CDI CORP.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 8th
day of April, 2000 between CDI Corp., a Pennsylvania corporation (the
"Company"), and Xxxxxxxx Xxxxxxx ("Executive").
Executive has been employed by the Company as its President and Chief
Executive Officer under the terms of an employment agreement dated March 11,
1997 (the "Prior Agreement"). The original term of that agreement expired April
7, 2000.
The Company desires to continue to employ Executive, and Executive is
willing to remain 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
SECTION 1. EMPLOYMENT.
The Company hereby continues Executive in its employment, and Executive
hereby accepts such continued employment and agrees to continue to serve as the
Company's President and Chief Executive Officer, and to render services to the
Company and its subsidiaries, divisions and affiliates, during the Employment
Period set forth in Section 3, subject to the terms and conditions hereinafter
set forth.
SECTION 2. MANAGEMENT & BOARD DUTIES.
As President and Chief Executive Officer of the Company during the
Employment Period, Executive shall carry out such duties as are customarily
associated with the position of president and chief executive officer, which
duties shall however in all cases be subject to policies set by, and at the
direction and control of, the Company's Board of Directors (the "Board of
Directors"). The Company shall use its best efforts to have Executive nominated
and elected to the Board of Directors during the Employment Period. During the
Employment Period, Executive shall be afforded the full protection of the
indemnifications generally available to officers and directors under the
Company's by-laws.
SECTION 3. TERM.
The term of Executive's employment under this Agreement (the "Employment
Period") shall commence as of April 8, 2000, and, unless sooner terminated
pursuant to Section 7 of this Agreement, shall continue until the close of
business on April 7, 2002. 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.
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
management and operations of the Company and its business and 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. During
the Employment Period, Executive shall, if elected or appointed, serve as a
director of the Company and as an executive officer and/or director of any
subsidiary, division or affiliate of the Company and shall hold, without any
compensation other than that provided for in this Agreement, the offices in the
Company and in any such subsidiary, division or affiliate to which Executive
may, at any time or from time to time, be elected or appointed.
SECTION 5. COMPENSATION AND BENEFITS.
(a) Base Salary. During the Employment Period, Executive shall receive as
compensation for his services a salary at the rate of Six Hundred Thousand
Dollars ($600,000) 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 Board of Directors and may be
increased if so determined by the Board of Directors in its absolute and sole
discretion.
(b) Restricted Stock. On March 11, 1997, Executive was granted 30,000
restricted shares of the Company's Common Stock (the "Restricted Stock")
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
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shares vest pursuant to Section 4 of the Restricted Stock Agreement.
Of the 30,000 shares of Restricted Stock, one-half of those shares (15,000) to
the extent not already vested or forfeited in accordance with the Prior
Agreement, shall continue to vest pursuant to the bonus awards 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 30,000 shares of Restricted Stock (15,000) shall vest over
time as described in Section 4 of the Restricted Stock Agreement.
(c) Nonqualified Stock Options. As of the date hereof, Executive shall be
granted non-qualified stock options to purchase 150,000 shares of the Company's
Common Stock 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 bonus compensation shall be determined on a
basis no less favorable than under the terms of the Company's Annual and
Performance Share bonus plans (the "Bonus Plans") as in effect on the date
hereof. In addition, for each calendar year in which the Executive achieves the
threshold performance target established for his annual bonus under (i) below,
3,000 shares of the Restricted Stock described in (b) above shall vest. If that
threshold performance target is not achieved in any calendar year, the 3,000
shares of Restricted Stock that would have vested had that threshold been met,
will be forfeited. After all 15,000 shares of Restricted Stock have either been
vested or forfeited, the Executives bonuses shall consist solely of awards under
the Bonus Plans, plus the vesting of any additional shares of restricted stock
that the Board of Directors may in its sole discretion determine to make
available to Executive. The bonus award during Executive's employment with the
Company shall be determined as follows:
(i) Within a mutually agreeable time period before the beginning of
each calendar year, Executive shall submit to the Board of Directors for its
approval the Company's operational plan, including a fiscal budget, for the next
calendar year. A committee of the Board of Directors, all of the voting members
of which shall be outside directors as defined in regulations issued under
ss.162(m) of the Internal Revenue Code of 1986, as amended, shall establish
goals each year based on the approved operational plan, the budget and the terms
of the Company's Bonus Plans. The goals and conditions established for the
Executive's bonus opportunities shall be consistent with those established for
other senior executives of the Company. Provided that the Board of Directors
then ratifies those goals, the Executive shall receive the percentage of the
maximum bonus award,
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specified by the applicable bonus plan, depending on
whether the Company attains all or a portion of the goals established for that
year.
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.
(ii) Payment of Bonuses and Vesting of Restricted Stock. All cash
bonuses payable under this Section 5(d) shall be paid to Executive within two
weeks after the delivery of audited financial statements to the Company for the
prior calendar year. Any shares of Restricted Stock that vest as a result of
Executive receiving all or a portion of the maximum bonus award shall become
vested on the same date that the cash bonus is paid to Executive. No bonuses
will be paid to Executive, and no shares of Restricted Stock shall vest, if
Executive's employment with the Company has terminated before the bonus has been
paid, regardless of whether he would have been entitled to a bonus based on the
Company's financial results for the prior year, unless the Company terminates
Executive without Cause after a year has ended but before the bonus becomes
payable for such year.
(e) Employee Benefits. During the Employment Period, Executive shall be
entitled to participate in all employee benefit plans and programs approved by
the Board of Directors as the Company shall provide generally to other senior
executive officers of the Company from time to time, other than any bonus plans.
In addition, the Company's contribution on behalf of Executive under the CDI
Corporation Excess Benefit Plan in a particular plan year shall be calculated as
if compensation under the Excess Benefit Plan included any bonus awards made
under Section 5(d) for that plan year, including the fair market value of any
shares of Restricted Stock that became vested (whether automatically or as part
of a bonus award), as determined as of the date on which they vest, in that plan
year. Executive shall begin participation in the Company's disability insurance
programs as of the date his employment commences hereunder, notwithstanding any
terms of such programs to the contrary.
(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, provided such expenses are properly
reported to the Company in accordance with its accounting procedures.
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SECTION 7. TERMINATION.
(a) The Employment Period may be terminated by either the Board 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 commission of 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 Board
of Directors; provided, however, that a termination under this Section 7(c)(ii)
shall not be for Cause unless the Company provides written notice to Executive
of its intention to terminate Executive for Cause under this Section 7(c)(ii),
and Executive fails, to the reasonable satisfaction of the Company, to cure the
defects stated in such written notice within ten days after the notice was given
to Executive;
(iii) Executive's willful misconduct or gross negligence in connection
with the performance of his duties under this Agreement that materially
adversely affects Executive's ability to perform his duties for the Company or
materially adversely affects the Company;
(iv) Executive's material breach of any of the terms or conditions of
this Agreement;
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(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) or 7(h).
(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. 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 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 following a Change in Control, as hereinafter
defined, because (A) Executive is assigned duties that are demeaning or
otherwise materially inconsistent with the duties currently performed by
Executive, or (B) Executive's place of employment with the Company is moved
outside the Philadelphia metropolitan area. Before the Executive terminates for
Good Reason, he must notify the Company in writing of his intention to terminate
and the
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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 (1) the Company, (2) any "person" who on the date
hereof is a director or officer of the Company, (3) any "person" who on the date
hereof is the beneficial owner of 5% or more of the voting power of the
Company's outstanding securities or an affiliate of any such person or (4) a
trust established under an employee benefit plan for employees of the Company of
its subsidiaries, 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) Except as provided in (h) below, 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.
(h) If Executive's employment is terminated for any reason other than
Cause, following a Change in Control then, in addition to any other benefits,
including pursuant to option agreements and employee benefit plans, to which
Executive may be entitled following such a Change in Control, the Executive
shall be entitled to:
(i) a payment equal to the excess of twice the Executive's Base Salary
paid during that year of the Employment Period during which the greatest Base
Salary was paid over the amount of severance pay to which the Executive is
entitled under Section 7(e);
(ii) a bonus payment in an amount determined by the Compensation
Committee of the Company's Board of Directors, as constituted immediately before
the effective date of the Change in Control, up to a maximum of
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twice the Executive's highest bonus payments made during that year of the
Employment Period in which the greatest aggregate bonuses were paid;
(iii) vesting of the Restricted Stock described in Section 5(b)
immediately upon the Executive's satisfaction of his non-compete obligations
under Section 9(i) hereof;
(iv) release from any restrictions on the sale by Executive of
Restricted Stock granted to him under this Agreement and its predecessor
immediately upon the Executive's satisfaction of his non-compete obligations
under Section 9(i) hereof ,
provided that the payments to be made under this Section 7(h), together with all
payments otherwise to be made to the Executive on account of the Change in
Control, shall be limited to the maximum amount that can be paid to the
Executive without the imposition on such payments of any excise tax under
section 4999 of the Code or any loss of deduction by the Company under section
280G of the Code. If it shall be finally determined that payments in excess of
those limits have been made to the Executive, such payments shall be considered
to have been a loan to the Executive by the Company and shall be repaid, with
interest at the short term annual rate established under section 1274 of the
code, upon demand by the Company.
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 has had and will continue to have access
to Confidential Information; (ii) such Confidential Information is proprietary,
material and important to the Company and its non-disclosure is essential to the
effective and successful conduct of the Company's business; (iii) the Company's
business, its customers' business and the businesses of other companies with
which the Company may have commercial relationships could be damaged by the
unauthorized use or disclosure of this Confidential Information; and (iv) it is
essential to the protection of the Company's goodwill and to the maintenance of
the Company's competitive position that the Confidential Information be kept
secret, and that Executive not disclose the Confidential Information to others
or use the Confidential Information to Executive's advantage or the advantage of
others.
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(c) Executive acknowledges that as the Company's Chief Executive Officer
and President, Executive has been and will continue to be put in a position of
trust and confidence and have access to Confidential Information, will continue
to supervise the operations and employees of the Company, will continue to be in
contact with customers and prospective customers, will continue to participate
in the preparation and submission of bids and proposals to customers and
prospective customers, and will continue to be responsible for the formulation
and implementation of the Company's strategic plans.
(d) Executive acknowledges that as the Company's Chief Executive, 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.
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.
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(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, 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
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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) For (1) the period during which the Executive is entitled to severance
payments under Section 7, other than Section 7(h), if the Executive's employment
is terminated by the Company other than for Cause, or (2) 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, if
Executive's employment is terminated by the Executive for any reason, including
resignation by Executive or by the Company, with Cause, Executive agrees not to:
(i) own, manage, operate, finance, join, control, or participate in
the ownership, management, operation, financing or control of, or be connected,
directly or indirectly, as proprietor, partner, shareholder, director, officer,
executive, employee, agent, creditor, consultant, independent contractor, joint
venturer, investor, representative, trustee or in any other capacity or manner
whatsoever with, any entity that engages or intends to engage in any Competing
Business anywhere in the world. "Competing Business" means any business or other
enterprise which engages in the staffing business; and
(ii) directly or indirectly, solicit, interfere with or attempt to
entice away from the Company, any officer or management employees of the Company
or anyone who was one of the Company's officers or management employees within
12 months prior to such contact, solicitation, interference or enticement; and
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(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.
SECTION 12. NOTICES.
All notices required or permitted hereunder shall be made in writing by
hand-delivery, certified or registered first-class mail, or air courier
guaranteeing overnight delivery to the other party at the following addresses:
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To the Company:
CDI Corp.
0000 Xxxx Xxxxxxxx Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Board of Directors
with a required copy to:
CDI Corp.
0000 Xxxx Xxxxxxxx Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
To Executive:
Xxxxxxxx Xxxxxxx
000 Xxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
or to such other address as either of such parties may designate in a written
notice served upon the other party in the manner provided herein. All notices
required or permitted hereunder shall be deemed duly given and received when
delivered by hand, if personally delivered; on the third day next succeeding the
date of mailing if sent by certified or registered first-class mail; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
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, except as specified
herein, 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.
14
SECTION 19. COUNSEL.
Executive acknowledges that he has been advised to consult with counsel
concerning this Agreement, has had ample opportunity to consult with counsel of
his own selection and has so consulted to the extent Executive determined to be
necessary or appropriate.
IN WITNESS WHEREOF, the undersigned have executed this Agreement this 12th
day of June, 2000, effective as of the date and year first written above.
COMPANY:
CDI CORP.
By:/s/ Xxxx Xxxxxxx
EXECUTIVE:
/s/ Xxxxxxxx Xxxxxxx
15
(EXHIBIT A)
CDI CORP.
RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT (the "Agreement") is entered into as of
this 11th day of March, 1997 between CDI Corp., a Pennsylvania corporation (the
"Company"), and Xxxxxxxx Xxxxxxx ("Executive").
SECTION 1. GRANT OF RESTRICTED STOCK.
The Company hereby grants to Executive 30,000 shares of the Company's
common stock par value $.10 per share, subject to restrictions set forth herein.
The Company, immediately following the execution of this Agreement, will issue
or transfer 30,000 shares of the Company's common stock ("Stock") to Executive.
The Stock shall consist of 10 certificates of 3,000 shares each 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.
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SECTION 4. VESTING OF RESTRICTED STOCK.
Executive will vest, if at all, in one-half of the number of shares of
Stock (15,000 shares) pursuant to the terms of Section 5(d) of the Employment
Agreement between Executive and the Company, dated March 11, 1997 (the
"Employment Agreement"). Executive will vest in the other half of the shares of
Stock (the "15,000 Time-Vesting Shares") as follows: (i) 3,000 shares on the
first anniversary of the date of the Employment Agreement, (ii) 3,000 shares on
the second anniversary of the date of the Employment Agreement, (iii) 3,000
shares on the third anniversary of the date of the Employment Agreement, (iv)
3,000 shares on the fourth anniversary of the date of the Employment Agreement,
and (v) 3,000 shares on the fifth anniversary of the date of the Employment
Agreement. 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
continue to vest in the 15,000 Time-Vesting Shares for the duration of the
Severance Period, as such term is defined in the Employment Agreement. If
Executive's employment with the Company terminates for any other reason than as
specified in the immediately preceding sentence, none of the unvested 15,000
Time-Vesting Shares shall ever vest and such shares shall be forfeited to the
Company as of the date that Executive's employment with the Company terminates
for any other reason than as specified in the immediately preceding sentence,
none of the unvested 15,000 Time-Vesting Shares shall ever vest and such shares
shall be forfeited to the Company as of the date that Executive's employment
with the Company terminates. For all shares of Stock in which Executive becomes
vested, the escrow will terminate and the Secretary will deliver the stock
certificates to Executive as soon as practicable after such shares vest.
SECTION 5. FORFEITURE OF STOCK.
Executive shall forfeit all remaining escrowed Stock upon the termination
of his service as an employee of the Company for any reason other than a
termination of his service by the Company without Cause, as defined in the
Employment Agreement, or upon any attempt by Executive to sell, exchange,
transfer, pledge, hypothecate or otherwise dispose or encumber any of the
escrowed Stock. Executive shall also forfeit any shares of escrowed Stock that
were subject to vesting under Section 5(d) of the Employment Agreement, but
which did not vest thereunder in a given year because Executive was not entitled
to the Maximum Bonus Award for that year. Title to all forfeited shares of Stock
shall be transferred back to the Company as soon as reasonably practicable after
they are forfeited.
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SECTION 6. RESTRICTION ON TRANSFER RIGHTS OF SHARES.
Whenever shares of Stock vest under this Agreement or the Employment
Agreement, one-half of those shares of Stock may not be sold or transferred
until the second anniversary of their respective vesting date, and the other
half may be sold or transferred at any time on or after their respective vesting
date. With respect to any shares of Stock the sale or transfer of which is
restricted under this Section 6, Executive may not engage in any transaction
designed to provide him with substantially the same economic benefit of a sale
of any shares of Stock so restricted, such as a short sale or a sale of a put
option. Certificates representing any shares of Stock so restricted will be
inscribed with an appropriate legend prohibiting such transfer.
SECTION 7. COMPLIANCE WITH LAWS.
All shares of Stock issued to Executive or his personal representative
shall be transferred in accordance with all applicable laws, regulations or
listing requirements of any national securities exchange, and the Company may
take all actions necessary or appropriate to comply with such requirements
including, without limitation, withholding federal income and other taxes with
respect to such Stock; restricting (by legend or otherwise) such Stock as shall
be necessary or appropriate, in the opinion of counsel for the Company, to
comply with applicable federal and state securities laws, including Rule 16b-3
(or any similar rule) of the Securities and Exchange Commission, which
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.
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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: /s/ Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxxxx Xxxxxxx
19
(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 Xxxxxxxx
Xxxxxxx (the "Optionee") an option (the "Option" when reference is made to the
right to purchase all of the Shares) to purchase up to 150,000 shares of CDI
Corp. common stock (the "Shares" when reference is made to all or a portion of
the shares subject to the Option), according to the terms and conditions set
forth herein and in the Plan.
SECTION 2. OTHER DEFINITIONS.
(a) "Board" means the board of directors of the Company.
(b) "Cause" means termination of Optionee's employment with the Company
resulting from any one or more of the following events:
(i) Optionee's commission of a felony or other crime involving moral
turpitude;
(ii) Optionee's refusal to perform such services as may be reasonably
delegated or assigned to Optionee, consistent with his position, by the Board of
Directors; 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 April 8, 2000 (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;
20
(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 (1) the Company, (2) any "person" who on the date hereof
is a director or officer of the Company, (3) any "person" (for example, a
beneficiary of a trust or trusts created by Xxxxxx X. Xxxxxxxx that holds
Company Stock) who on the date hereof is the beneficial owner of 5% or more of
the voting power of the Company's outstanding securities or an affiliate of any
such person or (4) a trust established under an employee benefit plan for
employees of the Company of its subsidiaries, 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 Compensation 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 April 8, 2000, 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.
21
(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, in either case as
reported on the New York Stock Exchange consolidated transaction reporting
system.
(j) "Good Reason" exists if the Optionee voluntarily terminates employment
with the Company following a Change in Control because (i) the Optionee is
assigned duties that are demeaning or otherwise materially inconsistent with the
duties currently performed by the Optionee, or (ii) the Optionee's place of
employment with the Company is moved outside the Philadelphia metropolitan area.
Before the Optionee terminates for Good Reason, he must notify the Company in
writing of his intention to terminate and the Company shall have 15 days after
receiving such written notice to remedy the situation, if possible.
(k) "Option Price" means $21.625, representing the Fair Market Value of a
share of Stock on the last trading date immediately preceding the Date of Grant.
(l) "Stock" means the Company's common stock, par value $.10 per share.
(m) "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. April 8, 2010.
SECTION 3. TIME OF EXERCISE.
No Option shall be exercisable with respect to any Shares unless the Option
has vested with respect to such Shares in accordance with Section 4 hereof. If
vested, the Option may be exercised at any time after vesting until the
Termination Date in whole or in part.
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SECTION 4. OPTION VESTING.
Subject to the accelerated vesting and exercise provisions of Section 5(d),
the Option will vest as follows:
(a) With respect to 50,000 Shares, the Option will vest on the first
anniversary of the Date of Grant;
(b) With respect to an additional 50,000 Shares, the Option will vest on
the second anniversary of the Date of Grant; and
(c) With respect to the final 50,000 shares, the Option will vest on the
third anniversary of the Date of Grant.
Notwithstanding the above, no portion of the Option will vest on or after the
Termination Date, except as provided in Section 5(d) below.
SECTION 5. OPTION EXERCISE.
(a) With respect to 50,000 Shares, the Option will become exercisable upon
the earlier of (1) the first date during the period April 8, 2000 through April
7, 2001, that the closing price of the Stock on the New York Stock Exchange (or
if the Stock ceases to be traded on the New York Stock Exchange, on the relevant
exchange) has averaged $30 or more for 90 consecutive days or (2) April 7, 2007.
(b) With respect to a second 50,000 Shares, the Option will become
exercisable when (1) the closing price of the Stock, on the New York Stock
Exchange (or if the Stock ceases to be traded on the New York Stock Exchange, on
the relevant exchange) has averaged $35 or more for 90 consecutive days during
the period April 8, 2001 through April 7, 2002 or (2) April 7, 2007, whichever
first occurs.
(c) With respect to the third 50,000 Shares, the Option will vest and
become exercisable (1) when the closing price of the Stock, on the New York
Stock Exchange (or if the Stock ceases to be traded on the New York Stock
Exchange, on the relevant exchange) has averaged $40 or more for 90 consecutive
days during the period April 8, 2002 through April 7, 2003, or (2) April 7,
2007, whichever first occurs.
Notwithstanding the above, no portion of the Option will vest, nor will the
Option be exercisable with respect to any Shares covered by a portion of the
Option that has previously vested, on or after the Termination Date except as
provided in Section 5(d) below.
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(d) Accelerated Vesting. In addition to the vesting provisions above, the
Option shall immediately vest in full upon the termination of the Optionee's
employment with the Company following a Change in Control of the Company if such
termination is by the Company without Cause or by the Optionee for Good Reason,
and to the extent then exercisable, shall remain exercisable until the
Termination Date.
(e) Accelerated Exercise. Further, if the Change in Control is the result
of the purchase of voting securities of the Company representing more than 50%
of the then outstanding combined voting power of the Company's securities, the
price conditions on exercise set out in Sections 5(b) and 5(c) will be deemed to
have been satisfied if the price at which such securities were purchased (or if
more than one purchase occurred, the most recent such price) is equal to or
greater than the price condition established by Section 5(b), 5(c) or both, as
applicable.
(f) If the Company terminates Optionee's employment without Cause, any
portion of the Option which has vested, but which has not yet become
exercisable, shall remain outstanding and shall become exercisable if the
exercise conditions of Section 5(a), (b) or (c), as applicable, are satisfied
before April 7, 2003. For purposes of determining the period during which such
portion(s) of the Option may be exercised, Optionee's Termination Date shall be
deemed to be the last day of the original term of his Employment Agreement.
Expiration of the Employment Agreement without renewal shall not be considered a
termination by the Company, either with or without Cause.
SECTION 6. 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 or by any other method allowed by the Plan, on the
terms and conditions specified in the Plan.
SECTION 7. 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 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
24
19103-2768. Such notice must state the number of Shares as to which the Option
is exercised. Each such notice shall be irrevocable once given. Notice of
exercise must be accompanied by full payment in accordance with Section 6.
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 unless otherwise
satisfied by the method of payment determined under the Plan and Section 6, 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 8 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.
25
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.
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
effective as of the Date of Grant.
For the Compensation Committee of the OPTIONEE
Board of Directors of CDI Corp.
By:/s/ Xxxx Xxxxxxx /s/ Xxxxxxxx Xxxxxxx
Xxxx Xxxxxxx Xxxxxxxx Xxxxxxx
26
