Exhibit 10.46
EMPLOYMENT AGREEMENT
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AGREEMENT, made and entered into as of the 5th day of August 1999 by and
between IKON Office Solutions, Inc., an Ohio corporation with its principal
office located at 00 Xxxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000
(together with its successors and assigns permitted under this Agreement, the
"Company") and Xxxxxxx Xxxxxx, who currently resides at 0000 Xxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxx 00000 (the "Executive");
W I T N E S S E T H:
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WHEREAS, the Company desires to employ the Executive and to enter into an
agreement embodying the terms of such employment;
WHEREAS, the Executive desires to accept employment with the Company,
subject to the terms and provisions of this Employment Agreement;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (together, the
"Parties") agree as follows:
1. Definitions.
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(A) "Affiliate" of a Person shall mean a Person that directly or
indirectly controls, is controlled by, or is under common control with, the
Person specified.
(B) "Agreement" shall mean this Employment Agreement, which includes
for all purposes its Exhibits hereto.
(C) "Base Salary" shall mean the salary provided for in Section 4 or
any increased salary granted to the Executive pursuant to Section 4.
(D) "Board" shall mean the Board of Directors of the Company.
(E) "Cause" shall mean:
(1) Executive fails to comply with any material written Company
policy, as the same may from time to time be adopted and/or modified by the
Company, including, but not limited to, the Company's Code of Ethics;
(2) Executive breaches her material obligations under the terms
of this Agreement; or
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(3) the Executive has committed an act of dishonesty, moral
turpitude or theft against the Company or has breached her duties of loyalty to
the Company.
(F) "Change in Control" shall mean the occurrence of any of the
following events:
(1) any "person," as such term is currently used in Section
13(d) of the Securities Exchange Act of 1934, as amended, becomes a "beneficial
owner," as such term is currently used in Rule 13d-3 promulgated under that act,
of 15% or more of the Voting Stock of the Company;
(2) a majority of the Board consists of individuals other than
Incumbent Directors, which term means the members of the Board on the Effective
Date; provided that any individual becoming a director subsequent to such date
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whose election or nomination for election was supported by a majority of the
directors who then comprised the Incumbent Directors shall be considered to be
an incumbent director;
(3) the Company adopts any plan of liquidation providing for the
distribution of all or substantially all of its assets;
(4) 50% or more of the assets of the Company is disposed of
pursuant to a merger, consolidation or other transaction or series of
transactions (unless the shareholders of the Company immediately prior to such
merger, consolidation or other transaction or series of transactions
beneficially own, directly or indirectly, in substantially the same proportion
as they owned the Voting Stock of the Company, more than 50% of the Voting Stock
or other ownership interests of the entity or entities, if any, that succeed to
the business of the Company); or
(5) the Company combines with another company and is the
surviving corporation but, immediately after the combination, the shareholders
of the Company immediately prior to the combination hold 50% or less of the
Voting Stock of the combined company, (there being excluded from the number of
shares held by such shareholders, but not from the Voting Stock of the combined
company, any shares received by Affiliates of such other company in exchange for
stock of such other company).
(G) "Claim" shall mean any claim, demand, request, investigation,
dispute, controversy, threat, discovery request, or request for testimony or
information.
(H) "Common Stock" shall mean common stock of the Company.
(I) "Constructive Termination Without Cause" shall mean a termination
by the Executive of her employment hereunder on 30 days' written notice given by
her to the Company following the occurrence, without her prior written consent,
of any of the following events, unless the Company shall have fully cured all
grounds for such termination within 15 days after the Executive gives notice
thereof:
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(1) any reduction in her then current Base Salary or in her annual
bonus award opportunity set forth herein;
(2) any material breach of any of the Company's obligations,
representations or warranties in this Agreement;
(3) any failure during the term of this Agreement to appoint, elect
or reelect her to any of the positions described in Section 3(A); the removal of
her during the term of this Agreement from any such position; or any change in
the reporting structure so that she reports to someone other than the Chief
Executive Officer of the Company;
(4) any material diminution in her duties or the assignment to her of
duties that materially impair her ability to perform her duties;
(5) following any Change in Control, any relocation of the Company's
principal office, or of her own office as assigned to her by the Company, to a
location more than 50 miles from Malvern, Pennsylvania;
(6) following any Change in Control, any failure by the Company to
continue in effect any compensation plan in which the Executive participated
immediately prior to such Change in Control and 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,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or any failure by the
Company to continue the Executive's participation therein (or in such substitute
or alternative plan) on a basis no less favorable to the Executive, 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
such Change in Control;
(7) following any Change in Control, any 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 such Change in Control, 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 perquisite enjoyed by the
Executive at the time of such Change in Control, 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 such Change in Control;
(8) following any Change in Control, any failure to elect Executive
as a senior executive of the Company by the Person acquiring the Company with
duties and responsibilities of comparable scope to Executive's duties and
responsibilities immediately prior to such Change in Control; or
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(9) the failure of the Company to obtain the assumption in
writing of its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company within 15 days after a merger,
consolidation, sale or similar transaction.
(J) "Disability" shall mean Total Disability as defined in the
Company's Long-Term Disability Plan, as amended from time to time.
(K) "Effective Date" shall mean September 13, 1999, or such other
date as the Parties may mutually agree to.
(L) "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, estate, board, committee,
agency, body, employee benefit plan, or other person or entity.
(M) "Potential Change in Control" shall mean the occurrence of any of
the following events:
(1) the Company enters into an agreement, the consummation of
which will result in the occurrence of a Change in Control;
(2) 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; or
(3) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.
(N) "Proceeding" shall mean any threatened or actual action, suit or
proceeding, whether civil, criminal, administrative, investigative, appellate or
other.
(O) "Pro-Rata" shall mean a fraction, the numerator of which is the
number of days that the Executive was employed in the applicable performance
period (a fiscal year in the case of an annual bonus) and the denominator of
which shall be the number of days in the applicable performance period.
(P) "Special Restricted Stock Award" shall mean the award of
restricted Common Stock referred to in Section 6(C);
(Q) "Special Stock Option" shall mean the stock option referred to in
Section 6(A);
(R) "Term of Employment" shall mean the period specified in Section
2.
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(S) "Termination Date" shall mean the date on which the Executive's
employment hereunder terminates in accordance with this Agreement.
(T) "Voting Stock" shall mean issued and outstanding capital stock or
other securities of any class or classes having general voting power, under
ordinary circumstances in the absence of contingencies, to elect, in the case of
a corporation, the directors of such corporation and, in the case of any other
entity, the corresponding governing Person(s).
2. Term of Employment.
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The Company hereby employs the Executive under this Agreement, and the
Executive hereby accepts such employment, for the Term of Employment. The Term
of Employment shall commence as of the Effective Date and shall end on the
second anniversary thereof. Notwithstanding the foregoing, the Term of
Employment may be earlier terminated in accordance with the provisions of
Section 8.
3. Positions, Duties and Responsibilities.
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(A) During the Term of Employment, the Executive shall serve as
Senior Vice President, Marketing of the Company; shall have the authority,
duties and responsibilities customarily exercised by an individual serving in
those positions in a corporation of the size and nature of the Company; shall
perform such duties relating to the management and operations of the Company,
consistent with the foregoing, as may from time to time be assigned to her by
the Chief Executive Officer of the Company (the "CEO"); shall be assigned no
duties or responsibilities that are materially inconsistent with, or that
materially impair her ability to discharge, the foregoing duties and
responsibilities; and shall report solely and directly to the CEO.
(B) During the Term of Employment, Executive will (1) devote
substantial and full-time attention and energies to the business of the Company,
particularly to its marketing function, and diligently perform all duties
incident to her employment; (2) use her best efforts to promote the interests
and goodwill of the Company; and (3) perform such duties commensurate with her
office as Senior Vice President, Marketing of the Company as may be assigned to
her by the CEO.
4. Base Salary.
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The Executive shall be paid an annualized Base Salary of $275,000,
payable in accordance with the regular payroll practices of the Company. The
Base Salary shall be reviewed in October 2000 and no less frequently than
annually thereafter for increase in the discretion of the CEO and, if
applicable, the Board.
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5. Annual Incentive Awards.
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The Executive shall be eligible for an annual incentive bonus award from
the Company in respect of each fiscal year of the Company that ends during the
Term of Employment. She shall be eligible for an annual bonus opportunity of no
less than $200,000 which shall be based upon the performance of the Company and
the performance of the Executive. In addition, in the sole discretion of the
CEO, the Executive may be eligible for an additional annual overachievement
bonus. To the extent earned, the Executive shall be paid her annual incentive
awards at the same time that other senior-level executives receive their
incentive awards.
6. Long-Term Incentive Awards.
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(A) Special Stock Option Award. On the date of the Company's
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quarterly Board meeting next following the Effective Date, the Company shall
grant the Executive a ten-year option to purchase 25,000 shares of Common Stock.
Such option shall be granted at an exercise price equal to the fair market value
of the Common Stock on the grant date, and shall become exercisable over a
period of five years from the grant date in five equal annual installments
commencing on the first anniversary of the grant date, subject to the terms,
conditions and adjustments set forth in Section 8 below.
(B) Regular Stock Option Award. In addition to the Special Stock
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Option described above, on the date of the Company's quarterly Board meeting
next following the Effective Date, the Company shall grant the Executive a ten-
year option to purchase 25,000 shares of Common Stock. Such option shall be
granted at an exercise price equal to the fair market value of the Common Stock
on the grant date, and shall become exercisable over a period of five years from
the grant date in five equal annual installments commencing on the first
anniversary of the grant date, subject to the terms, conditions and adjustments
set forth in Section 8, below.
(C) Special Restricted Stock Award. Subject to the terms and
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conditions of this Agreement, the Company shall issue and distribute 25,000
shares of restricted Common Stock to the Executive in the following installments
and on the following dates:
Date Installment
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September 13, 2002 8,334 shares
September 13, 2003 8,333 shares
September 13, 2004 8,333 shares
Except as provided in Section 8 hereof, the Executive must be a full-time
active employee of the Company on the applicable date in order to receive the
corresponding installment described above. Executive will have no rights as a
shareholder with respect to such shares unless and until such shares have been
distributed to her.
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7. Other Benefits.
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(A) Other Executive Compensation Plans. During the Term of
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Employment, the Executive shall be entitled to participate in all compensation
plans and programs made generally available to senior executives of the Company,
including, without limitation, the Executive Deferred Compensation Plan.
(B) Employee Benefits. During the Term of Employment, the Executive
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shall participate in all employee benefit plans and programs made available
generally to the Company's senior executives, including, without limitation,
pension, profit-sharing, savings, stock option, restricted stock and other
retirement plans or programs, medical, dental, hospitalization, short-term and
long-term disability and life insurance plans or programs, accidental death and
dismemberment protection, travel accident insurance, and any other employee
welfare or retirement benefit plans or programs that may be sponsored by the
Company from time to time, including any plans or programs that supplement the
above-listed types of plans or programs, whether funded or unfunded.
(C) Expenses. The Executive is authorized to incur reasonable
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expenses in carrying out her duties and responsibilities hereunder and the
Company shall promptly reimburse her for all such expenses, subject to
documentation in accordance with reasonable policies of the Company.
(D) Vacation. Executive shall be entitled to four weeks paid
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vacation per year.
8. Termination of Employment.
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(A) Termination Due to Death. In the event that the Executive's
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employment hereunder is terminated due to her death, her estate or her
beneficiaries (as the case may be) shall be entitled to:
(1) Base Salary through the end of the month in which her death
occurs;
(2) a Pro-Rata annual incentive award for the fiscal year in
which her death occurs, based on the Executive's annual bonus opportunity for
the year of death (excluding any overachievement bonus opportunity), payable in
a lump sum promptly following her death, regardless of the Executive's and
Company's performance during such fiscal year;
(3) the continued right to exercise each outstanding stock
option, including the Special Stock Option, for a period of 12 months from the
date of her death, all such options to become fully exercisable as of the date
of her death, and the immediate distribution of all shares of restricted stock
of the Company, including the Special Restricted Stock Award, as of the date of
her death;
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(4) immediate vesting in the Company's Retirement Savings Plan
(or any successor 401(k) plan), pension plan, supplemental retirement plan and
deferred compensation plans; and
(5) the benefits described in Section 8(I)(1).
(B) Termination Due to Disability. In the event that the Executive's
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employment hereunder is terminated due to Disability, she shall be entitled to
the following:
(1) periodic disability payments in accordance with the
Company's Long-Term Disability Plan;
(2) Base Salary through the end of the month in which the
Termination Date occurs;
(3) a Pro-Rata annual incentive award for the fiscal year in
which her Termination Date occurs, based on the Executive's annual bonus
opportunity for such fiscal year (excluding any overachievement bonus award
opportunity), payable in a lump sum promptly following the Termination Date,
regardless of the Executive's and Company's performance during such fiscal year;
(4) the continued right to exercise each outstanding stock
option, including the Special Stock Option, for a period of 12 months from the
Termination Date, all such options to become fully exercisable as of the
Termination Date, and the immediate distribution of all shares of restricted
stock of the Company, including the Special Restricted Stock Award, as of the
Termination Date; and
(5) continued participation, for a period of two years from the
Termination Date, in all medical, dental, vision, hospitalization, disability
and life insurance coverages and in all other employee welfare benefit plans,
programs and arrangements in which she was participating on the date on which
her employment terminates, on terms and conditions that are no less favorable to
her than those that applied on such date, and with COBRA benefits commencing
thereafter; provided that the Company's obligation under this Section 8(B)(5)
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shall be reduced to the extent that equivalent coverages and benefits
(determined on a coverage-by-coverage and benefit-by-benefit basis) are provided
under the plans, programs or arrangements of a subsequent employer;
(6) immediate vesting in the Company's Retirement Savings Plan
(or any successor 401(k) plan), pension plan, supplemental retirement plan and
deferred compensation plans; and
(7) the benefits described in Section 8(I)(1).
No termination of the Executive's employment for Disability shall
be effective unless the Company first gives 15 days written notice of such
termination to Executive.
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(C) Termination by the Company for Cause.
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(1) No termination of the Executive's employment hereunder by
the Company for Cause shall be effective unless the provisions of this Section
8(C)(1) shall have been complied with. The Executive shall be given written
notice by the CEO of the intention to terminate her for Cause, such notice to
state in detail the particular circumstances that constitute the grounds on
which the proposed termination for Cause is based. Except in the case of a
termination for Cause pursuant to Section 1(E)(1) or Section 1(E)(3) which will
be effective, in the sole discretion of the CEO, on the date set forth in the
notice, the Executive shall have 15 days after receiving such notice in which to
cure such grounds, to the extent such cure is possible. If she fails to cure
such grounds, her employment hereunder shall thereupon be terminated for Cause.
(2) In the event that the Executive's employment hereunder is
terminated by the Company for Cause in accordance with Section 8(C)(1), she
shall be entitled to:
(a) expiration and forfeiture of any stock options
unexercisable on the Termination Date, including the Special Stock Option (to
the extent not exercisable as of the Termination Date), and forfeiture of any
shares of restricted stock not distributed as of the Termination Date, including
the Special Restricted Stock Award;
(b) 30 days to exercise any stock option exercisable on the
Termination Date (including the Special Stock Option to the extent so
exercisable); and
(c) the benefits described in Section 8(I)(1).
(D) Termination Without Cause. In the event that the Executive's
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employment hereunder is terminated by the Company without Cause and Sections
8(A), (B) or (F) do not apply, then the Executive shall be entitled to:
(1) Base Salary for a two-year period ending on the second
anniversary of the Termination Date, payable as provided in Section 4, provided,
however, that if Executive earns any employment income, self-employment income
or consulting income from other sources during such two-year period, Executive
shall provide written notice to the Company setting forth the nature and amount
of such income, which shall be offset against Base Salary payments otherwise due
to the Executive hereunder in excess of one year's Base Salary (so that the
Executive will receive no less than one year's Base Salary pursuant to this
Section 8(D)(1), regardless of other income);
(2) a Pro-Rata annual incentive award for the fiscal year in which
the Termination Date occurs, based on the Executive's annual bonus opportunity
for such fiscal year (excluding any overachievement bonus opportunity), payable
in a lump sum promptly following the Termination Date, regardless of the
Executive's and Company's performance during such fiscal year;
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(3) the continued right to exercise the Special Stock Option for a
period of two years from the Termination Date, such Special Stock Option to
become fully exercisable as of the Termination Date, and the immediate
distribution of all shares of the Special Restricted Stock Award as of the
Termination Date;
(4) the continued right to exercise any stock option exercisable on
the Termination Date, other than the Special Stock Option, for a period of 3
months from the Termination Date;
(5) expiration and forfeiture of any stock options unexercisable on
the Termination Date, other than the Special Stock Option, and forfeiture of any
shares of restricted stock not distributed as of the Termination Date, other
than the Special Restricted Stock Award;
(6) continued participation, through the second anniversary of the
Termination Date, in all medical, dental, vision, hospitalization, disability
and life insurance coverages and in all other employee welfare benefit plans,
programs and arrangements in which she or her family members were participating
on such date, on terms and conditions that are no less favorable to her than
those that applied on such date and with COBRA benefits commencing thereafter;
provided that the Company's obligation under this Section 8(D)(5) shall be
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reduced to the extent that equivalent coverages and benefits (determined on a
coverage-by-coverage and benefit-by-benefit basis) are provided under the plans,
programs or arrangements of a subsequent employer;
(7) immediate vesting in the Company's Retirement Savings Plan (or
any successor 401(k) plan), pension plan, supplemental retirement plan, and
deferred compensation plans; and
(8) the benefits described in Section 8(I)(1).
(E) Constructive Termination Without Cause. In the event that (i) a
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Constructive Termination Without Cause occurs and (ii) Section 8(F) does not
apply, then the Executive shall have the same entitlements as provided under
Section 8(D) for a termination by the Company without Cause.
(F) Termination Without Cause Following a Change in Control or
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Potential Change in Control. In the event that (i) the Executive's employment
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hereunder is terminated (a) through a Constructive Termination without Cause, or
(b) by the Company without Cause, or (c) as a result of the Company's failure to
offer to renew this Agreement on terms at least as favorable to the Executive as
the terms set forth herein, and (ii) the termination of employment occurs within
two years following a Change in Control, then the Executive shall be entitled
to:
(1) Base Salary through the second anniversary of the
Termination Date, payable as provided in Section 4;
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(2) a Pro-Rata annual incentive award for the fiscal year in which
her employment terminates based on the Executive's annual bonus opportunity for
the year of termination (excluding any overachievement bonus opportunity),
payable in a lump sum promptly following the Termination Date, regardless of the
Executive's and Company's performance during such fiscal year;
(3) an annual incentive award for a period of 24 months following the
Termination Date, based on the Executive's annual bonus opportunity for the year
of termination (excluding any overachievement bonus opportunity) payable in
equal installments over the 24-month period for which Base Salary is continued;
(4) the continued right to exercise any Special Stock Option for a
period of two years from the Termination Date, such Special Stock Option to
become fully exercisable as of the Termination Date;
(5) the continued right to exercise any outstanding stock option,
other than the Special Stock Option, for a period of 3 months from the
Termination Date, all such options to become fully exercisable as of the
Termination Date;
(6) the immediate distribution of all shares of restricted stock of
the Company, including the Special Restricted Stock Award, as of the Termination
Date;
(7) 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 permitted under such plan;
(8) an amount equal to the excess of (i) 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 for a period of 24 months
following the Termination Date 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 24-month separation period,
over (ii) 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 the
early commencement of pension payments based on the Executive's age on the last
day of the 24th month following the Termination Date;
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(9) immediate vesting in the Company's Retirement Savings Plan (or
any successor 401(k) plan), pension plan, supplemental retirement plan and
deferred compensation plans;
(10) continued participation, through the second anniversary of the
Termination Date, in all medical, dental, vision, hospitalization, disability
and life insurance coverages and in all other employee welfare benefit plans,
programs and arrangements in which she or her family members were participating
on such date, on terms and conditions that are no less favorable to her than
those that applied on such date and with COBRA benefits commencing thereafter,
provided that the Company's obligation under this Section 8(F)(10) shall be
reduced to the extent that equivalent coverages and benefits (determined on a
coverage-by-coverage and benefit-by-benefit basis) are provided under the plans,
programs or arrangements of a subsequent employer; and
(11) the benefits described in Section 8(I)(1).
For purposes of this Section 8(F), if preceded by a Potential Change
in Control, any of the following events (if such event occurs within two years
following such Potential Change in Control) shall be deemed to be a termination
of Executive's employment without Cause following a Change in Control: (i) the
Executive's employment is terminated without Cause and such termination is 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; ii) the Executive's employment is terminated
through a Constructive Termination Without Cause and the circumstances or events
which constitute the basis for Executive's claim of Constructive Termination
occur at the request or direction of, or pursuant to negotiations with, such
Person; iii) the Executive's employment is terminated at the end of the Term of
Employment as a result of the Company's failure to offer to renew this Agreement
on terms at least as favorable to the Executive as the terms set forth herein,
and such failure occurs at the request or direction of, or pursuant to
negotiations with, such Person; or (iv) the Executive's employment is terminated
without Cause and such termination is otherwise in connection with or in
anticipation of a Change in Control which actually occurs.
The Company agrees that the Executive is not required to seek other
employment or to attempt in any way to reduce amounts payable to Executive under
this Section 8(F), and the amounts payable to pursuant to this Section 8(F)
shall not be reduced by any amounts earned by or payable to Executive, except as
provided in Section 8(F)(10).
(G) Voluntary Termination. In the event that the Executive
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terminates her employment with the Company on her own initiative (other than by
death, for Disability, by a Constructive Termination Without Cause, or as a
result of the Company's failure to offer to renew this Agreement at the end of
the Term of Employment on terms at least as favorable to Executive as the terms
set forth herein), then she shall have the same entitlements as provided in
Section 8(C)(2) in the case of a termination by the Company for
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Cause. A voluntary termination under this Section 8(G) shall be effective upon
written notice to the Company and shall not be deemed a breach of this
Agreement.
(H) Termination by the Expiration of the Term of Employment. In the
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event that the Executive's employment hereunder is terminated due to the
Company's failure to renew this Agreement on terms at least as favorable to
Executive as the terms set forth herein, such termination shall be considered a
termination by the Company Without Cause, and the Executive shall be entitled to
the benefits set forth in Section 8(D). Accordingly, if the Company offers to
renew this Agreement on terms identical to or more favorable than the terms of
this Agreement, and Executive fails to accept such offer and her employment with
the Company terminates as a result thereof at the end of the Term of Employment,
she shall have the same entitlements upon such termination as provided in
Section 8(C)(2) for a termination by the Company for Cause. For purposes of
determining whether the terms of renewal are identical to, more favorable than,
or less favorable than the terms of this Agreement, the long-term incentive
awards set forth in Section 6(A), 6(B) and 6(C) of this Agreement shall not be
taken into consideration.
(I) Miscellaneous.
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(1) On any termination of the Executive's employment hereunder,
she shall be entitled to:
(a) Base Salary through the Termination Date;
(b) any amounts due her under Section 7;
(c) a lump-sum payment in respect of accrued but unused
vacation days at her Base Salary rate in effect as of the Termination Date;
(d) payment, promptly when due, of all amounts owed to her
in connection with the termination; and
(e) other benefits, if any, in accordance with applicable
plans, programs and arrangements of the Company, provided that Executive shall
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not be eligible to receive payments under any severance program of the Company
applicable to employees generally.
(2) Any amounts due under this Section 8 are considered to be
reasonable by the Company and are not in the nature of a penalty.
9. Golden Parachute Tax. In the event that any payment or benefit
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made or provided to or for the benefit of the Executive in connection with this
Agreement, the Executive's employment with the Company, or the termination
thereof (a "Payment") is determined to be subject to any excise tax ("Excise
Tax") imposed by Section 4999 of the Code (or any successor to such Section),
the Company shall pay to the Executive, prior to the time any Excise Tax is
payable with respect to such Payment (through withholding or
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otherwise), an additional amount which, after the imposition of all income,
employment, excise and other taxes, penalties and interest thereon, is equal to
the sum of (i) the Excise Tax on such Payment plus (ii) any penalty and interest
assessments associated with such Excise Tax. The determination of whether any
Payment is subject to an Excise Tax and, if so, the amount to be paid by the
Company to the Executive and the time of payment shall be made by an independent
auditor (the "Auditor") selected jointly by the Parties and paid by the Company.
Unless the Executive agrees otherwise in writing, the Auditor shall be a
nationally recognized United States public accounting firm that has not, during
the two years preceding the date of its selection, acted in any way on behalf of
the Company or any of its Affiliates. If the Parties cannot agree on the firm to
serve as the Auditor, then the Parties shall each select one accounting firm and
those two firms shall jointly select the accounting firm to serve as the
Auditor.
10. Indemnification; D&O Insurance.
------------------------------
(A) Indemnification. The Company agrees that (i) if the Executive is
---------------
made a party, or is threatened to be made a party, to any Proceeding by reason
of the fact that she is or was a director, officer, employee, agent, manager,
consultant or representative of the Company or is or was serving at the request
of the Company or any of its Affiliates as a director, officer, member,
employee, agent, manager, consultant or representative of another Person or (ii)
if any Claim is made, or threatened to be made, that arises out of or relates to
this Agreement or the Executive's service hereunder or in any of the foregoing
capacities, then the Executive shall promptly be indemnified and held harmless
by the Company to the fullest extent legally permitted or authorized by the
Company's Articles of Incorporation, Code of Regulations or Board resolutions or
by the laws of the State of Ohio, against any and all costs, expenses,
liabilities and losses (including, without limitation, attorney's fees,
judgments, interest, expenses of investigation, penalties, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) incurred or
suffered by the Executive in connection therewith, and such indemnification
shall continue as to the Executive even if she has ceased to be a director,
member, employee, agent, manager, consultant or representative of the Company or
other Person and shall inure to the benefit of the Executive's heirs, executors
and administrators. The Company shall advance to the Executive all costs and
expenses incurred by her in connection with any such Proceeding or Claim within
20 days after receiving written notice requesting such an advance. Such notice
shall include, to the extent required by applicable law, an undertaking by the
Executive to repay the amount advanced if she is ultimately determined not to be
entitled to indemnification against such costs and expenses.
(B) D&O Insurance. During the Term of Employment and for a period of
-------------
six years thereafter, the Company shall keep in place a directors' and officers'
liability insurance policy (or policies) providing comprehensive coverage to the
Executive to the extent that the Company provides such coverage for any other
senior executive or director.
14
11. Covenants.
---------
(A) Confidentiality. During the Term of Employment and thereafter,
---------------
the Executive shall not, without the prior written consent of the Company,
divulge, disclose or make accessible to any Person any confidential non-public
document, record or information concerning the business or affairs of the
Company that she has acquired in the course of her employment hereunder, except
(i) to the Company or to any authorized (or apparently authorized) agent or
representative of the Company, (ii) in connection with performing her duties
under this Agreement, or (iii) when required to do so by law or by a court,
governmental agency, legislative body, or other Person with apparent
jurisdiction to order her to divulge, disclose or make accessible such
information; provided that these restrictions shall not apply to any document,
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record or other information that (i) has previously been disclosed to the
public, or is in the public domain, other than as a result of the Executive's
breach of this Section 11(A), or (ii) is known or generally available within any
trade or industry of the Company.
(B) Non-Solicitation. During the 24-month period that commences on
----------------
the Termination Date and ends on the second anniversary of the Termination Date,
without the prior consent of the Company the Executive shall not:
(a) solicit, on her own behalf or on behalf of any other Person,
any individual known by the Executive to be an employee of the Company to
instead become an employee of any Person not affiliated with the Company; or
(b) solicit, on her own behalf or on behalf of any other Person,
any Person known by the Executive to be customer of, or vendor to, the Company
to instead become a customer of, or vendor to, any Person not affiliated with
the Company.
(C) Non-Competition. During the 24-month period that commences on
---------------
the Termination Date and ends on the second anniversary of the Termination Date,
the Executive shall not, without the prior consent of the Company, directly or
indirectly own, manage, operate, join, control or participate in the ownership,
management, operation or control of, or be employed by 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
Termination Date; 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".
The foregoing noncompetition restriction of this Section 11(C) shall
not apply following a Change of Control if (i) the Executive's employment has
been terminated by the Company without Cause within two years following such
Change in Control, (ii) the Executive terminates her employment as the result of
a Constructive Termination within two years following such Change in Control; or
(iii) the Executive's employment terminates at the end of the Term of Employment
within two years following such Change in Control as a
15
result of the Company's failure to offer to renew this Agreement on terms at
least as favorable to Executive as the terms set forth herein.
The foregoing noncompetition restriction of this Section 11(C) shall
not apply following a Potential Change in Control if: (i) the Executive's
employment is terminated without Cause within two years following such Potential
Change in Control, and such termination is 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; (ii)
the Executive's employment is terminated through a Constructive Termination
Without Cause within two years following such Potential Change in Control, and
the circumstances or events which constitute the basis for Executive's claim of
Constructive Termination occur at the request or direction of, or pursuant to
negotiations with, such Person, iii) the Executive's employment is terminated at
the end of the Term of Employment within two years following such Potential
Change in Control, as a result of the Company's failure to offer to renew this
Agreement on terms at least as favorable to Executive as the terms set forth
herein and such failure was at the request or direction of or pursuant to
negotiations with such Person; or (iv) the Executive's employment is terminated
without Cause within two years following such Potential Change in Control and
such termination is otherwise in connection with or in anticipation of a Change
in Control which actually occurs.
12. Assignability; Binding Nature.
-----------------------------
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of the Executive)
and assigns. No rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation in which
the Company is not the continuing entity, or a sale or liquidation of all or
substantially all of the assets of the Company; provided that the assignee or
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transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in this Agreement, either contractually or
as a matter of law. In the event of any sale of assets or liquidation as
described in the preceding sentence, the Company shall use its best efforts to
cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than her rights to compensation and benefits, which may be transferred
only by will or operation of law, except as provided in Section 16(E).
13. Representations.
---------------
(A) The Company's Representations. The Company represents and
-----------------------------
warrants that (i) it is fully authorized by action of its Board (and of any
other Person or body whose action is required) to enter into this Agreement and
to perform its obligations under it; (ii) the execution, delivery and
performance of this Agreement by the Company does not violate any applicable
law, regulation, order, judgment or decree or any agreement, plan or
16
corporate governance document of the Company; and (iii) upon the execution and
delivery of this Agreement by the Parties, this Agreement shall be the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except to the extent enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
(B) The Executive's Representations. The Executive represents and
-------------------------------
warrants that, to the best of her knowledge and belief, (i) delivery and
performance of this Agreement by her does not violate any applicable law,
regulation, order, judgment or decree or any agreement to which the Executive is
a party or by which she is bound, and (ii) upon the execution and delivery of
this Agreement by the Parties, this Agreement shall be the valid and binding
obligation of the Executive, enforceable against her in accordance with its
terms, except to the extent enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
14. Resolution of Disputes.
----------------------
Any Claim arising out of or relating to this Agreement or the
Executive's employment with the Company or the termination thereof shall be
resolved by binding confidential arbitration, to be held in Philadelphia,
Pennsylvania, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
15. Notices.
-------
Any notice, consent, demand, request, or other communication given to
a Person in connection with this Agreement shall be in writing and shall be
deemed to have been given to such Person (i) when delivered personally to such
Person or (ii), provided that a written acknowledgment of receipt is obtained,
two days after being sent by prepaid certified or registered mail, or by a
nationally recognized overnight courier, to the address specified below for such
Person (or to such other address as such Person shall have specified by ten days
advance notice given in accordance with this Section 15), or (iii) in the case
of the Company only, on the first business day after it is sent by facsimile to
the facsimile number set forth for the Company (or to such other facsimile
number as the Company shall have specified by ten days advance notice given in
accordance with this Section 15), with a confirmatory copy sent by certified or
registered mail or by overnight courier to the Company in accordance with this
Section 15.
If to the Company: IKON Office Solutions, Inc.
00 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Chief Executive Officer
Facsimile #: 000-000-0000
If to the Executive: Xxxxxxx Xxxxxx (at the last address known
17
to the Company with a copy to the Executive at the
Company's address)
If to a beneficiary The address most recently specified by the Executive or
of the Executive: beneficiary through notice given in accordance with this
Section 15.
16. Miscellaneous.
-------------
(A) Entire Agreement. This Agreement contains the entire
----------------
understanding and agreement between the Parties concerning the subject matter
hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the Parties with
respect thereto.
(B) Severability. In the event that any provision or portion of this
------------
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law so as to achieve the purposes of this Agreement.
(C) Amendment or Waiver. No provision in this Agreement may be
-------------------
amended unless such amendment is set forth in a writing signed by the Parties.
No waiver by either Party of any breach of any condition or provision contained
in this Agreement shall be deemed a waiver of any similar or dissimilar
condition or provision at the same or any prior or subsequent time. To be
effective, any waiver must be set forth in a writing signed by the waiving
Party.
(D) Headings. The headings of the Sections contained in this
--------
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
(E) Beneficiaries/References. The Executive shall be entitled, to
------------------------
the extent permitted under any applicable law, to select and change a
beneficiary or beneficiaries to receive any compensation or benefit hereunder
following the Executive's death by giving the Company written notice thereof. In
the event of the Executive's death or a judicial determination of her
incompetence, references in this Agreement to the Executive shall be deemed,
where appropriate, to refer to her beneficiary, estate or other legal
representative.
(F) Survivorship. Except as otherwise set forth in this Agreement,
------------
the respective rights and obligations of the Parties hereunder shall survive any
termination of the Executive's employment.
(G) Governing Law/Jurisdiction. This Agreement shall be governed,
--------------------------
construed, performed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania, without reference to principles of conflict of
laws.
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(H) Counterparts. This Agreement may be executed in two or more
------------
counterparts.
(I) Employee Benefit Plans. In the event that the terms of any of
----------------------
the Company's employee benefit plans provide for the vesting or distribution of
benefits on a date earlier than the date set forth in this Agreement, such
earlier date shall prevail.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
The Company
By: ______________________________
Title:
The Executive
_________________________________
Xxxxxxx Xxxxxx
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