EMPLOYMENT AGREEMENT
BETWEEN
STV Group, Inc., Employer
AND
Xxxxxxx Xxxxxxxxxx, Employee
Made October 29, 1998
Effective on January 1, 1999
TABLE OF CONTENTS
BACKGROUND ................................................................1
1. Employment and Duties; Board of Directors . .......................2
1.1. Employment and Duties. ....................................2
1.2. Board of Directors ........................................3
2. Term ..............................................................3
3. Compensation ......................................................4
3.1. Salary ....................................................4
3.2. Annual Incentive ..........................................4
3.3. Long Term Incentives ......................................4
3.4. Welfare Benefits ..........................................5
3.5. Fringe Benefits and Business Expenses .....................5
3.5.1 Fringe Benefits ...................................6
3.5.2 Vacation ..........................................6
3.5.3 Reimbursement of Expenses .........................6
3.6. Retirement Benefits .......................................6
3.6.1 General............................................6
3.6.2 Medical Coverage ..................................6
3.6.3 Supplemental Retirement Benefits...................7
4. Termination .......................................................9
4.1. Notice of Termination .....................................9
4.2. Grounds for Termination ..................................10
4.2.1 Termination upon Death ...........................10
4.2.2 Termination upon Disability ......................10
4.2.3 Termination for Cause ............................11
4.2.4 Termination Other Than For Cause .................12
4.2.5 Termination For Good Reason ......................12
4.3. Compensation upon Termination for Good Reason ............13
4.4. Procedure Upon Termination ...............................13
5. Employee's Covenants .............................................14
5.1. Nondisclosure ............................................14
5.2. Noncompetition ...........................................15
5.3. Enforcement ..............................................16
5.4. Consideration ............................................17
5.5. Scope ....................................................17
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6. Miscellaneous .....................................................17
6.1. Notices....................................................17
6.2. Entire Understanding ......................................18
6.3. Modification ..............................................18
6.4. Prior Agreements ..........................................19
6.5. Termination of Prior Employment Agreements ................19
6.6. Parties in Interest .......................................19
6.7. Assignment ................................................20
6.8. Severability ..............................................21
6.9. Counterparts ..............................................21
6.10 Section Headings ..........................................21
6.11 References ................................................21
6.12 Controlling Law ...........................................21
EXHIBITS
Appendix: 23
A. Definition of Change of Control 23
ii
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made on October 29, 1998 and effective on January 1, 1999
by and between Xxxxxxx Xxxxxxxxxx ("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 and Employee are parties to an Employment Agreement, made
as of November 21, 1994, effective January 1, 1994, pursuant to which Employee
has been employed by Employer; and
WHEREAS, Employer desires to continue to retain the services of Employee on
and after January 1, 1999 under specific terms and conditions of employment; and
WHEREAS, Employee desires to continue to work for Employer on and after
January 1, 1999 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
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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; Board of Directors.
1.1. Employment and Duties.
Employer shall employ Employee as Employer's Chairman throughout the
term of employment set forth in Section 2 hereof. Employee shall carry out the
policies, programs, orders and resolutions adopted by the Board of Directors,
subject only to the direction of the Employer's Board of Directors. Employee
shall also have such other responsibilities and duties, consistent with his
position and expertise, as may from time to time be prescribed by the Board of
Directors of Employer and agreed to by Employee. it is understood that
Employee's work commitment to Employer will involve a portion, but not all, of
his business time, but that while engaged in the business and affairs of
Employer, Employee shall devote his best efforts to such business and affairs.
Nothing in this Agreement shall preclude the Employee from devoting reasonable
periods required for (i) personal business matters unrelated to Employer, (ii)
serving as a director or member of a committee of any organization involving no
conflict of interest with the interest of the Employer; (iii) delivering
2
lectures, fulfilling speaking engagements, teaching at educational institutions;
(iv) engaging in charitable and community activities; and (v) managing his
personal investments; and provided that such activities do not materially
interfere with the regular performance of his duties and responsibilities under
this Agreement. Employee agrees to serve without additional compensation, if
elected or appointed thereto, as a director of the Employer and any of its
subsidiaries and in one or more executive offices of any of the Employer's
subsidiaries, provided that the Employee is indemnified for serving in any and
all such capacities on a basis no less favorable than is currently provided in
the Bylaws of the Employer.
1.2.1. Board of Directors.
As a condition of his employment, Employee shall be nominated by
Employer's Board of Directors to stand for re-election to the Board of Directors
during the term of employment set forth in Section 2 hereof and Employer will
take all steps necessary to ensure such nomination and subsequent election.
2. Term. The term of Employee's employment under this Agreement shall be a
period of five (5) years commencing on January 1, 1999, and ending on December
31, 2003, unless further extended or sooner terminated in accordance with the
other provisions hereof (the "Term").
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3. Compensation.
3.1. Salary. Employer shall pay to Employee for services rendered
hereunder, in accordance with Employer's normal payroll practices for employees,
an annual base salary of Two Hundred and Twelve Thousand Dollars ($212,000).
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, at the minimum,
be increased annually by a cost-of-living factor based on the increase in the
Consumer Price Index - Urban Consumers for the immediately preceding calendar
year and be otherwise reviewed by the Compensation Committee of the Board of
Directors no less frequently than annually and may be increased, but not
decreased, 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 executive officers to the extent Employee is
eligible under the general provisions thereof, including, but not necessarily
limited to
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stock option plans, restricted stock plan, stock appreciation rights, and
performance units.
3.4. Welfare Benefits. During the Term, and subject to the other
provisions of this Agreement, Employee shall be entitled to participate and
shall be included in any welfare benefit plans of the Employer ("Welfare
Benefits"), including medical, generally available to executive officers, to the
extent Employee is eligible under the general provisions thereof. Employee shall
participate in such Plans on the same terms and conditions as all other senior
executive officers, except that, in addition, Employer shall provide Employee
with life insurance coverage in the amount of no less than $1 million.
3.5 Fringe Benefits and Business Expenses.
3.5.1. Fringe Benefits. During the Term, and subject to the other
provisions of this Agreement, in addition to any entitlements heretofore earned
by Employee under the terms of any prior agreement between Employer and
Employee, Employer shall provide Employee with and Employee shall be entitled to
the following (sometimes hereinafter referred to as "Fringe Benefits"):
(i) An automobile of such type as is comparable to that
currently provided. Employer shall maintain and pay for liability, collision and
comprehensive insurance covering such automobile, in such amounts and on such
terms as Employer deems appropriate.
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(ii) Club fees (initiation, dues and monthly charges) at
least comparable to those currently provided.
(iii) Personal financial planning and tax preparation
services, the annual cost of which shall not exceed $7,500.00.
(The above benefits are sometimes hereinafter referred to as "Fringe Benefits").
3.5.2. Vacation. Employee shall be entitled to unlimited vacation
during each year, subject to Employee's ability to perform his duties under this
Agreement.
3.5.3. Reimbursement of Expenses. Employee is authorized to incur
reasonable, ordinary, and necessary expenses in the course of Employer's
business. Employer shall reimburse Employee for such expenses ("Business
Expenses") advanced by Employee upon presentation by the Employee of an itemized
account of such expenditures in a manner prescribed by Employer.
3.6 Retirement Benefits.
3.6.1. General. 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").
3.6.2. Medical Coverage. Employee shall be entitled to, and
Employer shall provide, retiree
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medical coverage at least comparable to that currently in effect ("Medical
Retirement Benefits").
3.6.3. Supplemental Retirement Benefits. Commencing on the first
day of the month following termination of Employee's employment with Employer,
Employee shall be entitled to receive annual benefits from Employer under a
Supplemental Executive Retirement Plan ("SERP"), as described in this section
("Supplemental Retirement Benefits") in an amount equal to Employee's salary in
the final year of Employee's employment, by Employer as adjusted during the term
of this Agreement. This SERP benefit is fully vested and nonforfeitable. The
foregoing SERP benefit shall be payable monthly in equal installments for a
total period of fifteen (15) years of the lives of Employee and his spouse or of
the survivor next following the termination of Employee's employment with
Employer. As of January 1 of each year following the year in which payment of
the SERP benefit commences, the amount of the SERP benefit shall be increased by
a cost-of-living factor based on the increase in the Consumer Price Index-Urban
Consumers for the immediately preceding calendar year. Notwithstanding the
foregoing, if a change in control (as defined in Appendix A) shall occur before
the SERP benefit has been fully paid, the Employer shall i) within thirty (30)
days following such change of control provide to the Employee and Employee's
spouse, or the survivor, security for the life of such benefit in the form of a
fully funded annuity payment or other guarantee
7
administered by the Compensation Committee of the Board of Directors of the
Employer; or ii) the actuarial lump sum equivalent of the remaining benefit
shall be accelerated and paid to Employee or his surviving spouse in a single
lump sum in cash within forty-five (45) days following such change of control.
Any such annuity contract shall be issued by an insurance company having an A.M.
Best financial strength rating of at least A+ and a Standard & Poor's claims
paying ability rating of at least AA. Actuarial equivalence shall be determined
by the Compensation Committee of the Board of Directors of the Employer in
accordance with reasonable actuarial assumptions. The Compensation Committee,
with the consent and approval of the Employee, which consent and approval shall
not unreasonably be withheld, shall retain an independent third party actuarial
firm to determine the actuarial lump sum equivalent. In the event that the
Company shall elect to make payment of the SERP by annuity as provided above,
upon the death of Employee's surviving spouse within the 15-year term of the
SERP, the balance of any remaining SERP benefits which would have become due and
owing to Employee, or to Employee's surviving spouse, shall be payable to such
beneficiaries as may have been designated by Employee or Employee's surviving
spouse during their respective lifetimes. In addition, in the event that, as a
result of the Employer's election to make payment of the SERP by annuity as
provided above, any taxable income is recognized by Employee in advance of
receipt of payment of
8
the SERP in whole or in part, Employer shall, promptly upon its calculation,
advance to Employee, in cash, an amount sufficient to cover any of Employee's
federal, state and local tax liability with respect to any such taxable income
recognized by Employee as a consequence of Employer's election to make payment
of the SERP by annuity, as well as Employee's federal, state and local tax
liability with respect to such cash payment, which advance shall be repaid
without interest by the employee pari pasu as Employee receives payment of such
SERP.
(Collectively, the General Retirement Benefits, Medical Retirement Benefits and
Supplemental Retirement Benefits are referred to as "Retirement Benefits").
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.
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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 surviving
spouse, heirs, personal representatives or estate shall be entitled to (i) any
unpaid portion of his Compensation and Benefits accrued up to the Date of
Termination and shall also be entitled to reimbursement for any expenses
incurred by Employee hereunder and (ii) such rights as Employee's surviving
spouse may have under Employer's SERP.
4.2.2. Termination upon Disability. This Agreement shall
terminate immediately in the event that Employee becomes retired on account of
disability. Employee will be deemed to be retired on account of disability 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 Executive's usual and customary duties under this Agreement.
In the event that by reason of physical or mental injury or disease, Employee
has been unable to perform substantially the Executive's usual and customary
duties under this Agreement until the date of retirement on account of
disability, Employee shall continue to receive his compensation and benefits in
accordance with company policy with respect to disability benefits in effect at
the time of such disability.
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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 at a duly convened
meeting of the Board of Directors or the appropriate committee of the Board of
Directors of which Employee was given reasonable advance notice (30 days or
more) and at which Employee and his counsel had the opportunity to be heard, a
resolution was duly adopted by the affirmative vote of not less than two-thirds
of the Board present and entitled to vote on this matter finding that, in the
good faith judgment of the Board or such committee, (1) an event (which is
described in the resolution in reasonable detail) constituting Cause has
occurred, and (2) the Employee was given reasonable notice of the event 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
grossly negligent in the performance of his duties under this Agreement
resulting in a material impairment of Employer's performance, and Employee
continues to be grossly 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
11
grossly negligent under this Agreement or (2) Employee is convicted of or pleads
guilty or nolo contendere to a felony.
On termination of this Agreement pursuant to this Section 4.2.3, with
the exception of any benefits under the SERP which survive such termination and
except that Employee shall be entitled to any unpaid portion of his Compensation
and Benefits earned prior to the date of termination, all rights to Compensation
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 Welfare Benefits and Fringe Benefits under the
Agreement for the remaining term of the Agreement. In addition, Employee shall
be deemed to have earned the maximum Annual Incentive Opportunity for each
fiscal year of the Employer during the remaining term of this Agreement, to be
paid in a lump sum, and all Long-Term Incentives will fully and immediately vest
and Employee shall be deemed to be retired for purposes of the SERP.
4.2.5. Termination For Good Reason. Employee may terminate his
employment hereunder for good reason. For purposes of this Agreement, "Good
Reason" means any of the following events which occur without the Employee's
prior written consent (1) a significant reduction in Employee's duties as such
duties are contemplated by
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Section 1 hereof; (2) any removal of Employee from or any failure to re-elect
Employee to any of the positions indicated in Section 1 hereof, except in
connection with termination of Employee's employment for Cause; (3) a reduction
in Employee's base salary or a material reduction of Employee's other
compensation, benefits or perquisites; (4) a relocation of Employee's principal
place of business to a location which is more than fifty (50) miles from its
current location; (5) retirement.
4.3. Compensation upon Termination for Good Reason. If Employee's
employment shall be terminated for good reason other than for retirement,
Employee shall be entitled to all compensation and benefits as if such
Termination of Employment was by Employer other than for Cause as set forth in
Paragraph 4.2.4 hereunder. Upon Employee's retirement prior to the expiration of
the Term of this Agreement, Employee shall be entitled to all salary,
compensation and benefits up to the date of retirement and shall thereafter be
immediately entitled to all of Employee's retirement benefits as provided for
herein. If Employee terminates his employment, other than for good reason, all
rights to Compensation and Benefits hereunder shall automatically cease except
that Employee shall be entitled to any unpaid portion of his Compensation and
Benefits earned to the date thereof and to the SERP provided herein.
4.4. Procedure Upon Termination. On termination of employment
regardless of the reason, Employee
13
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.
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
14
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 during any period in
which Employee is receiving a SERP benefit, 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
15
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 of any of the
covenants and agreements of this Section 5 ("Covenants") will result in
irreparable injury to the injured 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
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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 not 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
17
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 Xxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
ATT: Corporate Secretary
With a copy to:
Xxxxxxx X. XxXxxxx, Esquire
Blank, Rome, Xxxxxxx & XxXxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
If to Employee, to:
Xx. Xxxxxxx Xxxxxxxxxx
Chairman and Chief Executive Officer
STV Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxx X. Xxxxxx, Esquire
Xxxxxx, Xxxxxx & Xxxxxx
Xxx Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 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
18
or approval, shall be effective unless approved by a majority of the Board.
6.4. Prior Agreements. Employee represents to Employer (1) that there
are no restrictions, agreements or understandings 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 and all rights of Employee
hereunder shall inure to the benefit of, bind and be enforceable by Employee and
his surviving spouse, heirs, personal representatives, estate and beneficiaries,
and Employer and its successors and assigns. This Agreement is a personal
employment contract of Employer,
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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
20
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.
Attest: /s/ Xxxxx X. Xxxxx EMPLOYER:
Secretary By: /s/ Xxxxx Xxxxxxxxxx, MD
(Corporate Seal) (Authorized Officer)
(SEAL) EMPLOYEE: /s/ Xxxxxxx Xxxxxxxxxx
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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") of 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-l(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,
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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
24
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, of the
25
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.
26
