EMPLOYMENT AGREEMENT
BETWEEN
STV GROUP, INC., Employer
AND
PETER W. KNIPE, Employee
Made on July 9, 1999
Effective on June 1, 1999
TABLE OF CONTENTS
Employment and Duties..........................................................1
Employment and Duties.................................................1
Term and Termination of Term...................................................2
Term..................................................................2
Termination of Term...................................................2
Compensation...................................................................2
Salary................................................................2
Annual Incentive......................................................2
Long Term Incentives..................................................2
Benefits .............................................................2
Retirement Benefits...................................................2
Termination....................................................................3
Notice of Termination.................................................3
Grounds for Termination...............................................3
Termination upon Death.......................................3
Termination upon Disability..................................3
Termination for Cause........................................3
Termination Other Than For Cause.............................4
Termination For Good Reason Upon a Change of Control.........4
Termination Upon Retirement..................................4
Procedure Upon Termination............................................4
Employee's Covenants...........................................................5
Nondisclosure.........................................................5
Noncompetition........................................................5
Enforcement...........................................................5
Consideration.........................................................6
Scope.................................................................6
Miscellaneous..................................................................6
Notices...............................................................6
Entire Understanding..................................................7
Modification..........................................................7
Prior Agreements......................................................7
Termination of Prior Employment Agreements............................7
Parties in Interest...................................................7
Assignment............................................................8
Severability..........................................................8
Counterparts..........................................................8
Section Headings......................................................8
References............................................................8
Controlling Law.......................................................8
EMPLOYMENT AGREEMENT
THIS AGREEMENT made on July 9, 1999, but effective as of June 1, 1999
by and between Peter W. Knipe ("Employee") and STV Group, Inc., a Pennsylvania
corporation ("Employer").
BACKGROUND
WHEREAS, Employer is engaged in the business of providing consulting
engineering, architectural, interior design, planning, construction management
and management consulting services to its customers; and
WHEREAS, Employer and Employee acknowledge that Employer is engaged in
a highly competitive business and wishes to protect its competitive position in
its industry; and
WHEREAS, Employer desires to continue to retain the services of
Employee under specific terms and conditions of employment; and
WHEREAS, Employee desires to continue to work for Employer under the
specific terms and conditions of employment which include terms to protect
Employer's competitive position in the industry; and
WHEREAS, Employee and Employer have freely negotiated their respective
terms and conditions of employment, and have had the opportunity to consult with
counsel of their choice, and have reached agreement thereon;
NOW THEREFORE, in consideration of the promises, covenants and
agreements of the parties contained herein, and intending to be legally bound,
the parties hereby covenant and agree as follows:
1. Employment and Duties.
1.1. Employment and Duties. Employer shall employ Employee
throughout the term of employment set forth in Section 2 hereof as Senior Vice
President of Finance. Employee shall also have such other responsibilities and
duties, consistent with his positions and expertise, as may from time to time be
prescribed by the Employer's Chief Executive Officer. Employee shall devote his
full time, energy, skill and best efforts to the business and affairs of
Employer. Nothing in this Agreement shall preclude Employee from serving as a
director, trustee, officer of, or partner in, any other firm, trust, corporation
or partnership or from pursuing personal investments, as long as such activities
do not interfere with Employee's performance of his duties hereunder.
2. Term and Termination of Term.
2.1. Term. The term of Employee's employment under this
Agreement shall be a period of two years commencing on June 1, 1999, and ending
on May 31, 2001, unless further extended or sooner terminated in accordance with
the other provisions hereof (the "Term"). Subject to Section 2.2, and if the
Term has not been terminated pursuant to Section 4, on June 1, 2000 and on each
June 1 thereafter (each such June 1, an "Extension Date") the Term shall be
extended for an additional period of one year.
2.2. Termination of Term. The Employee or the Employer may
elect to terminate the automatic extension of the Term set forth in Section 2.1
("Automatic Extension") by giving written notice of such election. Any notice
given hereunder must be given not less than 180 days prior to the applicable
Extension Date.
3. Compensation.
3.1. Salary. Employer shall pay to Employee for services
rendered hereunder an annual base salary of $140,000 per year ("Salary"),
payable in accordance with Employer's normal payroll practices for employees.
Employer shall deduct or cause to be deducted from the Salary all taxes and
amounts required by law to be withheld. Employee's Salary shall be reviewed by
the Employer's Chief Executive Officer no less frequently than annually and may
be increased, but not deceased, as a result thereof.
3.2. Annual Incentive. During the Term, and subject to the
other provisions of this Agreement, Employee shall be entitled to participate in
and shall be included in Employer's Annual Incentive Plan established by the
Compensation Committee and ratified by the Board.
3.3. Long Term Incentives. During the Term, and subject to the
other provisions of this Agreement, Employee shall be entitled to participate in
and shall be included in all of Employer's long term incentive plans ("Long Term
Incentives") generally available to officers to the extent Employee is eligible
under the general provisions thereof, including, but not necessarily limited to
stock option plans, restricted stock plan, stock appreciation rights, and
performance units.
3.4. Benefits. During the Term, and subject to the other
provisions of this Agreement, Employee shall be entitled to participate and
shall be included in benefit plans of the Employer generally available to
officers.
3.5. Retirement Benefits. Employee shall be entitled to
continue to participate and shall continue to be included in Employer's ESOP and
401(K) plans on the same terms and conditions as other employees of Employer
("General Retirement Benefits").
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4. Termination.
4.1. Notice of Termination. Any termination by Employer or by
Employee, other than due to death of Employee, shall be communicated by written
Notice of Termination to the other party hereto. As used in this Agreement,
"Notice of Termination" means a notice specifying the termination provision in
this Agreement relied upon and setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision specified. As used in this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination.
4.2. Grounds for Termination.
4.2.1. Termination upon Death. Employee's employment
with Employer and allof Employee's rights to compensation and benefits hereunder
shall automatically terminate upon his death, except that Employee's heirs,
personal representatives or estate shall be entitled to any unpaid portion of
his Salary and benefits accrued up to the Date of Termination and shall also be
entitled to reimbursement for any expenses incurred by Employee hereunder.
4.2.2. Termination upon Disability. This Agreement
shall terminate immediately in the event that Employee becomes disabled.
Employee will be deemed to be disabled at the end of any period of six
consecutive months during which, by reason of physical or mental injury or
disease, Employee has been unable to perform substantially the Employee's usual
and customary duties under this Agreement. In the event of termination as a
result of disability, Employee shall receive compensation and benefits in
accordance with the Employer policy with respect to disability benefits in
effect at the time of such disability.
4.2.3. Termination for Cause. At any time during
the Term, Employer may terminate Employee's employment hereunder for Cause (as
defined herein), effective immediately upon notice to Employee, if the Employee
was given reasonable notice of the event constituting cause and either Employee
had a reasonable opportunity to take remedial action but failed or refused to do
so, or an opportunity to take remedial action would not have been meaningful or
appropriate under the circumstances.
For purposes of this Agreement, Cause shall mean: (1) Employee
is negligent in the performance of his duties under this Agreement resulting in
a material impairment of Employer's performance, and Employee continues to be
negligent after demand for corrective action is delivered by the Employer that
specifically identifies the manner in which the employer believes the Employee
has been grossly negligent under this Agreement (2) Employee is convicted of or
pleads guilty or nolo contendere to a felony or (3) Employee willfully refuses
or continues to fail, without proper cause and, other than by reason of illness,
to follow the lawful directions of the Chief Executive Officer.
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On termination of this Agreement pursuant to this Section
4.2.3, with the exception that Employee shall be entitled to any unpaid portion
of his Salary and benefits earned prior to the date of termination, all rights
to Salary and benefits of Employee shall cease as of the Date of Termination.
4.2.4. Termination Other Than For Cause. In the
event that Employer terminates Employee's employment hereunder without cause,
Employee shall receive his Salary for the remainder of the term of the Agreement
and shall continue to receive all benefits under the Agreement for the remaining
term of the Agreement. In addition, all Long-Term Incentives will fully and
immediately vest.
4.2.5. Termination For Good Reason Upon a Change of
Control. Employee may terminate his employment hereunder for Good Reason (as
defined herein). For purposes of this Agreement, Good Reason means (1) a
significant reduction in Employee's duties as such duties are contemplated by
Section 1 hereof; (2) any termination of Employee, except in connection with
termination of Employee's employment for Cause; (3) a reduction in Employee's
Salary or a material reduction of Employee's other compensation, benefits or
perquisites; or (4) a relocation of Employee's principal place of business to a
location which is more than fifty (50) miles from its current location.
If Employee's employment shall be terminated for Good
Reason after a Change of Control (as defined in Appendix A), Employee shall be
paid a lump-sum payment equal to the sum of (x) three times the Employee's then
current Salary plus (y) the amount of any cash bonus awarded to the Employee for
services in the three most recent fiscal years; and all stock options, stock
awards and similar equity rights, if any, shall vest and become exercisable
immediately prior to the termination of the Term and remain exercisable through
their original terms.
4.2.6 Termination Upon Retirement. Employee may
terminate this Agreement upon retirement in accordance with the Employer's
policies for retirement. Upon such retirement, Employee shall be entitled to all
of Employee's retirement benefits as provided for herein.
4.2.7 Termination Other Than for Good Reason or
Retirement. If Employee terminates his employment, other than for good reason or
retirement, all rights to Salary and benefits hereunder shall automatically
cease except that Employee shall be entitled to any unpaid portion.
4.3. Procedure Upon Termination. On termination of employment
regardless of the reason, Employee shall promptly return to Employer all
documents (including copies) and other property of Employer, including without
limitation, customer lists, manuals, letters, materials, reports, and records in
his possession or control no matter from whom or in what manner acquired.
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5. Employee's Covenants.
5.1. Nondisclosure. At all times during and after the Term,
Employee shall keep confidential and shall not, except with Employer's express
prior written consent, or except in the proper course of his employment with
Employer, directly or indirectly, communicate, disclose, divulge, publish, or
otherwise express, to any Person, or use for his own benefit or the benefit of
any Person, any trade secrets, confidential or proprietary knowledge or
information, no matter when or how acquired, concerning the conduct and details
of Employer's business, including without limitation names of customers and
suppliers (including customer buying and credit information, customer
requirements and preferences and customer ratings), lists of or information
pertaining to prospective customers, pricing information, credit information,
gross margin and cost information, sales and marketing studies, reports,
projections and information, number schedule and methods of delivery of
services, finances, accounting methods, marketing methods, trade secrets,
policies, prospects and financial condition. For purposes of this Section 5.1.,
confidential information shall not include any information which is now known by
or readily available to the general public or which becomes known by or readily
available to the general public other than as a result of any improper act or
omission of Employee.
5.2 Noncompetition. During the Term hereof, and for a period
of one year thereafter (provided that Employee is receiving compensation for
such one year under Section 4.2.4 of this Agreement) Employee shall not, except
with Employer's express prior written consent, directly or indirectly, in any
capacity, for the benefit of any Person:
(1) Communicate with or solicit any Person who is or during
such period becomes a customer, supplier, employee, salesman, agent or
representative of Employer, in any manner which interferes or might interfere
with such Person's relationship with Employer, or in an effort to obtain such
Person as a customer, supplier, employee, salesman, agent, or representative of
or on behalf of any business in competition with Employer.
(2) Establish, engage, own, manage, operate, join or control,
or participate in the establishment, ownership, management, operation or control
of, or be a director, officer, employee, salesman, agent or representative of,
or be a consultant to, any Person in any business in competition with Employer,
at any location where Employer now conducts or during the Term hereof begins
conducting any material business, or act or conduct himself in any manner which
he would have reason to believe inimical or contrary to the best interests of
Employer; provided, however, that this provision shall not be construed to
prohibit the ownership by Employee of any interest in any business entity doing
business with Employer or of not more than 2% of any class of securities of any
corporation which is engaged in any of the foregoing businesses that has a class
of securities registered pursuant to the Securities Exchange Act of 1934.
5.3. Enforcement. The parties acknowledge that Employer's
business is highly competitive and world-wide in scope and that any breach by
either party of any of the covenants and agreements of this Section 5
("Covenants") will result in irreparable injury to the injured
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party for which money damages could not adequately compensate such party, and
therefore, in the event of any material breach of this agreement, the injured
party shall be entitled, in addition to all other rights and remedies which such
party may have at law or in equity, to have an injunction issued by any
competent court enjoining and restraining the party in breach and/or all other
Persons involved therein from continuing such breach. The existence of any claim
or cause of action which either party may have against the other shall not
constitute a defense or bar to the enforcement of any of the Covenants. If a
party is obliged to resort to litigation to enforce any of the Covenants which
has a fixed term, then such term shall be extended for a period of time equal to
the period during which a material breach of such Covenant was occurring,
beginning on the date of a final court order (without further right of appeal)
holding that such a material breach occurred or, if later, the last day of the
original fixed term of such Covenant.
5.4. Consideration. The parties expressly acknowledge that the
Covenants are a result of arms length negotiations between the parties and are a
material part of the consideration bargained for by them and that without the
agreement of each to be bound by the Covenants, neither would have agreed to
enter into this Agreement.
5.5. Scope. If any portion of any Covenant or its application
is construed to be invalid, illegal or unenforceable, then the other portions
and their application shall not be affected thereby and shall be enforceable
without regard thereto. If any of the Covenants is determined to be
unenforceable because of its scope, duration, geographical area or similar
factor, then the court making such determination shall have the power to reduce
or limit such scope, duration, area or other factor, and such Covenant shall
then be enforceable in its reduced or limited form.
6. Miscellaneous.
6.1. Notices. All notices, requests, demands, consents or
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if and when (1)
delivered personally, (2) mailed by first class certified mail, return receipt
requested, postage prepaid, or (3) sent by a nationally recognized express
courier service, postage or delivery charges prepaid, to the parties at their
respective addresses stated below or to such other addresses of which the
parties may give notice in accordance with this Section.
If to Employer, to:
STV Group, Inc.
205 W. Welsh Drive
Douglassville, PA 19103
ATTN: Chief Executive Officer
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With a copy to:
Richard J. McMahon, Esquire
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, PA 19103
If to Employee to:
Peter W. Knipe
1104-22 Briton Place Road
West Chester, PA 19380
6.2. Entire Understanding. This Agreement, together with all
other documents, instruments, certificates and agreements executed in connection
herewith, sets forth the entire understanding between the parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous,
written, oral, expressed or implied, communications, agreements and
understandings with respect to the subject matter hereof.
6.3. Modification. This Agreement shall not be amended,
modified, supplemented or terminated except in writing signed by both parties.
No action taken by Employer hereunder, including without limitation any waiver,
consent or approval, shall be effective unless approved by a majority of the
Board or the Chief Executive Officer.
6.4. Prior Agreements. Employee represents to Employer (1)
that there are no restrictions, agreements or understanding whatsoever to which
Employee is a party which would prevent or make unlawful his execution of this
Agreement or his employment hereunder, (2) that his execution of this Agreement
and his employment hereunder shall not constitute a breach of any contract,
agreement or understanding, oral or written to which he is a party or by which
he is bound and (3) that he is free and able to execute this Agreement and to
enter into employment by Employer.
6.5. Termination of Prior Employment Agreements. All prior
employment agreements between Employee and Employer (and/or any of its
affiliates) are hereby terminated as of the effective date hereof as fully
performed on both sides, provided that the execution and delivery of this
Agreement shall not be deemed to reduce any compensation or benefits or
eliminate any other entitlements or rights of Employee that were earned, vested
or existed prior to the effective date hereof.
6.6. Parties in Interest. This Agreement all rights of
Employee hereunder shall inure to the benefit of, bind and be enforceable by
Employee and his surviving spouse, and his heirs, personal representatives,
estate and beneficiaries, and Employer and its successors and
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assigns. This Agreement is a personal employment contract of Employer, being for
the personal services of Employee, and shall not be assignable by Employee.
6.7. Assignment. Employer, upon written consent of Employee,
may assign its rights and duties hereunder provided that the assignee is the
successor, by operation of law or otherwise, to the business of Employer, and
the nature of Employee's duties hereunder do not change in any material respect.
Employer will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Employer, by agreement, in form and substance satisfactory to
Employee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to perform it if
no such succession had taken place. Failure of Employer to obtain such agreement
and Employee's consent to the assignment prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Employee to
compensation from Employer in the same amount and on the same terms as he would
be entitled to hereunder if he terminated his employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the date of the termination of this
Agreement. As used in this Agreement, "Employer" shall mean Employer as
hereinabove defined and any successor to its business and/or assets as aforesaid
which executed and delivers the agreement provided for in this Section or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
6.8. Severability. If any provision of this Agreement is
construed to be invalid, illegal or unenforceable, then the remaining provisions
hereof shall not be affected thereby and shall be enforceable without regard
thereto.
6.9. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original hereof, and it shall not be necessary in making proof of this Agreement
to produce or account for more than one counterpart hereof.
6.10. Section Headings. Section and subsection headings in
this Agreement are inserted for convenience of reference only, and shall neither
constitute a part of this Agreement nor affect its construction, interpretation,
meaning or effect.
6.11. References. All words used in this agreement shall be
construed to be of such number and gender as the context requires or permits.
6.12. Controlling Law. This Agreement is made under, and shall
be governed by, construed and enforced in accordance with, the substantive laws
of Pennsylvania applicable to agreements made and to be performed entirely
therein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above mentioned, under Seal, intending to be legally bound
hereby.
EMPLOYER: STV GROUP, INC.
By: /s/ Dominick M. Servedio
----------------------------
Dominick M. Servedio
(Authorized Officer)
EMPLOYEE: /s/ Peter W. Knipe
----------------------------
Peter W. Knipe
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APPENDIX A
Definition of Change in Control
For purposes of this Agreement, "change of control" shall mean the
occurrence of one or more of the following: (A) The acquisition, other than from
Employer, by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) (a "Person") or 30% or more of either (i)
the then outstanding shares of Common Stock of Employer (the "Outstanding
Employer Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of Employer entitled to vote generally in the
election of directors (the "Employer Voting Securities"), provided, however,
that any acquisition by (x) Employer or any of its subsidiaries, or any employee
benefit plan (or related trust) sponsored or maintained by Employer or any of
its subsidiaries or (y) any Person that is eligible, pursuant to Rule 13d-1(b)
under the Exchange Act, to file a statement on Schedule 13G with respect to its
beneficial ownership of Employer Voting Securities, whether or not such Person
shall have filed a statement on Schedule 13G, unless such Person shall have
filed a statement on Schedule 13D with respect to beneficial ownership of 30% or
more of Employer Voting Securities or (z) any corporation with respect to which,
following such acquisition, more than 60% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Employer Common Stock
and Employer Voting Securities immediately prior to such acquisition in
substantially the same proportion as their ownership, immediately prior to such
acquisition, of the Outstanding Employer Common Stock and Employer Voting
Securities, as the case may be, shall not constitute a Change of Control, or (B)
Individuals who, as of the date hereof, constitute the Board of Directors of
Employer (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to the date hereof whose election or nomination for election by
Employer's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of Employer (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or (C) Approval by the shareholders of
Employer of a reorganization, merger or consolidation (a "Business
Combination"), in each case, with respect to which all or substantially all of
the individuals and entities who were the respective beneficial owners of the
Outstanding Employer Common Stock and Employer Voting Securities immediately
prior to such Business Combination do not, following such Business Combination,
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of Employer resulting from Business Combination
in substantially the same proportion as their ownership immediately prior to
such Business
Combination of the Outstanding Employer Common Stock and Employer Voting
Securities, as the case may be; or (D) (i) a complete liquidation or dissolution
of Employer or of (ii) sale or other disposition of all or substantially all of
the assets of Employer other than to a corporation with respect to which,
following such sale or disposition, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors is then owned beneficially, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, all of the Outstanding Employer Common Stock and Employer
Voting Securities immediately prior to such sale or disposition in substantially
the same proportion as their ownership of the Outstanding Employer Common Stock
and Employer Voting Securities, as the case may be, immediately prior to such
sale or disposition.