<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CDI CORP.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF CDI CORP. APPEARS HERE]
1717 ARCH STREET, 35TH FLOOR
PHILADELPHIA, PENNSYLVANIA 19103-2768
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 7, 1996
To Shareholders:
The Annual Meeting of the Shareholders of CDI Corp. (the "Company"), a
corporation organized under the laws of the Commonwealth of Pennsylvania, will
be held in the Furness Forum on the 50th Floor of the Bell Atlantic Tower,
1717 Arch Street, Philadelphia, Pennsylvania 19103, on Tuesday, May 7, 1996,
at 10:00 A.M., for the following purposes:
1. To elect eight directors of the Company to serve during the ensuing year
or until their successors have been duly elected and qualified;
2. To act upon a proposed amendment to the Company's Non-Qualified Stock
Option and Stock Appreciation Rights Plan providing that stock options
be automatically granted to eligible directors of the Company in lieu of
cash retainer fees; and
3. To transact such other business as may properly come before the meeting
or any and all adjournments or postponements of the meeting.
Only shareholders of record on March 12, 1996 are entitled to notice of and to
vote at the Annual Meeting. IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN
PERSON AND DESIRE TO HAVE THE STOCK REGISTERED IN YOUR NAME REPRESENTED AND
VOTED AT THE MEETING, PLEASE FILL IN, SIGN, DATE AND PROMPTLY RETURN THE
ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE, TO WHICH POSTAGE NEED NOT BE
ADDED IF MAILED IN THE UNITED STATES. If you attend the meeting, you may
revoke your proxy and vote in person.
By Order of the Board of Directors
/s/ Joseph R. Seiders
Dated: March 21, 1996 JOSEPH R. SEIDERS, Secretary
Philadelphia, Pennsylvania
<PAGE>
[LOGO OF CDI CORP. APPEARS HERE]
1717 ARCH STREET, 35TH FLOOR
PHILADELPHIA, PENNSYLVANIA 19103-2768
-----------------------------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 7, 1996
-----------------------------------------------
GENERAL INFORMATION
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors (the
"Board") of CDI Corp. (the "Company") to be used at the Annual Meeting of
Shareholders to be held on Tuesday, May 7, 1996 at 10:00 A.M. in the Furness
Forum on the 50th Floor of the Bell Atlantic Tower, 1717 Arch Street,
Philadelphia, Pennsylvania and at any and all adjournments or postponements of
that meeting. The date of mailing of this Proxy Statement and the form of
proxy to the Company's shareholders is on or about March 21, 1996.
The solicitation of proxies is being handled by the Company at its cost,
principally through the use of the mails. If it appears desirable to do so in
order to assure adequate representation of shareholders at the meeting,
officers and other employees of the Company may communicate with shareholders,
banks, brokerage firms or nominees by telephone or in person to request that
proxies be furnished in time for the meeting. No solicitation is being made by
specially engaged employees of the Company or paid solicitors.
If the enclosed form of proxy is executed and returned, it may, nevertheless,
be revoked by giving written notice of such revocation to the Secretary of the
Company at any time prior to the voting thereof. The proxy is in such a form
that authority to vote for the election of all or any one of the directors can
be withheld and that separate approval or disapproval can be indicated with
respect to Proposal Two, which is identified in the proxy and the accompanying
Notice of Annual Meeting of Shareholders and is set forth and commented upon in
this Proxy Statement. The shares represented by the proxy will be voted for the
election of all of the directors unless authority to do so is withheld and will
be voted for approval of the amendment to the Company's Non-Qualified Stock
Option and Stock Appreciation Rights Plan set forth in Proposal Two unless a
contrary choice is specified.
ANNUAL REPORT
The Company's Annual Report to Shareholders for the year ended December 31,
1995 is being mailed to all shareholders together with this Proxy Statement.
That report is not to be regarded as proxy solicitation material or as a part
of this Proxy Statement.
1
<PAGE>
VOTING RIGHTS
There were issued and entitled to vote, as of March 12, 1996, 19,820,428
shares of the common stock, par value $.10 per share, of the Company ("Common
Stock"), the only class of stock of the Company now issued and outstanding.
Shareholders are entitled to one vote for each share of stock held. The
presence, in person and by proxy, of a majority of the number of outstanding
shares of stock entitled to vote at the Annual Meeting will constitute a
quorum for the transaction of business. A quorum being present, proposals will
be decided by a majority of the votes cast, in person and by proxy, at the
Annual Meeting by all shareholders entitled to vote thereon. Shares
represented by proxies that reflect abstentions and shares referred to as
"broker nonvotes" (i.e., shares held by brokers or nominees as to which
instructions have not been received from beneficial owners and as to which the
broker or nominee does not have discretionary voting power on a particular
matter, such as Proposal Two described below) will be treated as being present
for purposes of determining the presence of a quorum but will not constitute a
vote cast with respect to any matter. Only shareholders of record at the close
of business on March 12, 1996 will be entitled to vote at the meeting.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT STOCK OWNERSHIP
As of February 14, 1996, the following persons and entities were known by
the Company to be beneficial owners of more than 5% of the outstanding Common
Stock of the Company. The following table shows, as of that date, the number
of shares of Common Stock so owned and the percentage of outstanding Common
Stock represented by the number of shares so owned.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
NAME AND ADDRESS OF OF COMMON STOCK OUTSTANDING
BENEFICIAL OWNER OWNED BENEFICIALLY* COMMON STOCK
------------------- ------------------- -------------
<S> <C> <C>
Donald W. Garrison, Christian M. Hoechst, 6,084,556 30.6%
Allen I. Rosenberg and Barton J. Winokur, as (1)
Co-Trustees, or Messrs. Rosenberg and Winokur,
as Co-Trustees, of various trusts for the
benefit of members of Walter R. Garrison's
family
c/o Robert L. Freedman, Esquire
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Walter R. Garrison 1,938,563 9.8%
1717 Arch Street, 35th Floor (2)
Philadelphia, PA 19103-2768
FMR Corp. 1,334,700 6.7%
82 Devonshire Street
Boston, MA 02109
</TABLE>
- --------
* Except as indicated in the footnotes below, the Company is informed that the
respective beneficial owners have sole voting power and sole investment
power with respect to the shares shown opposite their names.
2
<PAGE>
(1) Each trustee under these family trusts shares voting and investment power
with respect to these shares with the other trustees but disclaims any
beneficial interest except as a fiduciary. Those trustees who are also
directors of the Company own of record and beneficially the number of
shares of stock shown opposite their names on the following table, with
respect to which they have sole voting and investment power.
(2) Includes 28,705 shares held by Mr. Garrison's wife, 65,350 shares held by
a trust for the benefit of Mr. Garrison's wife (of which Mr. Garrison is a
trustee) and 29 shares for which Mr. Garrison's wife is custodian. Does
not include the shares held by the various family trusts referred to in
the table above or 175,000 shares held by The Garrison Foundation or
22,000 shares held by The Garrison Family Foundation. See footnotes (1)
and (3) to the following table.
The following table sets forth, as to each director and executive officer of
the Company individually and as to all directors and executive officers of the
Company as a group, the number of shares of Common Stock owned as of February
5, 1996 and the percentage of outstanding Common Stock represented by the
number of shares so owned.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
OF COMMON STOCK OUTSTANDING
NAME OF INDIVIDUAL OR GROUP OWNED BENEFICIALLY* COMMON STOCK
- --------------------------- ------------------- -------------
<S> <C> <C>
Walter E. Blankley 1,000 Less than .1%
Walter R. Garrison 1,938,563 (1)(2)(3) 9.8%
Christian M. Hoechst 336,338 (2)(3) 1.7%
Lawrence C. Karlson 30,000 .2%
Edgar D. Landis 375,000 1.9%
Allen M. Levantin 32,000 (4) .2%
Alan B. Miller 2,000 Less than .1%
John W. Pope 831,800 (3)(5) 4.2%
Barton J. Winokur 213,628 (2)(3)(6) 1.1%
All directors and
executive officers
as a group (9
persons) 3,760,329 (7) 18.9%
</TABLE>
- --------
* Except as indicated below, the Company is informed that the respective
beneficial owners have sole voting power and sole investment power with
respect to the shares shown opposite their names.
(1) Includes 28,705 shares held by Mr. Garrison's wife, 65,350 shares held by
a trust for the benefit of Mr. Garrison's wife (of which Mr. Garrison is a
trustee) and 29 shares for which Mr. Garrison's wife is custodian. Does
not include the 22,000 shares held by The Garrison Family Foundation,
which is a charitable trust. Mr. Garrison is one of fifteen trustees of
The Garrison Family Foundation, but disclaims beneficial ownership of the
foundation's shares except as a fiduciary.
(2) Does not include 6,084,556 shares of Common Stock held in various trusts
created by Walter R. Garrison for the benefit of members of his family.
These shares are referenced above in the Principal Shareholders table
under the names of the co-trustees of the various trusts. Except for
Donald W. Garrison (who is Walter R. Garrison's brother) and Allen I.
Rosenberg, each trustee of these trusts is either a director or both an
officer and director of the Company. Walter R. Garrison disclaims
beneficial ownership of these shares, as do the trustees except as
fiduciaries.
3
<PAGE>
(3) Does not include 175,000 shares held by The Garrison Foundation, a
charitable trust established for the benefit of the Pennsylvania Institute
of Technology. The trustees of The Garrison Foundation are Messrs.
Hoechst, Pope, Winokur, Walter R. Garrison and Joseph L. Carboni. Except
for Mr. Carboni, each trustee is either a director or both an officer and
director of the Company. The trustees disclaim beneficial ownership of
these shares except as fiduciaries.
(4) Includes 30,000 shares which Mr. Levantin presently has the right to
acquire through the exercise of options.
(5) Consists of 818,300 shares held by Variety Wholesalers, Inc. (of which Mr.
Pope is Chairman of the Board, President and Chief Executive Officer) and
13,500 shares held by Mr. Pope's wife. Does not include 265,200 shares
held by the John William Pope Foundation, a non-profit foundation of which
Mr. Pope is a non-voting Director Emeritus. Mr. Pope disclaims beneficial
ownership of the shares held by that foundation.
(6) Does not include 20,000 shares held by an irrevocable trust of which Mr.
Winokur is the sole trustee. Mr. Winokur has no beneficial interest in the
income or corpus of that trust and disclaims beneficial ownership of those
shares except as a fiduciary.
(7) If the 6,084,556 shares held in the Garrison family trusts referred to in
footnote (2) above, the 175,000 shares held by The Garrison Foundation and
the 22,000 shares held by The Garrison Family Foundation were combined
with the 3,760,329 shares shown in the table as held by directors and
executive officers as a group, the total would be 10,041,885 shares or
50.5% of the outstanding Common Stock.
PROPOSAL ONE
ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting of Shareholders, to
hold office until the next Annual Meeting of Shareholders or until their
successors are elected and qualified. The persons named in the enclosed form
of proxy (Joseph R. Seiders and Craig H. Lewis) have advised the Company that
they intend to vote FOR the eight nominees below unless authority to do so is
withheld. Each of these nominees has been designated by, and each is currently
a member of, the Board of Directors. The Board is not aware of any reason why
any nominee will be unable to stand for election as a director or serve if
elected, but if any such nominee should become unavailable, the Board may
nominate, and the persons named in the accompanying form of proxy may vote
for, a substitute nominee. One of the Company's current directors, John W.
Pope, has decided not to stand for reelection, and upon the expiration of Mr.
Pope's term (which coincides with the 1996 Annual Meeting of Shareholders),
the number of directors constituting the Board will be reduced to eight.
4
<PAGE>
INFORMATION ABOUT THE NOMINEES
The following table sets forth information about the nominees for election
to the Board of Directors.
<TABLE>
<CAPTION>
DIRECTOR OF PRINCIPAL PRESENT POSITION, BUSINESS EXPERIENCE
NAME AGE COMPANY SINCE** DURING PAST FIVE YEARS AND OTHER DIRECTORSHIPS
---- --- --------------- -----------------------------------------------
<S> <C> <C> <C>
Walter E. Blankley +# 60 1994 Chairman of the Board and Chief Executive
Officer of AMETEK, Inc., Paoli, PA
(manufacturer of electric motors, precision
instruments and industrial materials) since
1993; President and Chief Executive Officer
of AMETEK, Inc., from 1990-1993; Director of
Amcast Industrial Corporation
Walter R. Garrison * 69 1958 Chairman of the Board, President and Chief
Executive Officer of the Company since 1961
Christian M. Hoechst 59 1974 Executive Vice President of the Company
since 1971 (retiring on April 30, 1996)
Lawrence C. Karlson *+# 53 1989 Private investor and Chairman of the Board
and Chief Executive Officer of Karlson
Corporation, Blue Bell, PA (consulting
services) since April 1993; Chairman of the
Board of Spectra-Physics AB, Stockholm,
Sweden (instrumentations manufacturer) from
1990-1993; Director of AmeriSource Corp. and
Meridian Bancorp Inc.
Edgar D. Landis * 64 1975 Executive Vice President, Finance of the
Company since 1987
Allen M. Levantin 63 1989 Chairman and Chief Executive Officer of
Todays Temporary, Inc., a subsidiary of the
Company, since November 1, 1994 (serving
part-time); President and Chief Executive
Officer of CDI Temporary Services Inc., a
subsidiary of the Company, from July 1991 to
December 1992
Alan B. Miller + 58 1994 Chairman of the Board, President and Chief
Executive Officer of Universal Health
Services, Inc. (hospital management and
health care services); Director and Chairman
of the Board of Universal Health Realty
Income Trust; Director of Genesis Health
Ventures Inc., GMIS Inc. and Penn Mutual
Life Insurance Co.
Barton J. Winokur *+#(S) 56 1968 Partner in the law firm of Dechert Price &
Rhoads, Philadelphia, PA; Director of
AmeriSource Corp., The Bibb Company, DavCo
Restaurants, Inc. and Farm Fresh, Inc.
</TABLE>
- --------
* Member of the Executive Committee
+ Member of the Audit Committee
# Member of the Compensation Committee
(S) Member of the Stock Option Committee
** References to periods served as a director of the Company include periods
served as a director of CDI Corporation, the Company's predecessor
registrant under the Securities Exchange Act of 1934.
5
<PAGE>
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
The Board of Directors of the Company held six meetings during 1995, and
acted on one other occasion by unanimous written consent. The Board of
Directors has four standing committees: an Executive Committee, an Audit
Committee, a Compensation Committee and a Stock Option Committee. There is no
Nominating Committee or any committee performing the function of a nominating
committee.
The Executive Committee has the general authority of the Board, subject to
certain limitations, to act on behalf of the Board. This Committee held four
meetings during 1995, and acted on three other occasions by unanimous written
consent.
The Audit Committee reviews with KPMG Peat Marwick LLP, the Company's
independent auditors, the proposed scope of their examination and their
subsequent report on each annual audit, preliminary to the consideration
thereof by the full Board of Directors; monitors the independence of the
auditors; and reviews the Company's internal accounting controls, practices
and policies as well as the Company's internal audit function. The Audit
Committee held three meetings during 1995.
The Compensation Committee advises the Company on executive compensation
matters. This Committee held four meetings during 1995.
The Stock Option Committee administers the Company's Non-Qualified Stock
Option and Stock Appreciation Rights Plan. This Committee held no meetings
during 1995, but acted on two occasions by unanimous written consent.
John W. Pope, a current director who has decided not to stand for
reelection, is presently a member of the Compensation Committee and Stock
Option Committee.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, as well as beneficial owners of more than
10% of the Company's Common Stock, to file with the U.S. Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock. To the Company's knowledge, based on a review of
copies of such reports furnished to the Company and on written representations
made by such persons, the Company's directors, executive officers and
beneficial owners of more than 10% of Common Stock have complied with all
Section 16(a) filing requirements with respect to 1995, except that Alan B.
Miller, a director of the Company, was late on three occasions in filing
reports related to four purchases of an aggregate of 2,000 shares of Common
Stock.
6
<PAGE>
COMPENSATION OF DIRECTORS
Directors currently receive the following compensation for their
participation on the Board: each director who is not a full-time employee of
the Company or one of its subsidiaries is paid a retainer fee of $20,000 per
year for service on the Board (all or a portion of which may be paid in the
form of stock options, as described in the following paragraph) plus meeting
attendance fees of $1,000 for each Board meeting attended plus $500 for each
Audit Committee meeting attended.
Each director who is not a full-time employee of the Company and who is also
not a member of the Stock Option Committee of the Board is paid half of his
annual retainer fee in stock options of the Company (in lieu of cash) and can
elect to be paid all or a portion of the remaining half of the annual retainer
fee in stock options. The exercise price of such stock options is the market
value of the Common Stock as of the last trading day immediately preceding the
date of grant. To determine the number of options granted to the director in
lieu of cash retainer fees, each option is valued at 25% of its exercise
price. With respect to the half of the retainer fee that is automatically paid
in stock options, the options are granted at the beginning of the retainer fee
year, which is the date immediately following the annual shareholders'
meeting. With respect to the other half (the elective portion), directors must
make their elections by the beginning of the retainer fee year and options are
granted six months after the beginning of the retainer fee year. Stock options
granted to directors in lieu of cash retainer fees do not become exercisable
until one year after the date of grant.
Directors who serve on the Stock Option Committee are currently ineligible
to receive stock options and all retainer fees due such persons are paid
entirely in cash. Any director who is also a full-time employee of the Company
or one of its subsidiaries does not receive any fees for service on the Board
or any of its committees.
Proposal Two, which is described below in this Proxy Statement, contains
various proposed changes to the current arrangements under which certain
directors of the Company are paid their retainer fees in the form of stock
options.
The Company has a consulting arrangement with one of its directors, Lawrence
C. Karlson. Under this arrangement, Mr. Karlson provides consulting services
as requested from time to time by the Chief Executive Officer of the Company
and Mr. Karlson is paid a fee of $4,000 for each eight-hour day that he
provides such services and is reimbursed for the expenses that he incurs in
connection with providing such services. During 1995, Mr. Karlson earned
consulting fees of $75,692.
7
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding the
compensation for services to the Company and its subsidiaries during each of
the last three fiscal years which was earned by the three executive officers
of the Company, constituting the only three key policy-making members of
management. These officers are elected annually by the Board of Directors.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------------------------
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1)
- --------------------------- ---- -------- ---------- ----------------
<S> <C> <C> <C> <C>
Walter R. Garrison, 1995 $ 65,000 $1,038,143 $55,668
Chairman of the Board, 1994 65,000 1,037,584 53,231
President and Chief Executive Officer 1993 65,000 352,683 20,641
Christian M. Hoechst, 1995 80,000 1,543,549 67,334
Executive Vice President 1994 80,000 617,583 28,168
(retiring on April 30, 1996) 1993 80,000 261,648 18,476
Edgar D. Landis, 1995 227,000 150,000 18,525
Executive Vice President, 1994 217,800 150,000 13,032
Finance 1993 200,000 50,000 10,148
</TABLE>
- --------
(1) All Other Compensation in 1995, 1994 and 1993 consisted entirely of
Company contributions and allocations to the following employee benefit
plans: the Company's qualified Retirement Plan ($6,735 to the account of
each of Messrs. Garrison, Hoechst and Landis in 1995), the Company's
qualified 401(k) plan ($400 to the account of each of Messrs. Garrison,
Hoechst and Landis in 1995) and the Company's non-qualified excess
benefits plan ($48,533 to the account of Mr. Garrison, $60,199 to the
account of Mr. Hoechst and $11,390 to the account of Mr. Landis in 1995).
EMPLOYMENT AGREEMENTS
The Company has employment agreements with all three of the executive
officers included in the above Summary Compensation Table.
Mr. Garrison's current employment agreement, which was entered into in 1973,
provides for a base salary of $65,000 and a bonus based on a percentage of the
Company's pre-tax earnings from continuing operations. The bonus is 2% of the
first $500,000 of pre-tax earnings and 2 3/4% of pre-tax earnings in excess of
$500,000. The agreement is automatically renewed on an annual basis unless
terminated by either party at the end of any fiscal year on two months'
notice. The agreement contains certain noncompetition and nonsolicitation
covenants of Mr. Garrison which are effective for a period of two years after
termination of employment for any reason.
8
<PAGE>
Mr. Hoechst's current employment agreement, which was entered into in 1986,
provides for a base salary of $80,000 and a bonus made up of three components.
The first component is 2 1/2% of the pre-tax earnings of those operations
under his direct supervision. The second component is 1/2% of the pre-tax
earnings of the remaining operations of the Company, with the bonus relating
to this second component capped at $70,000 per year. The third component is
also based on a percentage of the pre-tax earnings of those operations under
his direct supervision, with the applicable percentage depending on the pre-
tax earnings return on the net working assets used in those operations. This
employment agreement will terminate on April 30, 1996, the date of Mr.
Hoechst's planned retirement from the Company. A description of the agreement
entered into by the Company and Mr. Hoechst in connection with his retirement
is provided below.
Mr. Landis' employment agreement, which was entered into in 1973, provides
for a salary which has since been increased to the level indicated in the
Summary Compensation Table above. The agreement can be terminated by either
party on two weeks' notice. The agreement contains certain noncompetition and
nonsolicitation covenants of Mr. Landis which are effective for a period of
six months after termination of employment for any reason.
SUPPLEMENTAL PENSION AGREEMENT
Under a 1978 supplemental pension agreement with Mr. Garrison, the Company
will, upon his retirement, pay him an additional pension of $35,000 per year
for 15 years. If Mr. Garrison dies prior to receiving all such payments, his
beneficiaries will receive the balance remaining in a lump-sum payment. The
Company's obligation to make such payments is conditioned upon the
satisfactory performance by Mr. Garrison of his duties until retirement.
NON-COMPETITION AND CONSULTING AGREEMENT
In October 1995, following the decision by Mr. Hoechst to retire as an
officer and employee of the Company as of April 30, 1996, the Company and Mr.
Hoechst entered into a Non-Competition and Consulting Agreement. That
agreement contains various noncompetition and nonsolicitation obligations of
Mr. Hoechst that extend until July 31, 2001. Subject to his continued
compliance with those obligations, the Company will make quarterly payments of
$66,250 to Mr. Hoechst through July 31, 2001 and will pay the costs of certain
health, disability and life insurance coverage for Mr. Hoechst through July
31, 2001. In addition, Mr. Hoechst agreed to render up to 25 days of
consulting services to the Company during the period May 1, 1996 through July
29, 2001, for total compensation of $100,000. The $100,000 for consulting
services is payable to Mr. Hoechst in four installments of $25,000 each, the
last installment of which is payable on February 1, 1997.
9
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee's policy with respect to the compensation of
executive officers for 1995 was that a substantial portion of the compensation
should be dependent upon the Company's performance. The base salaries of
Messrs. Garrison and Hoechst and the formulas for their bonuses have remained
unchanged since their current Employment Agreements were signed in 1973 and
1986, respectively. Mr. Garrison's bonus is based on the pre-tax earnings of
the Company, and Mr. Hoechst's bonus is based primarily on the pre-tax
earnings of the operations under his direct supervision. Those salary and
bonus arrangements are described in more detail elsewhere in this Proxy
Statement.
The Company's manufacturing technology business which serves the automotive
market became a discontinued operation at the end of 1995. As provided in his
Employment Agreement, Mr. Garrison's bonus is based on the pre-tax earnings of
the Company from continuing operations. Accordingly, the approximately $14.5
million operating loss incurred by the manufacturing technology business in
1995 while it was a continuing operation was included in the calculation of
Mr. Garrison's bonus. On the other hand, the reserves established at the end
of 1995 for the estimated losses to be incurred in 1996 after the
manufacturing technology business became a discontinued operation were
excluded from the calculation of Mr. Garrison's bonus.
The Committee intends that the salary paid to Edgar D. Landis, the Company's
Executive Vice President and chief financial officer, which was $227,000 in
1995, be roughly comparable to the average salary paid to chief financial
officers of companies in service businesses of a similar size to the Company,
though the Committee does not seek to adhere rigidly to this comparison in
setting Mr. Landis' salary. Bonuses to Mr. Landis are determined in the sole
discretion of the Committee. In recent years, in determining Mr. Landis'
bonus, the Committee has examined factors such as the level of the Company's
earnings, the average total compensation given to chief financial officers of
other companies of similar size and complexity as the Company, and Mr. Landis'
contribution to the performance of the Company during the year. The Committee
does not assign any particular priority or relative weight to these factors,
and acknowledges that the determination of Mr. Landis' compensation is
subjective. In 1995 and 1994, the Committee awarded a $150,000 bonus to
Mr. Landis, which was $100,000 higher than the bonus awarded to him in 1993.
The Committee has considered the impact of recently-enacted Section 162(m)
of the Internal Revenue Code, which limits the deductibility by the Company of
certain compensation in excess of $1 million that is paid to the executive
officers named in this Proxy Statement. Counsel to the Company have advised
that, presently, compensation paid to Messrs. Garrison and Hoechst under their
1973 and 1986 employment agreements is not subject to this limitation because
it is exempt under the rule's "grandfather" provisions. That particular
exemption would be lost at such time as either of their employment agreements
were modified. As a result of the "grandfather" provisions applicable to
10
<PAGE>
Messrs. Garrison and Hoechst and because the historic level of compensation
paid to Mr. Landis has not approached the $1 million level, the Compensation
Committee has not needed to adopt a policy with respect to the deductibility
limit. The Committee will consider the adoption of such a policy when the
deductibility limitation becomes relevant to the Company's executive officers.
However, the Board has thus far attempted to ensure that the Company's Non-
Qualified Stock Option and Stock Appreciation Rights Plan satisfies the
requirements for a "performance-based" stock option plan under the Section
162(m) regulations so that any compensation to executive officers under that
Plan would be exempt from the deductibility limitation. As an example of such
efforts, the Board in 1995 submitted to the shareholders of the Company a
proposed amendment to that Plan which restricted the number of stock options
and stock appreciation rights that may be granted to an individual in any one
calendar year. That amendment was approved by the Company's shareholders at
the 1995 annual meeting.
COMPENSATION COMMITTEE:
Lawrence C. Karlson, Chairman
Walter E. Blankley
John W. Pope
Barton J. Winokur
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Lawrence C. Karlson, Chairman of the Compensation Committee, has a
consulting agreement with the Company pursuant to which he is paid a fee of
$4,000 (plus expenses) for each eight-hour day that he renders consulting
services to the Company, as requested by the Chief Executive Officer of the
Company. Barton J. Winokur, a member of the Compensation Committee, is a
partner of Dechert Price & Rhoads, which performed legal services for the
Company during 1995.
11
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The following graph sets forth the cumulative total shareholder return
(assuming an investment of $100 on December 31, 1990 and the reinvestment of
any dividends) for the last five fiscal years on (a) the Common Stock of the
Company, (b) the Standard & Poor's (S&P) 500 Index, and (c) a peer group index.
The peer group selected by the Company consists of the following companies: (i)
Butler International Inc., Kelly Services, Inc., Manpower Inc., Olsten
Corporation, Robert Half International Inc., Uniforce Temporary Personnel, Inc.
and Volt Information Sciences, Inc., all of which are in the staffing business
(including the temporary placement of office and technical personnel and
permanent placement), and (ii) Foster Wheeler Corporation, Jacobs Engineering
Group, Inc. and Stone & Webster, Inc., all of which are in the engineering,
design and construction business. While the latter three companies often work
on projects significantly larger in size than does the Company in its
engineering and design business and only occasionally compete directly with the
Company, the Company believes that it and these three companies share various
important business characteristics.
"A LINE GRAPH SHOWING COMPARISON BETWEEN CDI CORP., PEER GROUP AND S&P 500 IS IN
THIS POSITION IN THE PRINTED PROXY STATMENT. A PAPER COPY OF THE GRAPH IS BEING
SUBMITTED TO THE FILER'S BRANCH CHIEF IN THE DIVISION OF CORPORATE FINANCE."
<TABLE>
<CAPTION>
Year Ended December 31
- ------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
CDI GROUP $100 $105.56 $124.07 $185.19 $294.44 $266.67
Peer Group 100 126.57 145.90 157.40 185.85 229.18
S&P 500 100 130.47 140.41 154.56 156.60 215.45
</TABLE>
12
<PAGE>
PROPOSAL TWO
PROPOSED AMENDMENT TO THE COMPANY'S
NON-QUALIFIED STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
PROVIDING THAT STOCK OPTIONS BE AUTOMATICALLY GRANTED
TO ELIGIBLE DIRECTORS IN LIEU OF CASH RETAINER FEES
The Company maintains a Non-Qualified Stock Option and Stock Appreciation
Rights Plan (the "Plan") under which the Company may grant options ("Options")
to purchase shares of its Common Stock or stock appreciation rights ("SARs"),
either alone or in tandem with Options. A more complete description of the
Plan begins on page 14 in this Proxy Statement. Since May 1995, the Plan has
provided that each director of the Company who is not a full-time employee of
the Company and who is not a member of the Stock Option Committee of the Board
will be paid half of his annual retainer fee in Options (in lieu of cash) and
can elect to be paid all or a portion of the remaining half of the annual
retainer fee in Options. Additional terms of the existing arrangement to grant
Options to directors in lieu of cash retainer fees are set forth above on page
7 under "Compensation of Directors".
DESCRIPTION OF AND REASONS FOR THE PROPOSED AMENDMENT TO THE PLAN
On February 1, 1996, the Board of Directors of the Company approved, subject
to shareholder approval, an amendment to the Plan which would modify the
existing directors' stock option arrangement in the following respects: (1)
eligible directors, as described below, would receive Options instead of cash
retainer fees; (2) eligible directors would be all directors of the Company
who are not full-time employees of the Company, including directors who serve
on the Stock Option Committee, but excluding any director whose compensation
for service on the Board is included in the income of a corporation or
partnership of which the director is an employee or partner; and (3) each
eligible director would automatically be granted 4,000 Options per year in
lieu of cash retainer fees (or such higher or lower number of Options as is
determined by the Board, which may not change the number more than once every
six months, and as adjusted for stock dividends and splits or other changes in
the capitalization of the Company). Half of the annual Options would be
granted on the first day of the retainer year (which is the date immediately
following the annual shareholders' meeting) and the remaining half would be
granted on the date six months after the start of the retainer year. Any
director who is not a full-time employee of the Company and whose compensation
for service on the Board is included in the income of a corporation or
partnership of which the director is an employee or partner would continue to
receive cash retainer fees.
As is the case under the existing arrangement, Options granted to directors
in lieu of cash retainer fees under the proposed new arrangement would have an
exercise price equal to the market value of the Common Stock as of the last
trading day immediately preceding the date of grant, and, unless the Board
determined otherwise, (a) the Options would not be exercisable until one year
after the date of grant, (b) Options would expire and become unexercisable
five years from the date of grant, and (c) if between the time that Options
are granted and the time that the Options would become exercisable, a director
ceases to be a member of the Board for any reason, the unvested Options would
expire and become unexercisable and the director would be paid cash equal to
the portion of his or her annual retainer fee represented by the portion of
the year during which the director served on the Board. If
13
<PAGE>
approved by the shareholders of the Company, this new arrangement would become
effective for the retainer year which starts on May 8, 1996.
The Board believes that compensating non-employee directors in the form of
stock options instead of in cash is in the best interests of the Company
because it aligns the directors' long-term interests with those of the
shareholders and because the availability of stock options helps attract and
retain highly qualified non-employee directors who are important to the
success of the Company. The Board has proposed this new directors' stock
option arrangement in order to expand the use of options in payment of
directors' retainer fees and to enable members of the Stock Option Committee
to be eligible to receive stock options in lieu of cash retainer fees and yet
remain "disinterested" for purposes of Rule 16b-3 under the Securities and
Exchange Act of 1934. Members of the Stock Option Committee must be
disinterested in order for the Plan to maintain its exemption under Rule 16b-
3.
If Proposal Two is adopted and if, during the year beginning May 8, 1996,
the Board consists of the persons nominated in Proposal One, then 4,000
Options would be granted to each of Messrs. Blankley, Hoechst, Karlson,
Levantin and Miller during the year, for a total of 20,000 Options. (One non-
executive director, Barton J. Winokur, would continue to receive cash retainer
fees because his compensation for service on the Board is included in the
income of the law firm of which he is a partner.) Messrs. Blankley, Karlson,
Levantin and Miller, who are nominees for reelection as directors under
Proposal One, have each been previously granted 4,175 Options in lieu of cash
retainer fees. Mr. Levantin, who has also served as an officer of a subsidiary
of the Company, has been granted an additional 30,000 Options. A total of
46,700 Options have been previously granted to non-executive directors.
DESCRIPTION OF THE PLAN
The Plan provides for two incentive elements, Options and SARs. An Option
gives the holder the right to purchase from the Company a specified number of
shares of Common Stock for a specified price during a specified period. An SAR
gives the holder the right, without payment to the Company, to receive its
"value", one-half in cash and one-half in shares of Common Stock. The "value"
of an SAR which is attached to an Option (see the description below of when an
SAR is attached to an Option) is the excess, if any, of the market price of
one share of Common Stock of the Company on the date the SAR is exercised over
the option price of one share under the attached Option. The "value" of an SAR
which is not attached to an Option is the excess, if any, of the market price
of the Common Stock on the date the SAR is exercised over the amount fixed by
the committee which administers the Plan on the date the SAR was granted (the
"SAR Reference Price").
The Plan is administered by a committee (the "Committee") composed of not
less than two directors of the Company appointed by the full Board of
Directors. Committee members are not presently eligible to receive Options or
SARs under the Plan, though if Proposal Two is adopted, they would be eligible
to receive Options in lieu of their cash retainer fees. Under the Plan, the
Committee may grant SARs and Options (either with or without SARs attached) to
salaried employees (including executive officers), consultants and directors
of the Company and certain of its subsidiaries. As of December 31, 1995 there
were approximately 1,700 eligible participants, consisting of approximately 12
consultants, 12 non-employee directors and the remainder being salaried
employees. Subject to the provisions of the Plan and except for Options
automatically granted to eligible directors in lieu of cash
14
<PAGE>
retainer fees, the Committee has full authority to determine which eligible
participants shall be granted Options and SARs and the amounts and other terms
of such Options and SARs. However, except for Options automatically granted to
directors in lieu of their cash retainer fees, any Options or SARs granted to
a member of the Board of Directors must be approved by a majority of the Board
not including the recipient.
The maximum number of shares of Common Stock which may be issued under the
Plan on and after April 30, 1991, pursuant to the exercise of Options or SARs,
is 1,100,000. No eligible individual may be granted, in any one calendar year,
Options or SARs with respect to more than 400,000 shares of Common Stock (such
number of shares is subject to appropriate adjustment in the event of certain
changes in capitalization of the Company, such as stock dividends and splits).
As of March 4, 1996, there were a total of 141,675 Options outstanding which
were held by employees of the Company (including 34,175 Options held by Allen
M. Levantin, who is also a director of the Company). None of those Options
were held by executive officers of the Company. The closing price per share of
the Company's Common Stock on the New York Stock Exchange on March 12, 1996
was $27.00.
The option price for Options granted under the Plan is determined by the
Committee, but may not be less than 50% of the fair market value of the shares
subject to the Option on the date of grant of such Option. The option price
may be paid in cash, in shares of Common Stock which have an aggregate fair
market value equal to the option price or in any combination of cash and
shares with an aggregate value equal to the option price. Upon exercise of an
Option, any SAR attached to such Option automatically expires.
The Committee may grant Options to eligible participants with or without
SARs attached. When SARs are granted in conjunction with Options each SAR will
attach to an Option to purchase one share of Common Stock. Upon exercise of an
SAR attached to an Option, the related Option automatically expires. The
Committee may also grant SARs which are not attached to Options. With respect
to SARs not attached to Options, the SAR Reference Price is determined by the
Committee, but may not be less than 50% of the fair market value of one share
of Common Stock on the date of grant of the SAR.
Options and SARs granted under the Plan are not exercisable after five years
from the date of grant unless the Committee otherwise provides. Options and
SARs are not transferable except by will or the laws of descent and
distribution, and during the lifetime of the participant are exercisable only
by him or her. Options and SARs terminate upon the death of the participant
or, unless otherwise determined by the Committee, on the termination of his or
her qualifying relationship with the Company or its subsidiaries. However, if
a participant dies, to the extent provided in his or her Option or SAR
agreement, the participant's estate or the participant's heirs or
beneficiaries may exercise the unexercised portion of his or her Option or SAR
within six months after the participant's death. In no event, however, may an
Option or SAR be exercised after its stated date of expiration.
The Board of Directors may terminate or amend the Plan at any time, but any
amendment which (i) increases the number of shares that may be issued under
the Plan, (ii) changes the class of persons eligible to receive Options or
SARs, (iii) deprives the Committee of authority to administer the Plan, or
(iv) otherwise requires the approval of the shareholders of the Company in
order to maintain the exemption available under Rule 16b-3 of the Securities
Exchange Act of 1934 will require the prior approval of the shareholders of
the Company.
15
<PAGE>
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES
The Company has been advised by its counsel that under present federal
income tax laws, the federal income tax consequences of the grant or exercise
of Options and SARs (including Options granted to directors in lieu of cash
retainer fees) are as follows:
Non-Qualified Stock Options. A participant will recognize no income and the
Company will receive no deduction for federal income tax purposes when an
Option is granted. Upon exercise of an Option, a participant will recognize
ordinary income in an amount measured by the excess of the fair market value
of the shares on the date of exercise over the option price, and the Company
will be entitled to a deduction in the same amount, provided, in the case of
certain executive officers, that the requirements of Section 162(m) of the
Internal Revenue Code are met. Section 162(m) places an annual $1 million
limit on the allowable deduction for compensation paid or accrued with respect
to the chief executive officer and each of the four most highly compensated
executive officers (other than the chief executive officer) of a publicly-held
company. This limitation, however, does not apply to compensation attributable
to stock options or SARs if the requirements for "performance-based"
compensation are met. The Plan currently meets such requirements.
The participant's holding period for shares received upon exercise of an
Option will begin to run from the date of exercise of the Option. Upon the
sale of the Option shares, the participant will recognize short-term or long-
term capital gain (or loss), depending upon whether the shares have been held
for more than one year. Such gain (or loss) will be measured by the difference
between the sale price of the shares and the fair market value of the shares
on the date that the Option was exercised.
If a participant pays the Option price with previously-owned shares of
Common Stock, he or she will be treated as having exchanged the number of
shares surrendered for an equal number of shares received upon the exercise of
the Option in a tax-free exchange. However, he or she will recognize income,
and the Company will be entitled to a corresponding deduction, in an amount
equal to the fair market value of the number of shares received in excess of
the fair market value of the number of shares surrendered. The participant's
tax basis in the shares received in the tax-free exchange will be equal to his
or her tax basis in the shares surrendered in the exchange. The tax basis in
the remaining shares received will be equal to the amount included in the
participant's income (i.e., the fair market value of the shares received minus
the fair market value of the shares surrendered).
Stock Appreciation Rights. A participant who is granted an SAR (whether or
not attached to an Option) under the Plan will not recognize income at the
time of the grant, nor will the Company be entitled to a deduction at that
time. In general, when a participant exercises an SAR, he or she will
recognize ordinary income, and the Company will be entitled to a corresponding
deduction, in an amount equal to the sum of the cash plus the fair market
value of the stock received. The participant's holding period for the stock
received will begin to run from the date of exercise of the SAR.
Upon the sale of the shares received on exercise of an SAR, the participant
will recognize short-term or long-term capital gain (or loss), depending upon
whether the shares have been held for more than one year. Such gain (or loss)
will be measured by the difference between the sale price of the shares and
the fair market value of the shares on the date that the SAR was exercised.
16
<PAGE>
THE BOARD OF DIRECTORS HAS APPROVED PROPOSAL TWO FOR THE REASONS DESCRIBED
ABOVE AND RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL.
The persons named in the enclosed form of proxy (Joseph R. Seiders and Craig
H. Lewis) have advised the Company that they intend to vote FOR approval of
Proposal Two unless a contrary choice is specified.
INDEPENDENT AUDITORS
The Company's independent auditors have been KPMG Peat Marwick LLP and it is
expected that they will continue in that capacity for the current year. A
representative of KPMG Peat Marwick LLP will be present at the meeting and
will have the opportunity to make a statement, if he or she so desires, and to
respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no other matters which may come before the
meeting. However, if any such matter should properly come before the meeting,
it is the intention of the persons named in the enclosed proxy to vote such
proxy in accordance with their best judgment on such matter.
SHAREHOLDER PROPOSALS
Shareholders of the Company are entitled to submit proposals for inclusion
in the Company's 1997 Proxy Statement, to be considered for action at the 1997
Annual Meeting of Shareholders. Proposals so submitted must be received by the
Company at its principal executive offices no later than November 21, 1996 and
must comply in all other respects with applicable rules and regulations of the
Securities and Exchange Commission relating to such inclusion.
By Order of the Board of Directors
/s/ Joseph R. Seiders
JOSEPH R. SEIDERS, Secretary
Dated: March 21, 1996
Philadelphia, Pennsylvania
17
<PAGE>
- --------------------------------------------------------------------------------
PROXY
CDI CORP.
1717 ARCH STREET, 35TH FLOOR PHILADELPHIA, PA 19103-2768
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph R. Seiders and Craig H. Lewis, or
either of them, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of common stock of CDI Corp. held of record by the undersigned on March 12,
1996, at CDI Corp.'s annual meeting of shareholders to be held on May 7, 1996,
or any adjournments or postponements thereof. The undersigned acknowledges
receipt of the Proxy Statement dated March 21, 1996 and hereby expressly
revokes any and all proxies heretofore given or executed by the undersigned
with respect to the shares of stock represented by this proxy and by filing
this proxy with the Secretary of CDI Corp. gives notice of such revocation.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ELECTION TO THE BOARD OF DIRECTORS OF ALL NOMINEES LISTED IN
PROPOSAL ONE ON THE REVERSE SIDE HEREOF AND FOR APPROVAL OF THE AMENDMENT TO
THE CDI CORP. NON-QUALIFIED STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
PROVIDING THAT ELIGIBLE DIRECTORS AUTOMATICALLY BE PAID THEIR ANNUAL RETAINER
FEES IN STOCK OPTIONS IN LIEU OF CASH, AS DESCRIBED IN PROPOSAL TWO. WITH
RESPECT TO OTHER MATTERS OF BUSINESS PROPERLY BEFORE THE MEETING, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AS THE NAMED PROXIES SHALL DECIDE.
(Continued and to be signed on the other side)
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
<PAGE>
- --------------------------------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[LOGO OF CDI CORP. APPEARS HERE]
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Please mark
your votes
as indicated
in this
example
[X]
PROPOSAL 1--ELECTION OF DIRECTORS
The nominees are:
Walter E. Blankley
Walter R. Garrison
Christian M. Hoechst
Lawrence C. Karlson
Edgar D. Landis
Allen M. Levantin WITHHOLD
Alan B. Miller FOR FOR ALL
Barton J. Winokur [_] [_]
WITHHOLD VOTE FOR: (Write the name(s) of such nominee(s) in the space provided
below.)
- -------------------------------------------------------------------------------
PROPOSAL 2--Amend the Non-Qualified Stock Option and Stock Appreciation Rights
Plan to provide that stock options be automatically granted to eligible
directors of the Company in lieu of cash retainer fees.
FOR AGAINST ABSTAIN
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
3. In their discretion, the named proxies are authorized to vote upon such
other business as may properly come before the meeting or any adjournments
or postponements thereof.
Signature(s) ____________________________ Dated ______________________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee, guardian,
corporate officer or partner, please give full title as such.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
CDI CORP. LOGO
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY
CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
In connection with Proposal Two in the above Proxy Statement and in
accordance with Instruction 3 to Item 10 of Schedule 14A, below is text of the
CDI Corp. Non-Qualified Stock Option and Stock Appreciation Rights Plan. The
text of this Plan is not a part of the Proxy Statement and is not being
distributed to the Company's shareholders.
As amended on 5/2/95
CDI CORP.
NON-QUALIFIED STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
1. Purpose. The purpose of this plan ("Plan") is to provide a more
effective method of compensating employees, consultants and directors of the
Company than is currently available and to complement the other incentive plans
of the Company, thus encouraging greater personal interest in the success of the
Company on the part of such personnel and furnishing them with a further
incentive to remain with the Company and to increase their efforts on its
behalf.
2. Definitions:
(a) "Board" means the board of directors of the Parent Company.
(b) "Committee" means the committee described in Paragraph 5.
(c) "Company" means CDI Corp. and each of its Subsidiary Companies.
(d) "Date of Exercise" means the date on which notice of exercise of
an Option or SAR is delivered to the Parent Company.
(e) "Date of Grant" means the date on which an Option or SAR is
granted.
(f) "Eligible Director" means any director of the Parent Company who
is neither a full-time employee of the Parent Company or any
Subsidiary Company nor a member of the Committee.
(g) "Fair Market Value" 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 on such Exchange on the last date on which there was a
sale.
(h) "Holder" means a person to whom an SAR not attached to an Option
has been granted under the Plan, which SAR has not been exercised
and has not expired or terminated.
(i) "Option" means a non-qualified stock option granted under the Plan
and described in Paragraph 4(a).
(j) "Optionee" means a person to whom an Option or an Option with an
SAR attached has been granted under the Plan, which Option or SAR
has not been exercised and has not expired or terminated.
(k) "Parent Company" means CDI Corp.
(l) "Retainer Fee" means the annual retainer fee payable to directors
of the Board who are not full-time employees of the Parent Company
or any Subsidiary Company for their service as directors of the
Parent Company during a Retainer Fee Year. A Retainer Fee does not
include attendance or committee fees.
(m) "Retainer Fee Option" means any Option granted to an Eligible
Director in
<PAGE>
partial payment of such Eligible Director's Retainer
Fee, whether such Option is granted automatically or by election
of the Eligible Director pursuant to the terms of this Plan.
(n) "Retainer Fee Year" means the one year period between consecutive
annual meetings of the shareholders of the Parent Company,
beginning on the date immediately following the annual meeting.
(o) "SAR" means a stock appreciation right granted under the Plan and
described in Paragraphs 4(b) or 4(c).
(p) "Shares" means shares of common stock, par value $.10 per share,
of the Parent Company.
(q) "Subsidiary Company" means any corporation controlled by the
Parent Company or by a subsidiary controlled by the Parent Company
("control" having the meaning set forth in Section 368(c) of the
Internal Revenue Code or corresponding provisions of successor
laws), provided that if the corporation is controlled by a
subsidiary of the Parent Company, either the Parent Company must
own 100% of the stock of the subsidiary or the subsidiary must own
100% of the stock of the corporation.
(r) "Value" of an SAR shall mean the excess of the Fair Market Value
of a Share on the Date of Exercise over an amount fixed by the
Committee on the Date of Grant (the "SAR Reference Price");
provided that the SAR Reference Price may not be less than 50% of
the Fair Market Value of a Share on the Date of Grant. Where an
SAR is attached to an Option, the SAR Reference Price shall be
equal to the Option price of one Share under the attached Option.
3. Shares Subject to the Plan. On and after April 30, 1991, not more
than 1,100,000 Shares may be delivered pursuant to the exercise of Options or
SARs under the Plan. The Shares so delivered may, at the election of the
Company, be either treasury Shares or Shares originally issued for the purpose.
When an Option is granted (whether or not attached to an SAR), the number of
Shares subject to such Option shall be reserved for issuance out of the Shares
remaining available for grant under the Plan. When SARs not attached to an
Option are granted, there shall be reserved for issuance thereunder Shares in an
amount equal to one-half of the number of SARs granted. If Options or SARs
granted under the Plan terminate or expire without being exercised in whole or
in part, other Options or SARs may be granted covering the Shares not delivered.
No individual shall be eligible to receive, in any one calendar year, Options or
SARs with respect to more than 400,000 Shares (which number is subject to
adjustment as provided in Paragraph 15 hereof).
4. Rights to be Granted. Rights which may be granted under the Plan
are:
(a) Options, which give the Optionee the right for a specified time
period to purchase a specified number of Shares at a specified price;
(b) SARs, which are attached to Options and which give the Optionee
the right for a specified time period, without payment to the Company, to
receive the Value of such SARs, to be paid in cash and Shares in accordance with
Paragraph 9 below, in lieu of purchasing Shares under the related Option; and
(c) SARs, which are not attached to Options and which give the Holder
the right for a specified time period, without payment to the Company, to
receive the Value
<PAGE>
of such SARs, to be paid in cash and Shares in accordance with
Paragraph 9 below.
5. Administration. The Plan shall be administered by the Stock Option
Committee, which shall be composed of not less than two directors of the Parent
Company, appointed by the Board, none of whom shall be eligible (or shall have
been eligible within one year prior to the date of their appointments) to be
granted Options or SARs under the Plan or to be selected as a participant under
any other discretionary plan of the Company or any of its affiliates entitling
them to acquire stock, stock options or stock appreciation rights of the Company
or any of its affiliates. Except with respect to Retainer Fee Options, the
Committee may determine from time to time which eligible participants shall be
granted Options or SARs under the Plan, the number of Shares to be subject to
the Option in each case, the number and type of SARs, if any, to be awarded in
each case, and the other substantive provisions of each Option and SAR
agreement. However, any Options, other than Retainer Fee Options, or SARs
granted to a member of the Board must also be approved by a majority of the
Board not including the recipient. At least 60 days before the next annual
meeting of shareholders of the Parent Company, the Committee may determine that
Retainer Fee Options will not be made available with respect to the Retainer
Fees to be earned during the Retainer Fee Year beginning on the day following
such annual meeting.
6. Retainer Fee Options.
(a) Mandatory Retainer Fee Options. Unless the Committee determines,
as provided in Paragraph 5, not to make Retainer Fee Options available with
respect to a Retainer Fee Year, an Eligible Director will be granted, on the
first business day of such Retainer Fee Year, Retainer Fee Options, having a
value, determined in accordance with Paragraph 6(c), equal to one half of the
cash value of his Retainer Fee for such Retainer Fee Year.
(b) Elective Retainer Fee Options. Unless the Committee determines, as
provided in Paragraph 5, not to make Retainer Fee Options available with respect
to a Retainer Fee Year, an Eligible Director may, in lieu of receiving in cash
all or any portion of his Retainer Fee due in cash for such Retainer Fee Year,
irrevocably elect to receive Retainer Fee Options having a value, determined in
accordance with Paragraph 6(c), equal to the portion of such Retainer Fee he
elects not to receive in cash. This election must be made by an Eligible
Director no later than the day before the first day of such Retainer Fee Year.
Grants made pursuant to such an Eligible Director's election will be made on the
first business day that is six months after the first day of the Retainer Fee
Year.
(c) Value of Retainer Fee Options. For purposes of this Paragraph 6
and unless otherwise determined by the Committee, the value of a Retainer Fee
Option to purchase one Share shall equal 25% (the "Option Percentage") of the
Fair Market Value of one Share on the last trading day immediately preceding the
Date of Grant; provided, however, that the Committee may change the Option
Percentage only if such change is made at least 60 days before the beginning of
any Retainer Fee Year in which Retainer Fee Options affected by such change
would be granted. Retainer Fee Options to purchase fractional Shares shall not
be granted; instead the number of Shares for which a Retainer Fee Option is
exercisable shall be rounded down to eliminate any fractional Share. If the
Committee determines that another method of valuing Retainer Fee Options would
be more appropriate, the Committee may implement an alternative method of
determining the value of Retainer Fee Options.
(d) Terms of Retainer Fee Options. The Committee may determine from
time to time the terms of the Retainer Fee Options, provided such terms are
consistent with the terms of the Plan. Unless otherwise determined by the
Committee, (a)
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Retainer Fee Options shall not vest until (and therefore will not be exercisable
until) one year after the Date of Grant and (b) if an Eligible Director ceases
to be a member of the Board for any reason: (i) unvested Retainer Fee Options
shall expire and be unexercisable and the portion of the Eligible Director's
Retainer Fee earned as of the date of cessation that is represented by such
unvested Retainer Fee Options shall be paid in cash, and (ii) Retainer Fee
Options elected, but not granted prior to such cessation, shall not be granted
and the portion of the Retainer Fee earned but not paid in such Retainer Fee
Options shall be paid in cash.
7. Eligibility. Eligible participants under the Plan shall be all
salaried employees, consultants and directors of the Parent Company or any
Subsidiary Company, except members of the Committee. Only Eligible Directors
shall be eligible to receive Retainer Fee Options pursuant to Paragraph 6.
8. Option Exercise Price.
(a) The price at which Shares may be purchased on exercise of an
Option shall be determined in each case by the Committee, but may not be less
than 50% of the Fair Market Value of the Shares on the Date of Grant; provided,
however, that unless otherwise determined by the Committee, the price at which
Shares may be purchased on exercise of a Retainer Fee Option shall be the Fair
Market Value of the Shares on the last trading day immediately preceding the
Date of Grant.
(b) Upon exercise of any Option granted pursuant to this Plan, the
Optionee shall pay to the Parent Company the full Option price:
(i) By check or in cash; or
(ii) By delivering to the Parent Company certificates for
Shares owned by the Optionee and endorsed to the Parent
Company representing a number of Shares having a then
current Fair Market Value equal to the Option price; or
(iii) Any combination of the above.
Upon payment of the Option price the appropriate accounts of the Parent Company
shall then be credited accordingly.
9. Issuance of Certificates; Payment of Cash.
(a) Upon payment of the Option price, a certificate for the number of
whole Shares and a check for the Fair Market Value on the Date of Exercise of
the fractional Share, if any, to which the Optionee is entitled shall be
delivered to such Optionee by the Parent Company, provided that the Optionee has
remitted to his employer an amount, determined by such employer, sufficient to
satisfy the applicable requirements to withhold federal, state, and local taxes,
or made other arrangements with his employer for the satisfaction of such
withholding requirements.
(b) Upon exercise of SARs, the Value of such SARs shall be paid one-
half in cash and one-half in Shares. The number of Shares to be delivered by the
Parent Company shall be an amount equal to 50% of the Value of such SARs divided
by the Fair Market Value of a Share on the Date of Exercise of such SARs. Any
right to a fractional Share shall be satisfied by the Parent Company in cash.
The employer of the Optionee or Holder shall deduct from the amount of cash
payable any amount necessary to satisfy applicable federal, state, or local
withholding requirements.
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10. Term. Unless otherwise determined by the Committee, Options or SARs
granted under the Plan shall not be exercisable after five years from the Date
of Grant.
11. Exercise of Options and SARs. Unless otherwise determined by the
Committee and subject to the provisions of Paragraphs 12 and 14, an Option or
SAR may be exercised in whole or in part during its term, provided that an
Option or SAR shall be exercisable only by the Optionee or Holder during his
lifetime and, unless otherwise determined by the Committee and subject to the
provisions of Paragraph 6, only while he is a salaried employee, consultant or
director of the Parent Company or of a Subsidiary Company.
12. Death or Termination of Qualifying Relationship. Unless otherwise
determined by the Committee, Options (other than Retainer Fee Options) and SARs
shall terminate upon the termination for any reason of the Optionee's or
Holder's qualifying relationship with the Company, except that if an Optionee or
Holder dies while holding a vested Option or SAR not fully exercised or expired,
the unexercised portion may be exercised by his estate or his heirs or
beneficiaries within the period of six months following the date of death (in no
event, however, may an Option or SAR be exercised after its stated date of
expiration). For purposes of this Plan, a transfer of a participant between two
employers, each of which is a part of the Company, shall not be deemed a
termination of employment.
13. Relationship Between Options and SARs. Upon exercise of an Option,
any SAR attached to such Option shall automatically expire. Upon exercise of an
SAR attached to an Option, the related Option shall automatically expire. Except
as set forth above, the grant, exercise, termination or expiration of any Option
granted to an Optionee or Holder shall have no effect upon any SAR held by such
Optionee or Holder, and the grant, exercise, termination or expiration of an SAR
granted to any Optionee or Holder shall have no effect upon any Option held by
such Optionee or Holder.
14. Transferability of Options and SARs. No Option or SAR may be
transferred except by will or the applicable laws of descent and distribution.
15. Adjustment on Change in Capitalization. In case the number of
outstanding Shares 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 which may be issued under the Plan, in the per
individual annual limitation set forth in Paragraph 3 above and in the number of
Shares subject to, and the Option price or Value of, any then outstanding
Options or SARs.
16. Certain Corporate Transactions. If during the term of any Option or
SAR, or after an Eligible Director has elected to receive, but before he has
received, Retainer Fee Options, the Parent Company or any of the Subsidiary
Companies shall be merged into or consolidated with or otherwise combined with
or acquired by another person or entity, or there is a divisive reorganization
or a liquidation or partial liquidation of the Parent Company, the Parent
Company may (but shall not be required to) take any of the following courses of
action:
(a) Not less than 10 days nor more than 60 days prior to any such
transaction, all Optionees and Holders shall be notified that their Options and
SARs shall expire on the 10th day after the date of such notice, in which event
all Optionees and Holders shall have the right to exercise all of their Options
and SARs prior to such new expiration date; or
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(b) The Parent Company shall provide in any agreement with respect to
any such merger, consolidation, combination or acquisition that the surviving,
new or acquiring corporation shall grant options and stock appreciation rights
to the Optionees and Holders to acquire shares, or stock appreciation rights in
shares, in such corporation provided that the excess of the fair market value of
the shares of such corporation immediately after the consummation of such
merger, consolidation, combination or acquisition over the option price, or the
value of such stock appreciation rights at the time of grant, shall not be
greater than the excess of the Fair Market Value of the Shares over the Option
price of Options, or the Value of the SARs as determined under Paragraph 2(r),
immediately prior to the consummation of such merger, consolidation, combination
or acquisition; or
(c) Cancel an Eligible Director's right to receive Retainer Fee
Options elected, but not yet granted, and on the date the Eligible Directors
would otherwise have received Retainer Fee Options, the Parent Company or any
successor corporation shall pay the Retainer Fees to which such elected but
ungranted Retainer Fee Options relate in cash; or
(d) The Parent Company shall take such other action as the Board shall
determine to be reasonable under the circumstances in order to permit Optionees,
Holders and Eligible Directors to realize the value of rights granted to them
under the Plan.
17. Plan Not to Affect Relationship With the Company. Neither the Plan
nor any Option or SAR shall confer upon any participant any right to continue in
the service of the Company.
18. Amendment. The Board may at any time terminate the Plan or make such
changes therein as it shall deem advisable. The Board may not, however, without
the approval of the voting shareholders of the Parent Company, (i) increase the
total number of Shares which may be delivered under the Plan, (ii) change the
class of persons eligible to receive Options or SARs, (iii) withdraw the
authority to administer the Plan from a committee consisting of directors or
(iv) otherwise amend the Plan in a manner which would require the approval of
the shareholders of the Parent Company in order to maintain the exemption
available under Rule 16b-3 (or any similar rule) of the Securities and Exchange
Commission. No outstanding Option or SAR shall be affected by any such amendment
without the written consent of the Optionee, Holder or other person then
entitled to exercise such Option or SAR.
19. Securities Laws. The Committee shall make each grant under the Plan
subject to such conditions as shall cause both the grant and exercise of any
Option or SAR to comply with the then-existing requirements of Rule 16b-3 (or
any similar rule) of the Securities and Exchange Commission.
Unless otherwise permitted by the Committee, the date of any exercise of an
SAR by a Holder or an Optionee who is an officer, director or beneficial owner
of ten percent or more of any class of any registered equity security of the
Parent Company shall be required to occur within the period beginning with the
third and ending with the twelfth business day after the date of the release of
the Parent Company's quarterly or annual sales and earnings information to the
public.
20. Performance-Based Compensation. Unless otherwise provided by the
Committee in their discretion pursuant to the first sentence of Paragraph 8(a),
it is intended that all compensation income recognized by employees as the
result of the exercise of Options or SARs, or the disposition of Shares acquired
on exercise of Options or SARs, shall be considered performance-based
compensation excludable
<PAGE>
from such employee's "applicable employee remuneration" pursuant to section
162(m)(4)(C) of the Internal Revenue Code of 1986, as amended.
21. General. Each Option or SAR granted shall be evidenced by a written
instrument containing such terms and conditions not inconsistent with the Plan
as the Committee may determine. The issuance of Shares on the exercise of an
Option or SAR shall be subject to all of the applicable requirements of the
Pennsylvania Business Corporation Law and other applicable laws. Among other
things the Optionee or Holder may be required to deliver an investment
representation to the Company in connection with any exercise of an Option or
SAR or to agree to refrain from selling or otherwise disposing of the Shares
acquired for a specified period of time.
