Dated , 1999
--------------------------------------------------
IKON OFFICE SOLUTIONS PLC
- and-
DAVID MILLS
- --------------------------------------------------------------------------------
SUPPLEMENTAL EXECUTIVE EMPLOYMENT AGREEMENT
- --------------------------------------------------------------------------------
ASFFURST MORRIS CRISP
Broadwalk House
5 Appold Street
London EC2A 2HA
Tel: 01 71 638 1111
Fax: 0 1 71 972 7990
Ref. OHBIAKGII30800826
THIS AGREEMENT is made on 1999
BETWEEN:
(1) IKON OFFICE SOLUTIONS PLC whose registered office is at IKON House, 30
Cowcross Street, London ECIM 6DQ (the "Company"); and
(2) DAVID MILLS of 2 Farley Park, Oxted, Surrey, RH8 9HY (the "Executive")
WHEREAS:
(A) By an executive employment agreement dated 22 October 1997 (the "Employment
Agreement"), the Executive is employed by the Company
(B) The Company and the Executive have agreed to amend the Employment Agreement
in the manner hereinafter appearing.
THE PARTIES AGREE AS FOLLOWS:
I. DEFINITIONS
In this agreement unless the context otherwise requires:
1.1 "Change of Control" means (subject to clause 3):
(i) any Person, together with its affiliates and associates (as
such terms are used in Rule 12b-2 of the US Securities
Exchange Act of 1934), is or becomes a Beneficial Owner (as
defined in Rule 13d-3 of the said Act) directly or
indirectly of 15% or more of either the then outstanding
shares of common stock of IKON, Inc.; or
(ii) the following individuals cease for any reason to constitute
a majority of the number of directors then serving on the
IKON, Inc. Board: individuals who on the date hereof,
constitute the IKON, Inc. Board and any new director whose
appointment or election by the IKON, Inc. Board or
nomination for election by IKON, Inc.'s shareholders was
approved by a vote of at least a majority of the directors
then still in office who either were directors on the date
hereof or whose appointment, election or nomination for
election was previously so approved; or
(iii) IKON, Inc. consolidates with, or merges with or into, any
other Person (other than a wholly owned subsidiary of IKON.
Inc.), or any other person consolidates with, or merges with
or into IKON, Inc., and, in connection therewith, all or
part of the outstanding shares of common stock of IKON, Inc.
shall be changed in any way or converted into or exchanged
for stock or other securities or cash or any other property;
or
(iv) a transaction or series of transactions in which, directly
or indirectly, IKON, Inc. shall sell or otherwise transfer
(or one or more of its subsidiaries shall sell or otherwise
transfer) assets (x) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (y)
generating more than 50% of the operating income or cash
flow of IKON, Inc. and its subsidiaries (taken as a whole)
to any other Person or group of Persons.
2
Notwithstanding the foregoing, no "Change of Control" shall
be deemed to have occurred if there is consummated any
transaction or series of integrated transactions immediately
following which the record holders of the common stock of
IKON, Inc. immediately prior to such transaction or series
of transactions own a majority of the outstanding voting
shares and in substantially the same proportion in any
entity which owns all or substantially all of the assets of
IKON, Inc. immediately following such transaction or series
of transactions.
1.2 "IKON, Inc." means IKON Office Solutions, Inc. an Ohio corporation with its
principal offices located at Malvem, Pennsylvania USA.
1.3 "Person" shall have the meaning given to it in section 3(a)(9) of the US
Securities Exchange Act of 1934 as modified and used in sections 13(d) and
14(d) thereof, except that such term shall not include (i) IKON, Inc. or
any of its affiliates (as defined in Rule 12b-2 promulgated under the said
Act), (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of IKON, Inc. or any of its affiliates, (iii) an
underwriter temporarily holding securities pursuant to the offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of IKON, Inc. in substantially the same proportions as their
ownership of stock of IKON, Inc.
1.4 "Separation Period" means the two year period (or such longer period as the
Human Resources Committee of the board of IKON, Inc. may determine)
beginning on the Termination Date (as defined in clause 3.2).
1.5 The definitions contained in the Employment Agreement apply in this
Agreement,
2. EMPLOYMENT AGREEMENT
2.1 Save as expressly varied by this Agreement the Employment Agreement shall
continue in force and effect.
3. CHANGE OF CONTROL
3.1 Notwithstanding article 1.2 of the Employment Agreement if within the
period of 24 months following a Change of Control and subject to clause 3.3
either:
(i) the Company serves notice on the Executive to terminate the
Employment Agreement whether or not with immediate effect (for
any reason save those stated at article 2.1 of the Employment
Agreement); or
(ii) the Executive is constructively dismissed by the Company (which,
without prejudice to the generality of the foregoing, shall be
deemed to have occurred where the Executive does not receive from
the person who effects the Change of Control either confirmation
that his employment with the Company shall continue on the terms
set out in Employment Agreement or where the Executive does not
receive within six months of the Change of Control from the
Person who effects the Change of Control suitable alternative
employment which is overall no less beneficial to the Executive
than his employment under the Employment Agreement. Suitable
alternative employment must include, but not be limited to, an
equivalent remuneration package (in terms of fixed salary, an
opportunity to
3
earn bonus and other benefits (including pension) and an
equivalent position to that held by the Executive prior to the
Change of Control);
then the Executive shall receive the Package (as stated in clause 3.2)
within 20 days of the date on which the condition is satisfied
("Termination Date");
3.2 The Package shall comprise the following:
(i) a payment equal to the target Contractual Bonus pro rata the
period served in the financial year (in which the Termination
Date occurs) to the Termination Date;
(ii) continued provision of private health insurance and life
insurance for the Separation Period on the terms provided at
Articles 3.2 and 3.3 of Addendum A of the Employment Agreement
(in the event that the Company is precluded from continuing such
provision it shall provide the Executive with a cash sum equal to
such amount as would enable the Executive to purchase such
provision). The provision of such benefit shall cease to the
extent that the Executive is already receiving or receives an
equivalent benefit from a source other than the Company;
(iii) a payment equal to the Base Salary payable as at the Termination
Date for the duration of the Separation Period;
(iv) a payment equal to the target Contractual Bonus payable as at the
Termination Date for the duration of the Separation Period;
(v) a payment equal to the difference between (i) value of the
benefits to which the Executive would be entitled under the
pension arrangements described at Article 3.3 of Addendum A of
the Employment Agreement if the Executive had continued working
for the Company during the Separation Period, and (ii) the value
of the benefits to which the Executive is actually entitled under
the pension arrangements described at Article 3.3 of Addendum A
of the Employment Agreement as at the Termination Date. This
calculation shall be made by the Company's actuaries as at the
Termination Date.
(vi) notwithstanding any provision of IKON, lnc.'s LTIP to the
contrary, the Executive shall be fully vested in all conditional
awards under the LTIP and the Company shall pay to the Executive
a lump sum amount, in cash, equal to the total of any incentive
compensation which has been allocated or awarded to the Executive
for a measuring period which commenced prior to the Termination
Date under the IKON, Inc. LTIP but which, as of the Termination
Date, is contingent only upon the continued employment of the
Executive to a subsequent date and/or upon achievement of
performance goals and which otherwise has not been paid, computed
as if all performance goals have been or will be achieved to the
maximum extent, in lieu of any payment of such incentive
compensation under the IKON, Inc. LTIP, and without proration;
provided, however, that the foregoing amount shall be paid only
to the extent, and in the amount, not already paid under the
terms of the IKON, Inc. LTIP;
(vii) full vesting in all stock options, including options granted
after the date of this Agreement which, to the extent not
previously vested under the terms of the IKON, Inc. stock option
plans, shall be exercisable beginning on the Termination Date;
and
4
(viii) waiver of all or any claims that the Company or any Group Company
may have in respect of Article 4 of the Employment Agreement.
3.3 In the event of disability or death, Article 2.3 of the Employment
Agreement shall continue to apply to the exclusion of the provisions of
this clause.
3.4 The provision of the Package shall be without prejudice to the Executive's
right to payment of accrued Base Salary, Contractual Bonus and other
Contractual Entitlements (each of Base Salary, Contractual Bonus and other
Contractual Entitlements as set out in Addendum A of the Employment
Agreement) to the Termination Date.
3.5 The payments (being part of the Package) due under clause 3.2 shall be
payable less any sums paid to the Executive under Articles 1.2.2, 1.2.3 and
4.2.1 of the Employment Agreement and less tax and other statutory
deductions which the Company is obliged to deduct from such payment and/or
benefit.
3.6 The Package shall be accepted by the Executive in full and final settlement
of all and any claims that the Executive may have arising out of his
employment with the Company or its termination.
3.7 Following the Termination Date the Company shall reimburse the Executive
for all his reasonable legal fees and other expenses incurred by him
relating to the Executive's rights and obligations under this Agreement.
The Company shall reimburse the Executive for all such reasonable legal
fees and expenses no later than five business days after delivery of the
Executive's written requests for payment accompanied with such evidence of
fees and expenses incurred as the Company reasonably may require.
4. RECONSTRUCTION AND AMALGAMATION
Without prejudice to clause 3 if at any time the Executive's employment is
terminated in connection with any reconstruction or amalgamation of the
Company or any of the subsidiary companies whether by winding up or
otherwise and the Executive receives an offer on terms which (considered in
their entirety) are not less favorable to any material extent than the
terms of this agreement from a company involved in or resulting from such
reconstruction or amalgamation the Executive shall have no claim whatsoever
against the Company or any such company arising out of or connected with
such termination.
IN WITNESS whereof this Agreement has been executed as a deed on the date first
above written
Signed as a Deed by IKON OFFICE )
SOLUTIONS PLC in the presence )
Of: )
Director
Signed as a deed by the said
DAVED MILLS in the
5
Witness Signature ............................................
Name ............................................
Address ............................................
............................................
Occupation ............................................
6