16
CDI CORP.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as
of this 4th day of August, 1997 between CDI Corp., a Pennsylvania
corporation (the "Company"), and Xxxxxx X. Xxxxxxxxx ("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
SECTION 1. Employment.
The Company hereby employs Executive, and Executive hereby
accepts such employment and agrees to serve as the Company's Executive
Vice President and Chief Operating 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. Duties.
Executive shall carry out such duties as are customarily
associated with the position of Executive Vice President and Chief
Operating Officer including but not limited to providing leadership
and management of the Company's operating business units through the
presidents of those units, managing the integration of acquisitions into
the Company's operations and providing the leadership and manage-ment
necessary to develop and maintain cost-effective, innovative and
responsive operations at both the corporate and unit level. 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 August 11, 1997 and, unless
sooner terminated pursuant to Section 7 of this Agreement, shall
continue until the close of business on December 31, 1999. 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. During the Employment Period,
Executive shall, if elected or appointed, serve as an executive officer
and/or director of any subsidiary, division or affiliate of the Company
and shall hold, without any compensation other than that provided in
this Agreement, the offices in any such subsidiary, division or
affiliate to which Executive may, at any time or from time to time, be
elected or appointed.
SECTION 5. Compensation and Benefits.
(a) Base Salary. During the Employment Period, Executive
shall receive as compensation for his services a salary at the rate
of Two Hundred and Seventy-Five Thousand Dollars ($275,000) 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. Executive shall be granted 6,000
restricted shares of the Company's Common Stock (the "Restricted
Stock") as of the commencement of the Employment Period, pursuant to the
terms of a Restricted Stock Agreement to be entered into between
Executive and the Company. Pursuant to Section 6 of the Restricted
Stock Agreement, Executive shall not be able to sell, transfer or
otherwise benefit from any of the Restricted Stock until such shares
vest pursuant to Section 4 of the Restricted Stock Agreement. 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) Nonqualified Stock Options. Executive shall be granted
non-qualified stock options, effective as of the commencement of the
Employment Period, to purchase 60,000 shares of the Company's Common
Stock pursuant to the terms of a Non-Qualified Stock Option Agreement to
be entered into between Executive and the Company.
(d) Bonus Awards. Executive shall be eligible to receive
bonus compensation during the Employment Period. Such bonus awards
shall be based upon the Company's annual financial results, as reflected
in the Company's audited financial statements for such
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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 and a vesting of up to the total number of shares of Restricted
Stock available for such year.
The maximum cash bonus award and the vesting of the maximum number of
shares of Restricted Stock available in a given year are, together,
referred to as the "Maximum Bonus Award" for that year. However, after
all of the above shares of Restricted Stock have either been vested or
forfeited, the Maximum Bonus Award shall consist solely of an annual
cash payment plus the vesting of any additional shares of restricted
stock that the Company may determine to make available to Executive.
The bonus award during Executive's employment with the Company shall be
determined as follows:
(i) 1997. The maximum cash bonus award for 1997 is
$175,000, one-half of which is guaranteed. The Maximum Bonus Award for
1997 shall not be reduced to reflect that this period is less than a
full calendar year. The maximum bonus that Executive may earn in 1997
is referred to herein as the "1997 Maximum Bonus Award" and shall be
determined in accordance with performance goals, as follows:
(A) Executive shall have the opportunity to
receive up to 40% of the 1997 Maximum Bonus Award based on the
President's determination of whether the qualitative goals set forth
on Exhibit A to this Agreement have been met during 1997;
(B) Executive shall have the opportunity to
receive up to 30% 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 30% 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 30% of the 1997 Maximum Bonus Award based on the Company's
achievement of its earnings before interest and taxes ("EBIT") target as
provided in the Company's 1997 operational plan ("1997 EBIT Target").
Executive shall receive a portion of the 1997 Maximum Bonus Award under
this Section 7(d)(i)(C) equal to 30% 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
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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.
For calendar years 1998 and 1999, the maximum cash bonus amount will be
$200,000 with the additional cash bonus of $25,000 for each of those
years (i.e. over the 1997 $175,000 per year maximum cash bonus) being
payable if extraordinary financial performance goals for those years, as
set by the President, are achieved.
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 receive a proportionate amount of the maximum cash
bonus award (but no Restricted Stock vesting) for the year during which
the termination occurs. This proportionate amount will be calculated
using the same procedure as for full year cash bonus amounts, i.e., by
determining that portion of the year's qualitative and quantitative
goals that have been achieved by Executive for that portion of the year
during which he was employed by the Company. This proportionate amount
will be paid when the bonus otherwise would have been paid for that
year.
(e) Employee Benefits. During the Employment Period,
Executive shall be entitled to participate in all employee benefit plans
and programs as the Company shall provide generally to other senior
executive officers of the Company from time to time, other than any
bonus plans applicable to such other executives 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.
(f) All payments to Executive or his estate made pursuant
to this Agreement shall be subject to such withholding as may be
required by any applicable laws.
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SECTION 6. Expense Reimbursements.
(a) Temporary Housing and Relocation. Executive currently
maintains a primary residence in Connecticut ("Current Residence").
In connection with Executive becoming Executive Vice President and Chief
Operating Officer of the Company, Executive shall be required
to maintain his primary residence in the Philadelphia metropolitan
area ("New Residence"). The Company shall reimburse Executive for
the reasonable cost of maintaining a temporary residence in the
Philadelphia metropolitan area until the earlier of (i) Executive
occupying his New Residence, or (ii) November 1, 1997. Before October
15, 1997 the Company shall, at its cost, hire two independent appraisers
to assess the fair market value of Executive's Current Residence (the
"Appraisals"). After the Appraisals are made and communicated to
Executive, he shall be given 14 days to decide whether he wishes to sell
his Current Residence on his own, or whether he wishes to transfer his
Current Residence to the Company or its designee, and to receive from
the Company or its designee an amount equal to the average of the two
Appraisals. To the extent not mentioned above, the Company shall
reimburse Executive for any additional reasonable moving expenses he
incurs for himself and his family in connection with their relocating
from Connecticut to the Philadelphia metropolitan area, in accordance
with the Company's policies generally applicable to its senior executive
officers.
(b) 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
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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 President; provided, however, that a termination
under this Section 7(c)(ii) shall not be for Cause unless the Company
provides written notice to Executive of its intention to terminate
Executive for Cause under this Section 7(c)(ii), and Executive fails, to
the reasonable satisfaction of the Company, to cure the defects stated
in such written notice within ten days after the notice was given to
Executive;
(iii) Executive's willful misconduct or gross
negligence in connection with the performance of his duties under this
Agreement that materially adversely affects Executive's ability to
perform his duties for the Company or materially adversely affects the
Company;
(iv) Executive's material breach of any of the terms
or conditions of this Agreement;
(v) receipt of notice from Executive of Executive's
intention to terminate his employment with the Company; or
(vi) receipt of reliable information from another
source of Executive's intention to terminate his employment with the
Company unless Executive delivers a written statement to Company
providing that he does not intend to terminate his employment with the
Company as long as such statement is delivered to the Company no later
than 48 hours after the Company has asked Executive whether its
information regarding his intended termination is accurate.
(d) Following any termination of Executive's employment
hereunder, all obligations of the Company under this Agreement shall
terminate except (i) any obligations with respect to the payment of
accrued and unpaid salary or expense reimbursements under Sections 5
or 6 hereof through the date of Executive's termination of employment
hereunder, and (ii) any obligations as set forth in Section 7(e).
(e) In the event of any termination of Executive's
employment:
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
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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 employ-ment with the
Company is moved outside the Philadelphia metropolitan area. Before the
Executive terminates for Good Reason, he must notify the Company in
writing of his intention to terminate and the Company shall have 15 days
after receiving such written notice to remedy the situation, if
possible.
(ii) "Change in Control" shall mean a change in control
of a nature that would be required to be reported in response to Item 1
of Form 8-K promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), provided, that, without limitation, such a change
in control shall be deemed to have occurred if (A) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Act), other than the
Company or any "person" who on the date hereof is a director or officer
of the Company, is or becomes the "beneficial owner," (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the
Company's then outstanding securities; or (B) during any period of two
consecutive years during the term of this Agreement, individuals who at
the beginning of such period constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board, unless the election of each director who was not a director at
the beginning of such period has been approved in advance by directors
representing at least a majority of the directors then in office who
were members of the Incumbent Board or whose election was approved by
the Incumbent Board.
(f) Any termination by the Company or by Executive of
Executive's employment hereunder shall be communicated by written
notice.
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(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.
SECTION 8. Representations, Warranties and Acknowledgments of
Executive.
(a) Executive represents and warrants that his experience
and capabilities are such that the provisions of Section 9 will not
prevent him from earning his livelihood, and acknowledges that it would
cause the Company serious and irreparable injury and cost if Executive
were to use his ability and knowledge in competition with the Company or
to otherwise breach the obligations contained in Section 9.
(b) Executive acknowledges that (i) during the term of
Executive's employment with the Company, Executive will have access
to Confidential Information; (ii) such Confidential Information is
proprietary, material and important to the Company and its
non-disclosure is essential to the effective and successful conduct
of the Company's business; (iii) the Company's business, its customers'
business and the businesses of other companies with which the Company
may have commercial relationships could be damaged by the unauthorized
use or disclosure of this Confidential Information; and (iv) it is
essential to the protection of the Company's goodwill and to the
maintenance of the Company's competitive position that the Confidential
Information be kept secret, and that Executive not disclose the
Confidential Information to others or use the Confidential Information
to Executive's advantage or the advantage of others.
(c) Executive acknowledges that as the Company's Executive
Vice President and Chief Operating Officer, 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 Executive
Vice President and Chief Operating Officer, it is essential for the
Company's protection that Executive be restrained following the
termination of Executive's employment with the Company from soliciting
or inducing any of the Company's officers and management employees to
leave the Company's employ, hiring or attempting to hire any of the
Company's officers or management employees, soliciting the Company's
customers and suppliers for a competitive purpose, and competing against
the Company for a reasonable period of time.
(e) Executive represents and warrants that Executive is not
bound by any other agreement, written or oral, which would preclude
Executive from fulfilling all the obligations, duties and covenants in
this Agreement. Executive also represents and warrants that Executive
will not use, in connection with his employment under this Agreement,
any 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
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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.
(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,
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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 other-wise 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,
partner, shareholder, director, officer, executive, employee, agent,
creditor, consultant, independent contractor, joint venturer, investor,
representative, trustee or in any other capacity or manner whatsoever
26
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.
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:
Xxxxxx X. Xxxxxxxxx
00 Xxxx Xxx Xxxxxxx
Xxxxxxxxx, 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 counter-
parts, 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.
29
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:
_________________________________________
Xxxxxx X. Xxxxxxxxx
30
CDI CORP.
RESTRICTED STOCK AGREEMENT
SECTION 1. Grant of Restricted Stock.
CDI Corp. (the "Company") hereby grants to Xxxxxx X.
Xxxxxxxxx (the "Executive") 6,000 shares of the Company's common stock
par value $.10 per share subject to the restrictions set forth herein.
The Company, immediately following the execution of this Agreement, will
issue or transfer 6,000 shares of the Company's common stock ("Stock")
to Executive. The Stock shall consist of eight certificates, all
registered in Executive's name (the "Certificates"), subject to the
restrictions set forth herein, and in the following amounts:
4 certificates for 1,000 shares each and 4 certificates for 500 shares
each.
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.
The following table shows the number of shares which are
eligible for vesting in each of the years listed in the table.
Executive will vest, if at all, in half of each year's shares pursuant
to the terms of Section 5(d) of the Employment Agreement between
Executive and the Company, dated August 4, 1997 (the "Employment
Agreement"). Executive will vest in the other half of each year's
shares on December 31st of such year.
1998 1999 2000 2001
---- ---- ---- ----
1,000 2,000 2,000 1,000
31
If Executive's employment with the Company terminates for any reason,
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 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.
32
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 as of
August 4, 1997.
CDI CORP.
By _____________________________________
Xxxxxxxx Xxxxxxx,
President and Chief Executive Officer
EXECUTIVE:
________________________________________
Xxxxxx X. Xxxxxxxxx
33
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 Xxxxxx X. Xxxxxxxxx (the
"Optionee") an option (the "Option" when reference is made to the right
to purchase all of the Shares) to purchase up to 60,000 shares of CDI
Corp. common stock (the "Shares" when reference is made to all or a
portion of the shares subject to the Option), according to the terms and
conditions set forth herein and in the Plan.
SECTION 2. Other Definitions.
(a) "Board" means the board of directors of the Company.
(b) "Cause" means termination of Optionee's employment
with the Company resulting from any one or more of the following events:
(i) Optionee's commission of a felony or other crime
involving moral turpitude;
(ii) Optionee's refusal to perform such services as
may be reasonably delegated or assigned to Optionee, consistent with his
position, by the President; provided, however, that a termination under
this Section 2(b)(ii) shall not be for Cause unless the Company
provides written notice to Optionee of its intention to terminate
Optionee for Cause under this Section 2(b)(ii), and Optionee fails, to
the reasonable satisfaction of the Company, to cure the defects stated
in such written notice within ten days after the notice was given to
Optionee;
(iii) Optionee's willful misconduct or gross
negligence in connection with the performance of his duties under his
Employment Agreement with the Company dated August 4, 1997 (the
"Employment Agreement") that materially adversely affects Optionee's
ability to perform his duties for the Company or materially adversely
affects the Company;
(iv) Optionee's material breach of any of the terms
or conditions of the Employment Agreement;
(v) receipt of notice from Optionee of Optionee's
intention to terminate his employment with the Company; or
(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
34
Company as long as such statement is delivered to the Company no later
than 48 hours after the Company has asked Optionee whether its
information regarding his intended termination is accurate.
(c) "Change in Control" shall mean a change in control of
a nature that would be required to be reported in response to Item 1 of
Form 8-K promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), provided, that, without limitation, such a change
in control shall be deemed to have occurred if (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Act), other than the
Company or any "person" who on the date hereof is a director or officer
of the Company, is or becomes the "beneficial owner," (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the
Company's then outstanding securities; or (ii) during any period of two
consecutive years during the term of this Agreement, individuals who at
the beginning of such period constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board, unless the election of each director who was not a director at
the beginning of such period has been approved in advance by directors
representing at least a majority of the directors then in office who
were members of the Incumbent Board or whose election was approved by
the Incumbent Board.
(d) "Committee" means the Stock Option Committee of the
Board.
(e) "Company" means CDI Corp.
(f) "Date of Exercise" means the date on which the written
notice required by Section 8 below is received by the Treasurer of the
Company.
(g) "Date of Grant" means August 4, 1997, the date on
which the Option is awarded pursuant to the Plan and this Agreement.
(h) "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.
(i) "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 and there is a corresponding reduction in Optionee's
compensation, 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.
35
(j) "Option Price" means $38-5/16, representing the Fair
Market Value of a share of Stock on the last trading date immediately
preceding the Date of Grant.
(k) "President" means the President and Chief Executive
Officer of the Company.
(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 for any reason other than death, termination by the
Company without Cause following a Change in Control, or termination by
Optionee for Good Reason;
(ii) in the event of termination of Optionee's
employment by the Company without Cause following a Change in Control or
by Optionee for Good Reason, the date two weeks after the date of such
termination;
(iii) in the event of the death of Optionee, the date
six months after the date of the Optionee's death; or
(iv) 12:00 a.m., August 4, 2004.
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 over time, as to a certain number of shares
on August 4th of each year. the following table shows the number of
shares as to which the Option will vest on August 4th of each of the
listed years :
(a) Vesting Table.
1998 1999 2000 2001 2002
---- ---- ---- ---- ----
12,000 12,000 12,000 12,000 12,000
(b) Accelerated Vesting. In addition to the vesting
provisions above: the Option shall vest and be immediately exercisable
upon the termination of the Optionee's employment with the Company
following a Change in Control of the Company if such termination is by
Company without Cause or by the Optionee for Good Reason.
36
SECTION 5. Payment for Shares by the Optionee.
Full payment for Shares purchased upon the exercise of the
Option shall be made by check or bank draft.
SECTION 6. Nontransferability of Option.
The Option may not be transferred, in whole or in part,
except by will or the applicable laws of descent and distribution.
The Option may not be exercised by any person other than the Optionee
or, in the case of the Optionee's death, by the person to whom the
Optionee's rights have passed by will or by the applicable laws of
descent and distribution.
SECTION 7. Restriction on Transfer Rights of Shares.
Whenever Shares are purchased through the exercise of all
or a portion of the Option, one-half of the purchased Shares may not be
sold or transferred until the second anniversary of their respective
Dates of Exercise, and the other half may be sold or transferred at
any time on or after their respective Dates of Exercise.
With respect to any Shares the sale or transfer of which is
restricted under this Section 7, Optionee may not engage in any
transaction designed to provide him with substantially the same economic
benefit of a sale of any Shares so restricted, such as a short sale or a
sale of a put option. Certificates representing any Shares so
restricted will be inscribed with an appropriate legend prohibiting such
transfer.
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,
37
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.
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 adjust-
ment 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:______________________________ _______________________________
Xxxxxx X. Xxxxxxxxx
