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NON-COMPETITION AND CONSULTING AGREEMENT
THIS IS A NON-COMPETITION AND CONSULTING AGREEMENT (hereinafter
referred to as "Agreement") made this 17th day of October, 1995, by and
between CDI Corp., a Pennsylvania corporation (hereinafter referred to
as "CDI"; as the context requires in this Agreement, "CDI" will also
refer to CDI Corp.'s subsidiary, CDI Corporation) and Christian M.
Hoechst (hereinafter referred to as "Hoechst").
Background
A. Hoechst has been employed by CDI since 1962 and currently
serves as a member of CDI Corp.'s Board of Directors, as its Executive
Vice President and as a director and/or officer of numerous CDI
subsidiaries; and
B. Hoechst and CDI entered into an employment agreement on April
1, 1963, which has most recently been amended and restated, effective
May 1, 1986 (hereinafter referred to as the "Employment Agreement"),
which governs the terms of Hoechst's employment with CDI; and
C. Hoechst will retire from CDI and its subsidiaries as of April
30, 1996 and the Employment Agreement will terminate at that time; and
D. Hoechst and CDI desire to set forth in writing Hoechst's
agreement not to compete with CDI, the consulting arrangement to which
Hoechst and CDI have agreed and Hoechst's release and waiver of claims
against CDI.
Agreement
NOW, THEREFORE, for and in consideration of the mutual promises and
undertakings set forth below, the sufficiency of which is hereby
acknowledged by both parties, and intending to be legally bound hereby,
CDI and Hoechst agree as follows:
1. Effective as of April 30, 1996, Hoechst will retire from
employment with CDI, and will resign as Executive Vice President of CDI
and as a director and officer of all direct and indirect subsidiaries of
CDI. Hoechst will remain an employee of CDI through April 30, 1996
under the current terms and conditions of the Employment Agreement. CDI
and Hoechst agree that the Employment Agreement will terminate on April
30, 1996.
2. Prior to July 31, 2001, Hoechst shall not, unless authorized
as an officer or employee of CDI or one of its subsidiaries or under the
consulting arrangement described in Section 4, below, directly or
indirectly:
(a) own, manage, operate, finance, join, control or
participate in the ownership, management, operation,
financing or control of, or be connected as an officer,
employee, consultant, agent, independent contractor,
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representative, trustee or stockholder with, or render
consulting marketing, sales, management or operations
advice or services to, or engage in, any business or
other enterprise which directly or indirectly competes
with CDI or any related entity (including any subsidiary
or affiliate of CDI) in any state, province or similar
political division in the United States, United Kingdom
or Canada in which CDI or any related entity is then
conducting business. The following will not constitute
violations of this provision: ownership of not more than
5% of the outstanding stock of any publicly traded
company; employment with a non-competing unit of a
diversified company which has another unit, distinct and
separate from the employing unit, which does compete with
CDI, so long as Hoechst does not render any advice or
assistance to such competing unit; or, if CDI decides to
enter a new line of business (i.e. other than the lines
of business it is in as of April 30, 1996 or any natural
extensions thereof), engaging in that new line of
business.
(b) solicit for the performance of services, interfere with
or attempt to entice away from CDI or any related entity,
any person, firm, company or corporation which is at the
time of such solicitation, or was within five years prior
to such solicitation, a customer of CDI or any related
entity; provided that this paragraph (b) shall not
prohibit Hoechst from providing services to such a
customer that are of a different nature from the services
historically provided to such customer by CDI or a
related entity (for purposes of this covenant, "solicit"
shall include contact in person, by mail, by advertising
media, or by telephone or other electronic communication
device); or
(c) solicit, employ, interfere with or attempt to entice away
from CDI or any related entity, any person who is an
employee of CDI or any related entity, or was an employee
of CDI or any related entity within three months prior to
such solicitation, employment or interference.
Hoechst acknowledges that in the event of a breach or threat of a breach
of any portion of this Section 2, CDI's remedies at law will be
inadequate, and in any such event CDI will be entitled to an injunction
to prevent breaches of this Agreement and to enforce specifically the
provisions hereof, in addition to any other remedy to which CDI may be
entitled at law or equity.
3. Subject to paragraphs (c) and (d) below and to Section 12
below, CDI will make the payments described in paragraphs (a)
and (b) below provided that Hoechst has complied with his
non-competition and non-solicitation obligations under Section
2 above:
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(a) Commencing on July 31, 1996, and on each October 31,
January 31, April 30 and July 31 thereafter, to and
including July 31, 2001, CDI will pay Hoechst the sum of
$66,250.
(b) As a result of Hoechst's termination of employment on
April 30, 1996, Hoechst will be entitled under section
4980B of the Internal Revenue Code of 1986, as amended,
and sections 601-609 of the Employee Retirement Income
Security Act of 1974, as amended (commonly
referred to as "COBRA") to continue his group health
insurance coverage with CDI under the CDI group health
insurance plan that is then in effect for CDI's active
employees. If Hoechst elects under COBRA to continue
coverage under CDI's group health insurance plan,
CDI will pay for a portion of Hoechst's COBRA premium in
the same proportion that CDI contributed toward Hoechst's
coverage immediately prior to his termination of
employment with CDI. Following the end of the COBRA
continuation period, Hoechst's health insurance coverage
will be maintained through a conversion of CDI's group
coverage to an individual policy or, as the parties may
agree, through a separate individual policy having
coverage substantially similar to CDI's then existing
group coverage. CDI and Hoechst will each pay the same
proportion of the premium for such coverage as they paid
for the COBRA coverage. CDI will continue to pay its
share of the premium for this coverage until July 31,
2001 at which point its obligation with respect to
providing health insurance coverage for Hoechst will
cease. In addition, CDI will from April 30, 1996 through
July 31, 2001 continue Hoechst s current life and, if
reasonably obtainable, disability insurance, through
group coverage to the extent permitted by CDI s normal
insurance carriers, or otherwise through conversion to,
or purchase of, individual insurance policies having
coverage substantially similar to CDI s then existing
group coverage. Each of CDI and Hoechst will pay the
same proportion of the premiums for such coverages as
they paid for such coverages as of April 30, 1996. CDI
will have no further obligation to pay any part of the
cost of any insurance coverages after July 31, 2001.
(c) If at any time Hoechst fails to comply with his
obligations under Section 2 hereof, and such failure is
not cured within thirty (30) days following notice from
CDI of such failure, CDI's obligation to make any
further payments under Section 3(a) and (b) shall cease
and terminate forever. CDI's right to cease such
payments upon a breach by Hoechst of his obligations
under Section 2 shall not constitute CDI's sole remedy
for such breach, and Hoechst acknowledges that in the
event of a breach of Section 2 of this Agreement, CDI
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shall remain entitled to an injunction to prevent further
breaches of the Agreement and to enforce specifically the
provisions hereof and to all other remedies available at
law or in equity for such breach.
(d) CDI's obligations to make any further payments under this
Section 3 shall cease and terminate forever upon
Hoechst's death.
4. Subject to Section 12 below, Hoechst will render up to
twenty-five (25) days of consulting services to CDI during the
period May 1, 1996 through July 29, 2001. These services will be
rendered at the request of the then Chief Executive Officer of
CDI at times reasonably convenient to Hoechst and Hoechst will use his
best efforts to perform the requested services. CDI will pay Hoechst
$100,000 for these consulting services, payable in four quarterly
installments of $25,000 each on (i) the fifth (5th) business day
following the expiration of the revocation period, as defined in Section
12, provided the release referred to in Section 12 has not been revoked
during the revocation period, (ii) August 1, 1996, (iii) November 1,
1996, and (iv) February 1, 1997. CDI will reimburse Hoechst for his
necessary and reasonable expenses incurred in connection with his
performance of these consulting services. Through July 29, 2001,
Hoechst will also attend World Presidents Organization ("WPO") and
Philadelphia Presidents Organization ("PPO") conferences and seminars on
CDI's behalf as he did while employed by CDI and will give reports to
CDI regarding these conferences and seminars as reasonably requested by
CDI. CDI will also reimburse his WPO and PPO membership fees, and
travel (business class for travel outside the United States), lodging,
meals, attendance fees and related expenses associated with attendance
at WPO and PPO conferences and seminars in accordance with CDI's past
practice of reimbursing such expenses to Hoechst.
5. Should Hoechst be elected and serve on the Board of Directors
of CDI Corp. after April 30, 1996, Hoechst will be compensated for such
Board service under the same terms and conditions as other CDI Corp.
Board members who are not employees of CDI.
6. Hoechst acknowledges that during his term of employment with
CDI he has had and will have access to confidential information of both
a technical nature and of a sensitive nature relating to CDI and its
customers. Hoechst acknowledges that such confidential information is
proprietary, material and important to CDI and its non-disclosure is
essential to the effective and successful conduct of CDI's business.
Hoechst agrees that during and after the term of this Agreement he will
hold all of this confidential information in the strictest confidence
and will not use any of it for any purpose and will not publish,
disseminate, disclose or otherwise make any such confidential
information available to any third party, except as may be required in
connection with the performance of the consulting contemplated under
Section 4 of this Agreement, or if CDI gives Hoechst prior written
consent to use such confidential information. Hoechst further agrees to
return to CDI upon request all CDI property and any other items that in
any way incorporate, embody or reflect any confidential information.
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7. Hoechst hereby, on behalf of himself, his descendants,
ancestors, dependents, heirs, executors, administrators, assigns and
successors, covenants not to make any claim or initiate any lawsuit, and
fully and forever releases and discharges CDI and its subsidiaries,
affiliates, divisions, successors, and assigns, together with its
past and present directors, officers, agents, attorneys, insurers,
employees, stockholders, and representatives (hereinafter collectively
referred to as the "CDI Group"), from any and all claims, wages,
demands, rights, liens, agreements, contracts, covenants, actions,
suits, causes of action, obligations, debts, costs, expenses, attorneys'
fees, damages, judgments, orders or liabilities of whatsoever kind or
nature in law, equity or otherwise, whether now known or unknown,
suspected or unsuspected which Hoechst now owns or holds or has at any
time heretofore owned or held against the CDI Group, arising out of or
in any way connected with Hoechst's employment relationship with CDI, or
the cessation of that employment, or any other transactions,
occurrences, acts or omissions or any loss, damage or injury whatsoever,
known or unknown, suspected or unsuspected, resulting from any act or
omission by or on the part of the CDI Group related to Hoechst's
employment by CDI, committed or omitted prior to the date of this
Agreement, including, but not limited to claims under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
any other federal, state or local statute or ordinance which deals with
discrimination or any claim for severance pay, bonus, salary, sick
leave, holiday pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit or disability benefit. This
release and waiver of claims will not apply with respect to (i) amounts
payable to Hoechst with respect to his employment through April 30, 1996
under the Employment Agreement, (ii) any vested benefits due Hoechst
under any CDI Corp. benefit plan, (iii) any amounts payable to Hoechst
under this Agreement, or (iv) any claim for indemnity for acts or
omissions of Hoechst committed during his employment or in his capacity
as an officer or director of CDI.
8. Hoechst warrants and agrees that he is responsible for any
federal, state, and local taxes which may be owed by him by virtue of
the receipt of any portion of the consideration paid hereunder and
agrees to fully indemnify CDI from and against any and all claims by any
governmental authority relating to Hoechst's failure to fully pay
such taxes. CDI will, however, make any withholdings on payments made
to Hoechst under this Agreement which it is required to make under laws
applicable at the time of such payments.
9. Hoechst acknowledges that he has been encouraged to seek the
advice of an attorney of his choice in regard to this Agreement. CDI
and Hoechst represent that they have relied upon the advice of their
attorneys, who are attorneys of their own choice. Hoechst hereby
acknowledges that he understands the significance and consequences of
this Agreement and represents that the terms of this Agreement are
fully understood and voluntarily accepted by him.
10. Both Hoechst and CDI have cooperated in the drafting and
preparation of this Agreement. Hence, in any construction to be made of
this Agreement, the same shall not be construed against any party on the
basis that the party was the drafter.
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11. Hoechst acknowledges that he has had at least twenty-one (21)
days to consider the terms of this Agreement prior to his signing it.
Hoechst further understands that he may revoke this Agreement anytime up
to seven (7) days following the date he signs the Agreement by giving
written notice of such revocation to CDI. Such notice must be dated no
later than the seventh (7th) day following the date on which he signed
the Agreement and must be received promptly thereafter by CDI.
12. On or after April 30, 1996, but no later than May 7, 1996, CDI
will deliver to Hoechst for his signature a release, substantially in
the form attached hereto as Exhibit A, releasing CDI and related parties
from any liability to Hoechst. Hoechst will have twenty-one (21) days
from receipt of such release to decide whether he will sign such a
release, and if he signs and delivers the release to CDI, he will then
have seven (7) days to revoke the release (the "revocation period") in
accordance with its terms. If Hoechst has not executed such a release
and delivered the same to CDI by May 31, 1996, or if he has revoked the
release during the revocation period, CDI will not have any obligation
to make any payments to Hoechst under this Agreement.
13. This Agreement constitutes the entire agreement concerning all
subject matters addressed herein. This Agreement supersedes and
replaces all prior negotiations. All agreements, proposed or otherwise,
whether written or oral, concerning all subject matters covered herein
are incorporated into this Agreement. If any provision of this
Agreement is determined by any court of competent jurisdiction to
be unenforceable by reason of its extending for too long a period of
time or over too large a geographical area or by reason of its being too
extensive in any other respect, it will be deemed reformed to extend
only over the longest period of time for which it may be enforceable,
and/or over the largest geographical area as to which it may be
enforceable and/or to the maximum extent in all other respects as to
which it may be enforceable, all as determined by such court in such
action. Any such determination of unenforceability or subsequent
reformation will not affect any other provision or application of this
Agreement which can be given effect without the unenforceable or
reformed provision and will not invalidate, render unenforceable or
require the reformation of such provision in any other jurisdiction.
The time period for Hoechst's obligations contained in Section 2 of this
Agreement will be extended beyond the time period specified therein by
the length of time, if any, during which he has been in breach (as
determined by a court of competent jurisdiction in a final,
nonappealable judgment, ruling or order or by an arbitration) of the
provisions in Section 2.
14. The rights and obligations of either party hereto may not be
transferred or assigned without the prior written consent of the other
party. In the event of any corporate reorganization or merger, CDI's
rights hereunder will inure to the benefit of its successor and its
obligations hereunder will be enforceable against such successor.
15. All notices required or permitted hereunder shall be made in
writing by hand-delivery, certified or registered first-class mail,
facsimile transmission or air courier guaranteeing overnight delivery to
the other party at the following addresses:
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To CDI: Walter R. Garrison
President and Chief Executive Officer
CDI Corp.
Bell Atlantic Tower - 35th Floor
1717 Arch Street
Philadelphia, PA 19103
To Hoechst: 340 Barren Road
Media, PA 19063
or to such other address as either of such parties may designate in a
written notice served upon the other party in the manner provided
herein. All notices required or permitted hereunder shall be deemed
duly given and received when delivered by hand, if personally delivered;
on the fourth (4th) day next succeeding the date of mailing if sent by
certified or registered first-class mail; when received if sent by
facsimile transmission; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
16. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
WITNESSES CDI CORP.
/s/ Joseph R. Seiders By: /s/ Walter R. Garrison
Walter R. Garrison
President and Chief Executive Officer
Dated: October 17, 1995 Dated: October 17, 1995
/s/ Joseph R. Seiders /s/ Christian M. Hoechst
Christian M. Hoechst
Dated: October 17, 1995 Dated: October 17, 1995
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EXHIBIT A
GENERAL RELEASE
NOTICE: This is a very important legal document and you should
carefully review and understand the terms and effect of this document
before signing it. By signing this General Release you are agreeing to
completely release CDI Corp. from all liability to you. Therefore, you
should consult with an attorney before signing this General Release.
You have 21 days from the date of the distribution of this document to
consider this document. If you have not returned a signed copy of the
General Release by that time, we will assume that you have elected not
to sign the General Release. If you choose to sign the General Release,
you will have an additional 7 days following the date of your signature
to revoke this General Release and it shall not become effective or
enforceable until the revocation period has expired.
In consideration of benefits which would not otherwise be
offered to me by CDI Corp., I hereby, on behalf of myself, my
descendants, ancestors, dependents, heirs, executors, administrators,
assigns and successors, release and discharge CDI Corp. and its
subsidiaries, affiliates, divisions, successors, and assigns, together
with its past and present directors, officers, agents, attorneys,
insurers, employees, stockholders, and representatives (hereinafter
collectively referred to as the "CDI Group"), from any and all claims,
wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders or liabilities of whatsoever
kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected which I now own or hold or have at any
time heretofore owned or held against the CDI Group, arising out of or
in any way connected with my employment relationship with CDI Corp., or
the cessation of that employment, or any other transactions,
occurrences, acts or omissions or any loss, damage or injury whatsoever,
known or unknown, suspected or unsuspected, resulting from any act or
omission by or on the part of the CDI Group related to Hoechst's
employment by CDI, committed or omitted prior to the date of this
General Release, including, but not limited to claims under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
any other federal, state or local statute or ordinance which deals with
discrimination or any claim for severance pay, bonus, salary, sick
leave, holiday pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit or disability benefit. This
General Release and waiver of claims will not apply with respect to (i)
amounts payable to me with respect to my employment through April 30,
1996 under my Employment Agreement with CDI Corp., amended and restated,
effective May 1, 1986, (ii) any vested benefits due me under any CDI
Corp. benefit plan, (iii) any amounts payable to me under my
Non-Competition and Consulting Agreement with CDI Corp., dated October
17, 1995, or (iv) any claim for indemnity for acts or omissions
committed by me during my employment or in my capacity as an officer or
director of CDI.
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By signing below, I acknowledge that I have carefully read and
fully understand the provisions of this General Release. I further
acknowledge that I am signing this General Release knowingly and
voluntarily and without duress, coercion or undue influence. This
General Release constitutes the total and complete understanding between
me and CDI Corp. relating to the subject matter covered herein, and all
other prior or contemporaneous written or oral agreements or
representations, if any, relating to the subject matter of this General
Release are null and void. It is also expressly understood and agreed
that the terms of this General Release may not be altered except in a
writing signed by both me and CDI Corp.
INTENDING TO BE LEGALLY BOUND, I hereby set my hand below:
WITNESSED BY:
_____________________ ___________________________
Christian M. Hoechst
Dated:_______________ Dated: ____________________