Exhibit 10.25
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), entered into on August __,
1997, made by and between IKON Office Solutions, Inc., an Ohio corporation with
its principal offices located at Malvern, Pennsylvania (the "Company"), and Xxxx
X. Xxxxxx (the "Executive"), effective as of May 1, 1997.
WHEREAS, the Executive is currently the Chairman and Chief Executive
Officer of the Company;
WHEREAS, the Company considers it essential to the best interests of
its shareholders to facilitate the recruitment and xxxxxx the continuous
employment of senior executive officers;
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control*/ exists and that such possibility, and the uncertainty and
questions which it raises, may result in the departure or distraction of the
Company's senior executive officers to the detriment of the Company and its
shareholders;
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of the
Company's senior executive officers, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control; and
WHEREAS, the Executive is willing to continue to serve as Chairman and
Chief Executive Officer of the Company, and the Company desires to retain the
Executive in such capacities on the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Employment. The Company agrees to continue to employ Executive,
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and the Executive agrees to be employed by the Company, upon the terms and
conditions herein provided, for an initial period commencing as of May 1, 1997
and ending on April 30, 2000. On each anniversary date of this Agreement,
commencing May 1, 2000, the Term shall be automatically extended for one
additional year unless not less than six months prior to such anniversary date
either party gives written notice of his or her intent not to extend the Term
for an additional one-year period (a "Notice of Nonrenewal"); provided, however,
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that the Term shall not be extended beyond Executive's 65th birthday unless
affirmatively extended in writing
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*/ The definitions of capitalized terms not otherwise identified are set
forth in Section 20 of the Agreement.
by the Company and Executive. In the event either party gives the other Notice
of Nonrenewal, the other party may elect to terminate this Agreement as of the
date of such Notice. In such event Executive agrees that, if requested by the
Board of Directors, he shall be reasonably available for a period ending on the
date on which such Notice of Nonrenewal was intended to become effective to
assist in the orderly transition of his duties and responsibilities to such
person or persons as shall be designated by the Board of Directors.
2. Position and Duties. During the Term, the Company agrees to
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employ the Executive to serve as Chairman and Chief Executive Officer of the
Company. The Executive will have such powers and duties as are commensurate with
such positions and as may be conferred upon him by the Board. During the Term,
and except for illness or incapacity and reasonable vacation periods consistent
with the discharge of the Executive's duties and responsibilities hereunder, the
Executive shall devote substantially all of his business time, attention, skill
and efforts exclusively to the business and affairs of the Company and its
subsidiaries and affiliates, provided, however, that the Executive may devote
such time as is reasonably required for charitable and personal activities, in
accordance with the Company's practices and policies, and serve on other boards
as a director or trustee if such service does not interfere with his ability to
discharge his duties and responsibilities to the Company.
3. Compensation. For all services rendered by the Executive in any
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capacity required hereunder during the Term, including, without limitation,
services as an executive, officer, director, or member of any committee of the
Company, or any subsidiary, affiliate or division thereof, the Executive shall
be compensated as follows:
(a) Base Salary. The Company shall pay the Executive a fixed
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salary of $900,000 per annum or such higher annual amount as is being paid from
time to time pursuant to the terms hereof . Such fixed salary, together with all
adjustments, is referred to herein as the "Base Salary." The Executive's Base
Salary shall not be decreased at any time from the amount then in effect, unless
the Executive otherwise agrees in writing. The Base Salary shall be subject to
such periodic review (which shall occur at least annually) and such periodic
increases as the Board shall deem appropriate in accordance with the Company's
customary procedures and practices regarding the salaries of senior officers.
Base Salary shall be payable in accordance with the customary payroll practices
of the Company, but in no event less frequently than monthly.
(b) Incentive Compensation. The Executive shall be entitled to
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receive annual and long-term incentive compensation awards, if earned, under the
policies and plans maintained by the Company providing for the payment of
incentive compensation to key officers based upon the performance of the Company
and, if applicable, the officer's individual performance. The Executive's
percentage participation, target percentage or other similar measure under any
such policy or plan during the Term shall be at least at the highest level
provided to any participant under such policy or plan.
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(c) Stock Options. The Executive shall be eligible to receive
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grants under the Company's stock option plan(s) including grants relating to the
Company's Long-Term Incentive Compensation Plan ( the "LTIP"), at the sole
discretion of the Human Resources Committee of the Board (the "Human Resources
Committee"), subject to such terms and conditions as such Committee may decide,
and in accordance with the grant letter for such options. In connection with
this Agreement, Executive has been granted 250,000 options on May 1, 1997, with
100,000 options to vest on April 30, 2002 and the balance to vest on November
30, 2006, if the Executive is an employee of the Company on such date. In
addition:
(i) The 100,000 options scheduled to vest on April 30,
2002 shall vest prior to April 30, 2002 (i.e., on the date of employment
termination) in the event the Executive's employment hereunder terminates due to
the Executive's death or Disability, a Without Cause Termination, a Constructive
Discharge, or the Company's election not to renew.
(ii) The 150,000 options scheduled to vest on November 30,
2006 shall vest prior to such date (i.e., on the date of employment termination)
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if Executive is employed by the Company after April 30, 2002, and after such
date the Executive's employment hereunder terminates due to the Executive's
death or Disability, a Without Cause Termination, a Constructive Discharge, or
the Company's election not to renew.
(iii) All of such options shall vest upon a termination of
employment after the Executive has satisfied the requirements for Early
Retirement; provided, however, that the number of options that vest in such
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event shall be reduced by the sum of (A) the total number of options granted
pursuant to Section 3(c) multiplied by a percentage equal to the percentage used
to reduce the Executive's pension payable at normal retirement under the
Company's Pension Plan, based on the terms of the Pension Plan in effect on the
date hereof, to determine the pension payments payable to the Executive upon his
Early Retirement; and (B) the number of such options previously vested under
other provisions of this Agreement.
(iv) All options which become vested hereunder or under
any other provisions of this Agreement shall be exercisable by the Executive at
any time during the Executive's employment with the Company in accordance with
the terms and conditions of the option plan, and for a period of twelve months
following the Date of Termination. For purposes of this paragraph, in the event
of the Company's election not to extend the Term of this Agreement, the
Executive's employment shall be deemed to terminate on the date such election is
intended to become effective, notwithstanding that the Executive elects, in
accordance with Section 1 hereof, to terminate his employment as of the date of
the Notice of Nonrenewal.
(d) Additional Benefits. Except as modified by this Agreement,
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the Executive (and the Executive's family, if applicable) shall be entitled to
participate in all compensation or employee benefit plans or programs (currently
including, but not limited to, the LTIP, the 1994 Deferred Compensation Plan,
the Executive Deferred Compensation Plan, the 1991 Deferred Compensation Plan,
the Partners Stock Purchase Plan, the Annual Bonus Plan, the Supplemental
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Retirement Plan, and the Partners Loan Program) and to receive all benefits,
perquisites and emoluments, for which the most senior executive employees of the
Company are eligible under any plan or program now or hereafter established and
maintained by the Company for senior officers, to the fullest extent permissible
under the general terms and provisions of such plans or programs and in
accordance with the provisions thereof, including group hospitalization, health,
dental care, life or other insurance, tax-qualified pension, savings, thrift and
profit-sharing plans, termination pay programs, sick-leave plans, travel or
accident insurance, disability insurance, automobile allowance or automobile
lease plans, and executive contingent compensation plans, including, without
limitation, capital accumulation programs and stock purchase, restricted stock
and stock option plans. Notwithstanding the foregoing, nothing in this Agreement
shall preclude the amendment or termination of any such plan or program,
provided that such amendment or termination is applicable generally to the
senior officers of the Company or any subsidiary or affiliate. Because of the
severance benefits provided in this Agreement, Executive shall not participate
in any general severance program established by the Company for its executives.
(e) Recognition of Past Service. If the Executive becomes a
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participant in any employee benefit plan, practice or policy of the Company or
its affiliates, the Executive shall be given credit under such plan, practice or
policy for all service in the employ of the Company and any predecessors thereto
or affiliates thereof prior to the date hereof, for purposes of eligibility and
vesting, benefit accrual and for all other purposes for which service is either
taken into account or recognized under the terms of such plan, practice or
policy, on terms no less favorable than are applicable to other senior
executives of the Company.
(f) Office. During the Term, the Executive shall be entitled to
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a private office, and such secretarial services as have been previously provided
to the Executive, and such other assistance and accommodations as shall be
suitable to the character of the Executive's position with the Company and
adequate for the performance of the Executive's duties hereunder.
(g) Automobile. During the Term, the Company shall continue to
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provide the Executive with a leased automobile for use by the Executive
consistent with the past practices and shall continue to pay or reimburse the
Executive for the maintenance and operation of such automobile upon receipt of
itemized vouchers therefor and such other supporting information that the
Company shall reasonably require.
(h) Telephone. During the Term, the Company shall continue to
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provide the Executive with a cellular telephone and related telephone service or
a cellular telephone allowance consistent with past practices.
(i) Place of Performance. In connection with his employment by
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the Company, the Executive shall at all times be entitled to maintain his office
at the principal executive offices of the Company, which shall not be more than
fifteen (15) miles of their current
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location, subject to the Executive's obligation to engage in such travel
reasonably related to the performance of his duties hereunder.
4. Business Expenses. The Company shall pay or reimburse the
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Executive for all reasonable travel or other expenses incurred by the Executive
(and his spouse where there is a legitimate business reason for his spouse to
accompany him) in connection with the performance of his duties and obligations
under this Agreement, including, without limitation, expenses for entertainment,
travel (including automobile operating expenses), meals, hotel accommodations
and the like, in accordance with such rules and policies relating thereto as the
Company may from time to time adopt. Reimbursement shall be subject to the
Executive's presentation of appropriate vouchers in accordance with such
procedures as the Company may from time to time establish for senior officers
and to preserve any deductions for Federal income taxation purposes to which the
Company may be entitled.
5. Effect of Termination of Employment Other Than in Connection with
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a Change in Control.
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(a) Certain Terminations. In the event the Executive's
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employment hereunder terminates due to (i) a Without Cause Termination, (ii) a
Constructive Discharge, or (iii) the Company's election not to renew, the
Company shall, as severance pay, continue, subject to the provisions of Section
7 below, to pay the Executive's Base Salary as in effect at the Date of
Termination during the Separation Period. In addition, earned but unpaid Base
Salary as of the Date of Termination shall be payable in full within seven days
of the Date of Termination. The salary continuation payments shall be offset to
the extent of the Executive's earnings from full-time employment with another
employer during the Separation Period (with any such payments and any other
payments arising from employment activities to be reported to the Company by the
Executive). Group hospitalization, health, dental care, life or other insurance,
travel or accident insurance, and disability insurance shall continue through
the end of the Separation Period, provided that the Company may cease to provide
such benefits if Executive obtains comparable coverage in connection with
subsequent employment during the Separation Period, and provided further that in
the event the Company is precluded from providing coverage under any such
program by applicable law or regulation, it shall provide Executive with a lump-
sum payment equal to an amount that would enable Executive after payment of
applicable taxes on such lump-sum amount to purchase comparable coverage. The
Executive shall be entitled to a pro rata award for any annual bonus award in
Section 3(b) for the fiscal year in which the Executive's termination occurs
based on actual results for the full year, payable at the same time as the award
is paid to other senior executives of the Company, and to outplacement
assistance at the Company's expense from an experienced third party vendor.
Except as the Human Resources Committee may otherwise determine at its
discretion or except as otherwise provided in the applicable plan, upon
termination of employment, the Executive shall not be entitled to any further
benefits or vesting under the Company's long term incentive plans, retirement or
savings plans, deferred compensation or stock purchase plans, or stock option
plans following the Date of Termination.
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(b) Other Terminations. In the event that the Executive's
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employment hereunder terminates due to Disability, a termination for Cause, or
the Executive's death, or the Executive voluntarily terminates employment with
the Company for reasons other than a Constructive Discharge or Disability (with
voluntary retirement or termination following Executive's delivery of a Notice
of Nonrenewal being a voluntary termination for purposes of this Agreement),
earned but unpaid Base Salary as of the Date of Termination shall be payable in
full. In the event of the Executive's Disability, Company shall pay to the
Executive, and in the event of the Executive's death, the Company shall pay to
the Executive's surviving spouse or to such other person or entity as Executive
may designate in writing on notice filed with the Company (or to his estate, if
he has made no such written designation and is not survived by a spouse), the
annual bonus award in Section 3(b) for the fiscal year in which his Disability
or death occurs, prorated to the date of the Executive's Disability or death.
However, except as the Human Resources Committee may otherwise determine at its
discretion or except as otherwise provided in the applicable plan, no other
payments shall be made, or benefits provided, by the Company under this
Agreement except for stock options to the extent already exercisable hereunder,
vested benefits payable under the terms of Company's retirement and savings
plans, and any other benefits which the Executive is entitled to receive under
the terms of any other employee benefit programs maintained by the Company or
its affiliates for its employees.
(c) A Notice of Termination shall be the sole means by which
the Company or the Executive may terminate the Executive's employment during the
Term. Any purported termination of the Executive's employment (other than by
reason of death) shall be communicated by a written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 10 hereof.
(d) A Notice of Termination for Cause shall include a copy of
a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the voting membership of the Board at a meeting of the
Board which considered such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct specifically included in the
definition of Cause, and specifying the particulars thereof in detail. In any
Board deliberations or votes concerning determinations under this paragraph,
Executive shall recuse himself from such deliberations and votes.
6. Effect of Termination of Employment in Connection with a Change in
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Control Event.
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(a) For purposes of this Section 6, if preceded by a Potential
Change in Control Event, any of the following events shall be deemed to be a
Termination upon a Change in Control Event: (i) the Executive's employment is
terminated without Cause and such termination was at the request or direction
of, or pursuant to negotiations with, a Person who has entered into an agreement
with the Company the consummation of which will constitute a
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Change in Control Event; (ii) the Executive terminates his employment due to
Constructive Discharge and the circumstance or event which constitutes
Constructive Discharge occurs at the request or direction of, or pursuant to
negotiations with, such Person; or (iii) the Executive's employment is
terminated without Cause and such termination is otherwise in connection with or
in anticipation of a Change in Control Event which actually occurs.
(b) Payments for Termination upon a Change in Control Event.
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In the event of the termination of Executive's employment in circumstances
constituting a Termination upon a Change in Control Event, the Company shall pay
to the Executive in a single payment in cash (without any discount or
reductions, except as otherwise specifically provided herein, for the time value
of money) and/or provide to the Executive, as applicable, the following:
(i) the Executive's earned but unpaid Base Salary
as of the Date of Termination;
(ii) the target annual bonus award in Section 3(b)
for the year in which termination occurs, prorated to the Date of Termination,
assuming all target performance goals have been or will be achieved;
(iii) the benefits, if any, to which the Executive is
entitled as a former employee under the employee benefit programs and
compensation plans and programs maintained for the benefit of the Company's
officers and employees;
(iv) continued group hospitalization, health, dental
care, life or other insurance, travel or accident insurance and disability
insurance, for the Separation Period, with coverage substantially similar to
those which the Executive is receiving immediately prior to the Notice of
Termination (without giving effect to any amendment to such benefits made
subsequent to a Change in Control Event which amendment adversely affects in any
manner the Executive's entitlement to or the amount of such benefits); provided,
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however, that (A) except as provided in subsection (B) of this paragraph, unless
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the Executive consents to a different method (after taking into account the
effect of such method on the calculation of "parachute payments" pursuant to
Section 6(c) hereof), such health insurance benefits shall be provided through a
third-party insurer, and provided further (B) in the event the Company is
precluded from providing coverage under any such program by applicable law or
regulation, it shall provide Executive with a lump-sum payment equal to an
amount that would enable Executive after payment of applicable income and
employment taxes on such lump-sum amount to purchase comparable coverage.
Benefits otherwise receivable by the Executive pursuant to this Section shall be
reduced to the extent comparable benefits are actually received by the Executive
without cost during the Separation Period (and any such benefits actually
received by the Executive shall be reported to the Company by the Executive).
(v) in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to
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the Executive, an amount equal to the Base Salary and annual bonus the Executive
would have earned during the Separation Period if the Executive had continued
working for the Company at the highest annual rate of Base Salary that the
Executive achieved before the Date of Termination, and received an annual target
percentage bonus for each year and part thereof at the target potential award
level, assuming all target performance goals have been or will be achieved.
(vi) an amount equal to the excess of (A) the
present value of the benefits to which the Executive would be entitled under the
Company's Pension Plan and Company's Supplemental Retirement Plan (and any
successor thereto) if the Executive had continued working for the Company during
the Separation Period at the highest annual rate of Base Salary achieved during
the Executive's period of actual employment with the Company, and the Pension
Plan continued in force during the Separation Period, over (B) the present value
of the benefits to which the Executive is actually entitled under the Company's
Pension Plan and Supplemental Retirement Plan, each computed as of the date of
the Executive's Date of Termination, with present values to be determined using
the discount rate used by the Pension Benefits Guaranty Corporation to calculate
the benefit liabilities under the Pension Plan in the event of a plan
termination on the Date of Termination, compounded monthly, the mortality tables
prescribed in the Company's Pension Plan for determining actuarial equivalence,
and the reduction factor (if any) for early commencement of pension payments
based on the Executive's age on the last day of the Separation Period;
(vii) an amount equal to the Company's contributions
to which the Executive would have been entitled under the Company's Retirement
Savings Plan (or any successor thereto) if the Executive had continued working
for the Company and the Retirement Savings Plan continued in force during the
Separation Period at the highest annual rate of Base Salary achieved during the
Executive's period of actual employment with the Company, and making the maximum
amount of employee contributions, if any, as are required under such plans;
(viii) Notwithstanding any provision of the
Company's LTIP or the Partners' Stock Purchase Plan to the contrary, the
Executive shall be fully vested in the Company contributions credited to him
under the Partners' Stock Purchase Plan, and the Company shall pay to the
Executive a lump sum amount, in cash, equal to the sum of (A) any incentive
compensation which has been allocated or awarded to the Executive for a
measuring period which commenced prior to the Date of Termination under the LTIP
but which, as of the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date and/or upon achievement of
performance goals and which otherwise has not been paid, computed as if all
performance goals have been or will be achieved to the maximum extent, in lieu
of any payment of such incentive compensation under the LTIP, and without
proration; (B) the amount of a 100% match on purchases made under the Partners'
Stock Purchase Plan in the year in which the Date of Termination occurs, less
the amount of the match actually made under the Partners' Stock Purchase Plan
for the portion of the year prior to the Date of Termination; and (C) the amount
of a 100% match on purchases the Executive could have made under the
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Partners' Stock Purchase Plan during the Separation Period (assuming no increase
or decrease in the purchase price under the Plan following the Date of
Termination) if the Executive had continued working for the Company and the
Partners' Stock Purchase Plan continued in force during the Separation Period at
the pay and bonus levels specified in (v) above;
(ix) Full vesting in all stock options, including
the stock options described in Section 3(c), and including stock options granted
after the date of this Agreement which, to the extent not previously vested,
shall be exercisable beginning on the date of the Termination upon a Change in
Control Event; and
(x) A one-year extension of any loan repayment
obligation under the Company's Partners Loan Program (subject to interest
accrual pursuant to the terms of such Plan).
(c) Adjustment for Excess Parachute Payments.
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(i) If any payment or benefit received or to be
received by the Executive in connection with a Change in Control Event or the
termination of the Executive's employment whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
Person whose actions result in a Change in Control Event or any Person
affiliated with the Company or such Person (with all such payments and benefits,
including the severance payments, hereinafter called "Total Payments") will be
subject (in whole or part) to the Excise Tax, then the Company shall pay to the
Executive an additional amount (the "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and employment taxes and Excise
Tax upon the Gross-Up Payment shall be equal to the Total Payments. For purposes
of determining the amount of the Gross-Up Payment, the Executive shall be deemed
to pay federal income and employment taxes at the highest marginal rate of
federal income and employment taxation in the calendar year in which the Gross-
Up Payment is to be made and state and local income taxes at the highest
marginal rate of taxation, including any surtax in the state and locality of the
Executive's residence on the Date of Termination (or, if inapplicable, the date
of the Change of Control Event, with the relevant date hereinafter referred to
as the "Payment Date"), net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes.
(ii) For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (A) all of the Total Payments shall be treated as "parachute payments"
within the meaning of section 280G(b)(2) of the Code, unless in the opinion of
tax counsel (the "Tax Counsel") reasonably acceptable to the Executive and
selected by the accounting firm (the "Auditor") which was, immediately prior to
the Change in Control Event, the Company's independent auditor, such other
payments or benefits (in whole or in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the Code, (B) all "excess
parachute payments" within the meaning of
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section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax
unless, in the opinion of Tax Counsel, such excess parachute payments (in whole
or part) represent reasonable compensation for services actually rendered,
within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base
Amount allocable to such reasonable compensation, or are otherwise not subject
to the Excise Tax, and (C) the value of any noncash benefits or any deferred
payment or benefit shall be determined by the Auditor in accordance with the
principles of section 280G(d)(3) and (4) of the Code. Prior to the payment date
set forth in Section 6(d) hereof, the Company shall provide the Executive with
its calculation of the amounts referred to in this Section and such supporting
materials as are reasonably necessary for the Executive to evaluate the
Company's calculations. If the Executive disputes the Company's calculations (in
whole or in part), the opinion of Tax Counsel with respect to the matter in
dispute shall prevail.
(iii) In the event that (A) amounts are paid to the
Executive pursuant to subsection (i) of this Section, and (B) the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
on the Payment Date, the Executive shall repay to the Company, within 90 days
following the date on which the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction plus interest on the amount of such repayment at the rate provided in
section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder in determining the
amount of the Gross-Up Payment at the time of the Payment Date (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional Gross-Up
Payment to the Executive in respect of such excess (plus any interest, penalties
or additions payable by the Executive with respect to such excess and such
portion) within 90 days following the date on which the amount of such excess is
finally determined at the rate provided in section 1274(b)(2)(B) of the Code.
(d) The payments provided for in subsections (i), (ii), (v),
(vi), (vii) and (viii) of Section 6(b) hereof and subsections (i), (ii) and, if
applicable, (iii) of Section 6(c) hereof shall be made not later than the
twentieth (20) day following the Date of Termination; provided, however, that if
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the amounts of such payments, or, if applicable, the Excise Tax, cannot be
finally determined on or before such day, the Company shall pay to the Executive
on such day an estimate, as determined in good faith by the Executive or, in the
case of Gross-Up Payments under Section 6(c) hereof, in accordance with Section
6(c)(ii) hereof, of the minimum amount of such payments to which the Executive
is clearly entitled and shall pay the remainder of such payments (together with
interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined but in no event later than the thirtieth
(30th) day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth (5th) business day after demand by the Company (together with interest
at the rate provided in section 1274(b)(2) (B) of the Code). At the time that
payments are made under this Section and Section 6(c), the Company shall provide
the Executive with a written statement setting forth the manner in which such
payments were
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calculated and the basis for such calculations including, without limitation,
any opinions or other advice the Company has received from outside counsel,
auditors or consultants (and any such opinions or advice which are in writing
shall be attached to the statement). In the event the Company should fail to pay
when due the amounts described in Section 6(b) hereof or subsections (i), (ii)
and, if applicable, (iii) of Section 6(c), the Executive shall also be entitled
to receive from the Company an amount representing interest on any unpaid or
untimely paid amounts from the due date, as determined under this Section, to
the date of payment at the rate provided in section 1274(b)(2)(B) of the Code
after such due date.
(e) The Company also shall pay to the Executive all legal fees
and expenses incurred by the Executive in (i) the negotiation and execution of
this Agreement, and (ii) following a Change in Control Event (including a
termination of employment following a Potential Change in Control Event if the
Executive alleges in good faith that such termination will be deemed to have
occurred following a Change in Control Event pursuant to Section 6(a) hereof) in
disputing in good faith any issue relating to the termination of the Executive's
employment or in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax audit or proceeding to
the extent attributable to the application of section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made as such fees
and expenses are incurred by the Executive, but in no event later than five (5)
business days after delivery of the Executive's written requests for payment
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require.
7. Other Duties of the Executive During and After Term.
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(a) Confidential Information. Executive acknowledges that by
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reason of his employment with the Company he has and will hereafter, from time
to time during the Term, become exposed to and/or become knowledgeable about
proposals, plans inventions, practices, systems, programs, formulas, processes,
methods, techniques, research, records, supplier sources, customer lists, and
other forms of business information which are not known to the Company's
competitors and which are not recognized as being encompassed within standard
business or management practices and which are kept secret and confidential by
the Company (the "Confidential Information"). The Executive therefore agrees
that at no time during or after the period of his employment by the Company will
he disclose or use the Confidential Information except to the extent such
information becomes public through no fault of the Executive, as required by
law, as authorized by the Board, or as may be required in the prudent course of
business for the benefit of the Company; provided, that no payment required to
be made by the Company under the terms of this Agreement after termination of
the employment of the Executive shall be subject to any right of set-off,
counterclaim, defense, abatement, suspension, deferment or reduction by reason
of any claim against the Executive based upon breach of the covenant in this
Section 7(a) other than upon execution of an unsatisfied judgment rendered by a
court of competent jurisdiction.
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(b) Non-Compete. In consideration of the mutual terms and
-----------
agreements set forth in this Agreement and the grant of stock options under
Section 3(c) hereof, the Executive hereby agrees that (i) while the Executive is
employed during the Term, (ii) during such time after the Term as the Executive
is employed by the Company and (iii) for a period of one year after the
Executive's Date of Termination, he will not, unless authorized in writing to do
so by the Company, directly or indirectly own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or be
employed or otherwise connected in any substantial manner with any business
which directly or indirectly competes to a material extent with any line of
business of the Company or its subsidiaries which was operated by the Company or
its subsidiaries at the Date of Termination; provided, that nothing in this
--------
paragraph shall prohibit the Executive from acquiring up to 5% of any class of
outstanding equity securities of any corporation whose equity securities are
regularly traded on a national securities exchange or in the "over-the-counter
market," and provided further, that the foregoing restriction of this Section
-------- -------
7(b) shall not apply following a Change of Control Event or a Potential Change
in Control Event if (v) the Executive's employment has been terminated by the
Company without Cause, (w) the Executive terminates his employment as the result
of a Constructive Discharge or (x) the Company elects not to extend the Term of
this Agreement. The Executive agrees that for a period ending three years after
the Date of Termination hereunder, the Executive will not (y) recruit any
employee of the Company or solicit or induce, or attempt to solicit or induce,
any employee of the Company to terminate his or her employment with, or
otherwise cease his or her relationship with, the Company, or (z) solicit,
divert or take away, or attempt to solicit, divert or take away, the business or
patronage of any of the clients, customers or accounts, or prospective clients,
customers or accounts, of the Company that were contacted, solicited or served
by the Executive while employed by the Company.
(c) Remedies. The Company and the Executive confirm that the
--------
restrictions contained in Sections 7(a) and 7(b) hereof are, in view of the
nature of the business of the Company, reasonable and necessary to protect the
legitimate interests of the Company and that any violation of any provision of
Section 7(a) or 7(b) will result in irreparable injury to the Company. The
Executive hereby agrees that, in the event of any breach or threatened breach of
the terms or conditions of this Agreement by the Executive, the Company's
remedies at law will be inadequate and, in any such event, the Company shall be
entitled to commence an action for preliminary and permanent injunctive relief
and other equitable relief in any court of competent jurisdiction. The Executive
further irrevocable consents to the jurisdiction of any Pennsylvania state court
or federal court located in the Commonwealth of Pennsylvania over any suit,
action or proceeding arising out of or relating to this Section 7(c) and hereby
waives, to the fullest extent permitted by law, any objection that he may now or
hereafter have to such jurisdiction or to the laying of venue of any such suit,
action or proceeding brought in such a court and any claim that such suit,
action or proceeding has been brought in an inconvenient forum. In addition, if
the Executive at any time during the Separation Period Executive engages in
conduct described in Section 7(b) (whether or not within the one-year period
after the termination of his employment with the Company), the Company shall be
entitled to discontinue the payments and benefits provided under Section 5(a).
The Executive's Agreement as set forth in this Section 7 shall: (x)
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survive the termination of this Agreement, and continue throughout the duration
of the Executive's employment with the Company, except as amended or modified by
written agreement of the parties; and (y) survive the Executive's termination of
employment with the Company for the periods specified in Section 7(b) hereof.
(d) Modification of Terms. If any restriction in this Section
---------------------
7 of the Agreement is adjudicated to exceed the time, geographic, service or
other limitations permitted by applicable law in any jurisdiction, the Executive
agrees that such may be modified and narrowed, either by a court or the Company,
to the maximum time, geographic, service or other limitations permitted by
applicable law so as to preserve and protect the Company's legitimate business
interest, without negating or impairing any other restrictions or undertaking
set forth in the Agreement.
8. Withholding Taxes. The Company may directly or indirectly withhold
-----------------
from any payments made under this Agreement all Federal, state, city or other
taxes as shall be required pursuant to any law or governmental regulation or
ruling.
9. Consolidation, Merger, or Sale of Assets. Nothing in this Agreement
----------------------------------------
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation
which assumes this Agreement and all obligations and undertakings of the Company
hereunder. Upon such a consolidation, merger or transfer of assets and
assumption, the term "Company" as used herein shall mean such other corporation
and this Agreement shall continue in full force and effect.
10. Notices. All notices, requests, demands and other communications
-------
required or permitted hereunder shall be given in writing and shall be deemed to
have been duly given if delivered or mailed, postage prepaid, by same day or
overnight mail as follows:
(a) To Company:
General Counsel
IKON Office Solutions, Inc.
00 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
(b) To the Executive:
Xxxx X. Xxxxxx
000 Xxxx Xxxxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
or to such other address as either party shall have previously specified in
writing to the other.
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11. No Attachment. Except as required by law, no right to receive
-------------
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
-------- -------
11 shall preclude the assumption of such rights by executors, administrators or
other legal representatives of the Executive or his estate and their assigning
any rights hereunder to the person or persons entitled thereto.
12. No Mitigation. The Executive shall not be required to mitigate the
-------------
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor except as otherwise specifically provided in this
Agreement shall the amount of any payment or benefit provided for in this
Agreement be reduced by any compensation earned by other employment or
otherwise.
13. Source of Payment. All payments provided for under this Agreement
-----------------
shall be paid in cash from the general funds of the Company. The Company shall
not be required to establish a special or separate fund or other segregation of
assets to assure such payments, and, if the Company shall make any investments
to aid it in meeting its obligations hereunder, the Executive shall have no
right, title or interest whatever in or to any such investments except as may
otherwise be expressly provided in a separate written instrument relating to
such investments. Nothing contained in this Agreement, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship, between the Company and the Executive or
any other person. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right, without prejudice to rights
which employees may have, shall be no greater than the right of an unsecured
creditor of the Company.
14. Severability. If any provision of this Agreement or application
------------
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction.
15. Contents of Agreement. This Agreement supersedes all prior
---------------------
agreements and sets forth the entire understanding between the parties hereto
with respect to the subject matter hereof and cannot be changed, modified,
extended or terminated except upon written amendment approved by the parties
hereto. Unless otherwise required by law, in the event of a conflict between
this Agreement and any plan, program, stock option award, LTIP award, or Company
policy, the terms of this Agreement shall be controlling.
16. Governing Law. The validity, interpretation, performance, and
-------------
enforcement of this Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania (and
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Federal laws to the extent applicable), and Executive consents to the
jurisdiction of the state and federal courts of Pennsylvania in any dispute
arising under this Agreement.
17. Survival of Benefits. Any Section of this Agreement which provides
--------------------
a benefit to the Executive and which does not expressly provide for its
termination upon the expiration of the Term shall survive the expiration of the
Term and the obligation to provide benefits to the Executive as set forth in
such Section shall remain binding upon the Company until such time as the
Executive's employment relationship with the Company is terminated and the
benefits provided under such Section are paid in full to the Executive.
18. Miscellaneous. All section headings are for convenience only. This
-------------
Agreement may be executed in any number of counterparts, each of which when
executed shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument. It shall not be necessary in marking
proof of this Agreement or any counterpart hereof to produce or account for any
of the other counterparts.
19. Settlement of Disputes; Arbitration. Except with respect to actions
-----------------------------------
for preliminary and permanent injunctive relief and other equitable relief under
Section 7, any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall be settled by arbitration in accordance
with the terms of this Section 19. All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Board and shall
be in writing. Any denial by the Board of a claim for benefits under this
Agreement shall be delivered to the Executive in writing within thirty (30) days
and shall set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the Board
within thirty (30) days after notification by the Board that the Executive's
claim has been denied. Any further dispute, controversy or claim arising out of
or relating to this Agreement, or the interpretation or alleged breach thereof,
shall be settled by arbitration in accordance with the Center for Public
Resources, Inc. Non-Administered Arbitration Rules, by three arbitrators, none
of whom shall be appointed by either party. The arbitration shall be governed by
United States Arbitration Act 9 U.S.C. (S). 1-16, and judgment upon the award
rendered by the arbitrators may be entered by any court having jurisdiction
thereof. The place of the arbitration shall be Philadelphia, Pennsylvania.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. Notwithstanding any provision of this Agreement to the contrary,
the Executive shall be entitled to seek specific performance of the Executive's
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
20. Definitions. For purposes of this Agreement, the following terms
-----------
have the following meanings:
-15-
(a) "Base Amount" shall have the meaning set forth in
section 280G(b)(3) of the Code.
(b) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.
(c) "Cause," prior to a Change of Control Event or a
Potential Change of Control Event, shall mean termination by the Company of the
Executive's employment due to (i) the willful and continued failure by the
Executive to substantially perform the Executive's duties with the Company
(other than any such failure resulting from the Executive's incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Executive by the Board, which demand specifically identifies
the manner in which the Board believes that the Executive has failed to
substantially perform the Executive's duties, and which provides Executive with
at least a 30-day period to correct such failure, or (ii) the willful engaging
by the Executive in conduct which is demonstrably and materially injurious to
the Company or its subsidiaries, monetarily or otherwise. For purposes of
clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company and
(y) in the event of a dispute concerning the application of this provision, no
claim by the Company that Cause exists shall be given effect unless the Board
determines, by an affirmative vote of not less than three-quarters (3/4) of the
voting membership of the Board, that Cause has been established by clear and
convincing evidence. In any Board deliberations or votes concerning a
determination under this paragraph, Executive shall recuse himself from such
deliberations and votes. Following a Change in Control Event or a Potential
Change in Control Event, "Cause" shall mean a judicial determination that the
Executive has committed fraud, misappropriation or embezzlement against the
Company; or a nonappealable conviction of, or entry of a plea of nolo contendere
for, an act by the Executive constituting a felony or misdemeanor which, as
determined by the Board in the good faith, constitutes a crime involving moral
turpitude and results in material harm to the Company. Any dispute by the
Executive of a Board determination under this paragraph shall be resolved in
accordance with Section 19 hereof.
(d) "Change in Control Event" shall mean any of the
following events:
(i) any Person, together with its affiliates and
associates (as such terms are used in Rule 12b-2 of the Exchange Act), is or
becomes the Beneficial Owner, directly or indirectly, of 15% or more of the then
outstanding shares of common stock of the Company; or
(ii) the following individuals cease for any reason
to constitute a majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new director whose
appointment or election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least a
-16-
majority of the directors then still in office who either were directors on the
date hereof or whose appointment, election or nomination for election was
previously so approved; or
(iii) the Company consolidates with, or merges with or
into, any other Person (other than a wholly owned subsidiary of the Company), or
any other person consolidates with, or merges with or into, the Company, and, in
connection therewith, all or part of the outstanding shares of common stock
shall be changed in any way or converted into or exchanged for stock or other
securities or cash or any other property; or
(iv) a transaction or series of transactions in
which, directly or indirectly, the Company shall sell or otherwise transfer (or
one or more of its subsidiaries shall sell or otherwise transfer) assets (A)
aggregating more than 50% of the assets (measured by either book value or fair
market value) or (B) generating more than 50% of the operating income or cash
flow of the Company and its subsidiaries (taken as a whole) to any other Person
or group of Persons.
Notwithstanding the foregoing, no "Change in Control
Event" shall be deemed to have occurred if there is consummated any transaction
or series of integrated transactions immediately following which the record
holders of the common stock of the Company immediately prior to such transaction
or series of transactions own a majority of the outstanding voting shares and in
substantially the same proportion in an entity which owns all or substantially
all of the assets of the Company immediately following such transaction or
series of transactions.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. Reference to any section or subsection of the Code
includes references to any comparable or succeeding provision of any legislation
which amends, supplements, or replaces such section or subsection.
(f) "Constructive Discharge" shall mean a termination by the
Executive of the Executive's employment as a result of the occurrence (without
the Executive's express written consent) of any one of the following acts by the
Company, or failures by the Company to act, unless, in the case of any act or
failure to act described in paragraph (i), (v), (vi) or (vii) below, such act or
failure to act is corrected prior to the Date of Termination:
(i) the assignment to the Executive of duties
inconsistent with the Executive's status as a senior executive officer of the
Company or a substantial alteration in the nature or status of the Executive's
responsibilities other than any such alteration primarily attributable to the
fact that the Company may no longer be a public company;
(ii) a reduction by the Company in the Executive's
Base Salary as in effect on the date hereof or as the same may be increased from
time to time;
-17-
(iii) the relocation of the Company's principal
executive offices to a location more than 15 miles from the then location of
such offices without the Executive's written consent or the Company's requiring
the Executive to be based anywhere other than the Company's principal executive
offices except for required travel on the Company's business to an extent
substantially consistent with the Executive's present business travel
obligations;
(iv) the failure by the Company to pay to the
Executive any portion of the Executive's current compensation or to pay to the
Executive any portion of an installment of deferred compensation under any
deferred compensation program of the Company within seven (7) days of the date
such compensation is due after written demand from the Executive has been
received therefor;
(v) following a Change in Control Event or a
Potential Change in Control Event, the failure by the Company to continue in
effect any compensation plan in which the Executive participates immediately
prior to the Change in Control Event or the Potential Change in Control Event
which is material to the Executive's total compensation, including but not
limited to the Company's stock option, incentive compensation, deferred
compensation, stock purchase, bonus and other plans or any substitute plans
adopted prior to the Change in Control Event, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue the Executive's
participation therein (or in such substitute or alternative plan) on a basis not
less favorable, both in terms of the amount of benefits provided and the level
of the Executive's participation, relative to other participants, as existed
immediately prior to the Change in Control Event or the Potential Change in
Control Event;
(vi) following a Change in Control Event or a
Potential Change in Control Event, the failure by the Company to continue to
provide the Executive with benefits substantially similar to those enjoyed by
the Executive under any of the Company's pension, life insurance, medical,
health and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control Event or the Potential
Change in Control Event, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive at the time of
the Change in Control Event or a Potential Change in Control Event, or the
failure by the Company to maintain a vacation policy with respect to the
Executive that is at least as favorable as the vacation policy (whether formal
or informal) in place with respect to the Executive immediately prior to the
Change in Control Event or the Potential Change in Control Event; or
(vii) following a Change in Control Event, or a
Potential Change of Control Event, any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination; or
-18-
(viii) any breach by the Company of any material
provision of this Agreement.
The Executive's right to terminate employment due to
Constructive Discharge shall not be affected by the Executive's incapacity due
to physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or failure
to act constituting Constructive Discharge hereunder.
For purposes of any determination regarding a
Constructive Discharge, a claim by the Executive of a Constructive Discharge
shall be presumed to be correct unless the Board determines, by an affirmative
vote of not less than three-quarters (3/4) of the voting membership of the
Board, that a Constructive Discharge has not occurred by clear and convincing
evidence. In any Board deliberations or votes concerning a determination under
this paragraph, Executive shall recuse himself from such deliberations and
votes. Any dispute by the Executive of a Board determination under this
provision shall be resolved in accordance with Section 19.
(g) "Date of Termination," with respect to any purported
termination of the Executive's employment, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during such thirty (30) day
period); and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than thirty (30) days nor more than sixty (60)
days, respectively, from the date such Notice of Termination is given).
(h) "Disability" shall mean termination by the Company of
the Executive's employment upon or following Executive's commencement of
benefits under the Company's long-term disability plan.
(i) "Early Retirement" shall mean attainment of age 55, and
completion of ten years of service with the Company as determined under the
Company's Pension Plan.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(k) "Excise Tax" shall mean any excise tax imposed under
section 4999 or the Code.
-19-
(l) "Gross-Up Payment" shall have the meaning set forth in
Section 6(c) hereof.
(m) "Notice of Termination" shall mean a notice indicating
the specific 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 the Executive's employment under the provision so
indicated.
(n) "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the Company or any of its
affiliates (as defined in Rule 12b-2 promulgated under the Exchange Act), (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
(o) "Potential Change in Control Event" shall be deemed to
have occurred if the event set forth in any one of the following paragraphs
shall have occurred:
(i) the Company enters into an agreement, the
consummation of which will result in the occurrence of a Change in Control
Event;
(ii) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated, will
constitute a Change in Control Event; or
(iii) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control Event has
occurred.
(p) "Separation Period" shall mean the three-year period (or
such longer period as the Human Resources Committee may determine) beginning on
the Date of Termination.
(q) "Term" shall mean the initial period commencing as of
May 1, 1997 and ending on April 30, 2000, and any additional one-year periods
for which this Agreement is extended in accordance with Section 1 hereof.
(r) "Termination upon a Change in Control Event" shall mean
a termination of employment:
-20-
(i) initiated by Company for any reason, including
delivery of Notice of Nonrenewal, other than termination for Cause, upon or
within two years after a Change in Control Event; or
(ii) initiated by the Executive due to a Constructive
Discharge, upon or within two years after a Change in Control Event; or
(iii) under circumstances described in Section 6(a)
hereof.
A termination due to death, Disability, or for Cause shall not constitute a
Termination upon a Change in Control Event, and payments in the event of such a
termination shall be determined under Section 5(b) hereof.
(s) "Total Payments" shall mean those payments described in
Section 6(c) hereof.
(t) "Without Cause Termination" shall mean a termination of
the Executive's employment by the Company, other than due to Disability,
voluntary retirement, expiration of the Term or for Cause.
-21-
IN WITNESS WHEREOF, and intending to be legally bound, the Company has
caused this Agreement to be executed by its duly authorized officers and the
Executive has signed this Agreement as of the date first above written.
IKON OFFICE SOLUTIONS, INC.
By:
------------------------------
Authorized Signatory
---------------------------------
XXXX X. XXXXXX
-22-
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement"), entered into on August __,
1997, made by and between IKON Office Solutions, Inc., an Ohio corporation with
its principal offices located at Malvern, Pennsylvania (the "Company"), and Xxxx
X. Xxxxxxxxxxx (the "Executive"), effective as of May 1, 1997.
WHEREAS, the Executive is currently the Chief Financial Officer of the
Company;
WHEREAS, the Company considers it essential to the best interests of
its shareholders to facilitate the recruitment and xxxxxx the continuous
employment of senior executive officers;
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control*/ exists and that such possibility, and the uncertainty and
questions which it raises, may result in the departure or distraction of the
Company's senior executive officers to the detriment of the Company and its
shareholders;
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of the
Company's senior executive officers, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control; and
WHEREAS, the Executive is willing to continue to serve as Chief
Financial Officer of the Company, and the Company desires to retain the
Executive in such capacity on the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Employment. The Company agrees to continue to employ Executive, and
----------
the Executive agrees to be employed by the Company, upon the terms and
conditions herein provided, for an initial period commencing as of May 1, 1997
and ending on April 30, 2000. On each anniversary date of this Agreement,
commencing May 1, 2000, the Term shall be automatically extended for one
additional year unless not less than six months prior to such anniversary date
either party gives written notice of his or her intent not to extend the Term
for an additional one-year period (a "Notice of Nonrenewal"); provided, however,
-------- -------
that the Term shall not be extended beyond Executive's 65th birthday unless
affirmatively extended in writing by the Company and Executive. In the event
either party gives the other Notice of Nonrenewal,
---------------------
*/ The definitions of capitalized terms not otherwise identified are set
forth in Section 20 of the Agreement.
the other party may elect to terminate this Agreement as of the date of such
Notice. In such event Executive agrees that, if requested by the Board of
Directors, he shall be reasonably available for a period ending on the date on
which such Notice of Nonrenewal was intended to become effective to assist in
the orderly transition of his duties and responsibilities to such person or
persons as shall be designated by the Board of Directors.
2. Position and Duties. During the Term, the Company agrees to employ
-------------------
the Executive to serve as Chief Financial Officer of the Company. The Executive
will have such powers and duties as are commensurate with such position and as
may be conferred upon him by the Board. During the Term, and except for illness
or incapacity and reasonable vacation periods consistent with the discharge of
the Executive's duties and responsibilities hereunder, the Executive shall
devote substantially all of his business time, attention, skill and efforts
exclusively to the business and affairs of the Company and its subsidiaries and
affiliates, provided, however, that the Executive may devote such time as is
reasonably required for charitable and personal activities, in accordance with
the Company's practices and policies, and serve on other boards as a director or
trustee if such service does not interfere with his ability to discharge his
duties and responsibilities to the Company.
3. Compensation. For all services rendered by the Executive in any
------------
capacity required hereunder during the Term, including, without limitation,
services as an executive, officer, director, or member of any committee of the
Company, or any subsidiary, affiliate or division thereof, the Executive shall
be compensated as follows:
(a) Base Salary. The Company shall pay the Executive a fixed
-----------
salary of $350,000 per annum or such higher annual amount as is being paid from
time to time pursuant to the terms hereof . Such fixed salary, together with all
adjustments, is referred to herein as the "Base Salary." The Executive's Base
Salary shall not be decreased at any time from the amount then in effect, unless
the Executive otherwise agrees in writing. The Base Salary shall be subject to
such periodic review (which shall occur at least annually) and such periodic
increases as the Board shall deem appropriate in accordance with the Company's
customary procedures and practices regarding the salaries of senior officers.
Base Salary shall be payable in accordance with the customary payroll practices
of the Company, but in no event less frequently than monthly.
(b) Incentive Compensation. The Executive shall be entitled to
----------------------
receive annual and long-term incentive compensation awards, if earned, under the
policies and plans maintained by the Company providing for the payment of
incentive compensation to key officers based upon the performance of the Company
and, if applicable, the officer's individual performance. The Executive's
percentage participation, target percentage or other similar measure under any
such policy or plan during the Term shall be at least at the level provided to
other senior executives of the Company (other than the Chief Executive Officer)
under such policy or plan.
-2-
(c) Stock Options. The Executive shall be eligible to receive
-------------
grants under the Company's stock option plan(s) including grants relating to the
Company's Long-Term Incentive Compensation Plan ( the "LTIP"), at the sole
discretion of the Human Resources Committee of the Board (the "Human Resources
Committee"), subject to such terms and conditions as such Committee may decide,
and in accordance with the grant letter for such options. In connection with
this Agreement, Executive has been granted 50,000 options on May 1, 1997, with
20,000 options to vest on April 30, 2002 and the balance to vest on November 30,
2006, if the Executive is an employee of the Company on such date. In addition:
(i) The 20,000 options scheduled to vest on April 30,
2002 shall vest prior to April 30, 2002 (i.e., on the date of employment
----
termination) in the event the Executive's employment hereunder terminates due to
the Executive's death or Disability, a Without Cause Termination, a Constructive
Discharge, or the Company's election not to renew.
(ii) The 30,000 options scheduled to vest on November 30,
2006 shall vest prior to such date (i.e., on the date of employment termination)
----
if Executive is employed by the Company after April 30, 2002, and after such
date the Executive's employment hereunder terminates due to the Executive's
death or Disability, a Without Cause Termination, a Constructive Discharge, or
the Company's election not to renew.
(iii) All options which become vested hereunder or under
any other provisions of this Agreement shall be exercisable by the Executive at
any time during the Executive's employment with the Company in accordance with
the terms and conditions of the option plan, and for a period of twelve months
following the Date of Termination. For purposes of this paragraph, in the event
of the Company's election not to extend the Term of this Agreement, the
Executive's employment shall be deemed to terminate on the date such election is
intended to become effective, notwithstanding that the Executive elects, in
accordance with Section 1 hereof, to terminate his employment as of the date of
the Notice of Nonrenewal.
(d) Additional Benefits. Except as modified by this Agreement,
-------------------
the Executive (and the Executive's family, if applicable) shall be entitled to
participate in all compensation or employee benefit plans or programs (currently
including, but not limited to, the LTIP, the 1994 Deferred Compensation Plan,
the Executive Deferred Compensation Plan, the 1991 Deferred Compensation Plan,
the Partners Stock Purchase Plan, the Annual Bonus Plan, the Supplemental
Retirement Plan, and the Partners Loan Program) and to receive all benefits,
perquisites and emoluments, for which the most senior executive employees of the
Company are eligible under any plan or program now or hereafter established and
maintained by the Company for senior officers, to the fullest extent permissible
under the general terms and provisions of such plans or programs and in
accordance with the provisions thereof, including group hospitalization, health,
dental care, life or other insurance, tax-qualified pension, savings, thrift and
profit-sharing plans, termination pay programs, sick-leave plans, travel or
accident insurance, disability insurance, automobile allowance or automobile
lease plans, and executive contingent compensation plans, including, without
limitation, capital accumulation programs and stock purchase, restricted stock
-3-
and stock option plans. Notwithstanding the foregoing, nothing in this Agreement
shall preclude the amendment or termination of any such plan or program,
provided that such amendment or termination is applicable generally to the
senior officers of the Company or any subsidiary or affiliate. Because of the
severance benefits provided in this Agreement, Executive shall not participate
in any general severance program established by the Company for its executives.
(e) Recognition of Past Service. If the Executive becomes a
---------------------------
participant in any employee benefit plan, practice or policy of the Company or
its affiliates, the Executive shall be given credit under such plan, practice or
policy for all service in the employ of the Company and any predecessors thereto
or affiliates thereof prior to the date hereof, for purposes of eligibility and
vesting, benefit accrual and for all other purposes for which service is either
taken into account or recognized under the terms of such plan, practice or
policy, on terms no less favorable than are applicable to other senior
executives of the Company.
(f) Office. During the Term, the Executive shall be entitled
------
to a private office, and such secretarial services as have been previously
provided to the Executive, and such other assistance and accommodations as shall
be suitable to the character of the Executive's position with the Company and
adequate for the performance of the Executive's duties hereunder.
(g) Automobile. During the Term, the Company shall continue to
----------
provide the Executive with a leased automobile for use by the Executive
consistent with the past practices and shall continue to pay or reimburse the
Executive for the maintenance and operation of such automobile upon receipt of
itemized vouchers therefor and such other supporting information that the
Company shall reasonably require.
(h) Telephone. During the Term, the Company shall continue to
---------
provide the Executive with a cellular telephone and related telephone service or
a cellular telephone allowance consistent with past practices.
4. Business Expenses. The Company shall pay or reimburse the Executive
-----------------
for all reasonable travel or other expenses incurred by the Executive (and his
spouse where there is a legitimate business reason for his spouse to accompany
him) in connection with the performance of his duties and obligations under this
Agreement, including, without limitation, expenses for entertainment, travel
(including automobile operating expenses), meals, hotel accommodations and the
like, in accordance with such rules and policies relating thereto as the Company
may from time to time adopt. Reimbursement shall be subject to the Executive's
presentation of appropriate vouchers in accordance with such procedures as the
Company may from time to time establish for senior officers and to preserve any
deductions for Federal income taxation purposes to which the Company may be
entitled.
5. Effect of Termination of Employment Other Than in Connection with a
-------------------------------------------------------------------
Change in Control.
-----------------
-4-
(a) Certain Terminations. In the event the Executive's
--------------------
employment hereunder terminates due to (i) a Without Cause Termination, (ii) a
Constructive Discharge, or (iii) the Company's election not to renew, the
Company shall, as severance pay, continue, subject to the provisions of Section
7 below, to pay the Executive's Base Salary as in effect at the Date of
Termination during the Separation Period. In addition, earned but unpaid Base
Salary as of the Date of Termination shall be payable in full within seven days
of the Date of Termination. The salary continuation payments shall be offset to
the extent of the Executive's earnings from full-time employment with another
employer during the Separation Period (with any such payments and any other
payments arising from employment activities to be reported to the Company by the
Executive). Group hospitalization, health, dental care, life or other insurance,
travel or accident insurance, and disability insurance shall continue through
the end of the Separation Period, provided that the Company may cease to provide
such benefits if Executive obtains comparable coverage in connection with
subsequent employment during the Separation Period, and provided further that in
the event the Company is precluded from providing coverage under any such
program by applicable law or regulation, it shall provide Executive with a
lump-sum payment equal to an amount that would enable Executive after payment of
applicable taxes on such lump-sum amount to purchase comparable coverage. The
Executive shall be entitled to a pro rata award for any annual bonus award in
Section 3(b) for the fiscal year in which the Executive's termination occurs
based on actual results for the full year, payable at the same time as the award
is paid to other senior executives of the Company, and to outplacement
assistance at the Company's expense from an experienced third party vendor.
Except as the Human Resources Committee may otherwise determine at its
discretion or except as otherwise provided in the applicable plan, upon
termination of employment, the Executive shall not be entitled to any further
benefits or vesting under the Company's long term incentive plans, retirement or
savings plans, deferred compensation or stock purchase plans, or stock option
plans following the Date of Termination.
(b) Other Terminations. In the event that the Executive's
------------------
employment hereunder terminates due to Disability, a termination for Cause, or
the Executive's death, or the Executive voluntarily terminates employment with
the Company for reasons other than a Constructive Discharge or Disability (with
voluntary retirement or termination following Executive's delivery of a Notice
of Nonrenewal being a voluntary termination for purposes of this Agreement),
earned but unpaid Base Salary as of the Date of Termination shall be payable in
full. In the event of the Executive's Disability, Company shall pay to the
Executive, and in the event of the Executive's death, the Company shall pay to
the Executive's surviving spouse or to such other person or entity as Executive
may designate in writing on notice filed with the Company (or to his estate, if
he has made no such written designation and is not survived by a spouse), the
annual bonus award in Section 3(b) for the fiscal year in which his Disability
or death occurs, prorated to the date of the Executive's Disability or death.
However, except as the Human Resources Committee may otherwise determine at its
discretion or except as otherwise provided in the applicable plan, no other
payments shall be made, or benefits provided, by the Company under this
Agreement except for stock options to the extent already exercisable hereunder,
vested benefits payable under the terms of Company's retirement and savings
plans,
-5-
and any other benefits which the Executive is entitled to receive under the
terms of any other employee benefit programs maintained by the Company or its
affiliates for its employees.
(c) A Notice of Termination shall be the sole means by which
the Company or the Executive may terminate the Executive's employment during the
Term. Any purported termination of the Executive's employment (other than by
reason of death) shall be communicated by a written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 10 hereof.
(d) A Notice of Termination for Cause shall include a copy of
a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the voting membership of the Board at a meeting of the
Board which considered such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct specifically included in the
definition of Cause, and specifying the particulars thereof in detail. In any
Board deliberations or votes concerning determinations under this paragraph,
Executive shall recuse himself from such deliberations and votes.
6. Effect of Termination of Employment in Connection with a Change in
------------------------------------------------------------------
Control Event.
-------------
(a) For purposes of this Section 6, if preceded by a Potential
Change in Control Event, any of the following events shall be deemed to be a
Termination upon a Change in Control Event: (i) the Executive's employment is
terminated without Cause and such termination was at the request or direction
of, or pursuant to negotiations with, a Person who has entered into an agreement
with the Company the consummation of which will constitute a Change in Control
Event; (ii) the Executive terminates his employment due to Constructive
Discharge and the circumstance or event which constitutes Constructive Discharge
occurs at the request or direction of, or pursuant to negotiations with, such
Person; or (iii) the Executive's employment is terminated without Cause and such
termination is otherwise in connection with or in anticipation of a Change in
Control Event which actually occurs.
(b) Payments for Termination upon a Change in Control Event.
-------------------------------------------------------
In the event of the termination of Executive's employment in circumstances
constituting a Termination upon a Change in Control Event, the Company shall pay
to the Executive in a single payment in cash (without any discount or
reductions, except as otherwise specifically provided herein, for the time value
of money) and/or provide to the Executive, as applicable, the following:
(i) the Executive's earned but unpaid Base Salary as
of the Date of Termination;
-6-
(ii) the target annual bonus award in Section 3(b) for the
year in which termination occurs, prorated to the Date of Termination, assuming
all target performance goals have been or will be achieved;
(iii) the benefits, if any, to which the Executive is
entitled as a former employee under the employee benefit programs and
compensation plans and programs maintained for the benefit of the Company's
officers and employees;
(iv) continued group hospitalization, health, dental
care, life or other insurance, travel or accident insurance and disability
insurance, for the Separation Period, with coverage substantially similar to
those which the Executive is receiving immediately prior to the Notice of
Termination (without giving effect to any amendment to such benefits made
subsequent to a Change in Control Event which amendment adversely affects in any
manner the Executive's entitlement to or the amount of such benefits); provided,
--------
however, that (A) except as provided in subsection (B) of this paragraph, unless
-------
the Executive consents to a different method (after taking into account the
effect of such method on the calculation of "parachute payments" pursuant to
Section 6(c) hereof), such health insurance benefits shall be provided through a
third-party insurer, and provided further (B) in the event the Company is
----------------
precluded from providing coverage under any such program by applicable law or
regulation, it shall provide Executive with a lump-sum payment equal to an
amount that would enable Executive after payment of applicable income and
employment taxes on such lump-sum amount to purchase comparable coverage.
Benefits otherwise receivable by the Executive pursuant to this Section shall be
reduced to the extent comparable benefits are actually received by the Executive
without cost during the Separation Period (and any such benefits actually
received by the Executive shall be reported to the Company by the Executive).
(v) in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, an amount equal to the
Base Salary and annual bonus the Executive would have earned during the
Separation Period if the Executive had continued working for the Company at the
highest annual rate of Base Salary that the Executive achieved before the Date
of Termination, and received an annual target percentage bonus for each year and
part thereof at the target potential award level, assuming all target
performance goals have been or will be achieved.
(vi) an amount equal to the excess of (A) the present
value of the benefits to which the Executive would be entitled under the
Company's Pension Plan and Company's Supplemental Retirement Plan (and any
successor thereto) if the Executive had continued working for the Company during
the Separation Period at the highest annual rate of Base Salary achieved during
the Executive's period of actual employment with the Company, and the Pension
Plan continued in force during the Separation Period, over (B) the present value
of the benefits to which the Executive is actually entitled under the Company's
Pension Plan and Supplemental Retirement Plan, each computed as of the date of
the Executive's Date of Termination, with present values to be determined using
the discount rate used by the Pension
-7-
Benefits Guaranty Corporation to calculate the benefit liabilities under the
Pension Plan in the event of a plan termination on the Date of Termination,
compounded monthly, the mortality tables prescribed in the Company's Pension
Plan for determining actuarial equivalence, and the reduction factor (if any)
for early commencement of pension payments based on the Executive's age on the
last day of the Separation Period;
(vii) an amount equal to the Company's contributions to
which the Executive would have been entitled under the Company's Retirement
Savings Plan (or any successor thereto) if the Executive had continued working
for the Company and the Retirement Savings Plan continued in force during the
Separation Period at the highest annual rate of Base Salary achieved during the
Executive's period of actual employment with the Company, and making the maximum
amount of employee contributions, if any, as are required under such plans;
(viii) Notwithstanding any provision of the Company's LTIP or
the Partners' Stock Purchase Plan to the contrary, the Executive shall be fully
vested in the Company contributions credited to him under the Partners' Stock
Purchase Plan, and the Company shall pay to the Executive a lump sum amount, in
cash, equal to the sum of (A) any incentive compensation which has been
allocated or awarded to the Executive for a measuring period which commenced
prior to the Date of Termination under the LTIP but which, as of the Date of
Termination, is contingent only upon the continued employment of the Executive
to a subsequent date and/or upon achievement of performance goals and which
otherwise has not been paid, computed as if all performance goals have been or
will be achieved to the maximum extent, in lieu of any payment of such incentive
compensation under the LTIP, and without proration; (B) the amount of a 100%
match on purchases made under the Partners' Stock Purchase Plan in the year in
which the Date of Termination occurs, less the amount of the match actually made
under the Partners' Stock Purchase Plan for the portion of the year prior to the
Date of Termination; and (C) the amount of a 100% match on purchases the
Executive could have made under the Partners' Stock Purchase Plan during the
Separation Period (assuming no increase or decrease in the purchase price under
the Plan following the Date of Termination) if the Executive had continued
working for the Company and the Partners' Stock Purchase Plan continued in force
during the Separation Period at the pay and bonus levels specified in (v) above;
(ix) Full vesting in all stock options, including the
stock options described in Section 3(c), and including stock options granted
after the date of this Agreement which, to the extent not previously vested,
shall be exercisable beginning on the date of the Termination upon a Change in
Control Event; and
(x) A one-year extension of any loan repayment
obligation under the Company's Partners Loan Program (subject to interest
accrual pursuant to the terms of such Plan).
(c) Adjustment for Excess Parachute Payments.
----------------------------------------
-8-
(i) If any payment or benefit received or to be received by
the Executive in connection with a Change in Control Event or the termination of
the Executive's employment whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control Event or any Person affiliated with the
Company or such Person (with all such payments and benefits, including the
severance payments, hereinafter called "Total Payments") will be subject (in
whole or part) to the Excise Tax, then the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up Payment shall be equal to the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income and employment taxes at the highest marginal rate of federal
income and employment taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation, including any surtax in the state and locality of the
Executive's residence on the Date of Termination (or, if inapplicable, the date
of the Change of Control Event, with the relevant date hereinafter referred to
as the "Payment Date"), net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes.
(ii) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(A) all of the Total Payments shall be treated as "parachute payments" within
the meaning of section 280G(b)(2) of the Code, unless in the opinion of tax
counsel (the "Tax Counsel") reasonably acceptable to the Executive and selected
by the accounting firm (the "Auditor") which was, immediately prior to the
Change in Control Event, the Company's independent auditor, such other payments
or benefits (in whole or in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the Code, (B) all "excess
parachute payments" within the meaning of section 280G(b)(1) of the Code shall
be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel,
such excess parachute payments (in whole or part) represent reasonable
compensation for services actually rendered, within the meaning of section
280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax, and (C)
the value of any noncash benefits or any deferred payment or benefit shall be
determined by the Auditor in accordance with the principles of section
280G(d)(3) and (4) of the Code. Prior to the payment date set forth in Section
6(d) hereof, the Company shall provide the Executive with its calculation of the
amounts referred to in this Section and such supporting materials as are
reasonably necessary for the Executive to evaluate the Company's calculations.
If the Executive disputes the Company's calculations (in whole or in part), the
opinion of Tax Counsel with respect to the matter in dispute shall prevail.
(iii) In the event that (A) amounts are paid to the Executive
pursuant to subsection (i) of this Section, and (B) the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
on the Payment Date, the Executive shall repay to the Company, within 90 days
following the date on which the amount of such reduction in Excise
-9-
Tax is finally determined, the portion of the Gross-Up Payment attributable to
such reduction plus interest on the amount of such repayment at the rate
provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder in determining
the amount of the Gross-Up Payment at the time of the Payment Date (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional Gross-Up
Payment to the Executive in respect of such excess (plus any interest, penalties
or additions payable by the Executive with respect to such excess and such
portion) within 90 days following the date on which the amount of such excess is
finally determined at the rate provided in section 1274(b)(2)(B) of the Code.
(d) The payments provided for in subsections (i), (ii), (v),
(vi), (vii) and (viii) of Section 6(b) hereof and subsections (i), (ii) and, if
applicable, (iii) of Section 6(c) hereof shall be made not later than the
twentieth (20) day following the Date of Termination; provided, however, that if
-------- -------
the amounts of such payments, or, if applicable, the Excise Tax, cannot be
finally determined on or before such day, the Company shall pay to the Executive
on such day an estimate, as determined in good faith by the Executive or, in the
case of Gross-Up Payments under Section 6(c) hereof, in accordance with Section
6(c)(ii) hereof, of the minimum amount of such payments to which the Executive
is clearly entitled and shall pay the remainder of such payments (together with
interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined but in no event later than the thirtieth
(30th) day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth (5th) business day after demand by the Company (together with interest
at the rate provided in section 1274(b)(2) (B) of the Code). At the time that
payments are made under this Section and Section 6(c), the Company shall provide
the Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from outside
counsel, auditors or consultants (and any such opinions or advice which are in
writing shall be attached to the statement). In the event the Company should
fail to pay when due the amounts described in Section 6(b) hereof or subsections
(i), (ii) and, if applicable, (iii) of Section 6(c), the Executive shall also be
entitled to receive from the Company an amount representing interest on any
unpaid or untimely paid amounts from the due date, as determined under this
Section, to the date of payment at the rate provided in section 1274(b)(2)(B) of
the Code after such due date.
(e) The Company also shall pay to the Executive all legal fees
and expenses incurred by the Executive in (i) the negotiation and execution of
this Agreement, and (ii) following a Change in Control Event (including a
termination of employment following a Potential Change in Control Event if the
Executive alleges in good faith that such termination will be deemed to have
occurred following a Change in Control Event pursuant to Section 6(a) hereof) in
disputing in good faith any issue relating to the termination of the Executive's
employment or in seeking in good faith to obtain or enforce any benefit or right
provided by this
-10-
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made as such fees and
expenses are incurred by the Executive, but in no event later than five (5)
business days after delivery of the Executive's written requests for payment
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require.
7. Other Duties of the Executive During and After Term.
---------------------------------------------------
(a) Confidential Information. Executive acknowledges that by
------------------------
reason of his employment with the Company he has and will hereafter, from time
to time during the Term, become exposed to and/or become knowledgeable about
proposals, plans inventions, practices, systems, programs, formulas, processes,
methods, techniques, research, records, supplier sources, customer lists, and
other forms of business information which are not known to the Company's
competitors and which are not recognized as being encompassed within standard
business or management practices and which are kept secret and confidential by
the Company (the "Confidential Information"). The Executive therefore agrees
that at no time during or after the period of his employment by the Company will
he disclose or use the Confidential Information except to the extent such
information becomes public through no fault of the Executive, as required by
law, as authorized by the Board, or as may be required in the prudent course of
business for the benefit of the Company; provided, that no payment required to
be made by the Company under the terms of this Agreement after termination of
the employment of the Executive shall be subject to any right of set-off,
counterclaim, defense, abatement, suspension, deferment or reduction by reason
of any claim against the Executive based upon breach of the covenant in this
Section 7(a) other than upon execution of an unsatisfied judgment rendered by a
court of competent jurisdiction.
(b) Non-Compete. In consideration of the mutual terms and
-----------
agreements set forth in this Agreement and the grant of stock options under
Section 3(c) hereof, the Executive hereby agrees that (i) while the Executive is
employed during the Term, (ii) during such time after the Term as the Executive
is employed by the Company and (iii) for a period of one year after the
Executive's Date of Termination, he will not, unless authorized in writing to do
so by the Company, directly or indirectly own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or be
employed or otherwise connected in any substantial manner with any business
which directly or indirectly competes to a material extent with any line of
business of the Company or its subsidiaries which was operated by the Company or
its subsidiaries at the Date of Termination; provided, that nothing in this
--------
paragraph shall prohibit the Executive from acquiring up to 5% of any class of
outstanding equity securities of any corporation whose equity securities are
regularly traded on a national securities exchange or in the "over-the-counter
market," and provided further, that the foregoing restriction of this Section
----------------
7(b) shall not apply following a Change of Control Event or a Potential Change
in Control Event if (v) the Executive's employment has been terminated by the
Company without Cause, (w) the Executive terminates his employment as the result
of a Constructive Discharge or
-11-
(x) the Company elects not to extend the Term of this Agreement. The Executive
agrees that for a period ending three years after the Date of Termination
hereunder, the Executive will not (y) recruit any employee of the Company or
solicit or induce, or attempt to solicit or induce, any employee of the Company
to terminate his or her employment with, or otherwise cease his or her
relationship with, the Company, or (z) solicit, divert or take away, or attempt
to solicit, divert or take away, the business or patronage of any of the
clients, customers or accounts, or prospective clients, customers or accounts,
of the Company that were contacted, solicited or served by the Executive while
employed by the Company.
(c) Remedies. The Company and the Executive confirm that the
--------
restrictions contained in Sections 7(a) and 7(b) hereof are, in view of the
nature of the business of the Company, reasonable and necessary to protect the
legitimate interests of the Company and that any violation of any provision of
Section 7(a) or 7(b) will result in irreparable injury to the Company. The
Executive hereby agrees that, in the event of any breach or threatened breach of
the terms or conditions of this Agreement by the Executive, the Company's
remedies at law will be inadequate and, in any such event, the Company shall be
entitled to commence an action for preliminary and permanent injunctive relief
and other equitable relief in any court of competent jurisdiction. The Executive
further irrevocable consents to the jurisdiction of any Pennsylvania state court
or federal court located in the Commonwealth of Pennsylvania over any suit,
action or proceeding arising out of or relating to this Section 7(c) and hereby
waives, to the fullest extent permitted by law, any objection that he may now or
hereafter have to such jurisdiction or to the laying of venue of any such suit,
action or proceeding brought in such a court and any claim that such suit,
action or proceeding has been brought in an inconvenient forum. In addition, if
the Executive at any time during the Separation Period Executive engages in
conduct described in Section 7(b) (whether or not within the one-year period
after the termination of his employment with the Company), the Company shall be
entitled to discontinue the payments and benefits provided under Section 5(a).
The Executive's Agreement as set forth in this Section 7 shall: (x) survive the
termination of this Agreement, and continue throughout the duration of the
Executive's employment with the Company, except as amended or modified by
written agreement of the parties; and (y) survive the Executive's termination of
employment with the Company for the periods specified in Section 7(b) hereof.
(d) Modification of Terms. If any restriction in this Section 7
---------------------
of the Agreement is adjudicated to exceed the time, geographic, service or
other limitations permitted by applicable law in any jurisdiction, the Executive
agrees that such may be modified and narrowed, either by a court or the Company,
to the maximum time, geographic, service or other limitations permitted by
applicable law so as to preserve and protect the Company's legitimate business
interest, without negating or impairing any other restrictions or undertaking
set forth in the Agreement.
8. Withholding Taxes. The Company may directly or indirectly
-----------------
withhold from any payments made under this Agreement all Federal, state, city or
other taxes as shall be required pursuant to any law or governmental regulation
or ruling.
-12-
9. Consolidation, Merger, or Sale of Assets. Nothing in this
----------------------------------------
Agreement shall preclude the Company from consolidating or merging into or with,
or transferring all or substantially all of its assets to, another corporation
which assumes this Agreement and all obligations and undertakings of the Company
hereunder. Upon such a consolidation, merger or transfer of assets and
assumption, the term "Company" as used herein shall mean such other corporation
and this Agreement shall continue in full force and effect.
10. Notices. All notices, requests, demands and other
-------
communications required or permitted hereunder shall be given in writing and
shall be deemed to have been duly given if delivered or mailed, postage prepaid,
by same day or overnight mail as follows:
(a) To Company:
General Counsel
IKON Office Solutions, Inc.
00 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
(b) To the Executive:
Xxxx X. Xxxxxxxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
or to such other address as either party shall have previously specified in
writing to the other.
11. No Attachment. Except as required by law, no right to receive
-------------
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
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11 shall preclude the assumption of such rights by executors, administrators or
other legal representatives of the Executive or his estate and their assigning
any rights hereunder to the person or persons entitled thereto.
12. No Mitigation. The Executive shall not be required to mitigate
-------------
the amount of any payment or benefit provided for in this Agreement by seeking
other employment or otherwise, nor except as otherwise specifically provided in
this Agreement shall the amount of any payment or benefit provided for in this
Agreement be reduced by any compensation earned by other employment or
otherwise.
13. Source of Payment. All payments provided for under this
-----------------
Agreement shall be paid in cash from the general funds of the Company. The
Company shall not be required to establish a special or separate fund or other
segregation of assets to assure such payments, and, if
-13-
the Company shall make any investments to aid it in meeting its obligations
hereunder, the Executive shall have no right, title or interest whatever in or
to any such investments except as may otherwise be expressly provided in a
separate written instrument relating to such investments. Nothing contained in
this Agreement, and no action taken pursuant to its provisions, shall create or
be construed to create a trust of any kind, or a fiduciary relationship, between
the Company and the Executive or any other person. To the extent that any person
acquires a right to receive payments from the Company hereunder, such right,
without prejudice to rights which employees may have, shall be no greater than
the right of an unsecured creditor of the Company.
14. Severability. If any provision of this Agreement or application
------------
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction.
15. Contents of Agreement. This Agreement supersedes all prior
---------------------
agreements and sets forth the entire understanding between the parties hereto
with respect to the subject matter hereof and cannot be changed, modified,
extended or terminated except upon written amendment approved by the parties
hereto. Unless otherwise required by law, in the event of a conflict between
this Agreement and any plan, program, stock option award, LTIP award, or Company
policy, the terms of this Agreement shall be controlling.
16. Governing Law. The validity, interpretation, performance, and
-------------
enforcement of this Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania (and Federal laws to the extent applicable), and Executive
consents to the jurisdiction of the state and federal courts of Pennsylvania in
any dispute arising under this Agreement.
17. Survival of Benefits. Any Section of this Agreement which
--------------------
provides a benefit to the Executive and which does not expressly provide for its
termination upon the expiration of the Term shall survive the expiration of the
Term and the obligation to provide benefits to the Executive as set forth in
such Section shall remain binding upon the Company until such time as the
Executive's employment relationship with the Company is terminated and the
benefits provided under such Section are paid in full to the Executive.
18. Miscellaneous. All section headings are for convenience only.
-------------
This Agreement may be executed in any number of counterparts, each of which when
executed shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument. It shall not be necessary in marking
proof of this Agreement or any counterpart hereof to produce or account for any
of the other counterparts.
19. Settlement of Disputes; Arbitration. Except with respect to
-----------------------------------
actions for preliminary and permanent injunctive relief and other equitable
relief under Section 7, any controversy or claim arising out of or relating to
this Agreement, or any breach thereof, shall be settled by
-14-
arbitration in accordance with the terms of this Section 19. All claims by the
Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to the Executive in writing
within thirty (30) days and shall set forth the specific reasons for the denial
and the specific provisions of this Agreement relied upon. The Board shall
afford a reasonable opportunity to the Executive for a review of the decision
denying a claim and shall further allow the Executive to appeal to the Board a
decision of the Board within thirty (30) days after notification by the Board
that the Executive's claim has been denied. Any further dispute, controversy or
claim arising out of or relating to this Agreement, or the interpretation or
alleged breach thereof, shall be settled by arbitration in accordance with the
Center for Public Resources, Inc. Non-Administered Arbitration Rules, by three
arbitrators, none of whom shall be appointed by either party. The arbitration
shall be governed by United States Arbitration Act 9 U.S.C. (S)1-16, and
judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. The place of the arbitration shall be Philadelphia,
Pennsylvania. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to seek specific performance of the
Executive's right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection with this
Agreement.
20. Definitions. For purposes of this Agreement, the following
-----------
terms have the following meanings:
(a) "Base Amount" shall have the meaning set forth
in section 280G(b)(3) of the Code.
(b) "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
(c) "Cause," prior to a Change of Control Event or a
Potential Change of Control Event, shall mean termination by the Company of the
Executive's employment due to (i) the willful and continued failure by the
Executive to substantially perform the Executive's duties with the Company
(other than any such failure resulting from the Executive's incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Executive by the Board, which demand specifically identifies
the manner in which the Board believes that the Executive has failed to
substantially perform the Executive's duties, and which provides Executive with
at least a 30-day period to correct such failure, or (ii) the willful engaging
by the Executive in conduct which is demonstrably and materially injurious to
the Company or its subsidiaries, monetarily or otherwise. For purposes of
clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company and
(y) in the event of a dispute concerning the application of this provision, no
claim by the Company that Cause
-15-
exists shall be given effect unless the Board determines, by an affirmative vote
of not less than three-quarters (3/4) of the voting membership of the Board,
that Cause has been established by clear and convincing evidence. In any Board
deliberations or votes concerning a determination under this paragraph,
Executive shall recuse himself from such deliberations and votes. Following a
Change in Control Event or a Potential Change in Control Event, "Cause" shall
mean a judicial determination that the Executive has committed fraud,
misappropriation or embezzlement against the Company; or a nonappealable
conviction of, or entry of a plea of nolo contendere for, an act by the
Executive constituting a felony or misdemeanor which, as determined by the Board
in the good faith, constitutes a crime involving moral turpitude and results in
material harm to the Company. Any dispute by the Executive of a Board
determination under this paragraph shall be resolved in accordance with Section
19 hereof.
(d) "Change in Control Event" shall mean any of the following
events:
(i) any Person, together with its affiliates and
associates (as such terms are used in Rule 12b-2 of the Exchange Act), is or
becomes the Beneficial Owner, directly or indirectly, of 15% or more of the then
outstanding shares of common stock of the Company; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals who,
on the date hereof, constitute the Board and any new director whose appointment
or election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least a majority of the directors then
still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved; or
(iii) the Company consolidates with, or merges with or
into, any other Person (other than a wholly owned subsidiary of the Company), or
any other person consolidates with, or merges with or into, the Company, and, in
connection therewith, all or part of the outstanding shares of common stock
shall be changed in any way or converted into or exchanged for stock or other
securities or cash or any other property; or
(iv) a transaction or series of transactions in which,
directly or indirectly, the Company shall sell or otherwise transfer (or one or
more of its subsidiaries shall sell or otherwise transfer) assets (A)
aggregating more than 50% of the assets (measured by either book value or fair
market value) or (B) generating more than 50% of the operating income or cash
flow of the Company and its subsidiaries (taken as a whole) to any other Person
or group of Persons.
Notwithstanding the foregoing, no "Change in Control
Event" shall be deemed to have occurred if there is consummated any transaction
or series of integrated transactions immediately following which the record
holders of the common stock of the Company immediately prior to such transaction
or series of transactions own a majority of the
-16-
outstanding voting shares and in substantially the same proportion in an entity
which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. Reference to any section or subsection of the Code
includes references to any comparable or succeeding provision of any legislation
which amends, supplements, or replaces such section or subsection.
(f) "Constructive Discharge" shall mean a termination by the
Executive of the Executive's employment as a result of the occurrence (without
the Executive's express written consent) of any one of the following acts by the
Company, or failures by the Company to act, unless, in the case of any act or
failure to act described in paragraph (i), (v), (vi) or (vii) below, such act or
failure to act is corrected prior to the Date of Termination:
(i) the assignment to the Executive of duties
inconsistent with the Executive's status as a senior executive officer of the
Company or a substantial alteration in the nature or status of the Executive's
responsibilities other than any such alteration primarily attributable to the
fact that the Company may no longer be a public company;
(ii) a reduction by the Company in the Executive's Base
Salary as in effect on the date hereof or as the same may be increased from time
to time;
(iii) the relocation of the Company's principal executive
offices to a location more than 15 miles from the then location of such offices
without the Executive's written consent or the Company's requiring the Executive
to be based anywhere other than the Company's principal executive offices except
for required travel on the Company's business to an extent substantially
consistent with the Executive's present business travel obligations;
(iv) the failure by the Company to pay to the Executive
any portion of the Executive's current compensation or to pay to the Executive
any portion of an installment of deferred compensation under any deferred
compensation program of the Company within seven (7) days of the date such
compensation is due after written demand from the Executive has been received
therefor;
(v) following a Change in Control Event or a Potential
Change in Control Event, the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately prior to the
Change in Control Event or the Potential Change in Control Event which is
material to the Executive's total compensation, including but not limited to the
Company's stock option, incentive compensation, deferred compensation, stock
purchase, bonus and other plans or any substitute plans adopted prior to the
Change in Control Event, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or the
failure by the Company to
-17-
continue the Executive's participation therein (or in such substitute or
alternative plan) on a basis not less favorable, both in terms of the amount of
benefits provided and the level of the Executive's participation, relative to
other participants, as existed immediately prior to the Change in Control Event
or the Potential Change in Control Event;
(vi) following a Change in Control Event or a Potential
Change in Control Event, the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by the Executive
under any of the Company's pension, life insurance, medical, health and
accident, or disability plans in which the Executive was participating
immediately prior to the Change in Control Event or the Potential Change in
Control Event, the taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the Executive of
any material fringe benefit enjoyed by the Executive at the time of the Change
in Control Event or a Potential Change in Control Event, or the failure by the
Company to maintain a vacation policy with respect to the Executive that is at
least as favorable as the vacation policy (whether formal or informal) in place
with respect to the Executive immediately prior to the Change in Control Event
or the Potential Change in Control Event; or
(vii) following a Change in Control Event, or a
Potential Change of Control Event, any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination; or
(viii) any breach by the Company of any material
provision of this Agreement.
The Executive's right to terminate employment due to
Constructive Discharge shall not be affected by the Executive's incapacity due
to physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or failure
to act constituting Constructive Discharge hereunder.
For purposes of any determination regarding a
Constructive Discharge, a claim by the Executive of a Constructive Discharge
shall be presumed to be correct unless the Board determines, by an affirmative
vote of not less than three-quarters (3/4) of the voting membership of the
Board, that a Constructive Discharge has not occurred by clear and convincing
evidence. In any Board deliberations or votes concerning a determination under
this paragraph, Executive shall recuse himself from such deliberations and
votes. Any dispute by the Executive of a Board determination under this
provision shall be resolved in accordance with Section 19.
(g) "Date of Termination," with respect to any purported
termination of the Executive's employment, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall
-18-
not have returned to the full-time performance of the Executive's duties during
such thirty (30) day period); and (ii) if the Executive's employment is
terminated for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination by the Company, shall not be less than
thirty (30) days (except in the case of a termination for Cause) and, in the
case of a termination by the Executive, shall not be less than thirty (30) days
nor more than sixty (60) days, respectively, from the date such Notice of
Termination is given).
(h) "Disability" shall mean termination by the Company of the
Executive's employment upon or following Executive's commencement of benefits
under the Company's long-term disability plan.
(i) [RESERVED]
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(k) "Excise Tax" shall mean any excise tax imposed under
section 4999 or the Code.
(l) "Gross-Up Payment" shall have the meaning set forth in
Section 6(c) hereof.
(m) "Notice of Termination" shall mean a notice indicating
the specific 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 the Executive's employment under the provision so
indicated.
(n) "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its affiliates
(as defined in Rule 12b-2 promulgated under the Exchange Act), (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
(o) "Potential Change in Control Event" shall be deemed to
have occurred if the event set forth in any one of the following paragraphs
shall have occurred:
(i) the Company enters into an agreement, the
consummation of which will result in the occurrence of a Change in Control
Event;
-19-
(ii) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated, will
constitute a Change in Control Event; or
(iii) the Board adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control Event has
occurred.
(p) "Separation Period" shall mean the three-year period (or
such longer period as the Human Resources Committee may determine) beginning on
the Date of Termination.
(q) "Term" shall mean the initial period commencing as of May
1, 1997 and ending on April 30, 2000, and any additional one-year periods for
which this Agreement is extended in accordance with Section 1 hereof.
(r) "Termination upon a Change in Control Event" shall mean a
termination of employment:
(i) initiated by Company for any reason, including
delivery of Notice of Nonrenewal, other than termination for Cause, upon or
within two years after a Change in Control Event; or
(ii) initiated by the Executive due to a Constructive
Discharge, upon or within two years after a Change in Control Event; or
(iii) under circumstances described in Section 6(a)
hereof.
A termination due to death, Disability, or for Cause shall not constitute a
Termination upon a Change in Control Event, and payments in the event of such a
termination shall be determined under Section 5(b) hereof.
(s) "Total Payments" shall mean those payments described in
Section 6(c) hereof.
(t) "Without Cause Termination" shall mean a termination of
the Executive's employment by the Company, other than due to Disability,
voluntary retirement, expiration of the Term or for Cause.
-20-
IN WITNESS WHEREOF, and intending to be legally bound, the Company has
caused this Agreement to be executed by its duly authorized officers and the
Executive has signed this Agreement as of the date first above written.
IKON OFFICE SOLUTIONS, INC.
By:
---------------------------
Authorized Signatory
------------------------------
XXXX X. XXXXXXXXXXX
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EXECUTIVE EMPLOYMENT AGREEMENT
THIS IS A VERY IMPORTANT LEGAL DOCUMENT WHICH MAY AFFECT YOUR RIGHTS
TO FUTURE EMPLOYMENT. AS A RESULT, YOU SHOULD REVIEW THE DOCUMENT
CAREFULLY, AND FULLY UNDERSTAND ITS TERMS AND IMPLICATIONS, BEFORE SIGNING.
This Employment Agreement ("Agreement") effective August 5,
1996 is entered into among IKON OFFICE SOLUTIONS, INC., a Delaware corporation
and an operating division (including its network of operating companies) of Alco
Standard Corporation ("IKON") and ALCO STANDARD CORPORATION, an Ohio Corporation
("Alco") (both entities IKON and Alco also collectively referred to as the
"Company"), with their principal place of business in Pennsylvania, and XXXXX X.
XXXXX ("Executive").
In consideration of the mutual promises contained in this
Executive Employment Agreement ("Agreement") including the following three
items, none of which would be conferred upon Executive absent execution of this
Agreement: (1) employment with the Company; (2) employment for a fixed period of
time in a new executive position, subject to the terms and conditions set forth
below; (3) one-time discretionary stock option award; (4) one-time special
bonus; (5) eligibility to participate as an IKON Group participant in the fiscal
1997-1999 Long-Term Incentive Compensation Program granted on October 1, 1996,
with respect to the three-year performance plan period from October 1, 1996
through September 30, 1999 ("LTIP"), in accordance with the additional terms of
that Program; and (6) additional good and valuable consideration including but
not limited to that set forth in Addendum B of this Agreement, the parties to
this Agreement ("Parties"), INTENDING TO BE LEGALLY BOUND, agree as follows:
ARTICLE I-TERMS OF EMPLOYMENT
-----------------------------
1.1 DUTIES.
------
1.1.1 DUTIES OF POSITION. IKON shall employ Executive as Senior Vice
------------------
President and CIO, IKON Office Solutions. The Parties expressly agree that the
position of Senior Vice President and CIO is a key position and an executive
position in the Company. Executive shall comply with his obligation set forth in
this Employment Agreement and with all reasonable Company policies, now
currently in force, or as may from time to time be unilaterally adopted and
modified by the Company, whether or not reduced to writing. In addition,
Executive shall have the duties set forth in Addendum A of the Agreement which
is hereby incorporated as if fully set forth herein.
Executive specifically recognizes and acknowledges that this position is one of
trust and confidence and that, as a result, he will have access to, and may be
given specialized education and confidential, proprietary information of the
Company.
1.1.2 DUTY OF LOYALTY. Executive will (1) devote substantially all his
---------------
time, attention, and energies to the business of the Company and diligently
perform all duties incident to his employment; (2) use his best efforts to
promote the interests and goodwill of the Company; and (3) perform such other
duties commensurate with his office as the President of IKON, or his assignees
from time to time assign him. Further, during the term of employment, Executive
shall not engage in any activity to the detriment or embarrassment of the
Company. By way of illustration and not as a limitation, Executive shall not
discuss with any customer or potential customer of the Company, or any
competitor of the Company, any plans by Executive or any other employees of the
Company to leave the employment of the Company or to compete with the Company,
and/or, Executive shall at all times in performance of his duties work in
concert with, and take direction from, the President of IKON.
1.2 TERM OF AGREEMENT. Unless terminated in accordance with Article 2,
-----------------
this Agreement shall remain in force until September 30, 1999 ("Term"), unless
soonerterminated in accordance with the provisions of this Agreement.
1.3 COMPENSATION. During the Term of the Agreement, the Executive shall be
------------
compensated in accordance with the terms set forth in Addendum B of the
Agreement which is incorporated as if fully set forth herein ("Total
Compensation Package"). In the event the Company shall pay to Executive during
the Term any compensation in excess of the Total Compensation Package provided
for herein, the payment of such increased compensation shall not be deemed to be
an amendment to this Agreement, and may be discontinued at any time without
cause.
1.4 ADDITIONAL OBLIGATIONS OF EXECUTIVE. Executive understands that the
-----------------------------------
obligations imposed under this Agreement are not exclusive, and that the Company
may unilaterally, from time to time, impose additional reasonable
Page 1 of 7
obligations upon Executive consistent with his duties and position within the
Company. If Company promotes Executive, or changes Executive's areas of
responsibilities during the Term of this Agreement, Company, at its option, may
require Executive to execute an Addendum describing the Executive's promotion,
or change of areas of Executive's responsibilities; provided, however, that in
no event shall a change in area of responsibility be to a position that is less
senior or without the authority that Executive has hereunder.
1.5 DISCOVERIES. Executive shall promptly disclose in writing to the Company any
-----------
and all information, ideas, conceptions, inventions, discoveries, processes,
methods, designs, and know-how, as well as all works of authorship (including
computer programs) which are within the subject matter of copyright, which are
conceived, originated, developed, made or acquired by Executive, either
individually or jointly with others, during the period of Executive's employment
with the Company or for one (1) year period thereafter and: (i) for which the
Company provided either equipment, supplies, facilities, or confidential
information; (ii) which were made or conceived on or partially on the Company's
time; or (iii) which relate to IKON's core businesses or additional core
businesses that IKON is in the process of developing (collectively referred to
as the "Vision Discoveries") and shall assign or offer to assign to Company any
and all of Executive's rights in each Vision Discovery.
1.6 COPYRIGHTS. All Vision Discoveries which are within the subject matter of
----------
copyright shall be considered a "work for hire" granting the Company full
ownership to the work and components and all rights comprised therein. Should
any work or component thereof not fall within the definition of a "work for
hire" under copyright law, the Executive hereby transfers and assigns or, if
necessary, will transfer and assign to the Company full ownership of the
copyright to the work or component thereof and all rights comprised therein. The
Executive will sign all applications for registrations of such copyright, and at
the Company's expense, perform all other acts necessary or convenient to carry
out the terms of this Provision.
ARTICLE 2-TERMINATION OF AGREEMENT
----------------------------------
2.1 TERMINATION BY THE COMPANY -- ENUMERATED REASONS. Company may, in its sole
------------------------------------------------
discretion, terminate Executive's employment at any time during the Term of the
Agreement under the following circumstances:
(1) Executive fails to comply with any material Company
Policy, either currently in force, or as may from time to time be adopted and
modified by the Company;
(2) Executive's performance falls below 80% of the stated
mutually agreed-upon operational and financial goals specifically applicable to
Executive;
(3) Executive materially breaches his obligations under the
terms of this Agreement;
(4) Executive has committed an act of dishonesty, moral
turpitude or theft or has breached his duties of loyalty to the Company, or an
act of insubordination to any of his supervisors.
It is specifically understood that, during the Term of the
Agreement, Executive shall not be terminated pursuant to either 2.1 (1), (2) or
(3) unless and until (a) Executive has received reasonable written notice from
the Company of the applicable Company Policy, or the operational and financial
goals applicable to the Executive, and (b) Executive has had reasonable
opportunity to comply with such Company Policy or perform up to the standards,
expectations or applicable goals set by Company. The Company may, however,
immediately terminate Executive pursuant to 2.1 (4) without notice.
In the event of the termination of Executive under this
Article 2.1, Executive's right to the compensation and benefits provided in
Addendum B shall immediately terminate and/or cease to accrue, provided,
however, that Executive shall receive (i) the unpaid portion, if any, of the
Base Salary computed on a pro-rata basis to the date of termination of
employment and (ii) any unpaid accrued benefits owed to the Executive in
accordance with the terms of any Plan or Program referenced in Addendum B.
2.2. TERMINATION BY THE COMPANY -- NOT ENUMERATED REASONS. The Company may
----------------------------------------------------
terminate the employment of Executive during the Term for reasons other than
those enumerated in Article 2.1. However, in such event, the Company shall be
liable to Executive for the Base Salary compensation and shall be liable for a
pro-rata portion of Executive's annual qualitative bonus as of the date of
termination and a pro-rata portion of Executive's annual quantitative bonus
(such pro-rata quantitative bonus payment to be paid within 45 days subsequent
to fiscal year end but only if Company
Page 2 of 7
achieves its business plan objectives for such fiscal year) and other remaining
benefits provided in Addendum B for the remainder of the Term, and, to the
extent not inconsistent with applicable law and/or the terms and conditions of
any Plan or Program, all other remaining benefits shall continue to accrue until
the end of the Term, which shall constitute the full liquidated damages to which
Executive is entitled. Executive agrees that he shall not be entitled to any
other remedy at law or in equity, including but not limited to general, special,
punitive or exemplary damages and/or injunctive relief.
2.3 DISABILITY AND DEATH
--------------------
2.3.1 DISABILITY. In the event that Executive is unable fully to
----------
perform his duties and responsibilities hereunder to the full extent required by
the Company by reason of illness, injury or incapacity for ninety (90)
consecutive days or ninety (90) working days during the Term, this Agreement may
be terminated by Company and Company shall have no further liability or
obligation to Executive for the compensation or benefits set forth in Addendum
B, provided however, that Executive will be entitled to receive (i) salary
continuation until the long-term disability benefit plan takes effect, (ii) the
payments prescribed under any disability benefit plan which may be in effect for
employees of the Company and in which he participated or participates and (iii)
any unpaid accrued benefits owed to the Executive in accordance with the terms
of any Plan or Program referenced in Addendum B.
2.3.2. DEATH. In the event that Executive dies during the Term, Company
-----
shall pay to his executors, legal representatives or administrators an amount
equal to the installment of his Base Salary set forth in Addendum B for the
month in which he dies, and thereafter Company shall have no further liability
or obligation pursuant to the Agreement to his executors, legal representatives,
administrators, heirs or assigns or any other person claiming under or through
him; provided however, that Executive's estate or designated beneficiaries shall
be entitled to receive (i) the payment prescribed for such recipients under any
death benefit plan which may be in effect for employees of the Company and in
which Executive participated and (ii) any unpaid accrued benefits owed to the
Executive in accordance with the terms of any Plan or Program referenced in
Addendum B.
ARTICLE 3-RESTRICTION ON THE USE OF CONFIDENTIAL INFORMATION
------------------------------------------------------------
3.1 SCOPE OF CONFIDENTIAL INFORMATION. Executive acknowledges that the Company,
---------------------------------
through IKON is engaged in the business of sales, servicing, renting and leasing
of copier equipment, facsimiles, micrographic equipment, computers, shredders,
offset printing, typewriters, laser printers, word processing equipment and
other related office products, the business of facilities management and
state-of-the-art copying and/or scanning operations, the ongoing development and
implementation of additional business segments providing outsourcing and
networking sales and services, and the growth through acquisitions of entities
engaged in any or all of the aforementioned businesses ("OP Division business").
Executive further recognizes that the Company's OP Division business and its
continued success depend upon the use and protection of a large body of
confidential and proprietary information. Executive further acknowledges that he
holds a position of trust and confidence by virtue of which he necessarily
possesses, has access to and, as a consequence of his signing this Agreement,
will continue to possess and have access to, highly valuable, confidential and
proprietary information not known to employees of the Company at large or the
public in general, and that it would be improper for him to make use of this
information for the benefit of himself or others. All of such confidential and
proprietary information now existing or to be developed in the future will be
referred to in this Agreement as "Company Secrets". Company and Executive intend
that the meaning of "Company Secrets" in this Agreement will be read as broadly
as possible to include all information of any sort (whether merely remembered or
embodied in a tangible medium) which (i) is related to OP Division business or
potential future business and (ii) is not generally and publicly known. This
includes, without specific limitation, information relating to the nature and
operation of the OP Division business, the persons, firms and corporations which
are customers or active prospects of the Company during Executive's employment
by the Company, the Company's development transition and transformation plans,
methodology and methods of doing business, strategic, acquisition, marketing and
expansion plans, including plans regarding planned and potential acquisitions
and sales, financial and business plans, employee lists, numbers and location of
sales representatives, new and existing programs and services, support and those
under development, prices and terms, customer service, integration processes
requirements, costs of providing service, support and equipment and equipment
maintenance costs; provided, however, notwithstanding the foregoing or any
contrary provision hereof, the term "Company Secrets" shall not include any
information (i) which is or becomes public otherwise than through a breach of
this Agreement, (ii) which was known to Executive prior to disclosure thereof by
the Company, or (iii) which is disclosed to Executive by a non-Company employee
third party not subject to an obligation to maintain such information in
confidence.
Page 3 of 7
3.2 EXECUTIVE'S DUTY NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Executive will
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protect and preserve as confidential during his employment relationship with the
Company and at all times after the termination of the employment relationship,
all of the Company Secrets at any time known to Executive or at any time in
Executive's possession or control (except for such information as Executive may
be legally obligated and required to disclose pursuant to a court order, law, or
other legal proceedings). Executive understands that this Agreement includes an
obligation not to disclose Company Secrets to employees within the Company who
do not have a right or need to know the Company Secrets.
Executive will, during his employment relationship with the Company and at all
times after the termination of the employment relationship, neither disclose,
use, nor allow any other person or entity to use in any way, except for the
benefit of the Company and as directed by the Company, any of the Company
Secrets.
3.3 RETURN OF CONFIDENTIAL INFORMATION. Executive will, prior to or upon leaving
----------------------------------
employment with the Company, deliver to the Company any and all records, items
and media of any type (including, without limitation, all partial or complete
copies of duplicates) containing or otherwise relating to any of the Company
Secrets, whether prepared or acquired by, or provided to, Executive. Executive
acknowledges that all such records, items and media are and at all times will be
and remain the property of Company.
3.4 ADDITIONAL AGREEMENTS REQUIRED BY THIRD PARTIES. Executive will enter into
-----------------------------------------------
and comply fully with any agreement reasonably required by any of the Company's
affiliates, business partners, suppliers or contractors with respect to the
protection of the confidential and proprietary information of such entities.
3.5 SEVERABILITY. Executive understands that the obligations imposed under this
------------
Restriction on the Use of Confidential Information are in addition to, and
independent of, any Restriction on Post-Termination Employment imposed under
this Agreement or any previously executed agreement concerning post-termination
employment, impose separate and distinct obligations from the Restriction on
Post-Termination Employment, and may be valid even if the Restriction on
Post-Termination Employment is declared invalid, in whole or in part, in any
judicial or quasi-judicial forum.
ARTICLE 4-RESTRICTION ON POST-TERMINATION EMPLOYMENT
----------------------------------------------------
4.1 ACKNOWLEDGMENTS BY EXECUTIVE.
----------------------------
4.1.1. ACKNOWLEDGMENT OF PROTECTIBLE INTERESTS. Executive agrees that
---------------------------------------
the Company has a protectible interest in the Company Secrets, goodwill and
specialized knowledge acquired by Executive during the course of his employment
with Company.
4.1.2. ACKNOWLEDGMENT OF CONSIDERATION. Executive acknowledges that the
-------------------------------
provisions of this Article 4 are in consideration of: (1) employment with the
Company; (2) employment for a fixed period of time, subject to the terms and
conditions set forth below; (3) one-time discretionary stock option award; (4)
one-time special bonus; (5) Executive's participation in the LTIP (as defined
above) in accordance with the additional terms of that Program; and (6)
additional good and valuable consideration as set forth in Addendum B of this
Agreement
4.1.3. ABILITY TO EARN LIVELIHOOD. Executive expressly agrees and
--------------------------
acknowledges that the Restrictions contained in this Article 4 do not preclude
Executive from earning a livelihood, nor does it unreasonably impose limitations
on Executive's ability to earn a living. In addition, the Executive agrees and
acknowledges that the potential harm to the Company of its non-enforcement
outweighs any harm to the Executive of its enforcement by injunction or
otherwise.
4.2 POST-EMPLOYMENT RESTRICTIONS. Executive agrees that if Executive's
----------------------------
employment with the Company is terminated for cause, by voluntary resignation on
the part of Executive, or without cause (whether by the Company, by Executive or
otherwise), the Executive will not, without the express written consent of the
Company, directly or indirectly, for a period of two (2) years from the date of
termination, in any capacity whatsoever, including either as an employee,
employer, officer, director, proprietor, partner, joint venturer, consultant,
stockholder (except for investments of no greater than 5% of the total
outstanding shares in any publicly funded company), on his behalf or on behalf
of any other entity:
(1) solicit, sell to, divert, serve, accept or receive
business, which is similar to, or competitive with, the OP Division
Business, from any entity which was a customer of IKON, or active
prospect of IKON, during the two (2) year period immediately preceding
the termination of Executive's employment, or
Page 4 of 7
(2) engage or manage in any business and in any geographic
area which competes with the Company's OP Division business at the time
of Executive's termination, or
(3) start-up, acquire, purchase, or work in any capacity
whatsoever for or on behalf of, any entity which has been identified as
an actual or potential acquisition of IKON during the two (2) year
period immediately preceding the termination of Executive's employment,
or
(4) solicit, entice, or encourage any employee of the Company
to leave the Company or hire or employ any such employee, or
(5) Manage the business or a portion of the business, of any
entity engaged in a business which is similar to, or competitive with,
the OP Division business.
Notwithstanding any provision in this Section 4.2 to the contrary, the Company
and Executive agree to the following: (i) the following businesses shall be
deemed to be directly competitive with the OP Division business and Executive
shall be precluded from being hired by these companies (or any of their
affiliated companies whether publicly spun off, affiliates and/or divested
divisions) during the two year restricted term - Xerox, IBM, AT&T,
Hewlett-Packard, Danka, Pitney Xxxxx Corporation, X.X. Xxxxxxxxx, General
Electric, Kinko's, Alpha Graphics, Staples, and Kodak Corporation; (ii) the
following business situations shall be deemed not to be competitive with the
Company or the OP Division business and Executive shall not be precluded from
being employed by these companies during the two year restricted term - any
employment position that Executive would have with a company other than those
listed in clause (i) solely in the area of internal systems integration; and
(iii) a determination of whether businesses that would involve a position in
external systems integration shall be deemed to be competitive with IKON shall
be subject to good faith and reasonable negotiation between the President of
IKON and Executive.
4.3 SEVERABILITY. Executive understands that the obligations imposed under this
------------
Restriction on Post-Termination Employment are in addition to, and independent
of, any Restriction on the Use of Confidential Information imposed under this
Agreement and any previously executed agreement concerning post-terminated
employment, impose separate and distinct obligations from the Restriction on the
Use of Confidential Information, and may be valid even if the Restriction on the
Use of Confidential Information is declared invalid, in whole or in part, in any
judicial or quasi-judicial forum.
ARTICLE 5-REMEDIES FOR BREACH
-----------------------------
5.1 INJUNCTIONS. In the event of a breach or threatened breach of any provision
-----------
of Articles 3 or 4 of this Agreement, Executive acknowledges and agrees that the
Company will suffer irreparable harm and further acknowledges and agrees that
the Company's remedies at law are inadequate, and that the Company shall be
entitled to an immediate injunction restraining such breach or potential breach
as well as other equitable relief; but nothing herein shall be construed as
prohibiting the Company from pursuing any other remedy available for such breach
or threatened breach.
5.2 RESTITUTION. Notwithstanding anything in this Agreement or any other
-----------
agreement between the parties to the contrary and in addition to any other
rights or remedies the Company may have, if at any time Executive (whether
during the Employment period or thereafter as provided herein) has violated any
of his obligations contained in Articles 3 and 4 above, then the obligation of
the Company to pay salary, vacation pay, bonus, incentive compensation or other
form of pay or compensation (other than any vested employee benefits pursuant to
a Company adopted plan) shall terminate, and from and after such termination
neither the Executive, his beneficiary nor any of their legal representatives or
distributees shall have any right to receive any payment(s) in connection
therewith.
ARTICLE 6 -MISCELLANEOUS
------------------------
6.1 ARBITRATION. Except as permitted or provided in the foregoing Article 5, in
-----------
the event Executive's employment is terminated, and Executive contends that such
termination was wrongful or otherwise in violation of his rights or privileges,
express or implied, whether founded in fact or in law, or any other rights or
privileges, or was in violation of any express or implied condition, term, or
covenant, whether founded in law or in fact, including but not limited to the
covenant of good faith and fair dealing, or otherwise in violation of law,
Executive and Company agree to submit the above-described disputed matter to
binding arbitration. Executive and Company further expressly agree that in any
such arbitration, the exclusive remedy which may be awarded by the arbitrator(s)
shall be limited to back pay (including all bonuses and compensation under
incentive or employee benefit plans) owing up to and including the date the
arbitration award becomes final with
Page 5 of 7
interest, and Executive agrees that he shall not be entitled to any other remedy
at law or in equity, including but not limited to general, special, punitive or
exemplary damages and/or injunctive relief.
6.2 REFORMATION. The provisions and covenants contained herein are intended to
-----------
be separate and divisible and if, for any reason, any one or more of such
provisions or covenants should be held to be invalid and unenforceable in whole
or in part, it is agreed that the same shall not be held to affect the validity
or enforceability of any other provisions and covenants of this Agreement. In
the event that any restriction set forth in this Agreement is determined by a
Court to be unenforceable with respect to scope, time or geographical coverage,
Executive agrees that such a restriction should be modified and narrowed so as
to provide the maximum protection of the Company's legally protectible interests
as described in this Agreement, and without negating or impairing any other
restrictions or agreements set forth herein.
6.3 REASONABLENESS. Executive acknowledges that he has carefully read this
--------------
Agreement and has given careful consideration to the restraints imposed upon the
Executive by this Agreement, and is in full accord as to their necessity for the
reasonable and proper protection of the Company's Secrets. The Executive
expressly acknowledges and agrees that each and every restraint imposed by this
Agreement is reasonable with respect to subject matter, time period and
geographical area.
6.4 MODIFICATION. The Parties agree that the Agreement may not be modified
------------
except by the mutual written consent of the Parties. Notwithstanding the
foregoing, the parties further agree that if a judicial or quasi-judicial entity
declares the agreement invalid in whole or in part, it may modify the terms of
the Agreement to give affect to the Agreement as modified.
6.5 SUCCESSORS AND ASSIGNS OF THE COMPANY. This Agreement shall bind Company and
-------------------------------------
Executive, and also all of their respective family members, heirs,
administrators, representatives, successors, assigns, officers, directors,
agents employees, shareholders, affiliates, predecessors, and also all other
persons, firms, corporations, associations, partnerships, and entities in
privity with or related to or affiliated with any such person, firm,
corporation, association, partnership or entity; including without limitation,
any person, firm, corporation, association, partnership, limited liability
company and entity or combination thereof which shall acquire substantially all
of the assets, or direct or indirect control of a majority of the voting stock,
of the Company, or which shall in any other manner cause a majority of the
current members of the Board of Directors or the President to be replaced at any
time after the effective date of this Agreement (a "Change of Control"). Any
termination under Section 2.1(2) within eighteen (18) months of a Change of
Control or any material demotion or restriction of Executive's current duties at
the time of the Change of Control or within eighteen (18) months of a Change of
Control, however effected, shall not be deemed a termination under Section 2.1
and Executive shall instead be entitled to receive the benefits he would be
entitled to receive under Section 2.2 of this Agreement.
6.6 SURVIVAL OF OBLIGATIONS AND PROVISIONS. Exercise of the Company's
--------------------------------------
termination rights according to the provisions of Articles 2.1, 2.2. and 2.3.1
shall not affect the Company's rights or the Executive's obligations under
Articles 3, 4, 5 or 6. The Parties acknowledge and agree that the provisions
within Articles 3, 4, 5 or 6 survive the termination or expiration of this
Agreement as well as the termination of Executive's employment relationship with
the Company.
6.7 AT-WILL PRESUMPTION. Upon completion of the Term of the Agreement, the
-------------------
Parties acknowledge and agree that any further employment with the Company shall
be in an at-will capacity and may be terminated at any time.
6.8 EXPENSES OF ENFORCEMENT. Executive shall be liable to, and will pay the
-----------------------
Company for all costs and expenses, including, but not limited to, reasonable
attorneys' fees, incurred by the Company in the successful enforcement in any
respect of any of its rights under this Agreement, whether in litigation or
otherwise. Likewise, in the event the Company is unsuccessful in enforcing its
rights under this Agreement, whether in litigation or otherwise, then the
Company shall pay all of Executive's costs and expenses, including, but not
limited to, reasonable attorneys' fees, incurred by Executive in defending the
Company's claims.
6.9 ENTIRE AGREEMENT. The Executive acknowledges and agrees that this Agreement,
----------------
including Addendums A and B which are incorporated herein and made a part of the
Agreement, together with the Alco Standard Corporation Confidentiality and
Patent Agreement executed by the Executive and constitute the entire agreement
between the Parties concerning the subject matter of this Agreement, and that
together they supersede and replace all prior agreements, whether written or
oral except the relevant benefit and compensation plans referred to elsewhere in
the Agreement, which are incorporated reference; there are no other agreements,
understandings, restrictions, warranties, or representations between the parties
relating to this
Page 6 of 7
subject matter. Executive hereby represents that, in signing the Agreement, he
has not relied upon any promise, representation, or any other inducement that is
not expressed herein.
6.10 APPLICABLE LAW. This Agreement, the construction of its terms, and the
--------------
interpretation of the parties' rights and duties shall be governed by and
construed according to the laws of the Commonwealth of Pennsylvania (the state
of the principal place of business of IKON) without regard to the choice of law
provisions of such law.
6.11 VENUE. The parties hereby agree that any lawsuit or proceeding instituted
-----
regarding this Agreement, its interpretation, enforcement or validity shall be
commenced in the Court of Common Pleas of Xxxxxxx County, Pennsylvania, or in
the United States District Court for the Eastern District of Pennsylvania, and
the parties hereby consent to the personal jurisdiction over them of both
Courts.
6.12 NOTICES. All notices and other communications concerning this Agreement
-------
shall be in writing and must be given by postage prepaid, registered or
certified mail, as follows:
(a) If to the Company, to: (b) If to Executive, to:
X.X. Xxx 000 X.X. Xxx 000
Xxxxxx Xxxxx, XX 00000 Xxxxxx Xxxxx, XX 00000
Attn: Law Department
6.13 UNDERSTANDING OF TERMS. Executive acknowledges that he has carefully
----------------------
reviewed the contents of this Agreement, understands its import and intent,
including the restrictions on post-termination employment it imposes, and that
he agrees to its terms without duress and in full and complete knowledge of its
effect.
6.14 WAIVER. No omission or delay on the part of either Party of due and
------
punctual fulfillment of any obligation shall be deemed to constitute a waiver by
the other Party of any of its rights to require such due and punctual
fulfillment of any other obligation hereunder, whether similar or otherwise, or
a waiver of any remedy it may have.
IN WITNESS HEREOF, the Parties have affixed their signatures to this Agreement
to be effective as of August 5, 1996.
WITNESS
----------------------------- ---------------------------
XXXXX X. XXXXX
Date:
ALCO STANDARD CORPORATION IKON OFFICE SOLUTIONS, INC.
----------------------------- ---------------------------
By: Xxxx X. Xxxxxxxxxxx By: Xxxx X. Xxxxxxxxxxx
Title: Vice President Title: President
Date: Date:
Page 7 of 7
