EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the 1st day of March, 2002 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 Xxxxx X. Xxxxx, who currently resides at 0 Xxxxxxxxxxxx Xxxx,
Xxxxxxx, XX 00000 (the "Executive");
W I T N E S S E T H:
WHEREAS, the Company desires to continue to employ the Executive and to
enter into an agreement embodying the terms of such employment;
WHEREAS, the Executive desires to accept continuation of 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.
(A) "Affiliate" of a Person shall mean a Person who 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 his/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 his/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 20% 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 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 sale, merger, consolidation or other transaction or
series of transactions (unless the shareholders of the Company immediately prior
to such sale, 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
not the surviving corporation or 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) "Committee" shall mean the Human Resources Committee of
the Board;
(I) "Common Stock" shall mean common stock of the Company.
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(J) "Constructive Termination Without Cause" shall mean a
termination by the Executive of his/her employment hereunder (including, without
limitation, termination by retirement) on 30 days' written notice given by
him/her to the Company following the occurrence, without his/her prior written
consent, of any of the following events, unless the Company (or, if applicable,
its successor) shall have fully cured all grounds for such termination within 15
days after the Executive gives notice thereof:
(1) any reduction in his/her then current Base Salary
or in his/her annual incentive 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 him/her to any of the positions described in Section
3(A); the removal of him/her during the term of this Agreement from any such
position; or any change in the reporting structure so that he/she reports to
someone other than the Chief Executive Officer of the Company;
(4) any material diminution in his/her duties or the
assignment to him/her of duties that materially impair his/her ability to
perform his/her duties or are inconsistent with his/her status as a senior
executive officer;
(5) following any Change in Control, any relocation
of the Company's principal office, or of his/her own office as assigned to
him/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 the vacation allowance provided in
Section 7 with respect to the Executive;
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(8) following any Change in Control, any failure to
elect Executive as Chief Information Officer of 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
(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 as part of
any merger, consolidation, sale or similar transaction. The Company shall notify
Executive of such failure at the time of such merger.
(K) "Disability" shall mean Total Disability as defined in the
Company's Long-Term Disability Plan, as amended from time to time.
(L) "Effective Date" shall mean March 1, 2002, or such other
date as the Parties may mutually agree to.
(M) "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.
(N) "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.
(O) "Proceeding" shall mean any threatened, pending or actual
action, suit or proceeding, whether civil, criminal, administrative,
investigative, appellate or other.
(P) "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 incentive bonus
award) and the denominator of which shall be the number of days in the
applicable performance period.
(Q) "Term of Employment" shall mean the period specified in
Section 2.
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(R) "Termination Date" shall mean the date on which the
Executive's employment with the Company terminates in accordance with this (or
any subsequent) Agreement.
(S) "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 Agreement.
The Company hereby agrees to continue to employ the Executive under this
Agreement, and the Executive hereby accepts such continued employment, for the
Term of Agreement. The initial Term of Agreement shall commence as of the
Effective Date and shall end on the second anniversary thereof. Thereafter, the
Term of Agreement shall be automatically extended for additional one-year
periods ("extension periods") unless either party provides notice of non-renewal
at least sixty (60) days prior to the expiration of the Initial Term or
extension period. Termination of Executive's employment as a result of
non-renewal by the Company shall be treated as a termination subject to the
provisions of Section 8(D) (Termination without Cause) of this Agreement. Notice
of non-renewal by Executive shall be treated as a termination subject to the
provisions of Section 8(G) (Voluntary Termination) of this Agreement.
Notwithstanding the foregoing, the Term of Agreement may be terminated at any
time prior to the expiration of the Initial Term and/or any extension period in
accordance with the provisions of Section 8.
3. Positions, Duties and Responsibilities.
(A) During the Term of Agreement, the Executive shall serve as
Senior Vice President and Chief Information Officer 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 him/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 his/her ability to discharge, the foregoing
duties and responsibilities; and shall report solely and directly to the CEO.
(B) During the Term of Agreement, Executive will (1) devote
substantial and full-time attention and energies to the business of the Company,
particularly to its information technology function, and diligently perform all
duties incident to his/her employment; (2) use his/her best efforts to promote
the interests and goodwill of the Company; and (3) perform such duties
commensurate with his/her office as Senior Vice President and Chief Information
Officer of the Company as may be assigned to him/her by the CEO.
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4. Base Salary.
The Executive shall be paid an annualized Base Salary of
$300,000, payable in accordance with the regular payroll practices of the
Company. The Base Salary shall be reviewed no less frequently than annually for
increase in the discretion of the CEO and, if applicable, the Board.
5. Annual Incentive Award Opportunity.
The Executive shall be eligible for an annual incentive bonus
award opportunity from the Company in respect of each fiscal year of the Company
that ends during the Term of Agreement. He/she shall be eligible for an annual
incentive bonus award opportunity of no less than $215,000 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 award opportunity. To the extent
earned, the Executive shall be paid his/her annual incentive awards at the same
time that other senior-level executives receive their incentive awards.
6. [ Intentionally left blank ]
7. Other Benefits.
(A) Other Executive Compensation Plans. During the Term of
Agreement, the Executive shall be entitled to participate in all compensation
plans and programs that are, from time to time, made generally available to
senior executives of the Company, including, without limitation, the Executive
Deferred Compensation Plan.
(B) Employee Benefits. During the Term of Agreement, the
Executive shall participate in all employee benefit plans and programs made
available generally to the Company's senior executives, including, without
limitation, pension, savings 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
expenses in carrying out his/her duties and responsibilities hereunder and the
Company shall promptly reimburse him/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
vacation per year.
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8. Termination of Employment.
(A) Termination Due to Death. In the event that the
Executive's employment hereunder is terminated due to his/her death, his/her
estate or his/her beneficiaries (as the case may be) shall be entitled to:
(1) Base Salary through the end of the month in which
his/her death occurs;
(2) a Pro-Rata annual incentive bonus award for the
fiscal year in which his/her death occurs, based on the Executive's annual
incentive bonus award opportunity for the year of death (excluding any
overachievement bonus award opportunity), payable in a lump sum promptly
following his/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 for a period of 12 months (provided, however, that no options can
be exercised beyond their expiration date), all such options to become fully
vested and exercisable as of the date of his/her death, and the immediate
vesting of all shares of restricted stock as of the date of his/her death;
(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(H)(1).
(B) Termination Due to Disability. In the event that the
Executive's employment hereunder is terminated due to Disability, he/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 bonus award for the
fiscal year in which his/her Termination Date occurs, based on the Executive's
annual incentive bonus award 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 for a period of 12 months (provided, however, that no options can
be exercised beyond their expiration date), all such options to become fully
vested and exercisable as of the Termination Date, and the immediate vesting of
all shares of restricted stock as of the Termination Date; and
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(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 he/she was
participating on the date on which his/her employment terminates, on terms and
conditions that are no less favorable to him/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) 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
(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(H)(1).
No termination of the Executive's employment for
Disability shall be effective until the Company first gives 15 days written
notice of such termination to Executive.
(C) Termination by the Company for Cause.
(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 him/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 he/she fails
to cure such grounds, his/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), he/she shall be entitled to:
(A) 30 days to exercise any stock option
which is vested and exercisable on the Termination Date (provided, however, that
no options shall be exercisable after their expiration date). All stock options
which are not vested and exercisable as of the Termination Date will be
forfeited, and all restricted stock which has not vested and been distributed as
of the Termination Date will be forfeited; and
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(B) the benefits described in Section
8(H)(1).
(D) Termination Without Cause. In the event that the
Executive's employment hereunder is terminated by the Company without Cause and
Sections 8(A) (death), (B) (disability) and (F) (change in control) 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;
(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;
(3) an amount equal to twice the Executive's annual
bonus opportunity for the year of termination (excluding any overachievement
bonus opportunity), payable in equal installments over the two-year period
ending on the second anniversary of the Termination Date;
(4) the continued right to exercise any vested and
exercisable stock option for a minimum period of 12 months from the Termination
Date (provided, however, that no options can be exercised after their expiration
date). During the 12-month period following the Termination Date, all unvested
stock options will continue to vest as if the Executive were still employed with
the Company. All stock options which are not vested or exercised as of 12 months
following the Termination Date will be forfeited. In addition, all restricted
stock which has not been distributed as of the Termination Date will be
forfeited;
(5) 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 he/she or
his/her family members were participating on such date, on terms and conditions
that are no less favorable to him/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 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(H)(1).
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(E) Constructive Termination Without Cause. In the event that:
(i) a Constructive Termination Without Cause occurs and (ii) Section 8(F)
(change in control) 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
Potential Change in Control. In the event that: (i) the Executive's employment
hereunder is terminated (A) through a Constructive Termination without Cause or
(B) by the Company without Cause 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;
(2) a Pro-Rata annual incentive bonus award for the
fiscal year in which the Termination Date occurs based on the Executive's annual
incentive bonus award 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;
(3) an amount equal to twice the Executive's annual
bonus opportunity for the year of termination (excluding any overachievement
bonus award opportunity) payable in equal installments over the 24-month period
for which Base Salary is continued;
(4) the continued right to exercise any outstanding
stock option for a period of 3 months from the Termination Date (provided,
however, that no options may be exercised after their expiration date), all such
options to become fully vested and exercisable as of the Termination Date;
(5) the immediate vesting of all shares of restricted
stock of the Company as of the Termination Date;
(6) 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
twenty-four months following the Termination Date ("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 plan;
(7) 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 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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(8) immediate vesting in the Company's Retirement
Savings Plan (or any successor 401(k) plan), pension plan, supplemental
retirement plan and deferred compensation plans;
(9) 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 he/she or his/her family members were participating on
such date, on terms and conditions that are no less favorable to him/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)(9) 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
(10) the benefits described in Section 8(H)(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, 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 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)(9).
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(G) Voluntary Termination. In the event that the Executive
terminates his/her employment with the Company on his/her own initiative (other
than by death, for Disability, by a Constructive Termination without Cause),
then he/she shall have the same entitlements as provided in Section 8(C)(2) in
the case of a termination by the Company for 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) Miscellaneous.
(1) On any termination of the Executive's employment
hereunder, he/she shall be entitled to:
(A) Base Salary through the Termination
Date;
(B) any amounts due him/her under Section 7;
(C) a lump-sum payment in respect of accrued
but unused vacation days at his/her Base Salary rate in effect as of the
Termination Date;
(D) payment, promptly when due, of all
amounts owed to him/her in connection with the termination; and
(E) other benefits, if any, in accordance
with applicable plans, programs and arrangements of the Company. This provision
will permit the Executive to elect to take advantage of any provisions of, or
changes to, the IKON benefit plans which are applicable to IKON employees
generally (including, without limitation, provisions relating to the
vesting/exercisability of stock options in the event of retirement or
disability), provided that Executive opts to have such general provisions
applied on his/her behalf instead of those set forth in this Agreement. In no
event, however, will this provision entitle Executive to duplicative or double
benefits, nor shall he/she 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 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 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
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"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 he/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 for any Claims
brought by a third party against the Executive 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 he/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 him/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
he/she is ultimately determined not to be entitled to indemnification against
such costs and expenses.
(B) D&O Insurance. During the Term of Agreement 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.
11. Covenants.
(A) Confidentiality. During the Term of Agreement 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 he/she has acquired in the course of his/her employment
hereunder, except (i) to the Company or to any authorized (or apparently
authorized) agent or representative of the Company, (ii) to authorized third
parties in connection with performing his/her duties under this Agreement, or
(iii) when required to do so by law or by a court, governmental agency,
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legislative body, or other Person with apparent jurisdiction to order him/her to
divulge, disclose or make accessible such information; provided that these
restrictions shall not apply to any document, 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, the Executive shall not without the prior consent of the
Company:
(a) solicit, on his/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 his/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 cease to be a customer or vendor of the Company and/or to
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 Event if (a) the Executive's
employment has been terminated by the Company without Cause within two years
following such Change in Control Event, (b) the Executive terminates his/her
employment as the result of a Constructive Termination within two years
following such Change in Control Event or (c) the Company elects, within two
years following such Change in Control Event, not to extend the term of
employment.
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 Discharge
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 Discharge occur at the request or direction of, or pursuant to
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negotiations with, such Person, iii) the Company elects, within two years
following such Potential Change in Control, not to extend the term of
employment, and such election 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 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 his/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 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 his/her knowledge and belief, (i) delivery and
performance of this Agreement by him/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 he/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 him/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.
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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. Pending
the resolution of any Claim (and provided that Executive is not in breach of his
post-termination obligations under this Agreement), the Executive (and his
beneficiaries) shall be advanced any payments which are allegedly due under the
Agreement (with the timing of such payments to be made in accordance with terms
of this Agreement). Any amounts advanced under this Section 14 will be subject
to offset by the Company from any award obtained by the Executive (and/or
reimbursement by the Executive to the Company in the event that his award (if
any) is less than the amount advanced).
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: Xxxxx X. Xxxxx, at the last address known
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.
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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. Executive specifically agrees that he/she is not entitled to
any relief under Section 8(H) of his/her prior Employment Agreement, dated April
1, 2000.
(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 his/her
incompetence, references in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his/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.
(H) Counterparts. This Agreement may be executed in two or
more counterparts.
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(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: ______________________________
Xxxxx X. Xxxxxx
Chairman & CEO
The Executive
_________________________________
Xxxxx X. Xxxxx
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