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CONSULTING AGREEMENT
THIS IS A CONSULTING AGREEMENT (hereinafter referred to as
"Agreement") made as of this third day of December, 1997, by and between
CDI Corp., a Pennsylvania corporation (hereinafter referred to as "CDI";
as the context requires in this Agreement, "CDI" will also refer to CDI
Corp.'s subsidiary, CDI Corporation) and Xxxxx X. Xxxxxx (hereinafter
referred to as "Xxxxxx").
Background
X. Xxxxxx currently serves as a member of CDI Corp.'s Board of
Directors and until recently served as CDI s Executive Vice President
and Chief Financial Officer and as a director and/or officer of numerous
CDI subsidiaries; and
X. Xxxxxx and CDI entered into an employment agreement as of April
30, 1973 (hereinafter referred to as the "Employment Agreement"), which
governs the terms of Xxxxxx employment with CDI; and
X. Xxxxxx will retire from CDI and its subsidiaries as of December
31, 1997 and the Employment Agreement will terminate at that time; and
X. Xxxxxx and CDI desire to set forth in writing the consulting
arrangement to which Xxxxxx and CDI have agreed, Xxxxxx agreement not
to compete with CDI, and Xxxxxx release and waiver of claims against
CDI.
Agreement
NOW, THEREFORE, for and in consideration of the mutual promises and
undertakings set forth below, the sufficiency of which is hereby
acknowledged by both parties, and intending to be legally bound hereby,
CDI and Xxxxxx agree as follows:
1. Term; Termination of Employment Agreement.
(a) The term of this Agreement shall commence as of January
1, 1998, and, unless sooner terminated in accordance with Section 8,
shall terminate on December 31, 2002.
(b) Effective as of December 31, 1997, Xxxxxx will retire
from employment with CDI. Effective as of November 10, 1997, Xxxxxx has
resigned as Executive Vice President and Chief Financial Officer of CDI
and as a director and officer of all direct and indirect subsidiaries of
CDI (but not as a director of CDI Corp.). Xxxxxx will
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remain an employee of CDI through December 31, 1997 under the current
terms and conditions of the Employment Agreement. CDI and Xxxxxx agree
that Xxxxxx employment under the Employment Agreement will terminate on
December 31, 1997.
(c) CDI shall pay Xxxxxx a bonus of $200,000 for services
rendered by Xxxxxx during 1997 within two weeks after the delivery of
audited financial statements to CDI for 1997.
(d) Following Xxxxxx termination of employment from CDI,
Xxxxxx, with such assistance from CDI as he may reasonably request, may
choose supplemental Medicare coverage (the "Insurance Policy") at a cost
that is reasonably acceptable to CDI. For the period January 1998
through June 30, 1999, CDI will reimburse Xxxxxx for the same percentage
of the premiums for the Insurance Policy that CDI contributed toward
Xxxxxx medical insurance coverage under the CDI group health insurance
plan in effect for CDI's active employees immediately prior to his
termination of employment from CDI.
(e) CDI shall pay Xxxxxx, on or before January 9, 1998, for
all of Xxxxxx earned but unused PDO s as of December 31, 1997 and for
all PDO s accrued through December 31, 1997. Payment for such days will
be based on Xxxxxx salary level as of December, 1997.
2. Consulting Services. During the 1998 calendar year, Xxxxxx
will render up to twenty (20) days of consulting services to CDI. These
services will be rendered at the request of the Chief Executive Officer
or the then Chief Financial Officer of CDI at times reasonably
convenient to Xxxxxx. In consideration for the consulting services, CDI
will pay Xxxxxx $80,000, such amount to be payable in two equal
installments of $40,000, each, on or before January 9, 1998 and July 1,
1998. CDI will also reimburse Xxxxxx for all necessary and reasonable
business expenses incurred by Xxxxxx in connection with his performance
of the consulting services.
3. Board Service. Xxxxxx agrees to continue to serve as a
director of CDI Corp. for the remainder of the term to which he has been
elected. Xxxxxx shall be compensated for his service on the Board in
the same manner as other outside directors, i.e., 1,334 stock options
(if permissible under CDI s stock option program for director
compensation and under applicable securities rules; otherwise Xxxxxx
will be paid $6,667) plus attendance fees.
4. Confidentiality. Xxxxxx acknowledges that during his term of
employment with CDI he has had access to confidential information of
both a technical nature and of a sensitive nature relating to CDI and
its customers. Xxxxxx acknowledges that such confidential information
is proprietary, material and important to CDI and its non-disclosure is
essential to the effective and successful conduct of CDI's business.
Xxxxxx agrees that during and after the term of this Agreement he will
hold all of this confidential information in the strictest confidence
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and will not use any of it for any purpose and will not publish,
disseminate, disclose or otherwise make any such confidential
information available to any third party, except as may be required in
connection with the performance of the consulting services contemplated
under Section 2 of this Agreement, or if CDI gives Xxxxxx prior written
consent to use such confidential information. Xxxxxx further agrees to
return to CDI upon request all CDI property and any other items that in
any way incorporate, embody or reflect any confidential information.
5. Non-Competition Obligations. Xxxxxx represents and warrants
that his experience and capabilities are such that the provisions of
this Section 5 will not prevent him from earning his livelihood, and
acknowledges that it would cause CDI serious and irreparable injury and
cost if Xxxxxx were to use his ability and knowledge in competition with
CDI or to otherwise breach the obligations contained in this Section 5.
(a) Xxxxxx acknowledges that it is essential for CDI's
protection that Xxxxxx be restrained following the termination of
Xxxxxx employment with, and consulting for, CDI from soliciting or
inducing any of CDI's officers and management employees to leave CDI's
employ, hiring or attempting to hire any of CDI's officers or management
employees, soliciting CDI's customers and suppliers for a competitive
purpose, and competing against CDI for a reasonable period of time.
(b) For the five-year term of this Agreement, Xxxxxx 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; but ownership of not more than one
percent (1%) of the outstanding stock of any publicly traded company
will not constitute a violation of this provision. "Competing Business"
means any business or other enterprise which engages in any business
conducted by CDI at the date of this Agreement or at any time during the
period Xxxxxx renders consulting services hereunder; and
(ii) directly or indirectly, solicit, interfere with or
attempt to entice away from CDI, any officer or management employees of
CDI or anyone who was one of CDI'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 CDI, any customer on behalf of a Competing Business.
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(c) References in this Section 5 to CDI shall include CDI,
its subsidiaries, divisions and affiliates.
(d) Xxxxxx acknowledges that in the event of a breach or
threat of a breach of any portion of this Section 5, CDI's remedies at
law will be inadequate, and in any such event CDI will be entitled to an
injunction to prevent breaches of this Agreement and to enforce
specifically the provisions hereof, in addition to any other remedy to
which CDI may be entitled at law or equity.
6. Non-Competition Consideration. Subject to paragraphs (b) and
(c) below, CDI will make the payments described in paragraph (a) below
provided that Xxxxxx has complied with his non-competition obligations
under Section 5 above:
(a) Commencing on March 31, 1998, and on each June 30,
September 30, December 31 and March 31 thereafter up to and including
December 31, 2002, CDI will pay Xxxxxx the sum of $25,000.
(b) If at any time Xxxxxx fails to comply with his
obligations under Section 5 hereof, and such failure is not cured within
thirty (30) days following notice from CDI of such failure, CDI's
obligation to make any further payments under Section 6(a) shall cease
and terminate forever. CDI's right to cease such payments upon a breach
by Xxxxxx of his obligations under Section 5 shall not constitute CDI's
sole remedy for such breach, and Xxxxxx acknowledges that in the event
of a breach of Section 5 of this Agreement, CDI shall remain entitled to
an injunction to prevent further breaches of the Agreement and to
enforce specifically the provisions hereof and to all other remedies
available at law or in equity for such breach.
(c) CDI's obligations to make any further payments under this
Section 6 shall cease and terminate forever upon Xxxxxx' death.
7. Release. Xxxxxx hereby, on behalf of himself, his
descendants, ancestors, dependents, heirs, executors, administrators,
assigns and successors, covenants not to make any claim or initiate any
lawsuit, and fully and forever releases and discharges CDI and its
subsidiaries, affiliates, divisions, successors, and assigns, together
with its past and present directors, officers, agents, attorneys,
insurers, employees, stockholders, and representatives (hereinafter
collectively referred to as the "CDI Group"), from any and all claims,
wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders or liabilities of whatsoever
kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected which Xxxxxx now owns or holds or has
at any time heretofore owned or held against the CDI Group, arising out
of or in any way connected with Xxxxxx employment with CDI, or the
cessation of that employment, or any other
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transactions, occurrences, acts or omissions or any loss, damage or
injury whatsoever, known or unknown, suspected or unsuspected, resulting
from any act or omission by or on the part of the CDI Group committed or
omitted prior to the date of this Agreement, including, but not limited
to claims under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, any other federal, state or local
statute or ordinance which deals with discrimination or any claim for
severance pay, bonus, salary, sick leave, holiday pay, vacation pay,
life insurance, health or medical insurance or any other fringe benefit
or disability benefit. This release and waiver of claims will not apply
with respect to (i) amounts payable to Xxxxxx with respect to his
employment through December 31, 1997 under the Employment Agreement,
(ii) any vested benefits due Xxxxxx under any CDI Corp. benefit plan, or
(iii) any amounts payable to Xxxxxx under this Agreement.
8. Taxes. The parties agree that Xxxxxx will perform the
consulting services contemplated by Section 2 of this Agreement as an
independent contractor, and that the parties will not take a position on
their tax returns (both federal and state, income and employment)
inconsistent with this position. Xxxxxx warrants and agrees that he is
responsible for any federal, state, and local taxes which may be owed by
him by virtue of the receipt of any portion of the consideration paid
hereunder and agrees to fully indemnify CDI from and against any and all
claims by any governmental authority relating to Xxxxxx failure to
fully pay such taxes.
9. Termination. The consulting arrangement shall automatically
terminate upon Xxxxxx death or his inability to perform the consulting
services requested of him due to his complete or partial disability.
CDI shall also have the right to terminate this Agreement if Xxxxxx
breaches the provisions of this Agreement in any material respect;
provided, however, that a termination of this Agreement by CDI shall not
be effective unless CDI provides written notice to Xxxxxx of its
intention to terminate this Agreement due to Xxxxxx breach and Xxxxxx
fails, to the reasonable satisfaction of CDI, to cure the defects stated
in such written notice within thirty (30) days after the notice was
given to Xxxxxx.
10. Legal Advice. Xxxxxx acknowledges that he has been encouraged
to seek the advice of an attorney of his choice in regard to this
Agreement. Xxxxxx hereby acknowledges that he understands the
significance and consequences of this Agreement and represents that the
terms of this Agreement are fully understood and voluntarily accepted by
him.
11. Drafting. Both Xxxxxx and CDI have cooperated in the drafting
and preparation of this Agreement. Hence, in any construction to be
made of this Agreement, the same shall not be construed against any
party on the basis that the party was the drafter.
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12. Revocation Period. Xxxxxx acknowledges that he was given at
least twenty-one (21) days to consider (while remaining free to execute
the Agreement at an earlier point in time) the terms of this Agreement
prior to his signing it. Xxxxxx further understands that he may revoke
this Agreement any time up to seven (7) days following the date he signs
the Agreement by giving written notice of such revocation to CDI. Such
notice must be dated no later than the seventh (7th) day following the
date on which he signed the Agreement and must be received promptly
thereafter by CDI.
13. 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.
14. Entire Agreement. This Agreement constitutes the entire
agreement concerning all subject matters addressed herein. This
Agreement supersedes and replaces all prior negotiations. All
agreements, proposed or otherwise, whether written or oral, concerning
all subject matters covered herein are incorporated into this Agreement.
If any provision of this Agreement is determined by any court of
competent jurisdiction to be unenforceable by reason of its extending
for too long a period of time or over too large a geographical area or
by reason of its being too extensive in any other respect, it will be
deemed reformed to extend only over the longest period of time for which
it may be enforceable, and/or over the largest geographical area as to
which it may be enforceable and/or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such
court in such action. Any such determination of unenforceability or
subsequent reformation will not affect any other provision or
application of this Agreement which can be given effect without the
unenforceable or reformed provision and will not invalidate, render
unenforceable or require the reformation of such provision in any other
jurisdiction. The time period for Xxxxxx'x obligations contained in
Section 5 of this Agreement will be extended beyond the time period
specified therein by the length of time, if any, during which he has
been in breach (as determined by a court of competent jurisdiction in a
final, nonappealable judgment, ruling or order or by an arbitration) of
the provisions in Section 5.
15. 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 CDI: CDI Corp.
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
To Xxxxxx: Xx. Xxxxx X. Xxxxxx
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
or to such other address as either of such parties may designate in a
written notice served upon the other party in the manner provided
herein. All notices required or permitted hereunder shall be deemed
duly given and received when delivered by hand, if personally delivered;
on the fourth (4th) 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.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania.
ATTEST: CDI CORP.
By:
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Xxxxx Xxxxxxx
President and
Chief Executive Officer
WITNESS:
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Xxxxx X. Xxxxxx
