<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
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material pursuant to Rule 14a-11(c) or Rule 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] No fee required.
[_] 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:
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<PAGE>
[LOGO OF CDI CORP. APPEARS HERE]
1717 ARCH STREET, 35TH FLOOR
PHILADELPHIA, PENNSYLVANIA 19103-2768
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1997
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 Monday, April 28, 1997,
at 10:00 A.M., for the following purposes:
1. To elect nine 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 proposal to increase the number of shares of Common Stock
which may be issued under the Company's Non-Qualified Stock Option and
Stock Appreciation Rights Plan from 1,100,000 to 1,600,000;
3. To act upon a proposal to approve a Bonus Plan for Mitchell Wienick, the
incoming President and Chief Executive Officer of the Company, as
described in the accompanying Proxy Statement; and
4. 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 10, 1997 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 31, 1997
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 APRIL 28, 1997
-----------------------------------------------
GENERAL INFORMATION
This Proxy Statement and the accompanying 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 Monday, April 28, 1997, 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 Proxy to the Company's
shareholders is on or about March 31, 1997.
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 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 and Proposal Three, which are identified in the Proxy
and the accompanying Notice of Annual Meeting of Shareholders and are 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, will be voted for approval of the increase in
the number of shares of Common Stock which may be issued under the Company's
Non-Qualified Stock Option and Stock Appreciation Rights Plan as set forth in
Proposal Two unless a contrary choice is specified, and will be voted for
approval of the Bonus Plan for the incoming President and Chief Executive
Officer of the Company as set forth in Proposal Three unless a contrary choice
is specified.
1
<PAGE>
ANNUAL REPORT
The Company's Annual Report to Shareholders for the year ended December 31,
1996 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.
VOTING RIGHTS
There were issued and entitled to vote, as of March 10, 1997, 19,830,062
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 and Proposal Three 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 10, 1997 will be
entitled to vote at the meeting.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT STOCK OWNERSHIP
As of February 28, 1997, 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, Lawrence C. Karlson, 5,944,814 29.9%
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
Walter R. Garrison's children
c/o Robert L. Freedman, Esquire
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Walter R. Garrison 1,901,505 9.6%
1717 Arch Street, 35th Floor (2)
Philadelphia, PA 19103-2768
FMR Corp. 1,131,600 5.7%
82 Devonshire Street (3)
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 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 22,155 shares held by Mr. Garrison's wife, 64,042 shares held by
a trust for the benefit of Mr. Garrison's wife (of which Mr. Garrison is a
trustee) and 42 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 (2)
and (4) to the following table.
(3) This number is as of December 31, 1996, based on a Schedule 13G filed by
the shareholder with the U.S. Securities and Exchange Commission.
The following table sets forth, as to each director, director nominee and
executive officer of the Company individually and as to all directors,
director nominees and executive officers of the Company as a group, the number
of shares of Common Stock owned as of February 28, 1997 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 5,175 (1) Less than .1%
Walter R. Garrison 1,901,505 (2)(3)(4) 9.6%
Christian M. Hoechst 40,868 .2%
Lawrence C. Karlson 34,175 (1)(3) .2%
Edgar D. Landis 375,000 1.9%
Allen M. Levantin 36,175 (5) .2%
Alan B. Miller 6,175 (1) Less than .1%
Mitchell Wienick 0 --
Barton J. Winokur 210,128 (3)(4)(6) 1.1%
All directors, director nominees and
executive officers as a group (9
persons) 2,609,201 (7) 13.1%
</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 4,175 shares which Messrs. Blankley, Karlson and Miller each
presently has the right to acquire through the exercise of options.
(2) Includes 22,155 shares held by Mr. Garrison's wife, 64,042 shares held by
a trust for the benefit of Mr. Garrison's wife (of which Mr. Garrison is a
trustee) and 42 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 twelve trustees of The
Garrison Family Foundation, but disclaims beneficial ownership of the
foundation's shares except as a fiduciary.
3
<PAGE>
(3) Does not include 5,944,814 shares of Common Stock held in various trusts
created by Walter R. Garrison for the benefit of his children. These
shares are referenced above in the Principal Shareholders table under the
names of the co-trustees of the various trusts. Two of the trustees, Mr.
Karlson and Mr. Winokur, are directors of the Company and a third trustee,
Donald W. Garrison, is Walter R. Garrison's brother. Walter R. Garrison
disclaims beneficial ownership of these shares, as do the trustees except
as fiduciaries.
(4) Does not include 175,000 shares held by The Garrison Foundation, a
charitable trust established for the benefit of the Pennsylvania Institute
of Technology. Among the four trustees of The Garrison Foundation are
Messrs. Garrison and Winokur, who are directors of the Company. The
trustees disclaim beneficial ownership of these shares except as
fiduciaries.
(5) Includes 34,175 shares which Mr. Levantin presently has the right to
acquire through the exercise of options.
(6) Does not include 20,000 shares held by a foundation of which Mr. Winokur
is the sole trustee. Mr. Winokur has no beneficial interest in the income
or assets of that foundation and disclaims beneficial ownership of those
shares except as a fiduciary.
(7) If the 5,944,814 shares held in the Garrison family trusts referred to in
footnote (3) 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 2,609,201 shares shown in the table as held by directors,
director nominees and executive officers as a group, the total would be
8,751,015 shares or 43.9% of the outstanding Common Stock.
PROPOSAL ONE
ELECTION OF DIRECTORS
Nine 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 Proxy
(Joseph R. Seiders and Craig H. Lewis) have advised the Company that they
intend to vote FOR the nine nominees below unless authority to do so is
withheld. Each of these nominees has been designated by the Board of
Directors. Except for Mr. Wienick, each of the nominees is a member of the
Board as of the date of this Proxy Statement. Mr. Wienick will become a member
of the Board, and will also become the President and Chief Executive Officer
of the Company, as of April 7, 1997. Mr. Wienick's employment agreement
provides that the Company will use its best efforts to have him nominated and
elected to the Board of Directors while he remains employed by the Company.
Certain elements of Mr. Wienick's executive compensation are the subject of
Proposal Three below. 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 Proxy may vote for, a substitute nominee.
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 +#(S) 61 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*.. 70 1958 Chairman of the Board, President and Chief
Executive Officer of the Company since 1961
(retiring as of April 7, 1997)
Christian M. Hoechst 60 1974 Retired; Executive Vice President of the
Company from 1971-1996
Lawrence C. Karlson *+.. 54 1989 Private investor and consultant; Chairman of
the Board of Spectra-Physics AB, Stockholm,
Sweden (instrumentations manufacturer) from
1990-1993; Director of AmeriSource Corp.
Edgar D. Landis* 65 1975 Executive Vice President, Finance of the
Company since 1987
Allen M. Levantin 64 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 +#(S) 59 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., Penn Mutual Life Insurance
Co. and Universal Health Realty Income Trust
Mitchell Wienick 48 -- Incoming President and Chief Executive
Officer of the Company (will assume those
positions as of April 7, 1997); President-
Consumer Services, Ameritech Corporation
(1995-March 1997); President-Small Business
Services, Ameritech Corporation (1993-1995);
Senior Group Vice President-Dairy Group,
Borden, Inc. (1992-1993)
Barton J. Winokur *+.. 57 1968 Partner in the law firm of Dechert Price &
Rhoads, Philadelphia, PA; Director of
AmeriSource Corp., 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
5
<PAGE>
.. Member of the Nominating 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.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
The Board of Directors of the Company held six meetings during 1996. The
Board of Directors has five standing committees: an Executive Committee, an
Audit Committee, a Compensation Committee, a Stock Option Committee and 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 five
meetings during 1996, 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 five meetings during 1996.
The Compensation Committee advises the Company on executive compensation
matters. This Committee held two meetings during 1996.
The Stock Option Committee administers the Company's Non-Qualified Stock
Option and Stock Appreciation Rights Plan. This Committee held three meetings
during 1996.
The Nominating Committee provides the Board of Directors with
recommendations relating to the selection of new members of the Board. The
Committee evaluates possible candidates, assists in attracting qualified
candidates and interviews candidates prior to making its recommendations to
the Board. Shareholders wishing to recommend candidates for nomination to the
Board of Directors should submit to the Secretary of the Company the name, a
statement of qualifications and the written consent of the candidate.
Recommendations may be submitted at any time and will be brought to the
attention of the Nominating Committee. The Nominating Committee held one
meeting during 1996.
COMPENSATION OF DIRECTORS
As compensation for a director's service on the Board, each director who is
not a full-time employee of the Company or one of its subsidiaries is eligible
to receive a retainer fee of $20,000 per year. However, in lieu of the annual
cash retainer fees, each director whose compensation for service as a director
is not included in the income of a corporation or partnership of which the
director is an employee or partner is presently granted options to purchase
4,000 shares of Common Stock (at an exercise price equal to the market value
of the Common Stock at the time of grant) each year for the director's service
on the Board. For additional information regarding the terms of these stock
options granted to eligible directors, see "Description of the Plan" under
Proposal Two below. In addition, each director who is not a full-time employee
of the Company or one of its subsidiaries receives meeting attendance fees of
$1,000 for each Board meeting attended plus $500 for each Audit Committee
6
<PAGE>
meeting attended. 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.
The Company has consulting arrangements with two of its directors, Lawrence
C. Karlson and Christian M. Hoechst. Mr. Karlson's arrangement provides for
him to provide consulting services as requested from time to time by the Chief
Executive Officer of the Company, for which 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 1996, Mr. Karlson earned consulting fees of $91,708. Mr.
Hoechst's consulting arrangement is described in more detail below under "Non-
Competition and Consulting Agreement with Christian M. Hoechst". During 1996,
Mr. Hoechst was paid $207,500 under his Non-Competition and Consulting
Agreement.
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 during those years. These officers are elected annually by the
Board of Directors. Mr. Hoechst served as an executive officer during only a
portion of last year, retiring on April 30, 1996.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------------------------
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1)
- --------------------------- ---- -------- ---------- ----------------
<S> <C> <C> <C> <C>
Walter R. Garrison, 1996 $ 65,000 $1,683,320 $23,689
Chairman of the Board, 1995 65,000 1,038,143 55,668
President and Chief Executive
Officer 1994 65,000 1,037,584 53,231
Christian M. Hoechst, 1996 36,614 632,758 264,352(2)
Executive Vice President 1995 80,000 1,543,549 67,334
(retired on April 30, 1996) 1994 80,000 617,583 28,168
Edgar D. Landis, 1996 238,000 150,000 19,663
Executive Vice President, 1995 227,000 150,000 18,525
Finance 1994 217,800 150,000 13,032
</TABLE>
- --------
(1) Except as described in footnote (2) below, all Other Compensation in 1996,
1995 and 1994 consisted entirely of Company contributions and allocations
to the following employee benefit plans: the Company's qualified
Retirement Plan ($6,716 to the account of each of Messrs. Garrison,
Hoechst and Landis in 1996), the Company's qualified 401(k) plan ($400 to
the account of each of Messrs. Garrison, Hoechst and Landis in 1996) and
the Company's non-qualified excess benefit plan ($16,573 to the account of
Mr. Garrison, $49,736 to the account of Mr. Hoechst and $12,547 to the
account of Mr. Landis in 1996).
(2) Includes $207,500 paid to Mr. Hoechst following his retirement pursuant to
his Non-Competition and Consulting Agreement. For a more complete
description, see below under "Non-Competition and Consulting Agreement
with Christian M. Hoechst".
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning the only grants of
stock options to an executive named in the preceding Summary Compensation
Table during the year ended December 31, 1996. Note, however, that these
grants were made to the executive, Christian M. Hoechst, after he retired as
an officer and employee of the Company on April 30, 1996 and were made to him
in lieu of cash retainer fees for his service on the Board of Directors of the
Company following his retirement as an executive. This payment of stock
options in lieu of cash retainer fees, which also applies to other non-
employee directors, is described above under "Compensation of Directors".
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(2)
----------------------------------------------- ---------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(1) DATE 5%($) 10%($)
---- ------------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Christian M. Hoechst 2,000 7.1% $29.75 05/08/01 $ 16,439 $ 36,325
2,000 7.1% $28.25 11/08/01 $ 15,610 $ 34,494
</TABLE>
- --------
(1) All options were granted at the market value on the last trading day
immediately preceding the date of grant, based on the closing price of the
Company's Common Stock on the New York Stock Exchange. Options are not
exercisable until one year after the date of grant.
(2) The dollar amounts under these calculations are the result of calculations
at the 5% and 10% rates set by the Securities and Exchange Commission and,
therefore, are not intended to forecast possible future appreciation, if
any, of the price of the Company's Common Stock or the present or future
value of the options.
Mr. Hoechst did not exercise any Company stock options during 1996. The
aggregate dollar value of in-the-money, unexercised options held at the end of
1996 by Mr. Hoechst was $250. None of those options were exercisable.
EMPLOYMENT AGREEMENTS
The Company has (or had, in the case of Mr. Hoechst, who has retired)
employment agreements with all three of the executive officers included in the
above Summary Compensation Table. Mr. Garrison's employment agreement is
expected to terminate in April 1997 when his successor, Mitchell Wienick,
assumes the offices of President and Chief Executive Officer of the Company.
The Company and Mr. Garrison are currently negotiating the terms of a
consulting agreement which will go into effect upon Mr. Garrison's retirement
as an officer of the Company.
Mr. Garrison's 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 contains certain noncompetition and nonsolicitation
covenants of Mr. Garrison which are effective for a period of two years after
termination of his employment for any reason.
8
<PAGE>
Mr. Hoechst's employment agreement, which was entered into in 1986 and which
terminated upon his retirement from the Company on April 30, 1996, provided
for a base salary of $80,000 and a bonus made up of three components. The
first component was 2 1/2% of the pre-tax earnings of those operations under
his direct supervision. The second component was 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 was 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. 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 his employment for any reason.
In March 1997, the Company entered into an Employment Agreement with
Mitchell Wienick pursuant to which Mr. Wienick will serve as the Company's
President and Chief Executive Officer beginning on April 7, 1997. The initial
term of the agreement is three years. The agreement provides for the following
elements of compensation to Mr. Wienick: (i) a base salary at the rate of
$500,000 per year; (ii) a bonus based on the percentage achievement of pre-
determined financial and other goals, with the maximum bonus award in any
calendar year being $500,000; (iii) the grant of 30,000 restricted shares of
Common Stock, half of which will vest over time (3,000 shares on each of the
first five anniversaries of the date of his Employment Agreement) and half of
which (up to 3,000 shares per year for five years) will vest depending on the
percentage achievement of the goals applicable to the cash bonus (shares which
do not vest are forfeited); and (iv) the grant of non-qualified stock options
to purchase 250,000 shares of Common Stock, at an exercise price equal to the
fair market value of the shares on the last trading date immediately preceding
the date of grant ($33.25 per share) and having a maximum term of ten years.
The option shares described in (iv) of the preceding sentence vest as follows:
50,000 shares on each of the second, third and fourth anniversaries of the
date of grant and 100,000 shares on the fifth anniversary of the date of
grant. The option shares, as well as the 15,000 shares of restricted stock
that vest based on the passage of time, will vest immediately in the event Mr.
Wienick's employment terminates following a change in control of the Company
if such termination is by the Company without cause or by Mr. Wienick either
because he is assigned duties materially inconsistent with his previous duties
or because his place of employment is moved outside the Philadelphia
metropolitan area. Whenever Mr. Wienick purchases shares upon exercise of his
options, half of the purchased shares may not be sold or transferred until the
second anniversary of the date of exercise; provided, however, that as to the
purchase of 50,000 of the shares which vest on the fifth anniversary of the
date of grant, those shares may not be sold or transferred until the earlier
of (a) one year after the date on which the fair market value of the Common
Stock has been greater than or equal to $90.00 per share for 180 consecutive
days, or (b) the ninth anniversary of the date of the option grant. The
restricted stock described in (iii) above is also subject to a restriction on
transfer such that whenever any of those shares vest, one-half of the shares
may not be sold or transferred until the second anniversary of the vesting
date. Certain elements of Mr. Wienick's compensation package are being
submitted to the shareholders of the Company for their approval in Proposal
Three.
9
<PAGE>
SUPPLEMENTAL PENSION AGREEMENT WITH WALTER R. GARRISON
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 WITH CHRISTIAN M. HOECHST
In October 1995, following the decision by Mr. Hoechst to retire as an
officer and employee of the Company effective 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 from July 31, 1996 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 was payable to Mr. Hoechst in four installments of $25,000
each, the last installment of which was paid on February 1, 1997.
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON 1996 EXECUTIVE COMPENSATION
The Compensation Committee's policy with respect to the compensation of
executive officers for 1996 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 remained
unchanged since their Employment Agreements were signed in 1973 and 1986,
respectively. Mr. Garrison's bonus was based on the pre-tax earnings of the
Company, and Mr. Hoechst's bonus was 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.
As provided in his Employment Agreement, Mr. Garrison's bonus was based on
the pre-tax earnings of the Company from continuing operations. At the end of
1995, the Company adopted a plan to dispose of the automotive manufacturing
technology division of a subsidiary (which made that division a discontinued
operation) and, at the end of 1996, the Company adopted a plan to dispose of
the automotive developmental engineering division of that subsidiary.
Accordingly, the approximately $1.2 million in operating profits earned by the
manufacturing technology business in 1996 after it was declared a discontinued
operation were excluded from the calculation of Mr. Garrison's 1996 bonus, but
the approximately $8 million in operating losses incurred by the developmental
engineering division in 1996 while it was a continuing operation were included
in the calculation of Mr. Garrison's 1996 bonus. Also, Mr. Garrison's 1996
bonus was not impacted by reserves set up for the estimated losses to be
incurred after the automotive manufacturing technology and developmental
engineering divisions became discontinued operations.
The Committee intends that the salary paid to Edgar D. Landis, the Company's
Executive Vice President and chief financial officer, which was $238,000 in
1996, be roughly comparable to the
10
<PAGE>
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. For each of the
past three years, the Committee has awarded a $150,000 bonus to Mr. Landis.
The Committee has considered the impact of 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
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. As a result of the "grandfather"
provisions applicable to Messrs. Garrison and Hoechst and because the historic
level of compensation paid to Mr. Landis has not approached the $1 million
level, the deductibility limitation has not been relevant to the Company's
executive officers in the past. It is the Compensation Committee's present
intention that any new executive compensation arrangements be structured so as
to be entirely deductible. In accordance with that objective, the Board has
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. For example, 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. Furthermore, in order to preserve deductibility of the
compensation to be paid to Mitchell Wienick, the Company's incoming President
and Chief Executive Officer, the Board is submitting to shareholders for their
approval at this Annual Meeting certain elements of Mr. Wienick's compensation
package.
COMPENSATION COMMITTEE:
Walter E. Blankley, Chairman
Alan B. Miller
11
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The following graph sets forth the cumulative total shareholder return
(assuming an investment of $100 on December 31, 1991 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 THE COMPARISON BETWEEN CDI CORP., THE PEER GROUP AND THE
S&P 500 IS IN THIS POSITION IN THE PRINTED PROXY STATEMENT. 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
--------------------------------------------
1991 1992 1993 1994 1995 1996
---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
CDI Corp........................... $100 $117.54 $175.44 $278.95 $252.63 $398.25
Peer Group......................... 100 115.27 124.36 146.84 181.07 187.90
S&P 500............................ 100 107.62 118.46 120.03 165.13 203.05
</TABLE>
12
<PAGE>
CERTAIN BUSINESS RELATIONSHIPS
Dechert Price & Rhoads performed legal services for the Company during 1996.
Barton J. Winokur, a director of the Company, is a partner of Dechert Price &
Rhoads.
PROPOSAL TWO
PROPOSED INCREASE IN THE NUMBER OF SHARES OF COMMON STOCK
WHICH MAY BE ISSUED UNDER THE COMPANY'S
NON-QUALIFIED STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
FROM 1,100,000 TO 1,600,000
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. On December 4, 1996, the Board of
Directors of the Company approved an amendment to the Plan increasing the
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, from
1,100,000 to 1,600,000. Under the Plan, an amendment to increase the number of
shares which may be delivered pursuant to the Plan requires the approval of
the shareholders of the Company.
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 except for Retainer Fee Options (described below) 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. 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 February
28, 1997 there were approximately 2,000 eligible participants, consisting of
approximately 12 consultants, 16 non-employee
13
<PAGE>
directors and the remainder being salaried employees. Subject to the
provisions of the Plan and except with respect to Retainer Fee Options, 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 Retainer Fee Options, 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. 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).
Under the Plan, each eligible director of the Company is granted 4,000
Options each year for the director's service on the Board, in lieu of a cash
retainer fee. An eligible director is a person who is not a full-time employee
of the Company or any of its subsidiaries and whose compensation for service
as a director is not included in the income of a corporation or partnership of
which the director is an employee or partner. The number of Options granted to
eligible directors (the "Retainer Fee Options") may be increased or decreased
by the Board from time to time, but not more often than once every six months
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder. One-half of each
year's Retainer Fee Options are granted on the first business day after the
annual meeting of shareholders at which the directors are elected and the
remaining one-half of the year's Retainer Fee Options are granted on the first
business day that is six months after the annual meeting. 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, (i) Retainer Fee Options do not vest (and
therefore are not exercisable) until one year after the date of grant and (ii)
if an eligible director ceases to be a member of the Board for any reason,
unvested Retainer Fee Options expire and become unexercisable and the portion
of the eligible director's retainer fee earned as of the date of cessation of
Board membership that is represented by such unvested Retainer Fee Options is
paid in cash.
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 closing price
per share of the Company's Common Stock on the New York Stock Exchange on
March 25, 1997 was $35.00. 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
14
<PAGE>
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.
OUTSTANDING OPTIONS
As of March 25, 1997, there were a total of 427,950 Options outstanding,
including the following:
<TABLE>
<CAPTION>
NUMBER OF
NAME AND POSITION OPTIONS HELD
----------------- ------------
<S> <C>
Mitchell Wienick, 250,000
Incoming President and Chief Executive Officer;
Nominee for Director
Christian M. Hoechst, 4,000
Director and retired Executive Vice President
All current non-executive directors as a group 66,700
All employees as a group (including Mr. Wienick) 399,425
</TABLE>
None of the Company's current executive officers hold Options, though Mr.
Wienick, the incoming President and Chief Executive Officer, holds 250,000
Options, as indicated above. There are no outstanding SARs.
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 Retainer Fee Options granted to eligible
directors) 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.
15
<PAGE>
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.
DESCRIPTION OF AND REASON FOR THE PROPOSED AMENDMENT TO THE PLAN
The Board believes that the Plan provides an important means to attract,
motivate and retain valuable personnel. Of the 1,100,000 shares which
presently may be issued under the Plan, 126,250 Option shares have previously
been exercised and 427,950 Options are presently outstanding (not all of which
are currently exercisable). If all of the presently outstanding Options were
exercised, there would remain 545,800 shares available for future grants of
Options or SARs. The Board believes it would be desirable and in the best
interest of the Company to increase the number of shares available for future
grants of Options or SARs in order to continue the benefits inuring to the
Company under the Plan. The proposed amendment would increase the number of
shares still available for grants by 500,000 and bring the total number of
shares which may be issued under the Plan on and after April 30, 1991 to
1,600,000. Neither the Board nor the Committee has any immediate plans to
grant any additional Options, though it is anticipated that stock options may
become a more significant element of compensation to the Company's officers
and managers than has been the case in the past. The number of Options and
SARs which may be granted in the future, and the related prices, will depend
on contingent and variable factors and cannot be estimated at this time.
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 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.
PROPOSAL THREE
APPROVAL OF BONUS PLAN
As part of the compensation for Mitchell Wienick, the Company's incoming
President and Chief Executive Officer, the Board of Directors has adopted, and
recommends that shareholders approve, a Bonus Plan under which Mr. Wienick can
earn cash and shares of restricted Common Stock upon meeting financial and
other performance targets established pursuant to the Bonus Plan. The
objectives of the Bonus Plan are to link a significant part of Mr. Wienick's
potential compensation to the Company's performance and to provide him with
incentives which, if met, will likely benefit the shareholders of the Company
as well.
Payments to Mr. Wienick under the Bonus Plan, described above on page 9 in
this Proxy Statement under the heading "Employment Agreements", are intended
to qualify as "performance based" compensation under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Section 162(m) of the
Code limits the deductibility of compensation paid to the Company's Chief
Executive Officer and each of the next four most highly compensated officers
unless that compensation is "performance based." Shareholder approval of the
Bonus Plan is necessary in order for compensation paid under the Plan to be
deemed "performance based."
The following is a summary of the features of the Bonus Plan for Mr.
Wienick.
Eligibility. Eligibility under the Bonus Plan is limited to Mr. Wienick.
Awards. For 1997 Mr. Wienick can earn a pro rata portion of the maximum
annual cash bonus ($500,000) plus 3,000 shares of restricted stock depending,
in part, upon his attainment of certain specified qualitative goals and, in
part, upon the Company's attainment of certain revenue and earnings goals, all
of which were established by the Board of Directors. The amount of the cash
bonus and the number of shares of restricted stock to be received by Mr.
Wienick in 1997 is not presently ascertainable. For years after 1997, a
committee of the Board, consisting of at least two outside directors, as that
term is defined in applicable Internal Revenue Service regulations, will set
goals for each year, before the beginning of that year, based on the Company's
operational plan and budget for the upcoming year. An "outside director" is
generally defined as a director whose only compensation from the Company,
other than certain de minimis amounts, is received solely for services as a
director.
Payment of Awards. Payments under the Bonus Plan will consist of cash and
shares of restricted Common Stock of the Company and will be payable to Mr.
Wienick based upon the attainment of the goals established for the year in
question by the Board's committee. Payment will be made within two weeks
following delivery to the Company of its audited financial statements for the
year in question and upon the certification by the Committee of outside
directors that the goals established for the year have been met.
17
<PAGE>
Termination of Employment. No amount will be paid to Mr. Wienick under the
Bonus Plan if his employment has terminated before the payment would otherwise
be made, unless his employment is terminated by the Company without cause
between the end of the year in question and the date on which the Bonus Plan
payments for that year would otherwise be paid.
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 payment of cash
bonuses and the vesting of restricted shares of Common Stock under the Bonus
Plan are as follows:
Cash Awards. Cash payments under the Bonus Plan will be deductible by the
Company when properly accrued under its accounting method, if either the total
payments to Mr. Wienick in any given year do not exceed the limits of
(S)162(m) of the Code or the shareholders approve the Bonus Plan and it
qualifies as "performance based" compensation under (S)162(m) of the Code, and
will be included in Mr. Wienick's income for the year of receipt.
Restricted Stock Awards. The grant of restricted stock is neither taxable to
Mr. Wienick nor deductible by the Company. When the restrictions lapse, by
reason of his attainment of the goals established under the Bonus Plan, Mr.
Wienick will realize taxable income in the amount of the then fair market
value of the stock. The Company will realize a corresponding deduction. Upon a
subsequent sale of the shares, Mr. Wienick will realize short-term or long-
term capital gain or loss, depending on whether the shares have then been held
for more than one year after the restrictions have lapsed. That gain or loss
will be equal to the difference between the sale price of the shares and their
fair market value on the date the restrictions lapsed.
THE BOARD OF DIRECTORS HAS APPROVED PROPOSAL THREE FOR THE REASONS DESCRIBED
ABOVE AND RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL.
The persons named in the enclosed Proxy (Joseph R. Seiders and Craig H.
Lewis) have advised the Company that they intend to vote FOR approval of
Proposal Three 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.
18
<PAGE>
SHAREHOLDER PROPOSALS
Shareholders of the Company are entitled to submit proposals for inclusion
in the Company's 1998 Proxy Statement, to be considered for action at the 1998
Annual Meeting of Shareholders. Proposals so submitted must be received by the
Company at its principal executive offices no later than December 2, 1997 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 31, 1997
Philadelphia, Pennsylvania
19
<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 on the reverse side, all
the shares of common stock of CDI Corp. held of record by the undersigned on
March 10, 1997, at CDI Corp.'s annual meeting of shareholders to be held on
April 28, 1997, or any adjournments or postponements thereof. The undersigned
acknowledges receipt of the Proxy Statement dated March 31, 1997 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, FOR APPROVAL OF THE INCREASE IN THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UNDER THE CDI CORP. NON-QUALIFIED
STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN, AS DESCRIBED IN PROPOSAL TWO,
AND FOR APPROVAL OF THE BONUS PLAN FOR THE INCOMING CHIEF EXECUTIVE OFFICER, AS
DESCRIBED IN PROPOSAL THREE. 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>
Please mark [X]
your votes as
indicated in
this example
The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
Proposal 1 - ELECTION OF DIRECTORS
The nominees are:
Walter E. Blankley
Walter R. Garrison
Christian M. Hoechst
Lawrence C. Karlson WITHHOLD
Edgar D. Landis FOR FOR ALL
Allen M. Levantin [_] [_]
Alan B. Miller
Mitchell Wienick
Barton J. Winokur
WITHHOLD VOTE FOR: (Write the name(s) of such nominee(s) in
the space provided below.)
- -----------------------------------------------------
Proposal 2 - Increase the number of shares of common stock which may be issued
under the Non-Qualified Stock Option and Stock Appreciation Rights Plan from
1,100,000 to 1,600,000.
FOR AGAINST ABSTAIN
[_] [_] [_]
Proposal 3 - Approve the Bonus Plan for Mitchell Wienick, the incoming President
and Chief Executive Officer of the Company, as described in the Proxy Statement.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. 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 Signature
------------------------------ --------------------------
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.
.FOLD AND DETACH HERE.
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>
EXHIBIT 10
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.
<PAGE>
As amended on 5/7/96
CDI CORP.
NON-QUALIFIED STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
1. Purpose. The purpose of this plan ("Plan") is to provide a
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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 Non-Employee Director except a
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.
(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) "Non-Employee Director" means any director of the Parent
Company who is not a full-time employee of the Parent Company
or any Subsidiary Company.
(j) "Option" means a non-qualified stock option granted under the
Plan and described in Paragraph 4(a).
<PAGE>
(k) "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.
(l) "Parent Company" means CDI Corp.
(m) "Retainer Fee" means the annual retainer fee payable to Non-
Employee Directors for their service as directors of the
Parent Company during a Retainer Fee Year. A Retainer Fee
does not include attendance or committee fees.
(n) "Retainer Fee Option" means an Option granted to an Eligible
Director in payment of such Eligible Director's Retainer Fee
pursuant to Paragraph 6.
(o) "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.
(p) "SAR" means a stock appreciation right granted under the Plan
and described in Paragraphs 4(b) or 4(c).
(q) "Shares" means shares of common stock, par value $.10 per
share, of the Parent Company.
(r) "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.
(s) "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
2
<PAGE>
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 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. No director serving on the
Committee shall (a) be eligible to be granted Options or SARs under the Plan
except for Retainer Fee Options, 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, or (b) have been granted Options or SARs under the Plan
during the one year period prior to service on the Committee, except for grants
which would not affect such director's status as "disinterested" for purposes of
Rule 16b-3 (or any similar rule) of the Securities and Exchange Commission.
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.
3
<PAGE>
6. Retainer Fee Options.
--------------------
(a) During each Retainer Fee Year, each Eligible Director will be
granted 4,000 Options in lieu of a cash Retainer Fee. Such number of Options
may be increased or decreased by the Board from time to time, but not more often
than once every six months other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder. Such number will also be subject to adjustment as provided in
Paragraph 15 hereof. One-half of each year's Retainer Fee Options will be
granted on the first business day of each Retainer Fee Year and the remaining
one-half of the year's Retainer Fee Options will be granted on the first
business day that is six months after the first day of the Retainer Fee Year.
(b) 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, (i) Retainer Fee Options
shall not vest (and therefore will not be exercisable) until one year after the
Date of Grant and (ii) if an Eligible Director ceases to be a member of the
Board for any reason, 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.
7. Eligibility. Eligible participants under the Plan shall
-----------
be all salaried employees, consultants and directors of the Parent Company or
any Subsidiary Company. 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 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
4
<PAGE>
(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.
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 except for
vested Retainer Fee Options, 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 vested 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.
5
<PAGE>
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 (a) the
aggregate number of Shares which may be issued under the Plan, (b) the per
individual annual limitation set forth in Paragraph 3 above, (c) the number of
Retainer Fee Options to be granted each year to Eligible Directors pursuant to
Paragraph 6 above, and (d) 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, 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
(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
6
<PAGE>
under Paragraph 2(r), immediately prior to the consummation of such merger,
consolidation, combination or acquisition; or
(c) 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 from such employee's "applicable employee remuneration"
pursuant to section 162(m)(4)(C) of the Internal Revenue Code of 1986, as
amended.
7
<PAGE>
21. General. Each Option or SAR granted shall be evidenced by a
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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.
8
<PAGE>
EXHIBIT 10.1
In connection with Proposal Three in the above Proxy Statement and in accordance
with Instruction 3 to Item 10 of Schedule 14A, below is text of Mitchell
Wienick's Employment Agreement and its exhibits (including the Restricted Stock
Agreement and Non-Qualified Stock Option Agreement). The text of these documents
is not a part of the Proxy Statement and is not being distributed to the
Company's shareholders.
<PAGE>
CDI CORP.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of this 11th day
of March, 1997 between CDI Corp., a Pennsylvania corporation (the "Company"),
and Mitchell Wienick ("Executive").
The Company desires to employ Executive, and Executive is willing to be employed
by the Company, upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and
intending to be legally bound hereby, the parties agree as follows:
TERMS
SECTION 1. Employment.
The Company hereby employs Executive, and Executive hereby accepts such
employment and agrees to serve as the Company's President and Chief Executive
Officer, and to render services to the Company and its subsidiaries, divisions
and affiliates, during the Employment Period set forth in Section 3, subject to
the terms and conditions hereinafter set forth.
SECTION 2. Management & Board Duties.
As President and Chief Executive Officer of the Company during the Employment
Period, Executive shall carry out such duties as are customarily associated with
the position of president and chief executive officer, which duties shall
however in all cases be subject to policies set by, and at the direction and
control of, the Company's Board of Directors (the "Board of Directors"). The
Company shall use its best efforts to have Executive nominated and elected to
the Board of Directors during the Employment Period. During the Employment
Period, Executive shall be afforded the full protection of the indemnifications
generally available to officers and directors under the Company's by-laws.
SECTION 3. Term.
The term of Executive's employment under this Agreement (the "Employment
Period") shall commence as of April 7, 1997, and, unless sooner terminated
pursuant to Section 7 of this Agreement, shall continue until the close of
business on the third anniversary of the date hereof. At the end of such
original period, the Employment Period shall be automatically extended
thereafter for successive one-year periods unless sooner terminated pursuant to
Section 7 of this Agreement or unless either party notifies the other party in
writing at least 90 days prior to the scheduled expiration of the Employment
Period that it does not wish to extend the Employment Period for any additional
one-year periods. This Agreement survives any termination of the Employment
Period.
SECTION 4. Extent of Services.
During the Employment Period, Executive shall devote his full time and attention
and give his best efforts, skills and abilities exclusively to the management
and operations of the Company and its business and the business of its
subsidiaries, divisions and affiliates. Executive shall perform his services
hereunder at the
<PAGE>
Company's offices in Philadelphia, Pennsylvania and at such other places as are
required for the effective management of the Company and its business and the
business of its subsidiaries, divisions and affiliates. During the Employment
Period, Executive shall, if elected or appointed, serve as a director of the
Company and as an executive officer and/or director of any subsidiary, division
or affiliate of the Company and shall hold, without any compensation other than
that provided for in this Agreement, the offices in the Company and in any such
subsidiary, division or affiliate to which Executive may, at any time or from
time to time, be elected or appointed.
SECTION 5. Compensation and Benefits.
(a) Base Salary. During the Employment Period, Executive shall receive
as compensation for his services a salary at the rate of Five Hundred Thousand
Dollars ($500,000) per annum payable in equal installments at such intervals as
the Company pays its senior executive officers generally (the "Base Salary").
The Base Salary shall be reviewed annually by the Board of Directors and may be
increased if so determined by the Board of Directors in its absolute and sole
discretion.
(b) Restricted Stock. As of the date of this Agreement, Executive
shall be granted 30,000 restricted shares of the Company's Common Stock (the
"Restricted Stock") pursuant to the terms of the Restricted Stock Agreement
attached hereto as Exhibit A. Pursuant to Section 6 of the Restricted Stock
Agreement, Executive shall not be able to sell, transfer or otherwise benefit
from any of the Restricted Stock until such shares vest pursuant to Section 4 of
the Restricted Stock Agreement. Of the 30,000 shares of Restricted Stock,
one-half of those shares (15,000) shall vest pursuant to the bonus awards in
Section 5(d) of this Agreement. Any share of Restricted Stock that does not vest
on the first date that such share was eligible to vest because Executive did not
receive the Maximum Bonus Award shall be forfeited on that date and shall never
vest. The other half of the 30,000 shares of Restricted Stock (15,000) shall
vest over time as described in Section 4 of the Restricted Stock Agreement.
(c) Nonqualified Stock Options. As of the date hereof, Executive shall
be granted non-qualified stock options to purchase 250,000 shares of the
Company's Common Stock pursuant to the terms of the Non-Qualified Stock Option
Agreement attached hereto as Exhibit B.
(d) Bonus Awards. Executive shall be eligible to receive bonus
compensation during the Employment Period. Such bonus awards shall be based upon
the Company's annual financial results, as reflected in the Company's audited
financial statements for such period, and shall consist of a cash payment and a
vesting of Restricted Stock. The maximum bonus award in any calendar year equals
a cash payment of $500,000 and a vesting of 3,000 shares of Restricted Stock
("Maximum Bonus Award"). However, after all 15,000 shares of Restricted Stock
have either been vested or forfeited, the Maximum Bonus Award shall consist
solely of an annual cash payment of $500,000, plus the vesting of any additional
shares of restricted stock that the Board of Directors may in its sole
discretion determine to make available to Executive. The bonus award during
Executive's employment with the Company shall be determined as follows:
(i) 1997. The bonus, if any, for the period beginning as of the
date of this Agreement and ending December 31, 1997 shall be determined in
accordance with the performance goals set forth below. The cash payment portion
of Maximum Bonus Award for 1997 shall be reduced on a pro-rata basis to reflect
that
<PAGE>
this period is less than a full calendar year, but vesting of Restricted Stock
shall not be reduced on a pro-rated basis and Executive shall have the
opportunity to vest in 3,000 shares of Restricted Stock if the Maximum Bonus
Award is attained. The cash portion of the Maximum Bonus Award for 1997 shall be
multiplied by a fraction, the numerator of which is the number of days between
the date on which Executives' employment hereunder commences and December 31,
1997, and the denominator of which is 365. The pro-rated cash payment and the
full vesting that Executive may earn in 1997 is referred to herein as the "1997
Maximum Bonus Award." The portion of the 1997 Maximum Bonus Award to be awarded
to Executive shall be determined as follows:
(A) Executive shall have the opportunity to receive up to
one-half of the 1997 Maximum Bonus Award based on the Board's determination of
whether the qualitative goals set forth on Exhibit C to this Agreement have been
met during 1997;
(B) Executive shall have the opportunity to receive up to
one-quarter of the 1997 Maximum Bonus Award based on the Company's achievement
of its revenue target as provided in the Company's 1997 operational plan ("1997
Revenue Target"). Executive shall receive a portion of the 1997 Maximum Bonus
Award under this Section 7(d)(i)(B) equal to 25 multiplied by the "Revenue
Factor." The Revenue Factor shall be a percentage ranging from 0% to 100%, with
100% representing that the Company's 1997 revenue is equal to or exceeds the
1997 Revenue Target, and with 0% representing that the Company's 1997 revenue is
equal to or less than the Company's 1996 revenue. If the Company's 1997 revenue
is greater than its 1996 revenue, but less than its 1997 Revenue Target, the
Revenue Factor shall equal a fraction, the numerator of which is the Company's
1997 revenue minus the Company's 1996 revenue, and the denominator of which is
the 1997 Revenue Target minus the Company's 1996 revenue; and
(C) Executive shall have the opportunity to receive up to
one-quarter of the 1997 Maximum Bonus Award based on the Company's achievement
of its earnings from continuing operations before interest and taxes ("EBIT")
target as provided in the Company's 1997 operational plan ("1997 EBIT Target").
Executive shall receive a portion of the 1997 Maximum Bonus Award under this
Section 7(d)(i)(C) equal to 25 multiplied by the "EBIT Factor." The EBIT Factor
shall be a percentage ranging from 0% to 100%, with 100% representing that the
Company's 1997 EBIT is equal to or exceeds the 1997 EBIT Target, and with 0%
representing that the Company's 1997 EBIT is equal to or less than the Company's
1996 EBIT. If the Company's 1997 EBIT is greater than its 1996 EBIT, but less
than its 1997 EBIT Target, the EBIT Factor shall equal a fraction, the numerator
of which is the Company's 1997 EBIT minus the Company's 1996 EBIT, and the
denominator of which is the 1997 Target EBIT minus the Company's 1996 EBIT.
(ii) Calendar Years 1998 and Thereafter. Within a mutually
agreeable time period before the beginning of each calendar year, Executive
shall submit to the Board of Directors for its approval the Company's
operational plan, including a fiscal budget, for the next calendar year. The
Board of Directors shall establish goals each year based on the approved
operational plan and budget, and Executive shall receive a percentage of the
Maximum Bonus Award, up to 100%, depending on whether the Company attains all or
a portion of the goals that the Board of Directors has established for that
year.
Any of the Company's financial results that are used to calculate bonuses under
this Section 7(d) shall be taken only from the Company's audited financial
statements for the applicable year.
<PAGE>
(iii) Payment of Bonuses and Vesting of Restricted Stock. All
cash bonuses payable under this Section 5(d) shall be paid to Executive within
two weeks after the delivery of audited financial statements to the Company for
the prior calendar year. Any shares of Restricted Stock that vest as a result of
Executive receiving all or a portion of the Maximum Bonus Award shall become
vested on the same date that the cash bonus is paid to Executive. No bonuses
will be paid to Executive, and no shares of Restricted Stock shall vest, if
Executive's employment with the Company has terminated before the bonus has been
paid, regardless of whether he would have been entitled to a bonus based on the
Company's financial results for the prior year, unless the Company terminates
Executive without Cause after a year has ended but before the bonus becomes
payable for such year.
(e) Employee Benefits. During the Employment Period, Executive shall
be entitled to participate in all employee benefit plans and programs approved
by the Board of Directors as the Company shall provide generally to other senior
executive officers of the Company from time to time, other than any bonus plans.
In addition, the Company's contribution on behalf of Executive under the CDI
Corporation Excess Benefit Plan in a particular plan year shall be calculated as
if compensation under the Excess Benefit Plan included any bonus awards made
under Section 5(d) for that plan year, including the fair market value of any
shares of Restricted Stock that became vested (whether automatically or as part
of a bonus award), as determined as of the date on which they vest, in that plan
year. Executive shall begin participation in the Company's disability insurance
programs as of the date his employment commences hereunder, notwithstanding any
terms of such programs to the contrary.
(f) All payments to Executive or his estate made pursuant to this
Agreement shall be subject to such withholding as may be required by any
applicable laws.
SECTION 6. Expense Reimbursements.
(a) Temporary Housing and Relocation. Executive currently maintains a
primary residence in the Chicago metropolitan area ("Current Residence"). In
connection with Executive becoming President and Chief Executive Officer of the
Company, Executive shall be required to maintain his primary residence in the
Philadelphia metropolitan area ("New Residence"). The Company shall reimburse
Executive for the reasonable cost of maintaining a temporary residence in the
Philadelphia metropolitan area until the earlier of (i) Executive occupying his
New Residence, or (ii) September 1 1997. Before July 1, 1997 the Company shall,
at its cost, hire two independent appraisers to assess the fair market value of
Executive's Current Residence (the "Appraisals"). After the Appraisals are made
and communicated to Executive, he shall be given 14 days to decide whether he
wishes to sell his Current Residence on his own, or whether he wishes to
transfer his Current Residence to the Company or its designee, and to receive
from the Company or its designee an amount equal to the average of the two
Appraisals. To the extent not mentioned above, the Company shall reimburse
Executive for any additional reasonable moving expenses he incurs for himself
and his family in connection with their relocating from the Chicago metropolitan
area to the Philadelphia metropolitan area, in accordance with the Company's
policies generally applicable to its senior executive officers.
(b) Ordinary Business Expenses. During the Employment Period, the
Company shall reimburse Executive for all reasonable and itemized out-of-pocket
expenses incurred by Executive in the ordinary course of the Company's business,
<PAGE>
provided such expenses are properly reported to the Company in accordance with
its accounting procedures.
SECTION 7. Termination.
(a) The Employment Period may be terminated by either the Board on
behalf of the Company or the Executive at any time or for any reason, as
provided in this Section 7(a). In addition to the scheduled expiration of the
Employment Period set forth in Section 3, the Employment Period shall terminate
upon the earliest to occur of the following:
(i) the Executive's death or Disability;
(ii) delivery by the Company to Executive of a written notice of
the Company's election to terminate Executive's employment hereunder, for any
reason whatsoever; or
(iii) the close of business on the day which is 90 days after the
date on which the Executive shall have delivered to the Company written notice
of Executive's election to terminate Executive's employment hereunder.
(b) For purposes of this Agreement, "Disability" shall have the same
meaning as "Total Disability" under the CDI Corporation Long Term Disability
Benefits Program, or such other comparable program as may then be in effect that
provides long term disability coverage to the Company's management employees.
(c) For purposes of this Agreement, "Cause" means any one or more of
the following bases for termination of Executive's employment with the Company:
(i) Executive's commission of a felony or other crime
involving moral turpitude;
(ii) Executive's refusal to perform such services as may be
reasonably delegated or assigned to Executive, consistent with his position, by
the Board of Directors; provided, however, that a termination under this Section
7(c)(ii) shall not be for Cause unless the Company provides written notice to
Executive of its intention to terminate Executive for Cause under this Section
7(c)(ii), and Executive fails, to the reasonable satisfaction of the Company, to
cure the defects stated in such written notice within ten days after the notice
was given to Executive;
(iii) Executive's willful misconduct or gross negligence in
connection with the performance of his duties under this Agreement that
materially adversely affects Executive's ability to perform his duties for the
Company or materially adversely affects the Company;
(iv) Executive's material breach of any of the terms or
conditions of this Agreement;
(v) receipt of notice from Executive of Executive's intention to
terminate his employment with the Company; or
(vi) receipt of reliable information from another source of
Executive's intention to terminate his employment with the Company unless
Executive delivers a written statement to Company providing that he does not
intend to terminate his employment with the Company as long as such statement is
delivered to the Company no later than 48 hours after the Company has asked
<PAGE>
Executive whether its information regarding his intended termination is
accurate.
(d) Following any termination of Executive's employment hereunder, all
obligations of the Company under this Agreement shall terminate except (i) any
obligations with respect to the payment of accrued and unpaid salary or expense
reimbursements under Sections 5 or 6 hereof through the date of Executive's
termination of employment hereunder, and (ii) any obligations as set forth in
Section 7(e).
(e) In the event of any termination of Executive's employment by the
Company other than for Cause, by Executive for Good Reason, as hereinafter
defined, or as a result of Executive's death or Disability, the Company shall
continue to pay Executive his Base Salary in the same intervals and amounts that
were in effect immediately prior to termination, until the later of (i) one year
from the date of such termination or (ii) the next scheduled expiration of the
Employment Period, without regard for any renewals that would or might have
taken place but for Executive's termination of employment. The period during
which the Company is required to continue to pay Executive his Base Salary under
this Section 7(e) is referred to as the "Severance Period." During the Severance
Period, the Company shall continue to pay for medical benefit plans and programs
for Executive comparable to those in which Executive participated and for which
the Company paid immediately prior to Executive's termination (except to the
extent Executive receives comparable benefits from another employer).
Notwithstanding the above, no amounts shall be paid or become payable to
Executive during the Severance Period until Executive has executed a valid
release and waiver of all claims and potential claims against the Company and
other related parties in a form that is reasonably satisfactory to the Company,
and any required waiting period under such release and waiver has expired and
Executive has not revoked the release during such waiting period.
(i) "Good Reason" exists if the Executive voluntarily terminates
employment with the Company following a Change in Control, as hereinafter
defined, because (A) Executive is assigned duties that are demeaning or
otherwise materially inconsistent with the duties currently performed by
Executive, or (B) Executive's place of employment with the Company is moved
outside the Philadelphia metropolitan area. Before the Executive terminates for
Good Reason, he must notify the Company in writing of his intention to terminate
and the Company shall have 15 days after receiving such written notice to remedy
the situation, if possible.
(ii) "Change in Control" shall mean a change in control of a
nature that would be required to be reported in response to Item 1 of Form 8-K
promulgated under the Securities Exchange Act of 1934, as amended (the "Act"),
provided, that, without limitation, such a change in control shall be deemed to
have occurred if (A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Act), other than the Company or any "person" who on the date hereof
is a director or officer of the Company, is or becomes the "beneficial owner,"
(as defined in Rule 13d-3 under the Act), directly or indirectly, of securities
of the Company representing more than 50% of the combined voting power of the
Company's then outstanding securities; or (B) during any period of two
consecutive years during the term of this Agreement, individuals who at the
beginning of such period constitute the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board, unless the election
of each director who was not a director at the beginning of such period has been
approved in advance by directors representing at least a majority of the
directors then in office who were members of the Incumbent Board or whose
election was approved by the Incumbent Board.
<PAGE>
(f) Any termination by the Company or by Executive of Executive's
employment hereunder shall be communicated by written notice.
(g) Any severance compensation granted in this Section 7 shall be the
sole and exclusive compensation or benefit due to Executive upon termination of
Executive's employment.
SECTION 8. Representations, Warranties and Acknowledgments of
Executive.
(a) Executive represents and warrants that his experience and
capabilities are such that the provisions of Section 9 will not prevent him from
earning his livelihood, and acknowledges that it would cause the Company serious
and irreparable injury and cost if Executive were to use his ability and
knowledge in competition with the Company or to otherwise breach the obligations
contained in Section 9.
(b) Executive acknowledges that (i) during the term of Executive's
employment with the Company, Executive will have access to Confidential
Information; (ii) such Confidential Information is proprietary, material and
important to the Company and its non-disclosure is essential to the effective
and successful conduct of the Company's business; (iii) the Company's business,
its customers' business and the businesses of other companies with which the
Company may have commercial relationships could be damaged by the unauthorized
use or disclosure of this Confidential Information; and (iv) it is essential to
the protection of the Company's goodwill and to the maintenance of the Company's
competitive position that the Confidential Information be kept secret, and that
Executive not disclose the Confidential Information to others or use the
Confidential Information to Executive's advantage or the advantage of others.
(c) Executive acknowledges that as the Company's Chief Executive
Officer and President, Executive will be put in a position of trust and
confidence and have access to Confidential Information, will be supervising the
operations and employees of the Company, will be in contact with customers and
prospective customers, will participate in the preparation and submission of
bids and proposals to customers and prospective customers, and will be
responsible for the formulation and implementation of the Company's strategic
plans.
(d) Executive acknowledges that as the Company's Chief Executive, it
is essential for the Company's protection that Executive be restrained following
the termination of Executive's employment with the Company from soliciting or
inducing any of the Company's officers and management employees to leave the
Company's employ, hiring or attempting to hire any of the Company's officers or
management employees, soliciting the Company's customers and suppliers for a
competitive purpose, and competing against the Company for a reasonable period
of time.
(e) Executive represents and warrants that Executive is not bound by
any other agreement, written or oral, which would preclude Executive from
fulfilling all the obligations, duties and covenants in this Agreement.
Executive also represents and warrants that Executive will not use, in
connection with his employment under this Agreement, any materials which may be
construed to be confidential to a prior employer or other persons or entities.
In the event of a breach of this Section 8 which results in damage to the
Company, Executive will indemnify and hold the Company harmless with respect to
such damage.
<PAGE>
References in this Section 8 to the Company shall include the Company, its
subsidiaries, divisions and affiliates.
SECTION 9. Executive's Covenants and Agreements.
(a) Executive agrees to maintain full and complete records of all
transactions and of all services performed by Executive on behalf of the Company
and to submit this information to the Company in the manner and at the times
that the Company may, from time to time, direct.
(b) Executive agrees to devote Executive's entire productive time,
ability and attention to the Company's business during the term of this
Agreement. Executive further agrees not to, directly or indirectly, render any
services of a business, commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the Company's prior
written consent.
(c) Executive agrees to abide by and comply with all personnel and
company practices and policies applicable to Executive.
(d) Executive shall promptly and completely disclose to the Company
and the Company or its customers will own all rights, title and interest to any
Inventions made, recorded, written, first reduced to practice, discovered,
developed, conceived, authored or obtained by Executive, alone or jointly with
others, during the term of Executive's employment with the Company (whether or
not such Inventions are made, recorded, written, first reduced to practice,
discovered, developed, conceived, authored or obtained during working hours) and
for one year after termination of Executive's employment with the Company.
Executive agrees to take all such action during the term of Executive's
employment with the Company or at any time thereafter as may be necessary,
desirable or convenient to assist the Company or its customers in securing
patents, copyright registrations, or other proprietary rights in such Inventions
and in defending and enforcing the Company's or such customer's rights to such
Inventions, including without limitation the execution and delivery of any
instruments of assignments or transfer, affidavits, and other documents, as the
Company or its customers may request from time to time to confirm the Company's
or its customers' ownership of the Inventions. Executive represents and warrants
that as of the date hereof there are no works, software, inventions, discoveries
or improvements (other than those included in a copyright or patent of
application therefor) which were recorded, written, conceived, invented, made or
discovered by Executive before entering into this Agreement and which Executive
desires to be removed from the provisions of this Agreement.
(e) For purposes of this Agreement, "Inventions" means concepts,
developments, innovations, inventions, information, techniques, ideas,
discoveries, designs, processes, procedures, improvements, enhancements,
modifications (whether or not patentable), including, but not limited to, those
relating to hardware, software, languages, models, algorithms and other computer
system components, and writings, manuals, diagrams, drawings, data, computer
programs, compilations and pictorial representations and other works (whether or
not copyrightable). Inventions does not include those which are made, developed,
conceived, authored or obtained by Executive without the use of the Company's
resources and which do not relate to any of the Company's past, present or
prospective activities.
(f) During and after the term of Executive's employment with the
<PAGE>
Company, Executive will hold all of the Confidential Information in the
strictest confidence and will not use any Confidential Information for any
purpose and will not publish, disseminate, disclose or otherwise make any
Confidential Information available to any third party, except as may be required
in connection with the performance of Executive's duties hereunder.
(g) For purposes of this Agreement, "Confidential Information" means
all information, data, know-how, systems and procedures of a technical,
sensitive or confidential nature in any form relating to the Company or its
customers, including without limitation about Inventions, all business and
marketing plans, marketing and financial information, pricing, profit margin,
cost and sales information, operations information, forms, contracts, bids,
agreements, legal matters, unpublished written materials, names and addresses of
customers and prospective customers, systems for recruitment, contractual
arrangements, market research data, information about employees, suppliers and
other companies with which the Company has a commercial relationship, plans,
methods, concepts, computer programs or software in various stages of
development, passwords, source code listings and object code.
(h) All files, records, reports, programs, manuals, notes, sketches,
drawings, diagrams, prototypes, memoranda, tapes, discs, and other
documentation, records and materials in any form that in any way incorporate,
embody or reflect any Confidential Information or Inventions will belong
exclusively to the Company and its customers and Executive will not remove from
the Company's or its customers' premises any such items under any circumstances
without the prior written consent of the party owning such item. Executive will
deliver to the Company all copies of such materials in Executive's control upon
the Company's request or upon termination of Executive's employment with the
Company and, if requested by the Company, will state in writing that all such
materials were returned.
(i) If Executive's employment is terminated for any reason, including
resignation by Executive or termination by the Company, with or without Cause,
then for a period which extends to the later of two years immediately following
Executive's termination or the date of which the Employment Period was scheduled
to expire, Executive agrees not to:
(i) own, manage, operate, finance, join, control, or participate
in the ownership, management, operation, financing or control of, or be
connected, directly or indirectly, as proprietor, partner, shareholder,
director, officer, executive, employee, agent,creditor, consultant, independent
contractor, joint venturer, investor, representative, trustee or in any other
capacity or manner whatsoever with, any entity that engages or intends to engage
in any Competing Business anywhere in the world. "Competing Business" means any
business or other enterprise which engages in the staffing business; and
(ii) directly or indirectly, solicit, interfere with or attempt
to entice away from the Company, any officer or management employees of the
Company or anyone who was one of the Company's officers or management employees
within 12 months prior to such contact, solicitation, interference or
enticement; and
(iii) contact, solicit, interfere with or attempt to entice away
from the Company, any customer on behalf of a Competing Business.
References in this Section 9 to the Company shall include the Company, its
subsidiaries, divisions and affiliates.
<PAGE>
SECTION 10. Remedies.
Executive acknowledges that his promised services hereunder are of a
special, unique, unusual, extraordinary and intellectual character, which give
them peculiar value the loss of which cannot be reasonably or adequately
compensated in an action of law, and that, in the event there is a breach hereof
by Executive, the Company will suffer irreparable harm, the amount of which will
be impossible to ascertain. Accordingly, the Company shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either at law or in equity, to obtain damages for any breach or to
enforce specific performance of the provisions or to enjoin Executive from
committing any act in breach of this Agreement. The remedies granted to the
Company in this Agreement are cumulative and are in addition to remedies
otherwise available to the Company at law or in equity. If the Company is
obliged to resort to the courts for the enforcement of any of the covenants of
Executive contained in Section 9 hereof, each such covenant shall be extended
for a period of time equal to the period of such breach, if any, which extension
shall commence on the later of (i) the date on which the original (unextended)
term of such covenant is scheduled to terminate or (ii) the date of the final
court order (without further right of appeal) enforcing such covenant.
SECTION 11. Waiver of Breach.
The waiver by the Company of a breach of any provision of this
Agreement by Executive shall not operate or be construed as a waiver of any
other or subsequent breach by Executive of such or any other provision. No delay
or omission by the Company or Executive in exercising any right, remedy or power
hereunder or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by the Company or
Executive from time to time and as often as may be deemed expedient or necessary
by the Company or Executive in its or his sole discretion.
SECTION 12. Notices.
All notices required or permitted hereunder shall be made in writing
by hand-delivery, certified or registered first-class mail, or air courier
guaranteeing overnight delivery to the other party at the following addresses:
To the Company:
CDI Corp.
3500 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Board of Directors
with a required copy to:
CDI Corp.
3500 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: General Counsel
To Executive:
<PAGE>
Mitchell Wienick
18 Polo Drive
S. Barrington, IL 60010
or to such other address as either of such parties may designate in a written
notice served upon the other party in the manner provided herein. All notices
required or permitted hereunder shall be deemed duly given and received when
delivered by hand, if personally delivered; on the third day next succeeding the
date of mailing if sent by certified or registered first-class mail; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
SECTION 13. Severability.
If any term or provision of this Agreement or the application thereof
to any person or circumstance shall, to any extent, be held invalid or
unenforceable by a court of competent jurisdiction, the remainder of this
Agreement or the application of any such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law. If any of
the provisions contained in this Agreement shall for any reason be held to be
excessively broad as to duration, scope, activity or subject, it shall be
construed by limiting and reducing it, so as to be valid and enforceable to the
extent compatible with the applicable law or the determination by a court of
competent jurisdiction.
SECTION 14. Governing Law; Exclusive Choice of Forum.
The implementation and interpretation of this Agreement shall be
governed by and enforced in accordance with the laws of the Commonwealth of
Pennsylvania without giving effect to the conflicts of law provisions thereof.
The parties hereby submit to the exclusive jurisdiction of, and waive any venue
objections against, the United States District Court for the Eastern District of
Pennsylvania and the state and local courts of the Commonwealth of Pennsylvania,
Philadelphia County, for any litigation arising out of this Agreement.
SECTION 15. Binding Effect and Assignability.
The rights and obligations of both parties under this Agreement shall
inure to the benefit of and shall be binding upon their heirs, successors and
assigns. Executive's rights under this Agreement shall not, in any voluntary or
involuntary manner, be assignable and may not be pledged or hypothecated without
the prior written consent of the Company.
SECTION 16. Counterparts; Section Headings.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. The section headings of this Agreement
are for convenience of reference only.
SECTION 17. Survival.
Notwithstanding the termination of this Agreement or Executive's
employment hereunder for any reason, Sections 8, 9, 10, 13, 14 and 17 hereof
shall survive any such termination.
<PAGE>
SECTION 18. Entire Agreement.
This instrument constitutes the entire agreement with respect to the
subject matter hereof between the parties hereto and replaces and supersedes as
of the date hereof any and all prior oral or written agreements and
understandings between the parties hereto. This Agreement may only be modified
by an agreement in writing executed by both Executive and the Company.
IN WITNESS WHEREOF, the undersigned have executed this Agreement the
date and year first written above.
COMPANY:
CDI CORP.
By: /s/ Walter R. Garrison
President and Chief Executive Officer
EXECUTIVE:
/s/ Mitchell Wienick
<PAGE>
(EXHIBIT A)
CDI CORP.
RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT (the "Agreement") is entered into as of this
11th day of March, 1997 between CDI Corp., a Pennsylvania corporation (the
"Company"), and Mitchell Wienick ("Executive").
SECTION 1. Grant of Restricted Stock.
The Company hereby grants to Executive 30,000 shares of the Company's
common stock par value $.10 per share, subject to restrictions set forth herein.
The Company, immediately following the execution of this Agreement, will issue
or transfer 30,000 shares of the Company's common stock ("Stock") to Executive.
The Stock shall consist of 10 certificates of 3,000 shares each registered in
Executive's name (the "Certificates"), subject to the restrictions set forth
herein.
SECTION 2. Custody of Stock.
The Company will deliver the Certificates to the Secretary of the
Company ("Secretary"), to be held in escrow in accordance with the terms of this
Agreement. Simultaneously with the delivery of the Certificates, Executive will
sign and deliver to the Secretary an undated stock power with respect to each of
the Certificates, authorizing the Secretary to transfer title to each
Certificate to the Company, in the event that Executive forfeits all or a
portion of the Stock in accordance with the terms of this Agreement.
SECTION 3. Rights to Vote Stock.
Executive will be considered a shareholder with respect to the
escrowed Stock and will have all corresponding rights, including the right to
vote the Stock and to receive all dividends and other distributions with respect
to the Stock, except that Executive will have no right to sell, exchange,
transfer, pledge, hypothecate or otherwise dispose of any escrowed Stock, and
Executive's rights in the escrowed Stock will be subject to forfeiture as
provided in Section 5 of this Agreement.
SECTION 4. Vesting of Restricted Stock.
Executive will vest, if at all, in one-half of the number of shares of
Stock (15,000 shares) pursuant to the terms of Section 5(d) of the Employment
Agreement between Executive and the Company, dated March 11, 1997 (the
"Employment Agreement"). Executive will vest in the other half of the shares of
Stock (the "15,000 Time-Vesting Shares") as follows: (i) 3,000 shares on the
first anniversary of the date of the Employment Agreement, (ii) 3,000 shares on
the second anniversary of the date of the Employment Agreement, (iii) 3,000
shares on the third anniversary of the date of the Employment Agreement, (iv)
3,000 shares on the fourth anniversary of the date of the Employment Agreement,
and (v) 3,000 shares on the fifth anniversary of the date of the Employment
Agreement. If Executive is terminated by the Company other than for Cause or as
a result of Executive's death or Disability, or if Executive terminates for Good
Reason, as such terms are defined in the Employment Agreement, Executive shall
continue to vest in the 15,000 Time-Vesting Shares for the duration of the
Severance Period, as such term is defined in the Employment Agreement. If
Executive's employment with the Company terminates for any other reason than as
specified in the immediately preceding sentence, none of the unvested 15,000
Time-Vesting Shares shall ever vest and such shares shall be forfeited to the
Company as of the date that Executive's
<PAGE>
employment with the Company terminates for any other reason than as specified
in the immediately preceding sentence, none of the unvested 15,000 Time-Vesting
Shares shall ever vest and such shares shall be forfeited to the Company as of
the date that Executive's employment with the Company terminates. For all
shares of Stock in which Executive becomes vested, the escrow will terminate
and the Secretary will deliver the stock certificates to Executive as soon as
practicable after such shares vest.
SECTION 5. Forfeiture of Stock.
Executive shall forfeit all remaining escrowed Stock upon the
termination of his service as an employee of the Company for any reason other
than a termination of his service by the Company without Cause, as defined in
the Employment Agreement, or upon any attempt by Executive to sell, exchange,
transfer, pledge, hypothecate or otherwise dispose or encumber any of the
escrowed Stock. Executive shall also forfeit any shares of escrowed Stock that
were subject to vesting under Section 5(d) of the Employment Agreement, but
which did not vest thereunder in a given year because Executive was not entitled
to the Maximum Bonus Award for that year. Title to all forfeited shares of Stock
shall be transferred back to the Company as soon as reasonably practicable
after they are forfeited.
SECTION 6. Restriction on Transfer Rights of Shares.
Whenever shares of Stock vest under this Agreement or the Employment
Agreement, one-half of those shares of Stock may not be sold or transferred
until the second anniversary of their respective vesting date, and the other
half may be sold or transferred at any time on or after their respective vesting
date. With respect to any shares of Stock the sale or transfer of which is
restricted under this Section 6, Executive may not engage in any transaction
designed to provide him with substantially the same economic benefit of a sale
of any shares of Stock so restricted, such as a short sale or a sale of a put
option. Certificates representing any shares of Stock so restricted will be
inscribed with an appropriate legend prohibiting such transfer.
SECTION 7. Compliance with Laws.
All shares of Stock issued to Executive or his personal representative
shall be transferred in accordance with all applicable laws, regulations or
listing requirements of any national securities exchange, and the Company may
take all actions necessary or appropriate to comply with such requirements
including, without limitation, withholding federal income and other taxes with
respect to such Stock; restricting (by legend or otherwise) such Stock as shall
be necessary or appropriate, in the opinion of counsel for the Company, to
comply with applicable federal and state securities laws, including Rule 16b-3
(or any similar rule) of the Securities and Exchange Commission, which
restrictions shall continue to apply after the delivery of certificates for the
Stock to Executive or his personal representative; and postponing the issuance
or delivery of any Stock. Notwithstanding any provision in this Agreement to the
contrary, the Company shall not be obligated to issue or deliver any Stock if
such action violates any provision of any law or regulation of any governmental
authority or any national securities exchange.
SECTION 8. Agreement Not to Affect Relationship with Company.
This Agreement shall not confer upon Executive any right to continue
in the employ or service of the Company.
SECTION 9. Adjustment for Capital Changes.
The number of shares of Stock subject to this Agreement shall be
appropriately adjusted in the event of a stock split, stock dividend,
recapitalization, or other capital change of the Company.
SECTION 10. Interpretation.
<PAGE>
The Company shall have the sole power to interpret this Agreement and
to resolve any disputes arising hereunder.
IN WITNESS WHEREOF, the undersigned have executed this Agreement the date and
year first written above.
Company:
CDI CORP.
By: /s/ Walter R. Garrison
President and Chief Executive Officer
EXECUTIVE:
/s/ Mitchell Wienick
<PAGE>
(EXHIBIT B)
CDI CORP.
NON-QUALIFIED STOCK OPTION AGREEMENT
SECTION 1. Grant of Option.
The CDI Corp. Board of Directors' Stock Option Committee, pursuant to
the authority granted to it under the CDI Corp. Non-Qualified Stock Option and
Stock Appreciation Rights Plan, as amended (the "Plan") hereby grants to
Mitchell Wienick (the "Optionee") an option (the "Option" when reference is made
to the right to purchase all of the Shares) to purchase up to 250,000 shares of
CDI Corp. common stock (the "Shares" when reference is made to all or a portion
of the shares subject to the Option), according to the terms and conditions set
forth herein and in the Plan.
SECTION 2. Other Definitions.
(a) "Board" means the board of directors of the Company.
(b) "Cause" means termination of Optionee's employment with the
Company resulting from any one or more of the following events:
(i) Optionee's commission of a felony or other crime involving
moral turpitude;
(ii) Optionee's refusal to perform such services as may be
reasonably delegated or assigned to Optionee, consistent with his position, by
the Board of Directors; provided, however, that a termination under this Section
2(b)(ii) shall not be for Cause unless the Company provides written notice to
Optionee of its intention to terminate Optionee for Cause under this Section
2(b)(ii), and Optionee fails, to the reasonable satisfaction of the Company, to
cure the defects stated in such written notice within ten days after the notice
was given to Optionee;
(iii) Optionee's willful misconduct or gross negligence in
connection with the performance of his duties under his Employment Agreement
with the Company dated March 11, 1997 (the "Employment Agreement") that
materially adversely affects Optionee's ability to perform his duties for the
Company or materially adversely affects the Company;
(iv) Optionee's material breach of any of the terms or conditions
of the Employment Agreement;
(v) receipt of notice from Optionee of Optionee's intention to
terminate his employment with the Company; or
(vi) receipt of reliable information from another source of
Optionee's intention to terminate his employment with the Company unless
Optionee delivers a written statement to Company providing that he does not
intend to terminate his employment with the Company as long as such statement is
delivered to the Company no later than 48 hours after the Company has asked
Optionee whether its information regarding his intended termination is accurate.
(c) "Change in Control" shall mean a change in control of a nature that
<PAGE>
would be required to be reported in response to Item 1 of Form 8-K promulgated
under the Securities Exchange Act of 1934, as amended (the "Act"), provided,
that, without limitation, such a change in control shall be deemed to have
occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Act), other than the Company or any "person" who on the date hereof is a
director or officer of the Company, is or becomes the "beneficial owner," (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing more than 50% of the combined voting power of the
Company's then outstanding securities; or (ii) during any period of two
consecutive years during the term of this Agreement, individuals who at the
beginning of such period constitute the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board, unless the election
of each director who was not a director at the beginning of such period has been
approved in advance by directors representing at least a majority of the
directors then in office who were members of the Incumbent Board or whose
election was approved by the Incumbent Board.
(d) "Committee" means the Stock Option Committee of the Board.
(e) "Company" means CDI Corp.
(f) "Date of Exercise" means the date on which the written notice required
by Section 8 below is received by the Treasurer of the Company.
(g) "Date of Grant" means March 11, 1997, the date on which the Option is
awarded pursuant to the Plan and this Agreement.
(h) "Disability" shall have the same meaning as "Total Disability" under
the CDI Corporation Long Term Disability Benefits Program, or such other
comparable program as may then be in effect that provides long term disability
coverage to the Company's management employees.
(i) "Fair Market Value" of a share of Stock means the closing price of
actual sales of shares on the New York Stock Exchange on a given date or, if
there are no such sales on such date, the closing price of the shares of Stock
on such exchange on the last date on which there was a sale.
(j) "Good Reason" exists if the Optionee voluntarily terminates employment
with the Company following a Change in Control because (i) the Optionee is
assigned duties that are demeaning or otherwise materially inconsistent with the
duties currently performed by the Optionee, or (ii) the Optionee's place of
employment with the Company is moved outside the Philadelphia metropolitan area.
Before the Optionee terminates for Good Reason, he must notify the Company in
writing of his intention to terminate and the Company shall have 15 days after
receiving such written notice to remedy the situation, if possible.
(k) "Group I Shares" means 200,000 shares of Stock subject to this Option.
(l) "Group II Shares" means 50,000 shares of Stock subject to this Option.
(m) "Group II Threshold" means the Fair Market Value of the Stock has been
greater than or equal to $90.00 per share for 180 consecutive days, including
non-trading days.
(n) "Group(s)" means one or more of the two groups into which the shares
of Stock subject to this Option are divided.
<PAGE>
(o) "Option Price" means $33.25, representing the Fair Market Value of a
share of Stock on the last trading date immediately preceding the Date of Grant.
(p) "Stock" means the Company's common stock, par value $.10 per share.
(q) "Termination Date" means the earliest of:
(i) the date on which Optionee's employment with the Company
terminates if such termination is by the Company for Cause or by Optionee
without Good Reason;
(ii) in the event of termination of Optionee's employment by the
Company without Cause or by Optionee for Good Reason, the date two weeks after
the date of such termination;
(iii) in the event of the death or Disability of the Optionee, the
date six months after the date of the Optionee's death or Disability; or
(iv) 12:00 a.m. March 11, 2007.
SECTION 3. Time of Exercise.
No Option shall be exercisable with respect to any Shares unless the
Option has vested with respect to such Shares in accordance with Section 4
hereof. If vested, the Option may be exercised at any time after vesting until
the Termination Date in whole or in part.
SECTION 4. Option Vesting.
Subject to the accelerated vesting provisions of Section 4(c), the Option
will vest as follows:
(a) the Group I Shares shall vest as follows:
(i) 50,000 shares on the second anniversary of the Date of Grant,
(ii) 50,000 shares on the third anniversary of the Date of Grant,
(iii) 50,000 shares on the fourth anniversary of the Date of Grant,
(iv) 50,000 shares on the fifth anniversary of the Date of Grant, and
(b) the Group II Shares shall vest on the fifth anniversary of the Date of
Grant.
Notwithstanding the above, no Shares will vest on or after the Termination Date
except as provided in Section 4(c) below.
(c) Accelerated Vesting. In addition to the vesting provisions above, the
Option shall vest and be immediately exercisable upon the termination of the
Optionee's employment with the Company following a Change in Control of the
Company if such termination is by the Company without Cause or by the Optionee
for Good Reason. In addition, if the Company terminates Optionee's employment
without Cause prior to three years after the Date of Grant, any of the Group I
Shares specified in Section 4(a)(i) and Section 4(a)(ii) which have not vested
shall
<PAGE>
vest and become immediately exercisable upon such termination of employment.
SECTION 5. Payment for Shares by the Optionee.
Full payment for Shares purchased upon the exercise of the Option
shall be made by check or bank draft.
SECTION 6. Nontransferability of Option.
The Option may not be transferred, in whole or in part, except by will
or the applicable laws of descent and distribution. The Option may not be
exercised by any person other than the Optionee or, in the case of the
Optionee's death, by the person to whom the Optionee's rights have passed by
will or by the applicable laws of descent and distribution.
SECTION 7. Restriction on Transfer Rights of Shares.
Whenever Group I Shares are purchased through the exercise of all or a
portion of the Option, one-half of the purchased Shares may not be sold or
transferred until the second anniversary of their respective Dates of Exercise,
and the other half may be sold or transferred at any time on or after their
respective Dates of Exercise. Whenever Group II Shares are purchased through the
exercise of all or a portion of the Option, the purchased Shares may not be sold
or transferred until the earlier of (a) the date which is the first anniversary
of the date on which the Group II Threshold is met, or (b) the ninth anniversary
of the Date of Grant of the Option.
With respect to any Shares the sale or transfer of which is restricted
under this Section 7, Optionee may not engage in any transaction designed to
provide him with substantially the same economic benefit of a sale of any Shares
so restricted, such as a short sale or a sale of a put option. Certificates
representing any Shares so restricted will be inscribed with an appropriate
legend prohibiting such transfer.
SECTION 8. Manner of Exercise.
The Option shall be exercised by giving written notice of exercise to
the Company's Treasurer, at 1717 Arch St., 35th Floor, Philadelphia,
Pennsylvania 19103-2768. Such notice must state the number of Shares and the
Group as to which the Option is exercised. Each such notice shall be irrevocable
once given. Notice of exercise must be accompanied by full payment.
SECTION 9. Securities Laws.
The Committee may from time to time impose any conditions on the
exercise of the Option as it deems necessary or advisable to ensure that all
options granted under the Plan, and the exercise thereof, satisfy Rule 16b-3 (or
any similar rule) of the Securities and Exchange Commission. Such conditions may
include, without limitation, the partial or complete suspension of the right to
exercise the Option.
SECTION 10. Issuance of Certificates; Payment of Taxes.
(a) The Option can only be exercised as to whole shares of Stock. Upon
exercise of the Option and payment of the Option Price, a certificate for the
number of shares of Stock purchased through the exercise will be issued and
delivered by the
<PAGE>
Company to the Optionee, provided that the Optionee has remitted to the
Company an amount, determined by the Company, sufficient to satisfy the
applicable requirements to withhold federal, state, and local taxes, or made
other arrangements with the Company for the satisfaction of such withholding
requirements.
(b) Subject to the provisions of Section 9 above, the Company may also
condition delivery of certificates for shares of Stock upon the prior receipt
from the Optionee of any undertakings that it determines are required to ensure
that the certificates are being issued in compliance with federal and state
securities laws.
SECTION 11. Rights Prior to Issuance of Certificates.
Neither the Optionee nor the person to whom the Optionee's rights
shall have passed by will or by the laws of descent and distribution shall have
any of the rights of a shareholder with respect to any shares of Stock issuable
upon exercise of the Option until the date of issuance to the Optionee of a
certificate for such shares as provided in Section 10 above.
SECTION 12. Option Not to Affect Relationship with Company.
The Option shall not confer upon the Optionee any right to continue in
the employ or service of the Company.
SECTION 13. Adjustment for Capital Changes.
In case the number of outstanding shares of the Company's capital
stock is changed as a result of a stock dividend, stock split, recapitalization,
combination, subdivision, issuance of rights or other similar corporate change,
the Board shall make an appropriate adjustment in the aggregate number of Shares
subject to, and the Option Price of, any then outstanding Option and the Group
II Threshold.
SECTION 14. Interpretation.
The Committee shall have the sole power to interpret this Agreement
and to resolve any disputes arising hereunder.
Intending to be legally bound, the parties have executed this
Agreement as of the Date of Grant.
For the Stock Option Committee OPTIONEE
of the Board of Directors of
CDI Corp.
By: /s/ Walter E. Blankley /s/ Mitchell Wienick
<PAGE>
EMPLOYMENT AGREEMENT
CDI CORP. AND MITCHELL WIENICK
EXHIBIT C
1997 QUALITATIVE CEO CDI CORP GOALS
- RECRUIT AND HIRE NEW CFO, COO, AND SENIOR VP OF HUMAN
RESOURCES; ASSESS NEED FOR NEW CIO, SENIOR VP OF MARKETING AND
OUTSIDE COMMUNICATIONS RESOURCES TO HELP MANAGE INVESTOR
RELATIONS, PUBLIC RELATIONS, AND BRAND IMAGING AND
COMMUNICATIONS.
- HELP FINALIZE SALE OR TERMINATION OF AUTOMOTIVE DEVELOPMENTAL
ENGINEERING AND AUTOMOTIVE MANUFACTURING TECHNOLOGY
OPERATIONS AND INTEGRATION OF RETAINED STAFFING OPERATIONS
INTO CDI'S NATIONAL STAFFING OPERATION.
- REVIEW BUSINESS IN DEPTH WITH SENIOR LEADERSHIP OF ALL KEY
BUSINESSES - TECHNICAL SERVICES, CDI ENGINEERING, TODAY'S
TEMPORARY, AND MRI.
- MAKE PRELIMINARY ASSESSMENT OF SENIOR LEADERSHIP AND
SUCCESSION PLANS/PROCESS.
- FORMALLY MEET WITH DECISION MAKER/BUYERS OF CDI'S TOP 5
ACCOUNTS WITHIN EACH MAJOR BUSINESS TO ASSESS CURRENT "GO TO
MARKET" STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS.
- IDENTIFY TOP 3 COMPANY STRATEGIC PRIORITIES AND REVISIT VISION
AND MISSION FOR POSSIBLE CHANGES.
- EVALUATE MRI STRATEGIC FIT IN COMPANY PORTFOLIO; REDESIGN
SENIOR MANAGEMENT INCENTIVE PLAN FOR THIS ORGANIZATION.
- INITIATE CREATION OF ROBUST/INTERACTIVE COMPANY WEB SITE.
- EVALUATE CURRENT STATUS AND PROPOSE NEXT STEPS ON EVA ROLL-OUT
AND IMPLEMENTATION AS WELL AS OVERALL SENIOR MANAGEMENT
INCENTIVE PLANS.
- DEVELOP RECOMMENDATION ON SIZE OF BOARD OF DIRECTORS AND
MEMBERSHIP.
- ESTABLISH PRIME ACQUISITION TARGET LIST
- IDENTIFY POTENTIAL INTERNATIONAL PARTNERS/ACQUISITION TARGET
LIST.
