Exhibit 10.49
EXHIBIT 10.49
EMPLOYMENT AGREEMENT
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AGREEMENT, made and entered into as of the 1st day of January, 2000 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 Xxxxxx XxXxxxxxx, who currently resides at 0 Xxxxxxx Xxxx,
Xxxxxx, XX 00000 (the "EXECUTIVE");
W I T N E S S E T H:
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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.
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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 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 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) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(I) "Common Stock" shall mean common stock of the Company.
(J) "Constructive Termination Without Cause" shall mean a termination
by the Executive of his/her employment hereunder on 30 days' written notice
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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 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 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;
(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 30 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
restricted stock, 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;
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(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
(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.
(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 January 1, 2000, 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 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.
(R) "Termination Date" shall mean the date on which the Executive's
employment hereunder terminates in accordance with this Agreement.
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(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 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, IKON North America; 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 Employment, Executive will (1) devote
substantial and full-time attention and energies to the business of the Company,
particularly to management of IKON North America, 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, IKON North America as
may be assigned to him/her by the CEO.
4. Base Salary.
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The Executive shall be paid an annualized Base Salary of $335,000,
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.
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. He/she shall be eligible for an annual bonus award
opportunity of no less than $250,000 (which may be adjusted and increased
annually) which shall be based upon the
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performance of the Company. 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. Long-Term Incentive Awards.
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Subject to the terms and conditions of this Agreement and the
applicable restricted stock agreement, the Company shall issue and distribute
30,000 shares of restricted Common Stock to the Executive, effective November
22, 1999, in the following installments and on the following dates:
Date Installment
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November 22, 2002 10,000 shares
November 22, 2003 10,000 shares
November 22, 2004 10,000 shares
Except as may otherwise be 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(s) described above.
Executive will have no rights as a shareholder with respect to such shares
unless and until such shares have been distributed to him/her.
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 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. In
addition, the Executive shall be entitled to an automobile allowance of $500 per
month and a reimbursement of reasonable country club fees and dues (including
all initiation fees) paid by the Executive.
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(D) Vacation. Executive shall be entitled to four weeks paid vacation
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per year and applicable carryover vacation in accordance with the Company's
policies.
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 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, all such options to become fully exercisable as of
the date of his/her death, and the immediate distribution 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(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, 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 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;
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(4) the continued right to exercise each outstanding stock option
for a period of 12 months, 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 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 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
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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;
(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.
(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 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) expiration and forfeiture of any stock options
unexercisable on the Termination Date and forfeiture of all shares of restricted
stock for which the applicable distribution date is after the Termination Date;
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(b) 30 days to exercise any stock option exercisable on the
Termination Date; 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;
(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) the continued right to exercise any stock option exercisable on
the Date of Termination for a period of 3 months from the Termination Date;
(4) expiration and forfeiture of any stock options unexercisable on
the Termination Date and forfeiture of all shares of restricted stock for which
the applicable distribution date is after the Termination Date;
(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
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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(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.
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(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;
(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 annual incentive award for a period of 24 months following
the Termination Date, based on the Executive's annual bonus award 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, all such options to become
fully 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 permitted 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
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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;
(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(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 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)(9).
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(G) Voluntary Termination. In the event that the Executive terminates
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his/her employment with the Company on his/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 on terms at
least as favorable to Executive as the terms set forth herein), 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) 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 to the Executive
than the terms of this Agreement, and Executive fails to accept such offer and
his/her employment with the Company terminates as a result thereof at the end of
the Term of Employment, he/she shall have the same entitlements upon such
termination as provided in Section 8(C)(2) for a termination by the Company for
Cause.
(I) Miscellaneous.
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(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, 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
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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
"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.
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(A) Indemnification. The Company agrees that (i) if the Executive is
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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 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 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.
13
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 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) 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, 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,
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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 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 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 his/her employment as the
result of a Constructive Termination within two years following such Change in
Control or (iii) the Executive's employment terminates within two years
following such Change in Control as a result of the Company's failure to
14
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
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. 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
15
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.
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: Xxxxxx XxXxxxxxx (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.
16
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 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.
17
(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
_________________________________
Xxxxxx XxXxxxxxx
00
