18
CDI CORP.
EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as
of this ____ day of July, 1997 between CDI Corp., a Pennsylvania
corporation (the "Company"), and Xxxxx X. 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.
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The Company hereby employs Executive, and Executive hereby accepts
such employment and agrees to serve as the Company's Senior Vice
President, Human Resources 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. Duties.
------
Executive shall carry out such duties as are customarily
associated with the position of Senior Vice President, Human Resources,
including but not limited to employee relations, organizational
development, selection and staffing, compensation and benefits,
strategic human resource planning, change management and senior
management development. 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") shall commence as of July 21, 1997 and, unless
sooner terminated pursuant to Section 7 of this Agreement, shall
continue until the close of business on the second 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 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. This Agreement survives any termination
of the Employment Period.
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SECTION 4. Extent of Services.
------------------
During the Employment Period, Executive shall devote his full time
and attention and give his best efforts, skills and abilities
exclusively to the performance of his duties hereunder, to the
operations of the Company and its business and to the business of 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
management of the Company and its business and the business of its
subsidiaries, divisions and affiliates.
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 Twenty-Five thousand Dollars ($225,000) per annum 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 commencement of the Employment
Period, Executive shall be granted 3,500 restricted shares of the
Company's Common Stock (the "Restricted Stock") in two Groups (1,500 in
"Group A" and 2,000 in "Group B") pursuant to the terms of the
Restricted Stock Agreement attached hereto as Exhibit A. 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. One-half of the shares in each Group will vest
pursuant to the bonus awards 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 shares in each Group will vest
over time as described in Section 4 of the Restricted Stock Agreement.
(c) Non-qualified Stock Options. As of the commencement of the
Employment Period, Executive shall be granted non-qualified stock
options to purchase 11,700 shares of the Company's Common Stock in two
Groups (5,200 shares in Group A and 6,500 shares in Group B) pursuant
to the terms of the Non-Qualified Stock Option Agreement attached
hereto as Exhibit B.
(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 shall
consist of a cash payment and a vesting of Restricted Stock. The
maximum bonus award for any calendar year would be a cash payment of
$112,500 (to be adjusted, however, to 50% of annual salary if the
Executive's annual salary rate is increased) and a vesting of up to
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the total number of shares of Restricted Stock available from "Group A"
and/or "Group B" for such year as set forth in the following table:
For Performance
In Calendar Year "Group A" Shares "Group B" Shares
---------------- ---------------- ----------------
1997 - -
1998 375 -
1999 375 500
2000 - 500
The maximum cash bonus award of $112,500 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 above shares of Restricted Stock have either
been vested or forfeited, the Maximum Bonus Award shall consist solely
of an annual cash payment of $112,500 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 bonus, if any, for the period beginning as
of the date of this Agreement and ending December 31, 1997 shall be
determined in accordance with the performance goals set forth below.
The Maximum Bonus Award for 1997 shall not be reduced to reflect that
this period is less than a full calendar year and half the cash award
($56,250) shall be guaranteed. The maximum bonus 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 C
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
(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
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("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. Within a mutually
agreeable time period before the beginning of each calendar year, the
President shall establish goals for Executive for the next calendar
year based on the final operational plan and budget of the Company for
such year, and Executive shall be entitled to receive a percentage of
the Maximum Bonus Award, up to 100%, depending on whether the Company
attains all or a portion of such goals. As in 1997, the goals in these
years will be both qualitative and quantitative in nature and will be
established in a manner comparable to that used for other senior
executives in the Company.
Any of the Company's financial results that are used to calculate
bonuses under this Section 5(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. In the event that
Executive's employment with the Company is terminated by the Company
other than for Cause, Executive will be paid a proportionate amount of
the cash bonus for the year during which the termination occurs. This
proportionate amount will be a percentage of the maximum cash bonus
available for such year which will be equal to the percentage of the
year during which Executive was employed by the Company.
(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 and with the exception
that, rather than the vacation schedule generally offered to such other
executives, Executive shall receive two weeks paid vacation in 1997 and
four weeks paid vacation during each calendar year thereafter. If
there is an overall revision in the Company's compensation structure or
benefits, Executive will participate in the revised structure and
benefits in a manner comparable to the other senior executives of the
Company.
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(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.
SECTION 6. Expense Reimbursements.
----------------------
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
pursuant to the terms of the Company's business expense reimbursement
policy and 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 terminate 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 90 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:
(i) Executive's conviction or commission of (but only if
Executive admits to committing or if a reasonable person would
conclude, based upon all available evidence, that Executive committed)
a felony or other crime involving moral turpitude;
(ii) 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,
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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; provided, however, that a termination
under this Section 7(c)(iv) shall not be for Cause unless the Company
provides written notice to Executive of its intention to terminate
Executive for Cause under Section 7(c)(iv), 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;
(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 by
the Company other than for Cause, by Executive for Good Reason (as
hereinafter defined) or 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 (i) one year from the date of such
termination or (ii) 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. In addition, all
unvested and unforfeited Restricted Stock and all unvested Stock
Options will immediately vest as of the date of termination. 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 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
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comparable benefits from another employer). Notwithstanding the above,
no amounts 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 at any time after: (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, or a request is made to Executive to
make such a move, and Executive is unwilling to make such a move, or
(C) Xxxxx Xxxxxxx involuntarily ceases to be President and Chief
Executive Officer of the Company, or (D) there is a Change in Control,
as defined below. 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 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 main-
tenance 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 Senior Vice
President, Human Resources, Executive will be put in a position of
trust and confidence and have access to Confidential Information, will
be supervising certain operations and employees of the Company, will be
in contact with customers and prospective customers and will
participate in the preparation and implementation of the Company's
strategic plans and its policies and procedures.
(d) Executive acknowledges that as the Company's Senior Vice
President, Human Resources, 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
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.
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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 productive
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 of 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.
(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,
27
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
copyrightable). 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
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,
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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.
SECTION 11. Waiver of Breach.
----------------
The waiver by the Company of a breach of any provision of this
Agreement by Executive shall not operate or be construed as a waiver of
any other or subsequent breach by Executive 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.
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SECTION 12. Notices.
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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: President/CEO
with a required copy to:
CDI Corp.
0000 Xxxx Xxxxxxxx Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
To Executive:
Xxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 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.
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 unenforceable, 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.
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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.
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.
31
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:
-------------------------------------
Xxxxx X. Xxxxxxx
32
EXHIBIT A
---------
CDI CORP.
RESTRICTED STOCK AGREEMENT
--------------------------
SECTION 1. Grant of Restricted Stock.
-------------------------
CDI Corp. (the "Company") hereby grants to Xxxxx X. Xxxxxxx (the
"Executive") 3,500 shares of the Company's common stock par value
$.10 per share in two groups ("Group A" for 1,500 shares and "Group B"
for 2,000 shares), subject to the restrictions set forth herein. The
Company, immediately following the execution of this Agreement, will
issue or transfer 3,500 shares of the Company's common stock ("Stock")
to Executive. The Stock shall consist of 4 certificates for the Group
A shares consisting of 375 shares each and 4 certificates for the Group
B shares consisting of 500 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 half of the shares in each
Group pursuant to the terms of Section 5(d) of the Employment Agreement
between Executive and the Company, dated ______, 1997 (the "Employment
Agreement"). Executive will vest in the other half of the shares in
each Group according to the following schedule:
33
Date of Vesting "Group A" Shares "Group B" Shares
--------------- ---------------- ----------------
12/31/97 - -
12/31/98 375 -
12/31/99 375 500
12/31/00 - 500
If Executive is terminated by the Company other than for Cause or as a
result of Executive s death or Disability, or if Executive terminates
for Good Reason, as such terms are defined in the Employment Agreement,
Executive shall immediately vest in all unvested restricted shares in
the above schedule and in any restricted shares subject to vesting
under Section 5(d) of the Employment Agreement which, as of the date of
such termination, have not been forfeited. If Executive s employment
with the Company terminates for any reason other than the reasons
specified in the immediately preceding sentence, none of the unvested
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.
-------------------
In addition to the reasons for forfeiture of restricted shares
described above, Executive shall also forfeit all remaining escrowed
Stock upon any attempt by Executive to sell, exchange, transfer,
pledge, hypothecate or otherwise dispose or encumber any of the
escrowed Stock. 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
34
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 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:
-------------------------------------
Xxxxxxxx Xxxxxxx,
President and Chief Executive Officer
EXECUTIVE:
---------
-------------------------------------
Xxxxx X. Xxxxxxx
35
EXHIBIT B
---------
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 Xxxxx X. Xxxxxxx (the "Optionee") an option (the
"Option" when reference is made to the right to purchase all of the
Shares) to purchase up to 11,700 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 conviction or commission of (but only if
Executive admits to committing or if a reasonable person would
conclude, based upon all available evidence, that Executive committed)
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 ______, 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; provided, however, that a
termination under this Section 2(b)(iv) shall not be for Cause unless
the Company provides written notice to Executive of its intention to
36
terminate Executive for Cause under this Section 2(b)(iv), 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.
(v) receipt of notice from Optionee of Optionee's
intention to terminate his employment with the Company; or
(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 (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.
(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 _____________, 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.
37
(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.
(j) "Good Reason" exists if the Optionee voluntarily terminates
employment with the Company at any time after (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, or a request is made to Optionee to
make such a move, and Optionee is unwilling to make such
a move, or (C) Xxxxx Xxxxxxx involuntarily ceases to be President and
Chief Executive Officer of the Company, or (D) there is a Change in
Control, as defined above. 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) "Group A" shares means 5,200 shares of the 11,700 shares
subject to this Option.
(l) "Group B" shares means the remaining 6,500 shares of the
11,700 shares subject to this Option.
(m) "Option Price" means $______, representing the Fair Market
Value of a share of Stock on the last trading date immediately
preceding the Date of Grant.
(n) "President" means the President and Chief Executive Officer
of the Company.
(o) "Stock" means the Company's common stock, par value $.10 per
share.
(p) "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) 12:00 a.m. __________, 2002.
38
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 in whole or
in part as to the vested portion at any time after vesting until the
Termination Date.
SECTION 4. Option Vesting.
--------------
Subject to the accelerated vesting provisions of Section 4(b), the
Option will vest as follows:
(a) Date of Vesting "Group A" Shares "Group B" Shares
--------------- ---------------- ----------------
12/31/97 1,560 -
12/31/98 1,560 1,950
12/31/99 2,080 1,950
12/31/00 - 2,600
(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 by the
Optionee for Good Reason, or following a Change in Control of the
Company if such termination is by the Company without Cause or as a
result of Optionee s death or Disability.
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
39
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.
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.
40
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 Stock Option Committee OPTIONEE
of the Board of Directors of
CDI Corp.
By:
----------------------------- -----------------------------
Xxxxx X. Xxxxxxx
41
EMPLOYMENT AGREEMENT
--------------------
CDI CORP. AND XXXXX X. XXXXXXX
------------------------------
EXHIBIT C
---------
1997 QUALITATIVE GOALS
----------------------
o Support development and implementation with Price Waterhouse of
new executive compensation plan.
o Develop strategy, organization, and staffing plan for CDI Human
Resource function and capabilities.
o Support and participate with Xxxx and Co. in development of CDI
corporate strategy.
o Develop preliminary new product development plan working with
business unit Presidents.
o Develop preliminary recommendation on new corporate benefit
plans including medical and life insurance, relocation policy
and 401(k) plans.
o Assist CEO in identifying, recruiting and hiring senior level
CDI executives.
o Assist CEO in developing senior level executive evaluation
process and tools.
o Assist CEO and other senior executives in defining and shaping
corporate culture leading to status as world class supplier of
staffing services.
o Assist CEO in developing 1998 operating planning process,
timetable and deliverables.
o Assume responsibility for CDI corporate communications function
including the hiring of a new corporate communications manager
and assessing value of existing corporate communications tools
and channels.
o Working with law department and outside resources, develop in-
depth understanding of rules, laws, regulations and court
rulings in the areas of co-employment, xxxxxxx'x compensation,
disability, benefits and liability.
