting, audit, tax and investor relations activities. Executive
shall perform these duties under the direction of the Company s
President and chief Executive Officer ( the President ).
SECTION 3. Term.
----
The term of Executive's employment under this Agreement (the
"Employment Period") is three years and shall commence as of November
10, 1997 and, unless sooner terminated pursuant to Section 7 of this
Agreement, shall continue until the close of business on the third
anniversary of the date hereof. At the end of such original period, the
Employment Period shall be automatically extended thereafter for
successive one-year periods unless sooner terminated pursuant to Section
7 of this Agreement or unless either party notifies the other
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party in writing at least 90 days prior to the scheduled expiration of
the Employment Period that it does not wish to extend the Employment
Period for any additional one-year periods.
SECTION 4. Extent of Services.
------------------
During the Employment Period, Executive shall devote his full
business time and attention and give his best efforts, skills and
abilities exclusively to providing leadership and direction to the
financial and related operations of the Company and its subsidiaries,
divisions and affiliates. Executive shall perform his services
hereunder at the Company's offices in Philadelphia, Pennsylvania and at
such other places as are required for the effective rendering of such
services. During the Employment Period, Executive shall, if elected or
appointed, serve as an executive officer and/or director of any
subsidiary, division or affiliate of the Company and shall hold, without
any compensation other than that provided for in this Agreement, the
offices in any such subsidiary, division or affiliate to which Executive
may, at any time or from time to time, be elected or appointed.
SECTION 5. Compensation and Benefits.
-------------------------
(a) Base Salary. During the Employment Period, Executive shall
receive as compensation for his services a salary at the rate of Two
Hundred Sixty-Five Thousand Dollars ($265,000) per annum during 1997 (to
be increased to $270,000 during 1998 and $275,000 during 1999) payable
in equal installments at such intervals as the Company pays its senior
executive officers generally (the "Base Salary"). The Base Salary shall
be reviewed annually by the President and may be increased if so
determined by the President in his absolute and sole discretion.
(b) Restricted Stock. As of the date of this Agreement, Executive
shall be granted 5,400 restricted shares of the Company's Common Stock
(the "Restricted Stock") pursuant to the terms of a Restricted Stock
Agreement to be entered into between Executive and the Company.
Pursuant to Section 6 of the Restricted Stock Agreement, Executive shall
not be able to sell, transfer or otherwise benefit from any of the
Restricted Stock until such shares vest pursuant to Section 4 of the
Restricted Stock Agreement. Of the 5,400 shares of Restricted Stock,
one-half of those shares (2,700 shares) shall vest pursuant to the bonus
award provision in Section 5(d) of this Agreement. Any share of
Restricted Stock that does not vest on the first date that such share
was eligible to vest because Executive did not receive the Maximum Bonus
Award shall be forfeited on that date and shall never vest. The other
half of the 5,400 shares of Restricted Stock (2,700 shares) shall vest
over time as described in Section 4 of the Restricted Stock Agreement.
(c) Nonqualified Stock Options. As of the date hereof, Executive
shall be granted non-qualified stock options to purchase 50,000 shares
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of the Company's Common Stock pursuant to the terms of a Non-Qualified
Stock Option Agreement to be entered into between Executive and the
Company.
(d) Bonus Awards. Executive shall be eligible to receive bonus
compensation during the Employment Period. Such bonus awards shall be
based upon the Company's annual financial results, as reflected in the
Company's audited financial statements for such period, and, if earned,
shall consist of a cash payment and, beginning in 1998, a vesting of
Restricted Stock.
The maximum cash bonus award and the vesting of the maximum number of
shares of Restricted Stock available in a given year are, together,
referred to as the Maximum Bonus Award for that year. However, after
all of the 2,700 shares of Restricted Stock referred to above have
either been vested or forfeited, the Maximum Bonus Award shall consist
solely of an annual cash payment plus the vesting of any additional
shares of restricted stock that the Company may determine to make
available to Executive. The bonus award during Executive's employment
with the Company shall be determined as follows:
(i) 1997. The maximum cash bonus award for 1997 is
$150,000 and shall be determined in accordance with the performance
goals set forth below and shall be reduced on a pro-rata basis to
reflect that this period is less than a full calendar year. Since no
shares of Restricted Stock are eligible for vesting with respect to 1997
performance, the pro-rated cash payment that Executive may earn in 1997
is referred to herein as the "1997 Maximum Bonus Award", and shall be
determined as follows:
(A) Executive shall have the opportunity to receive up
to 75% of the 1997 Maximum Bonus Award based on the President s
determination of whether the qualitative goals set forth on Exhibit A to
this Agreement have been met during 1997;
(B) Executive shall have the opportunity to receive up
to one-eighth of the 1997 Maximum Bonus Award based on the Company's
achievement of its revenue target as provided in the Company's 1997
operational plan ("1997 Revenue Target"). Executive shall receive a
portion of the 1997 Maximum Bonus Award under this Section 7(d)(i)(B)
equal to 12.5 multiplied by the "Revenue Factor." The Revenue Factor
shall be a percentage ranging from 0% to 100%, with 100% representing
that the Company's 1997 revenue is equal to or exceeds the 1997 Revenue
Target, and with 0% representing that the Company's 1997 revenue is
equal to or less than the Company's 1996 revenue. If the Company's 1997
revenue is greater than its 1996 revenue, but less than its 1997 Revenue
Target, the Revenue Factor shall equal a fraction, the numerator of
which is the Company's 1997 revenue minus the Company's 1996 revenue,
and the denominator of which is the 1997 Revenue Target minus the
Company's 1996 revenue; and
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(C) Executive shall have the opportunity to receive up
to one-eighth of the 1997 Maximum Bonus Award based on the Company's
achievement of its earnings before interest and taxes ("EBIT") target as
provided in the Company's 1997 operational plan ("1997 EBIT Target").
Executive shall receive a portion of the 1997 Maximum Bonus Award under
this Section 7(d)(i)(C) equal to 12.5 multiplied by the "EBIT Factor."
The EBIT Factor shall be a percentage ranging from 0% to 100%, with 100%
representing that the Company's 1997 EBIT is equal to or exceeds the
1997 EBIT Target, and with 0% representing that the Company's 1997 EBIT
is equal to or less than the Company's 1996 EBIT. If the Company's 1997
EBIT is greater than its 1996 EBIT, but less than its 1997 EBIT Target,
the EBIT Factor shall equal a fraction, the numerator of which is the
Company's 1997 EBIT minus the Company's 1996 EBIT, and the denominator
of which is the 1997 Target EBIT minus the Company's 1996 EBIT.
(ii) Calendar Years 1998 and Thereafter. The maximum cash
bonus awards for 1998 and 1999 shall be $155,000 and $160,000,
respectively. The President shall establish goals for Executive for
these and future calendar years based on the final operational plan and
budget of the Company for such year, and Executive shall receive a
percentage of the Maximum Bonus Award, up to 100%, depending on whether
the Company attains all or a portion of such goals.
Any of the Company's financial results that are used to calculate
bonuses under this Section 7(d) shall be taken only from the Company's
audited financial statements for the applicable year.
(iii) Payment of Bonuses and Vesting of Restricted Stock.
All cash bonuses payable under this Section 5(d) shall be paid to
Executive within two weeks after the delivery of audited financial
statements to the Company for the prior calendar year. Any shares of
Restricted Stock that vest as a result of Executive receiving all or a
portion of the Maximum Bonus Award shall become vested on the same date
that the cash bonus is paid to Executive. No bonuses will be paid to
Executive, and no shares of Restricted Stock shall vest, if Executive's
employment with the Company has terminated before the bonus has been
paid, regardless of whether he would have been entitled to a bonus based
on the Company's financial results for the prior year, unless the
Company terminates Executive without Cause after a year has ended but
before the bonus becomes payable for such year.
(e) Employee Benefits. During the Employment Period, Executive
shall be entitled to participate in all employee benefit plans and
programs as the Company shall provide generally to other senior
executive officers of the Company from time to time, other than any
bonus plans applicable to such other executives. Executive shall be
entitled annually to 4 weeks of paid vacation.
(f) All payments to Executive or his estate made pursuant to this
Agreement shall be subject to such withholding as may be required by any
applicable laws.
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SECTION 6. Expense Reimbursements.
----------------------
Temporary Housing and Relocation. Executive currently maintains a
primary residence in Wheaton, Illinois. In connection with Executive
becoming Executive Vice President and Chief Financial Officer of the
Company, shall be required to maintain his primary residence in the
Philadelphia metropolitan area. The Company shall reimburse Executive
for the reasonable cost of maintaining a temporary residence in the
Philadelphia metropolitan area until the earlier of (i) Executive
occupying his new residence in the Philadelphia metropolitan area, or
(ii) February 1, 1998. The Company shall also reimburse Executive for
the reasonable moving expenses he incurs in connection with relocating
from Wheaton, Illinois to the Philadelphia metropolitan area in
accordance with the Company's policies generally applicable to its
senior executive officers.
(b) Ordinary Business Expenses. During the Employment Period, the
Company shall reimburse Executive for all reasonable and itemized out-
of-pocket expenses incurred by Executive in the ordinary course of the
Company's business, provided such expenses are properly reported to the
Company in accordance with its accounting procedures.
SECTION 7. Termination.
(a) The Employment Period may be terminated by either the
President on behalf of the Company or the Executive at any time or for
any reason, as provided in this Section 7(a). In addition to the
scheduled expiration of the Employment Period set forth in Section 3,
the Employment Period shall termiante upon the earliest to occur of the
following:
(i) the Executive's death or Disability;
(ii) delivery by the Company to Executive of a written
notice of the Company's election to terminate Executive's employment
hereunder, for any reason whatsoever; or
(iii) the close of business on the day which is 30 days after
the date on which the Executive shall have delivered to the Company
written notice of Executive's election to terminate Executive's
employment hereunder.
(b) For purposes of this Agreement, "Disability" shall have the
same meaning as "Total Disability" under the CDI Corporation Long Term
Disability Benefits Program, or such other comparable program as may
then be in effect that provides long term disability coverage to the
Company's management employees.
(c) For purposes of this Agreement, "Cause" means any one or more
of the following bases for termination of Executive's employment with
the Company:
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(i) Executive's commission of a felony or other crime
involving moral turpitude;
(11) Executive's refusal to perform such services as may be
reasonably delegated or assigned to Executive, consistent with his
position, by the President; provided, however, that a termination under
this Section 7(c)(ii) shall not be for Cause unless the Company provides
written notice to Executive of its intention to terminate Executive for
Cause under this Section 7(c)(ii), and Executive fails, to the
reasonable satisfaction of the Company, to cure the defects stated in
such written notice within ten days after the notice was given to
Executive;
(iii) Executive's willful misconduct or gross negligence in
connection with the performance of his duties under this Agreement that
materially adversely affects Executive's ability to perform his duties
for the Company or materially adversely affects the Company;
(iv) Executive's material breach of any of the terms or
conditions of this Agreement;
(v) receipt of notice from Executive of Executive's
intention to terminate his employment with the Company; or
(vi) receipt of reliable information from another source
of Executive's intention to terminate his employment with the Company
unless Executive delivers a written statement to Company providing that
he does not intend to terminate his employment with the Company as long
as such statement is delivered to the Company no later than 48 hours
after the Company has asked Executive whether its information regarding
his intended termination is accurate.
(d) Following any termination of Executive's employment hereunder,
all obligations of the Company under this Agreement shall terminate
except (i) any obligations with respect to the payment of accrued and
unpaid salary or expense reimbursements under Sections 5 or 6 hereof
through the date of Executive's termination of employment hereunder, and
(ii) any obligations as set forth in Section 7(e).
(e) In the event of any termination of Executive's employment (i)
by the Company other than for Cause; (ii) by Executive for Good Reason,
as hereinafter defined, or (iii) as a result of Executive's death or
Disability, the Company shall continue to pay Executive his Base Salary
in the same intervals and amounts that were in effect immediately prior
to termination, until the later of (a) one year from the date of such
termination or (b) the next scheduled expiration of the Employment
Period, without regard for any renewals that would or might have taken
place but for Executive's termination of employment. The period during
which the Company is required to continue to pay Executive his Base
Salary under this Section 7(e) is referred to as the "Severance Period."
During the Severance Period, the Company shall continue to
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pay for medical benefit plans and programs for Executive comparable to
those in which Executive participated and for which the Company paid
immediately prior to Executive's termination (except to the extent
Executive receives comparable benefits from another employer).
Notwithstanding the above, no amounts described in this Section 7(e)
shall be paid or become payable to Executive during the Severance Period
until Executive has executed a valid release and waiver of all claims
and potential claims against the Company and other related parties in a
form that is reasonably satisfactory to the Company, and any required
waiting period under such release and waiver has expired and Executive
has not revoked the release during such waiting period.
(i) "Good Reason" exists if the Executive voluntarily
terminates employment with the Company following a Change in Control, as
hereinafter defined, because (A) Executive is assigned duties that are
demeaning or otherwise materially inconsistent with the duties currently
performed by Executive, or (B) Executive's place of employment with the
Company is moved outside the Philadelphia metropolitan area. Before the
Executive terminates for Good Reason, he must notify the Company in
writing of his intention to terminate and the Company shall have 15 days
after receiving such written notice to remedy the situation, if
possible.
(ii) "Change in Control" shall mean a change in control of a
nature that would be required to be reported in response to Item 1 of
Form 8-K promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), provided, that, without limitation, such a change
in control shall be deemed to have occurred if (A) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Act), other than the
Company or any "person" who on the date hereof is a director or officer
of the Company, is or becomes the "beneficial owner," (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the
Company's then outstanding securities; or (B) during any period of two
consecutive years during the term of this Agreement, individuals who at
the beginning of such period constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board, unless the election of each director who was not a director at
the beginning of such period has been approved in advance by directors
representing at least a majority of the directors then in office who
were members of the Incumbent Board or whose election was approved by
the Incumbent Board.
(f) Any termination by the Company or by Executive of Executive's
employment hereunder shall be communicated by written notice.
(g) Any severance compensation granted in this Section 7 and any
earned compensation described in Section 7(d) shall be the sole and
exclusive compensation or benefit due to Executive upon termination of
Executive's employment.
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SECTION 8. Representations, Warranties and Acknowledgments of
--------------------------------------------------
Executive.
---------
(a) Executive represents and warrants that his experience
and capabilities are such that the provisions of Section 9 will not
prevent him from earning his livelihood, and acknowledges that it would
cause the Company serious and irreparable injury and cost if Executive
were to use his ability and knowledge in competition with the Company or
to otherwise breach the obligations contained in Section 9.
(b) Executive acknowledges that (i) during the term of Executive's
employment with the Company, Executive will have access to Confidential
Information; (ii) such Confidential Information is proprietary, material
and important to the Company and its non-disclosure is essential to the
effective and successful conduct of the Company's business; (iii) the
Company's business, its customers' business and the businesses of other
companies with which the Company may have commercial relationships could
be damaged by the unauthorized use or disclosure of this Confidential
Information; and (iv) it is essential to the protection of the Company's
goodwill and to the maintenance of the Company's competitive position
that the Confidential Information be kept secret, and that Executive not
disclose the Confidential Information to others or use the Confidential
Information to Executive's advantage or the advantage of others.
(c) Executive acknowledges that as the Company's Executive Vice
President and Chief Financial Officer, Executive will be put in a
position of trust and confidence and have access to Confidential
Information, will be supervising the financial operations of the Company
and the employees working in those operations, will be in contact with
customers and prospective customers, will participate in the preparation
and submission of bids and proposals to customers and prospective
customers, and in the formulation and implementation of the Company's
strategic plans.
(d) Executive acknowledges that as the Company's Executive Vice
President and Chief Financial Officer, it is essential for the Company's
protection that Executive be restrained following the termination of
Executive's employment with the Company from soliciting or inducing any
of the Company's officers and management employees to leave the
Company's employ, hiring or attempting to hire any of the Company's
officers or management employees, soliciting the Company's customers and
suppliers for a competitive purpose, and competing against the Company
for a reasonable period of time.
(e) Executive represents and warrants that Executive is not bound
by any other agreement, written or oral, which would preclude Executive
from fulfilling all the obligations, duties and covenants in this
Agreement. Executive also represents and warrants that Executive will
not use, in connection with his employment under this Agreement, any
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materials which may be construed to be confidential to a prior employer
or other persons or entities. In the event of a breach of this Section
8 which results in damage to the Company, Executive will indemnify and
hold the Company harmless with respect to such damage.
References in this Section 8 to the Company shall include the Company,
its subsidiaries, divisions and affiliates.
SECTION 9. Executive's Covenants and Agreements.
------------------------------------
(a) Executive agrees to maintain full and complete records of all
transactions and of all services performed by Executive on behalf of the
Company and to submit this information to the Company in the manner and
at the times that the Company may, from time to time, direct.
(b) Executive agrees to devote Executive's entire business time,
ability and attention to the Company's business during the term of this
Agreement. Executive further agrees not to, directly or indirectly,
render any services of a business, commercial or professional nature to
any other person or organization, whether for compensation or otherwise,
without the Company's prior written consent.
(c) Executive agrees to abide by and comply with all personnel and
company practices and policies applicable to Executive.
(d) Executive shall promptly and completely disclose to the
Company and the Company or its customers will own all rights, title and
interest to any Inventions made, recorded, written, first reduced to
practice, discovered, developed, conceived, authored or obtained by
Executive, alone or jointly with others, during the term of Executive's
employment with the Company (whether or not such Inventions are made,
recorded, written, first reduced to practice, discovered, developed,
conceived, authored or obtained during working hours) and for one year
after termination of Executive's employment with the Company. Executive
agrees to take all such action during the term of Executive's employment
with the Company or at any time thereafter as may be necessary,
desirable or convenient to assist the Company or its customers in
securing patents, copyright registrations, or other proprietary rights
in such Inventions and in defending and enforcing the Company's or such
customer's rights to such Inventions, including without limitation the
execution and delivery of any instruments of assignments or transfer,
affidavits, and other documents, as the Company or its customers may
request from time to time to confirm the Company's or its customers'
ownership of the Inventions. Executive represents and warrants that as
of the date hereof there are no works, software, inventions, discoveries
or improvements (other than those included in a copyright or patent or
application therefor) which were recorded, written, conceived, invented,
made or discovered by Executive before entering into this Agreement and
which Executive desires to be removed from the provisions of this
Agreement.
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(e) For purposes of this Agreement, "Inventions" means concepts,
developments, innovations, inventions, information, techniques, ideas,
discoveries, designs, processes, procedures, improvements, enhancements,
modifications (whether or not patentable), including, but not limited
to, those relating to hardware, software, languages, models, algorithms
and other computer system components, and writings, manuals, diagrams,
drawings, data, computer programs, compilations and pictorial
representations and other works (whether or not copyright-able).
Inventions does not include those which are made, developed, conceived,
authored or obtained by Executive without the use of the Company's
resources and which do not relate to any of the Company's past, present
or prospective activities.
(f) During and after the term of Executive's employment with the
Company, Executive will hold all of the Confidential Information in the
strictest confidence and will not use any Confidential Information for
any purpose and will not publish, disseminate, disclose or otherwise
make any Confidential Information available to any third party, except
as may be required in connection with the performance of Executive's
duties hereunder.
(g) For purposes of this Agreement, "Confidential Information"
means all information, data, know-how, systems and procedures of a
technical, sensitive or confidential nature in any form relating to the
Company or its customers, including without limitation about Inventions,
all business and marketing plans, marketing and financial information,
pricing, profit margin, cost and sales information, operations
information, forms, contracts, bids, agreements, legal matters,
unpublished written materials, names and addresses of customers and
prospective customers, systems for recruitment, contractual
arrangements, market research data, information about employees,
suppliers and other companies with which the Company has a commercial
relationship, plans, methods, concepts, computer programs or software in
various stages of development, passwords, source code listings and
object code.
(h) All files, records, reports, programs, manuals, notes,
sketches, drawings, diagrams, prototypes, memoranda, tapes, discs, and
other documentation, records and materials in any form that in any way
incorporate, embody or reflect any Confidential Information or
Inventions will belong exclusively to the Company and its customers and
Executive will not remove from the Company's or its customers' premises
any such items under any circumstances without the prior written consent
of the party owning such item. Executive will deliver to the Company
all copies of such materials in Executive's control upon the Company's
request or upon termination of Executive's employment with the Company
and, if requested by the Company, will state in writing that all such
materials were returned.
(i) If Executive's employment is terminated for any reason,
including resignation by Executive or termination by the Company, with
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or without Cause, then for a period which extends to the later of two
years immediately following Executive's termination or the date of which
the Employment Period was scheduled to expire, Executive 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. "Competing Business" means any business
or other enterprise which engages in the staffing business; and
(ii) directly or indirectly, solicit, interfere with or
attempt to entice away from the Company, any officer or management
employees of the Company or anyone who was one of the Company'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 the Company, any customer on behalf of a Competing Business.
References in this Section 9 to the Company shall include the Company,
its subsidiaries, divisions and affiliates.
SECTION 10. Remedies.
--------
Executive acknowledges that his promised services hereunder are of
a special, unique, unusual, extraordinary and intellectual character,
which give them peculiar value the loss of which cannot be reasonably or
adequately compensated in an action of law, and that, in the event there
is a breach hereof by Executive, the Company will suffer irreparable
harm, the amount of which will be impossible to ascertain. Accordingly,
the Company shall be entitled, if it so elects, to institute and
prosecute proceedings in any court of competent jurisdiction, either at
law or in equity, to obtain damages for any breach or to enforce
specific performance of the provisions or to enjoin Executive from
committing any act in breach of this Agreement. The remedies granted to
the Company in this Agreement are cumulative and are in addition to
remedies otherwise available to the Company at law or in equity. If the
Company is obliged to resort to the courts for the enforcement of any of
the covenants of Executive contained in Section 9 hereof, each such
covenant shall be extended for a period of time equal to the period of
such breach, if any, which extension shall commence on the later of (i)
the date on which the original (unextended) term of such covenant is
scheduled to terminate or (ii) the date of the final court order
(without further right of appeal) enforcing such covenant.
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SECTION 11. Waiver of Breach.
----------------
The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a
waiver of any other or subsequent breach by the other party of such or
any other provision. No delay or omission by the Company or Executive
in exercising any right, remedy or power hereunder or existing at law or
in equity shall be construed as a waiver thereof, and any such right,
remedy or power may be exercised by the Company or Executive from time
to time and as often as may be deemed expedient or necessary by the
Company or Executive in its or his sole discretion.
SECTION 12. 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 the Company:
CDI Corp.
0000 Xxxx Xxxxxxxx Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Board of Directors
with a required copy to:
CDI Corp.
0000 Xxxx Xxxxxxxx Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
To Executive:
Xxxx Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, 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 third 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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SECTION 13. Severability.
------------
If any term or provision of this Agreement or the application
thereof to any person or circumstance shall, to any extent, be held
invalid or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement or the application of any such term or
provision to persons or circumstances other than those as to which it is
held invalid or unenforce- able, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to
the fullest extent permitted by law. If any of the provisions contained
in this Agreement shall for any reason be held to be excessively broad
as to duration, scope, activity or subject, it shall be construed by
limiting and reducing it, so as to be valid and enforceable to the
extent compatible with the applicable law or the determination by a
court of competent jurisdiction.
SECTION 14. Governing Law; Exclusive Choice of Forum.
----------------------------------------
The implementation and interpretation of this Agreement shall be
governed by and enforced in accordance with the laws of the Commonwealth
of Pennsylvania without giving effect to the conflicts of law provisions
thereof. The parties hereby submit to the exclusive jurisdiction of,
and waive any venue objections against, the United States District Court
for the Eastern District of Pennsylvania and the state and local courts
of the Commonwealth of Pennsylvania, Philadelphia County, for any
litigation arising out of this Agreement.
SECTION 15. Binding Effect and Assignability.
--------------------------------
The rights and obligations of both parties under this Agreement
shall inure to the benefit of and shall be binding upon their heirs,
successors and assigns. Executive's rights under this Agreement shall
not, in any voluntary or involuntary manner, be assignable and may not
be pledged or hypothecated without the prior written consent of the
Company.
SECTION 16. 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.
SECTION 17. Survival.
--------
Notwithstanding the termination of this Agreement or Executive's
employment hereunder for any reason, Sections 8, 9, 10, 13, 14 and 17
hereof shall survive any such termination.
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SECTION 18. Entire Agreement.
----------------
This instrument constitutes the entire agreement with respect to
the subject matter hereof between the parties hereto and replaces and
supersedes as of the date hereof any and all prior oral or written
agreements and understandings between the parties hereto. This
Agreement may only be modified by an agreement in writing executed by
both Executive and the Company.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
the date and year first written above.
COMPANY:
CDI CORP.
By:
---------------------------------------
Xxxxxxxx Xxxxxxx
President and
Chief Executive Officer
EXECUTIVE:
------------------------------------------
Xxxx Xxxxxxx
69
EMPLOYMENT AGREEMENT
CDI CORP. AND XXXX XXXXXXX
EXHIBIT A
PROPOSED 1997 QUALITATIVE CFO CDI CORP. GOALS
- COMPLETE FUNCTIONAL TRANSITION PROCESS WITH XX XXXXXX INCLUDING
BRIEFINGS WITH FINANCIAL RELATIONS BOARD AND KEY CDI STOCK ANALYSTS.
FINALIZE TRANSITION OF CDI ACCOUNTING CENTER TO FINANCE FUNCTION.
COMPLETE ORIENTATION AND BECOME ACTIVELY INVOLVED IN SELECTION OF
NEW COMPANY FINANCIAL SYSTEMS.
MAKE PRELIMINARY ASSESSMENT OF BUSINESS UNIT AND CORPORATE FINANCIAL
TALENT.
FINALIZE 1998 FINANCIAL GOALS WITH SENIOR MANAGEMENT, BOARD OF
DIRECTORS, AND KEY OPERATING UNIT PERSONNEL.
AS APPROPRIATE, HELP EVALUATE CURRENT I T ACQUISITION CANDIDATES
AND FINALIZE OFFER AND PURCHASE STRUCTURE.
COMPLETE ORIENTATIONS FROM KPMG (OUTSIDE AUDITORS), XXXXXX XXXXXXXX
(INSIDE AUDITORS), XXXX & CO., AND LAZARD FR RES.
HELP SELECT PRIMARY CDI INVESTMENT BANKING RELATIONSHIP.
CONCUR IN RENEGOTIATION OF CDI LINES OF CREDIT MINDFUL OF FUNDING
NEEDS FOR FUTURE ACQUISITIONS.
WORKING WITH CEO, DEVELOP PLANS TO EXECUTE NEW COMPANY STRATEGIC
DIRECTION WHEN FINALIZED.
70
CDI CORP.
RESTRICTED STOCK AGREEMENT
SECTION 1. Grant of Restricted Stock.
-------------------------
CDI Corp. (the "Company") hereby grants to Xxxx Xxxxxxx (the
"Executive ) 5,400 shares of the Company's common stock par value $.10
per share, subject to the restrictions set forth herein. The Company,
immediately following the execution of this Agreement, will issue or
transfer 5,400 shares of the Company's common stock ("Stock") to
Executive. The Stock shall consist of 10 certificates of 540 shares
each, all registered in Executive's name (the "Certificates"), subject
to the restrictions set forth herein.
SECTION 2. Custody of Stock.
----------------
The Company will deliver the Certificates to the Secretary of the
Company ("Secretary"), to be held in escrow in accordance with the terms
of this Agreement. Simultaneously with the delivery of the
Certificates, Executive will sign and deliver to the Secretary an
undated stock power with respect to each of the Certificates,
authorizing the Secretary to transfer title to each Certificate to the
Company, in the event that Executive forfeits all or a portion of the
Stock in accordance with the terms of this Agreement.
SECTION 3. Rights to Vote Stock.
--------------------
Executive will be considered a shareholder with respect to the
escrowed Stock and will have all corresponding rights, including the
right to vote the Stock and to receive all dividends and other
distributions with respect to the Stock, except that Executive will have
no right to sell, exchange, transfer, pledge, hypothecate or otherwise
dispose of any escrowed Stock, and Executive's rights in the escrowed
Stock will be subject to forfeiture as provided in Section 5 of this
Agreement.
SECTION 4. Vesting of Restricted Stock.
---------------------------
Executive will vest, if at all, in 2,700 of the shares of Stock at
the rate of 540 shares per year for each of years 1998 through 2002
pursuant to the terms of Section 5(d) of the Employment Agreement
between Executive and the Company, dated October 29, 1997 (the
"Employment Agreement"). Executive will vest in the other 2,700 shares
of Stock (the 2,700 Time-Vesting Shares ) at the rate of 540 shares per
year on the anniversary date of the Employment Agreement in each of the
years 1998 through 2002. If Executive s employment is terminated by the
Company other than for Cause, or as a result of Executive s death or
Disability, or if Executive terminates his employment for Good Reason,
as such terms are defined in the Employment Agreement, Executive shall
continue to vest in the Time-Vesting Shares for the
71
duration of the Severance Period, as such term is defined in the
Employment Agreement. If Executive s employment with the Company
terminates for any reason other than as specified in the immediately
preceding sentence, none of the unvested Time-Vesting Shares shall ever
vest and such shares shall be forfeited to the Company as of the date
that Executive s employment with the Company terminates. For all shares
of Stock in which Executive becomes vested, the escrow will terminate
and the Secretary will deliver the stock certificates to Executive as
soon as practicable after such shares vest.
SECTION 5. Forfeiture of Stock.
-------------------
Executive shall forfeit all remaining escrowed Stock upon the
termination of his service as an employee of the Company for any reason
other than a termination of his service by the Company without Cause, as
defined in the Employment Agreement, or upon any attempt by Executive to
sell, exchange, transfer, pledge, hypothecate or otherwise dispose or
encumber any of the escrowed Stock. Executive shall also forfeit any
shares of escrowed Stock that were subject to vesting under Section 5(d)
of the Employment Agreement, but which did not vest thereunder in a
given year because Executive was not entitled to the Maximum Bonus Award
for that year. Title to all forfeited shares of Stock shall be
transferred back to the Company as soon as reasonably practicable after
they are forfeited.
SECTION 6. Restriction on Transfer Rights of Shares.
----------------------------------------
Whenever shares of Stock vest under this Agreement or the
Employment Agreement, one-half of those shares of Stock may not be sold
or transferred until the second anniversary of their respective vesting
date, and the other half may be sold or transferred at any time on or
after their respective vesting date. With respect to any shares of
Stock the sale or transfer of which is restricted under this Section 6,
Executive may not engage in any transaction designed to provide him with
substantially the same economic benefit of a sale of any shares of Stock
so restricted, such as a short sale or a sale of a put option.
Certificates representing any shares of Stock so restricted will be
inscribed with an appropriate legend prohibiting such transfer.
SECTION 7. Compliance with Laws.
--------------------
All shares of Stock issued to Executive or his personal
representative shall be transferred in accordance with all applicable
laws, regulations or listing requirements of any national securities
exchange, and the Company may take all actions necessary or appropriate
to comply with such requirements including, without limitation,
withholding federal income and other taxes with respect to such Stock;
restricting (by legend or otherwise) such Stock as shall be necessary or
appropriate, in the opinion of counsel for the Company, to comply with
applicable federal and state securities laws, including Rule 16b-3 (or
any similar rule) of the Securities and Exchange Commission, which
72
restrictions shall continue to apply after the delivery of certificates
for the Stock to Executive or his personal representative; and
postponing the issuance or delivery of any Stock. Notwithstanding any
provision in this Agreement to the contrary, the Company shall not be
obligated to issue or deliver any Stock if such action violates any
provision of any law or regulation of any governmental authority or any
national securities exchange.
SECTION 8. Agreement Not to Affect Relationship with Company.
-------------------------------------------------
This Agreement shall not confer upon Executive any right to
continue in the employ or service of the Company.
SECTION 9. Adjustment for Capital Changes.
------------------------------
The number of shares of Stock subject to this Agreement shall be
appropriately adjusted in the event of a stock split, stock dividend,
recapitalization, or other capital change of the Company.
SECTION 10. Interpretation.
--------------
The Company shall have the sole power to interpret this Agreement
and to resolve any disputes arising hereunder.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
the date and year first written above.
COMPANY:
CDI CORP.
By:
---------------------------------------
Xxxxx Xxxxxxx
President and Chief Executive Officer
EXECUTIVE:
------------------------------------------
Xxxx Xxxxxxx
73
CDI CORP.
NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
SECTION 1. Grant of Option.
---------------
The CDI Corp. Board of Directors' Stock Option Committee, pursuant
to the authority granted to it under the CDI Corp. Non-Qualified Stock
Option and Stock Appreciation Rights Plan, as amended (the "Plan")
hereby grants to Xxxx Xxxxxxx (the "Optionee") an option (the "Option"
when reference is made to the right to purchase all of the Shares) to
purchase up to 50,000 shares of CDI Corp. common stock (the "Shares"
when reference is made to all or a portion of the shares subject to the
Option), according to the terms and conditions set forth herein and in
the Plan.
SECTION 2. Other Definitions.
-----------------
(a) "Board" means the board of directors of the Company.
(b) "Cause" means termination of Optionee's employment with the
Company resulting from any one or more of the following events:
(i) Optionee's commission of a felony or other crime
involving moral turpitude;
(ii) Optionee's refusal to perform such services as may be
reasonably delegated or assigned to Optionee, consistent with his
position, by the President; provided, however, that a termination under
this Section 2(b)(ii) shall not be for Cause unless the Company provides
written notice to Optionee of its intention to terminate Optionee for
Cause under this Section 2(b)(ii), and Optionee fails, to the reasonable
satisfaction of the Company, to cure the defects stated in such written
notice within ten days after the notice was given to Optionee;
(iii) Optionee's willful misconduct or gross negligence in
connection with the performance of his duties under his Employment
Agreement with the Company dated October 29, 1997 (the "Employment
Agreement") that materially adversely affects Optionee's ability to
perform his duties for the Company or materially adversely affects the
Company;
(iv) Optionee's material breach of any of the terms or
conditions of the Employment Agreement;
(v) receipt of notice from Optionee of Optionee's intention
to terminate his employment with the Company; or
74
(vi) receipt of reliable information from another source of
Optionee's intention to terminate his employment with the Company unless
Optionee delivers a written statement to Company providing that he does
not intend to terminate his employment with the Company as long as such
statement is delivered to the Company no later than 48 hours after the
Company has asked Optionee whether its information regarding his
intended termination is accurate.
(c) "Change in Control" shall mean a change in control of a nature
that would be required to be reported in response to Item 1 of Form 8-K
promulgated under the Securities Exchange Act of 1934, as amended (the
"Act"), provided, that, without limitation, such a change in control
shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act), other than the Company or
any "person" who on the date hereof is a director or officer of the
Company, is or becomes the "beneficial owner," (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of the Company's
then outstanding securities; or (ii) during any period of two
consecutive years during the term of this Agreement, individuals who at
the beginning of such period constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board, unless the election of each director who was not a director at
the beginning of such period has been approved in advance by directors
representing at least a majority of the directors then in office who
were members of the Incumbent Board or whose election was approved by
the Incumbent Board.
(d) "Committee" means the Stock Option Committee of the Board.
(e) "Company" means CDI Corp.
(f) "Date of Exercise" means the date on which the written notice
required by Section 8 below is received by the Treasurer of the Company.
(g) "Date of Grant" means November 10, 1997, the date on which the
Option is awarded pursuant to the Plan and this Agreement.
(h) "Disability" shall have the same meaning as "Total Disability"
under the CDI Corporation Long Term Disability Benefits Program, or such
other comparable program as may then be in effect that provides long
term disability coverage to the Company's management employees.
(i) "Fair Market Value" of a share of Stock means the closing
price of actual sales of shares on the New York Stock Exchange on a
given date or, if there are no such sales on such date, the closing
price of the shares of Stock on such exchange on the last date on which
there was a sale.
75
(j) "Good Reason" exists if the Optionee voluntarily terminates
employment with the Company following a Change in Control because (i)
the Optionee is assigned duties that are demeaning or otherwise
materially inconsistent with the duties currently performed by the
Optionee, or (ii) the Optionee's place of employment with the Company is
moved outside the Philadelphia metropolitan area. Before the Optionee
terminates for Good Reason, he must notify the Company in writing of his
intention to terminate and the Company shall have 15 days after
receiving such written notice to remedy the situation, if possible.
(k) "Option Price" means $40-11/16, representing the Fair Market
Value of a share of Stock on the last trading date immediately preceding
the Date of Grant.
(l) "President means the President and Chief Executive Officer of
the Company.
(m) "Stock" means the Company's common stock, par value $.10 per
share.
(n) "Termination Date" means the earliest of:
(i) the date on which Optionee's employment with the
Company terminates if such termination is by the Company for Cause or by
Optionee without Good Reason;
(ii) in the event of termination of Optionee's employment by
the Company without Cause or by Optionee for Good Reason, the date two
weeks after the date of such termination;
(iii) in the event of the death or Disability of the
Optionee, the date six months after the date of the Optionee's death or
Disability; or
(iv) November 9, 2007.
SECTION 3. Time of Exercise.
----------------
No Option shall be exercisable with respect to any Shares unless
the Option has vested with respect to such Shares in accordance with
Section 4 hereof. If vested, the Option may be exercised at any time
after vesting until the Termination Date in whole or in part.
SECTION 4. Option Vesting.
--------------
(a) Vesting. Subject to the accelerated vesting provisions of
Section 4(b) below, the Option will vest over time as to a certain
number of shares each year on the anniversary of the Date of Grant.
76
The following table shows the number of shares as to which the Option
will vest on the anniversary of the Date of Grant in each of the listed
years:
1998 1999 2000 2001 2002
---- ---- ---- ---- ----
10,000 10,000 10,000 10,000 10,000
Notwithstanding the above, no Shares will vest on or after the
Termination Date except as provided in Section 4(c) below.
(b) Accelerated Vesting. In addition to the vesting provisions
above, the Option shall vest and be immediately exercisable upon the
termination of the Optionee's employment with the Company following a
Change in Control of the Company if such termination is by the Company
without Cause or by the Optionee for Good Reason. In addition, if the
Company terminates Optionee's employment without Cause prior to three
years after the Date of Grant, any of the Shares scheduled to vest in
1998, 1999 and 2000 which have not vested shall vest and become
immediately exercisable upon such termination of employment.
SECTION 5. Payment for Shares by the Optionee.
----------------------------------
Full payment for Shares purchased upon the exercise of the Option
shall be made by check or bank draft.
SECTION 6. Nontransferability of Option.
----------------------------
The Option may not be transferred, in whole or in part, except by
will or the applicable laws of descent and distribution. The Option may
not be exercised by any person other than the Optionee or, in the case
of the Optionee's death, by the person to whom the Optionee's rights
have passed by will or by the applicable laws of descent and
distribution.
SECTION 7. Restriction on Transfer Rights of Shares.
----------------------------------------
Whenever Shares are purchased through the exercise of all or a
portion of the Option, one-half of the purchased Shares may not be sold
or transferred until the second anniversary of their respective Dates of
Exercise, and the other half may be sold or transferred at any time on
or after their respective Dates of Exercise.
With respect to any Shares the sale or transfer of which is
restricted under this Section 7, Optionee may not engage in any
transaction designed to provide him with substantially the same economic
benefit of a sale of any Shares so restricted, such as a short sale or a
sale of a put option. Certificates representing any Shares so
restricted will be inscribed with an appropriate legend prohibiting such
transfer.
77
SECTION 8. Manner of Exercise.
------------------
The Option shall be exercised by giving written notice of exercise
to the Company's Treasurer at 0000 Xxxx Xx., 00xx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000. Such notice must state the number of Shares
and the Group as to which the Option is exercised. Each such notice
shall be irrevocable once given. Notice of exercise must be accompanied
by full payment.
SECTION 9. Securities Laws.
---------------
The Committee may from time to time impose any conditions on the
exercise of the Option as it deems necessary or advisable to ensure that
all options granted under the Plan, and the exercise thereof, satisfy
Rule 16b-3 (or any similar rule) of the Securities and Exchange
Commission. Such conditions may include, without limitation, the
partial or complete suspension of the right to exercise the Option.
SECTION 10. Issuance of Certificates; Payment of Taxes.
------------------------------------------
(a) The Option can only be exercised as to whole shares of Stock.
Upon exercise of the Option and payment of the Option Price, a
certificate for the number of shares of Stock purchased through the
exercise will be issued and delivered by the Company to the Optionee,
provided that the Optionee has remitted to the Company an amount,
determined by the Company, sufficient to satisfy the applicable
requirements to withhold federal, state, and local taxes, or made other
arrangements with the Company for the satisfaction of such withholding
requirements.
(b) Subject to the provisions of Section 9 above, the Company may
also condition delivery of certificates for shares of Stock upon the
prior receipt from the Optionee of any undertakings that it determines
are required to ensure that the certificates are being issued in
compliance with federal and state securities laws.
SECTION 11. Rights Prior to Issuance of Certificates.
----------------------------------------
Neither the Optionee nor the person to whom the Optionee's rights
shall have passed by will or by the laws of descent and distribution
shall have any of the rights of a shareholder with respect to any shares
of Stock issuable upon exercise of the Option until the date of issuance
to the Optionee of a certificate for such shares as provided in Section
10 above.
SECTION 12. Option Not to Affect Relationship with Company.
----------------------------------------------
The Option shall not confer upon the Optionee any right to continue
in the employ or service of the Company.
78
SECTION 13. Adjustment for Capital Changes.
------------------------------
In case the number of outstanding shares of the Company's capital
stock is changed as a result of a stock dividend, stock split,
recapitalization, combination, subdivision, issuance of rights or other
similar corporate change, the Board shall make an appropriate adjustment
in the aggregate number of Shares subject to, and the Option Price of,
any then outstanding Option.
SECTION 14. Interpretation.
--------------
The Committee shall have the sole power to interpret this Agreement
and to resolve any disputes arising hereunder.
Intending to be legally bound, the parties have executed this
Agreement as of the Date of Grant.
For the Compensation and OPTIONEE
Stock Option Committee
of the Board of Directors of
CDI Corp.
By:
-------------------------- --------------------------
Xxxx Xxxxxxx
