EXHIBIT 10.33
January 1, 1998
IKON OFFICE SOLUTIONS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
THE PLAN
IKON Office Solutions, Inc. ("IKON") (formerly known as Alco Standard
Corporation) is offering to certain of its employees the opportunity to
participate in the IKON Office Solutions, Inc. Executive Deferred Compensation
Plan (the "Plan"), pursuant to which participants may defer a portion of their
compensation and receive payment on a future date specified by them.
The full text of the Plan is set forth beginning on page 11 of this
document. This document sets forth information about the Plan, but should be
read in conjunction with the text of the Plan itself.
IKON's principal office is located at 70 Valley Stream Parkway, Malvern,
Pennsylvania 19355. Its telephone number is (610) 296-8000. IKON's federal tax
identification number is 23-0334400.
ELIGIBILITY
You are eligible to participate in the Plan if you are:
--An employee of IKON;
--Holding an unvested award under IKON's Long Term Incentive Compensation
Plan ("LTIP"); and
--A U.S. taxpayer.
ELECTION TO PARTICIPATE
Participation in the Plan is voluntary. To participate, you must sign an
election form ("Election Form") which expresses your commitment to participate
in the Plan for the following calendar year and sets forth (a) the amount and
type of compensation you want to defer (e.g., salary, bonus, LTIP payout), (b)
how such deferred compensation should be "invested", (c) when the deferred
compensation should be paid to you and (d) a beneficiary to whom payments should
be made in the event of your death. You may also be required to sign additional
forms, if requested by the Plan Administrator.
DEFERRAL AMOUNT
In your Election Form, you may elect to defer receipt of all or a portion
of your salary
and/or annual bonus to be earned during the following calendar year and all or a
portion of any shares of IKON common stock or cash that you earn as an LTIP
payout during the following calendar year. If you elect to defer cash
compensation, the amount you elect to defer must be projected to be at least
$5,000. There is no maximum limit on your deferrals.
Deferrals from salary will generally be deducted through payroll deduction
in substantially equal installments. If you terminate employment with IKON,
your deferral of salary will immediately cease.
DEFERRAL ELECTION
Before the end of each calendar year during which you meet the eligibility
requirements for participating in the Plan, you will receive an Election Form
and will have the opportunity to elect to defer compensation to be earned in the
following calendar year until such future date (or dates) as you may specify in
your Election Form. Amounts must be deferred until at least January of the year
following the year in which the compensation would have been paid but for the
election to defer. You may defer receipt of your compensation to any date (or
dates) thereafter that is not later than January following the year in which you
reach age 60, or, if later, January following the year in which you retire from
IKON.
All distributions will be made in a lump sum in January of the year
specified in your Election Form, valued as of the preceding December 31. If you
prefer, you may elect to receive distributions in substantially equal annual
installments over a period not to exceed ten years, beginning in January of the
year specified in your Election Form. You may elect to defer the distribution
of your benefits to a later date by providing written notice to the
Administrator by December 31 of the second year prior to the date specified in
your Election Form, but such election may be made only once with respect to the
deferral pursuant to any Election Form.
INVESTMENT ACCOUNTS
CASH ACCOUNT. Cash amounts that you defer under the Plan will be credited
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to a cash deferral account ("Cash Account") established by IKON in your name.
Your Cash Account will be "indexed," or credited with earnings based on the
performance of various investment alternatives selected by you. In other words,
IKON will measure the performance of these funds, and will credit your account
accordingly. IKON may, but is not obligated to, use participant deferrals to
invest in the investment funds described below (IKON's current intention is to
use participant deferrals to purchase life insurance on the lives of employees
participating in the Plan). You will at all times remain a general unsecured
creditor of IKON.
In your Election Form, you may allocate your Cash Account balance among one
or more of the following alternatives (or such other alternatives as IKON may
designate from time to time), in any combination of whole percentages adding up
to 100%. No amounts in your Cash Account may be allocated to IKON common stock.
LARGE CAP VALUE
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1. VALUE EQUITY (NB) ALTERNATIVE - Seeks to provide above-average long-term
total return relative to the broad equity market and other value-oriented funds.
Common stocks are selected via a combination of systematic valuation processes
and individual security analysis. This Alternative's objective is to identify
equity issues that are inexpensively priced based upon measures such as
price/earnings, price/book or price/cash flow. (Adviser: Neuberger & Berman)
2. VALUE EQUITY (MS) ALTERNATIVE - Common stocks are selected through
quantitative analysis. Screens rank stocks based upon price/earnings ratios
with least expensive issues determining portfolio holdings. (This Alternative
is new to IKON as of 1/1/98. Adviser: Morgan Stanley)
LARGE CAP GROWTH
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3. GROWTH ALTERNATIVE - Seeks capital growth through investment in common
stocks of financially sound companies believed to have above average earnings or
otherwise provide above average potential for capital appreciation. Stocks with
greater than average market growth but undervalued by the market are candidates
for purchase. (Adviser: Neuberger & Berman)
4. S&P 500 ALTERNATIVE (previously labeled Quality Equity Portfolio
Alternative) - Seeks a return consistent with the Standard & Poor 500.
Portfolio duplicates the holdings and sector weights of the S&P 500 Index.
(This Alternative is new to IKON as of 1/1/98. Adviser: Fidelity Group)
5. CAPITAL APPRECIATION ALTERNATIVE - Seeks long-term capital appreciation by
investing in equity securities of companies generally with a market
capitalization in excess of $1 billion that demonstrate above average growth in
unit volume. (Adviser: The Alger Group)
MID-CAP GROWTH
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6. MID-CAP GROWTH ALTERNATIVE - Seeks, primarily through capital appreciation,
an above average long-term rate of return relative to broad market indices and
similar mid-cap funds. Positive revisions to earnings estimates are the key
factor in identifying possible holdings. (Adviser: Morgan Stanley as of
1/1/98)
SMALL CAP GROWTH
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7. SMALL-CAP ALTERNATIVE (previously labeled Equity Growth Portfolio
Alternative) - Seeks long-term capital growth through investment in small,
growth companies. This Alternative's objective is to identify companies with
the potential to expand market share in rapidly growing industries. (Adviser:
Bankers Trust as of 1/1/98)
INTERNATIONAL EQUITY
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8. GLOBAL EQUITY ALTERNATIVE - Seeks an attractive long-term rate of return
principally through equity securities of companies listed on U.S. and
international stock exchanges. Primary criteria for stock selection is an
inexpensive valuation based on price/earnings, price/book or price/cash flow
ratios. (This Alternative is new to IKON as of 1/1/98. Adviser: Morgan
Stanley)
9. INTERNATIONAL EQUITY ALTERNATIVE - Seeks long-term capital appreciation
primarily from non-U.S. equities and other securities with characteristics
similar to equities. This Alternative's investment approach is to identify
countries or regions with attractive growth prospects. Once identified,
equities with the potential to benefit from such trends are considered for
purchase. (Adviser: Bankers Trust as of 1/1/98)
10. EMERGING MARKET ALTERNATIVE - Seeks long-term capital appreciation in
markets other than the U.S., Canada, Japan, Australia, New Zealand and Western
Europe through aggressive positions in countries with the potential for rapid
growth. (This Alternative is new to IKON as of 1/1/98. Adviser: Morgan
Stanley)
BALANCED FUND
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11. ASSET MANAGER ALTERNATIVE (previously labeled Balanced Portfolio
Alternative) - Seeks to provide high total return with reduced risk through
long-term asset allocation in larger companies. Manager uses a broad range of
global investment alternatives while maintaining an overall asset mix
approximating 50% equities, 40% fixed income and 10% cash. (Adviser: Fidelity
Group as of 1/1/98)
BONDS
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12. LIMITED MATURITY BOND ALTERNATIVE - Seeks to achieve the highest current
income consistent with low risk to principal and liquidity through investment in
a diversified group of short to intermediate term debt securities with average
maturity of less than five years. (Adviser: Neuberger & Berman)
13. FIXED INCOME ALTERNATIVE (previously labeled Government Income Portfolio
Alternative) - Seeks to provide investors with an above average total return
relative to the intermediate maturity fixed income market via strategic shifts
in portfolio duration and value investing. (Adviser: Morgan Stanley as of
1/1/98)
14. HIGH YIELD ALTERNATIVE (previously labeled High Current Income Portfolio
Alternative) - Seeks above average long-term return relative to the high yield
fixed income market through diversified investments primarily in below-
investment grade corporate bonds selected based on the credit worthiness of the
underlying companies. (Adviser: Morgan Stanley as of 1/1/98)
SHORT TERM
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15. MONEY MARKET ALTERNATIVE (previously labeled Short Term Portfolio
Alternative) - Seeks maximum current income consistent with liquidity and
preservation of capital via money market
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securities. (Adviser: Fidelity Group as of 1/1/98)
You will receive additional information for each of the above Alternatives from
the Plan Administrator. The above descriptions are qualified in their entirety
by reference to such information.
You may change your allocation among the various alternatives once during
any calendar month. Any change you request by the 25th day of a month will
become effective as of the first day of the next calendar month.
THE VALUE OF THE BENEFIT YOU ULTIMATELY RECEIVE UNDER THE PLAN DEPENDS ON
THE RETURNS CREDITED TO YOUR ACCOUNT, BASED ON YOUR SELECTION OF ALTERNATIVES.
THERE IS NO GUARANTEED RATE OF RETURN ON YOUR ACCOUNT UNDER THE PLAN.
STOCK ACCOUNT. Shares of IKON common stock that you defer under the Plan
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will be credited to a stock deferral account ("Stock Account") established by
IKON in your name. The Stock Account will be denominated in share units
(representing the right to receive an equivalent number of shares of IKON common
stock). Whenever cash dividends are paid in respect of IKON common stock, the
amount of such dividends will be credited to your Stock Account in the form of
additional share units.
IKON intends to contribute all shares of IKON common stock deferred
pursuant to the Plan to a so-called rabbi trust. The rabbi trust will be deemed
to be the owner of such shares for corporate law purposes (but if you are an
officer of IKON, you may continue to report such shares on your Form 4 filings).
The trustee of the rabbi trust will have all of the rights of ownership of the
shares, including the right to vote and to receive dividends in respect of such
shares. The trustee is expected (but not obligated) to reinvest cash dividends
paid in respect of shares held in the trust to purchase additional shares of
IKON common stock. Shares held in the trust will be subject to the claims of
IKON's creditors.
Shares of IKON common stock that you defer into your Stock Account on or
after January 1, 1997 will be denominated in share units in your Stock Account
until you receive a distribution.
With respect to shares of IKON common stock that you deferred into your
Stock Account prior to January 1, 1997 (and the shares of Unisource Worldwide,
Inc. ("Unisource") common stock that were credited to your Stock Account in
connection with the December 31, 1996 distribution), you may elect to "sell"
some or all of the share units credited to your Stock Account and your Stock
Account will thereafter be credited with a cash amount, based on the value of
IKON common stock or Unisource common stock, as the case may be. If you are
subject to IKON's Confidential Information and Security Trading Policy, you may
make such an election only during a trading window and your Stock Account will
be credited with a cash amount based on the value of IKON common stock or
Unisource common stock, as the case may be, as of the following business day.
If you are not subject to IKON's Confidential Information and Security Trading
Policy, you may make such an election on or before the 25th of any month and
your Stock Account will be credited with a cash amount based on the value of
IKON
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common stock or Unisource common stock, as the case may be, as of the last
business day of that month.
Any cash amounts credited to your Stock Account will be "indexed," or
credited with earnings based on the performance of various investment index
alternatives selected by you. In other words, IKON will measure the performance
of these funds, and will credit your account accordingly. The trustee of the
rabbi trust may, but is not obligated to, sell shares of IKON common stock or
Unisource common stock held in the rabbi trust when you make an election to
"sell" your share units, and the trustee may, but is not obligated to, invest
the sale proceeds in investment funds that match your selection of index
alternatives. You may allocate the dollar value credited to your Stock Account
among one or more of the following alternatives (or such other alternatives as
IKON may designate from time to time), in any combination of whole percentages
adding up to 100%.
Any mutual fund available through the Vanguard family of funds
CoreStates Cash Reserve Y
Selected Neuberger & Berman Funds (available only for elections
made prior to July 1, 1997)
You may change your allocation among the various alternatives once during any
calendar month. Any change you request by the 25th day of a month will become
effective as of the first day of the next calendar month.
Distributions from your Stock Account will be made as follows: (i) share
units credited to your Stock Account will be distributed in the form of shares
of IKON common stock or Unisource common stock, as the case may be (and cash in
lieu of fractional shares), unless you elect, subject to the approval of the
Plan Administrator, to receive your distribution in cash and (ii) all other
items credited to your Stock Account will be distributed in the form of cash.
If you are an officer of IKON, any transfers out of your Stock Account and
any conversions of stock units within your Stock Account will be deemed a "sale"
of IKON common stock for purposes of Section 16(b) of the Securities Exchange
Act of 1934.
VESTING
You will be fully vested in your account at all times.
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DEATH BENEFITS
If you die before you have received full payment of amounts to which you
are entitled under the Plan, your beneficiary will receive the balance in your
Cash Account and your Stock Account (valued as of the end of the calendar month
in which you die) in a lump sum as soon as administratively practicable
following your date of death, notwithstanding any contrary election in your
Election Form. Distributions from your Stock Account will be made (i) in shares
of stock (and cash in lieu of fractional shares) for share units credited to
your account, unless your beneficiary elects, subject to the approval of the
Plan Administrator, to receive the distribution in cash, and (ii) in cash for
any other items credited to your account.
TERMINATION OF EMPLOYMENT
If your employment with IKON terminates prior to age 60 (for any reason,
including disability), you will receive the balance in your Cash Account and
your Stock Account (valued as of the end of the calendar year in which you
terminate employment) in a lump sum in January of the year following your date
of termination, notwithstanding any contrary election in your Election Form.
Distributions from your Stock Account will be made (i) in shares of stock (and
cash in lieu of fractional shares) for share units credited to your account,
unless you elect, subject to the approval of the Plan Administrator, to receive
your distribution in cash and (ii) in cash for any other items credited to your
account. For purposes of this provision, you will not be treated as having
terminated your employment with IKON if you continue to be an employee of
Unisource Worldwide, Inc.
CHANGE IN CONTROL
Upon a Change in Control (as defined in the Plan), the Plan will
terminate, and you will receive, in a lump sum payment, the balance in your Cash
Account and your Stock Account (valued as of the end of the month in which such
Change in Control occurs). Distributions from your Stock Account will be made
(i) in shares of stock (and cash in lieu of fractional shares) for share units
credited to your account, unless you elect, subject to the approval of the Plan
Administrator, to receive your distribution in cash and (ii) in cash for any
other items credited to your account.
UNSECURED OBLIGATION
Other than the assets held in the rabbi trust, no specific assets or funds
will be set aside for the payment of amounts to which you may be entitled under
the Plan. The obligations of IKON under the Plan will not be secured in any
manner and will, at all times, be subject to the claims of IKON's creditors.
Your interest in the Plan or an Election Form may not be assigned, transferred,
pledged, encumbered, alienated or charged.
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OTHER EMPLOYEE BENEFIT PLANS
Participation in the Plan does not in any way affect your right to
participate in any pension, profit-sharing, incentive, thrift, group health
insurance, stock option, termination pay, or similar plan of IKON except that
the deferrals will not be included in determining your benefits under any
retirement plans qualified under section 401(a) of the Internal Revenue Code.
Deferrals under this Plan will be included as compensation for purposes of
calculating the level of contributions under IKON's Partners' Stock Purchase
Plan.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
The Plan is a "pension plan" as defined in the Employee Retirement Income
Security Act of 1974 ("ERISA") and is subject to certain provisions of ERISA,
including certain requirements relating to reporting, disclosure, enforcement
and claims. The Plan is unfunded for purposes of ERISA. The Plan is not subject
to eligibility, participation, vesting, benefit accrual, or plan termination
insurance provisions of ERISA.
ADMINISTRATION
The Plan provides that authority for the administration and interpretation
of the Plan will be vested in a Committee selected by the Board of Directors of
IKON (the "Committee"). The Board of Directors may at any time change the
membership of the Committee.
The Committee will from time to time appoint a Plan Administrator who will
be responsible for the general administration of the Plan under the policy
guidance of the Committee. Walter J. Hope, Jr., Director-Risk Management of
IKON, P.O. Box 834, Valley Forge, PA 19482-0834 has been selected as the Plan
Administrator and the agent for service of process under the Plan. A new
Administrator may be appointed by the Committee at any time.
The Plan's fiscal year is January 1 - December 31. Its Plan number is 302.
All expenses incurred in administering the Plan (other than certain taxes
which IKON may, in its discretion, allocate to the accounts of Plan
participants) will be paid by IKON.
CLAIMS PROCEDURE
If at any time the Plan Administrator denies your written claim for any
payment to which you believe you are entitled under the Plan, the Plan
Administrator will send you written notice within 90 days (or 180 days under
special circumstances) of the date on which you filed your claim. This notice
will (a) explain the specific reason or reasons for the denial of your claim,
(b) refer to the specific Plan provision on which the denial is based, (c)
describe any additional information required in order to obtain a favorable
determination of your claim and explain why this information is necessary, and
(d) explain the steps to be taken if you wish to submit your claim for review.
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If you wish to appeal a denied claim, you must, within 60 days of receiving
your notice of denial, petition the Committee for a review. All petitions for
review must be made in writing on forms supplied by IKON. The Committee will
render a written decision within 60 days (or 120 days under special
circumstances) after receiving your petition.
You must follow the claims procedure described above before you can
consider legal action against IKON. Naturally, both you and IKON will want to
avoid legal action. Should you feel legal action is necessary, however, any
summons or other legal process should be served on the agent named above.
TAX CONSEQUENCES
The following discussion is intended to provide general information under
current federal law concerning the tax consequences of the Plan to the Plan
participants and to IKON. It does not provide information about the tax
consequences under any state or local law which may be applicable to the
transactions described herein. Because the consequences under federal, state
and local law may vary with each employee and may materially affect an
employee's decisions with respect to the Plan, you should seek competent advice
from legal or other counsel. There may also be changes in the law subsequent to
the date hereof which affect the tax consequences of the Plan or which cause
IKON to terminate the Plan in accordance with its terms.
The Plan is not a qualified Plan under section 401(a) of the Internal
Revenue Code of 1986, as amended.
1. YEARS OF DEFERRAL
An effective election under the Plan to defer compensation otherwise
payable in a taxable year will remove the amount so deferred from the taxable
income of the participant for such year for federal income tax purposes. IKON
will not be permitted a current federal income tax deduction for any amounts
deferred under the Plan.
Amounts deferred will generally be subject to taxes imposed under the
Federal Insurance Contributions Act ("FICA") or the Federal Unemployment Tax Act
("FUTA") in the year of deferral.
2. YEARS OF PAYMENT
Lump sum payments (or installment payments) will be taxable income to the
participant or a beneficiary in the year in which such payments are received.
Payments made in IKON common stock will be taxable to the participant based on
the value of such shares at the time of distribution. Amounts paid under the
Plan will generally not be subject to taxes imposed under FICA or FUTA, but are
subject to federal income tax withholding requirements. IKON will generally be
permitted a federal income tax deduction for the year in which such benefits are
paid.
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IKON OFFICE SOLUTIONS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(as amended and restated effective January 1, 1998)
A. PURPOSE. The purpose of the IKON Office Solutions, Inc. Executive
Deferred Compensation Plan is to permit certain eligible employees of IKON
Office Solutions, Inc. to defer a portion of their compensation and to
participate in a program under which they are provided income at a specified
time in the future. The program is intended to constitute an unfunded deferred
compensation arrangement for a select group of management or highly compensated
employees.
2. DEFINITION. Unless the context otherwise requires, the following
words as used herein shall have the following meanings:
(a) "Administrator" shall mean the person or persons so designated and
acting under Paragraph 16 hereof.
(b) "Compensation" shall mean all salaries and bonuses payable by IKON
and all shares of IKON common stock or cash payable pursuant to awards under the
LTIP, but shall not include company contributions under IKON's Partners' Stock
Purchase Plan or the IKON Retirement Savings Plan or any fringe benefits.
(c) "Effective Date" shall mean January 1, 1998, the effective date of
this amended and restated Plan. The rights of a Participant whose participation
in the Plan commenced prior to the Effective Date and who remains a Participant
on the Effective Date shall be governed by the terms of the amended and restated
Plan as set forth herein.
(d) "Election Form" shall mean the election form executed by each
Participant and IKON setting forth certain information relating to the
Participant's participation in the Plan.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(f) "IKON" shall mean IKON Office Solutions, Inc., an Ohio
corporation, formerly known as Alco Standard Corporation.
(g) "LTIP" shall mean IKON's Long Term Incentive Compensation Plan, as
amended from time to time.
(h) "Participant" shall mean any person employed by IKON who is
eligible, and who has elected, to participate in the Plan.
(i) "Plan" shall mean the IKON Office Solutions, Inc. Executive
Deferred Compensation Plan, as amended from time to time.
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(j) "Plan Year" shall mean the period beginning on January 1 and
ending on December 31 of each year.
3. PARTICIPATION. Any person who (a) is employed by IKON, (b) is holding
an unvested award under the LTIP and (c) is a United States taxpayer shall be
eligible to participate herein. A person eligible under this Paragraph 3 shall
become a Participant by executing an Election Form and such other forms as may
be required by the Administrator.
4. DEFERRAL OF COMPENSATION. Prior to the Effective Date and prior to
the beginning of each Plan Year during the term of the Plan, an employee who
meets the eligibility requirements of Paragraph 3 may irrevocably elect to defer
or forgo a portion of his Compensation for the following Plan Year.
The amount of the deferral for each Plan Year may vary, but cash deferrals
must be projected to be no less than $5,000 for any Plan Year. The amount to be
deferred for a Plan Year will be deducted from the Participant's Compensation
otherwise payable by IKON. In the case of deferrals from salary, such deferrals
will be made in substantially equal installments.
A Participant may specify the length of time for which receipt of cash
and/or shares of IKON common stock may be deferred, provided that (i) the
deferral period must extend at least until the January following the end of the
calendar year in which the Compensation would otherwise have been paid but for
the election to defer and (ii) distributions must commence no later than the
January following the year in which the Participant attains age 60 or the
January following the year in which the Participant retires or otherwise
terminates employment with IKON, whichever is later. A Participant may elect to
defer the distribution of benefits to a later date by providing written notice
of such election to the Administrator by December 31 of the second year prior to
the date on which benefits would otherwise have been paid; provided, however,
that such election may be made only once with respect to the deferral pursuant
to any Election Form.
5. INVESTMENT ACCOUNTS. Amounts deferred by a Participant pursuant to
Paragraph 4 will be credited to a cash deferral account and/or a stock deferral
account established by IKON in the name of the Participant. A Participant's
cash deferral account will be denominated in dollars and will be credited with
earnings based on the performance of various investment alternatives selected by
the Participant from among those made available by IKON from time to time. A
Participant's stock deferral account will initially be denominated solely in
share units (representing the right to receive an equivalent number of shares of
IKON common stock) and will be credited with additional share units to reflect
cash dividends paid by IKON in respect of its common stock.
With respect to shares deferred into a Participant's stock deferral account
prior to January 1, 1997 (including shares of Unisource Worldwide, Inc.
("Unisource") common stock that were credited to the Participant's stock
deferral account in connection with the December 31, 1996 spin-off
distribution), a Participant may elect to convert some or all of the share units
so that they will thereafter be denominated in dollars. To the extent that a
Participant makes such an election,
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his stock deferral account will thereafter contain a separate sub-account,
denominated in dollars. A Participant subject to IKON's Confidential Information
and Security Trading Policy may make such a conversion election only during a
trading window and the sub-account in the Participant's stock deferral account
will be credited with an amount based on the value of IKON common stock or
Unisource common stock, as the case may be, as of the following business day. A
Participant who is not subject to IKON's Confidential Information and Security
Trading Policy may make such a conversion election on or before the 25th of any
month and the sub-account in the Participant's stock deferral account will be
credited with an amount based on the value of IKON common stock or Unisource
common stock, as the case may be, as of the last business day of such month. The
sub-account in the Participant's stock deferral account will be credited with
earnings based on the performance of various investment index alternatives
selected by the Participant from among those made available by IKON from time to
time.
All amounts deferred into in a Participant's stock deferral account on or
after January 1, 1997 must remain denominated in stock units and may not be
converted to dollars at any time.
A Participant may request a change in the allocation of his cash deferral
account or the sub-account in his stock deferral account from among the various
available alternatives once during any calendar month. Any such change
requested by the 25th day of a month will become effective as of the first day
of the next calendar month.
6. RABBI TRUST. IKON intends to contribute all Participant deferrals of
IKON common stock to a "rabbi trust" (the "Trust") to be established for this
purpose. Assets held in the Trust will be subject to the claims of creditors of
IKON.
The Trust shall be deemed to be the owner of all shares held in the
Trust for corporate law purposes. The trustee of the Trust (the "Trustee")
shall retain all incidents of ownership in any shares held in the Trust,
including the right to vote such shares and to receive dividends paid in respect
of such shares. The Trustee may, but is not obligated to, reinvest any cash
dividends received in respect of shares of IKON common stock held in the Trust
to purchase additional shares of IKON common stock.
7. VESTING. A Participant shall be immediately vested in all amounts
deferred hereunder.
8. AMOUNT AND TIMING OF PAYMENTS. Except as otherwise provided in
Paragraphs 9 and 10, amounts to which a Participant is entitled under the Plan
shall be paid to him in a lump sum in January of the year specified in his
Election Form, valued as of the end of the preceding Plan Year. Alternatively,
if the Participant so elects, distributions may be made in substantially equal
annual installments over a period not to exceed ten years, beginning in January
of the year specified in the Participant's Election Form. All distributions
from the Trust shall be made (i) in shares of IKON common stock (or Unisource
common stock, as the case may be) for the stock units credited to the account,
unless the Participant elects, subject to the approval of the Plan
Administrator, to receive such distribution(s) in cash, and (ii) in cash for all
other items credited to the account.
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9. DEATH. Notwithstanding any contrary election in a Participant's
Election Form, if a Participant dies before receiving full payment of all
amounts to which he is entitled under the Plan, the beneficiary or beneficiaries
designated by the Participant in his Election Form shall receive the balance in
the Participant's cash deferral account and stock deferral account (valued as of
the end of the calendar month in which the Participant dies), in a lump sum
payment, as soon as administratively practicable following the Participant's
date of death. Distributions from a Participant's stock deferral account will
be made (i) in shares of stock (and cash in lieu of fractional shares) for the
stock units credited to the account, unless the beneficiary elects, subject to
the approval of the Administrator, to have the distribution paid in cash, and
(ii) in cash for all other items credited to the account.
10. TERMINATION OF EMPLOYMENT. Notwithstanding any contrary election in a
Participant's Election Form, if a Participant terminates employment with IKON,
he shall receive the balance in his cash deferral account and stock deferral
account (valued as of the end of the Plan Year in which the Participant's
employment terminates), in a lump sum payment, in January of the year following
his employment termination date. Distributions from a participant's stock
deferral account will be made (i) in shares of stock (and cash in lieu of
fractional shares) for the stock units credited to the account, unless the
Participant elects, subject to the approval of the Administrator, to have the
distribution paid in cash, and (ii) in cash for all other items credited to the
account. For purposes of this Paragraph 10, a Participant will not be treated
as having terminated employment with IKON if he continues to be an employee of
Unisource.
11. BENEFICIARY DESIGNATION. A Participant shall designate in his
Election Form the beneficiary or beneficiaries, who shall, in the event of his
death, receive the payments to which the Participant would otherwise have been
entitled. This designation may be amended in writing and filed with the
Administrator from time to time by the Participant. In the event that there is
no effective beneficiary designation when such amounts are payable, payment
shall be made to the members of the first surviving class of the Participant in
the following priority:
(a) spouse;
(b) the living children (including adopted children) in equal amounts;
(c) estate.
12. INCAPACITY OF RECIPIENT. Any payment required to be made under the
Plan to a person who is under a legal disability may be made to or for the
benefit of such person in such of the following ways as the Administrator shall
determine:
(a) to such person;
(b) to the legal representatives of such person;
(c) to a near relative of such person to be used for his benefit; or
(d) to pay the expenses of support, maintenance or education of such
person.
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The Administrator shall not be required to see to the application by any
third party of payments made pursuant to this Paragraph 12.
13. RESPONSIBILITY FOR PAYMENT. All amounts payable under the Plan shall
be paid by IKON. IKON may, in its sole discretion, determine the manner in
which it shall finance its obligation to pay such amounts.
14. NON-ASSIGNMENT. Except as hereinafter provided with respect to
marital or family support disputes, no amount payable under the Plan shall be
subject to assignment, transfer, sale, pledge, encumbrance, alienation or charge
by the Participant or any beneficiary. Any attempt to assign, transfer, sell,
pledge, encumber, alienate or charge any amount hereunder shall be without
effect. In cases of marital or family support disputes, the Administrator will
observe the terms of the Plan unless and until ordered to do otherwise by a
state or federal court. As a condition of participation in the Plan, the
Participant shall agree to hold IKON harmless from any claim that arises out of
obeying an order of any state or federal court with respect to marital or family
support disputes, whether such order effects a judgment of such court or is
issued to enforce a judgment or order of another court.
15. UNSECURED OBLIGATION. Other than the assets contributed to the Trust
pursuant to Paragraph 6, IKON shall not segregate or physically set aside any
funds or assets as a result of this Plan. Neither a Participant, nor his
beneficiary, nor any other person shall be deemed to have, pursuant to this
Plan, any property interest, legal or equitable, in any specific asset of IKON
or any specific asset in the Trust. To the extent that any person acquires any
right to receive payments under this Plan or an Election Form, such right shall
be no greater than, nor shall it have any preference or priority over, the
rights of any unsecured general creditor of IKON.
16. ADMINISTRATION. The Plan shall be administered by a Committee
selected from time to time by the Board of Directors of IKON (the "Committee").
The Committee shall select an Administrator from time to time to administer the
Plan under the general policy guidance of the Committee. The Administrator
shall be one or more persons who shall be responsible for:
(a) maintaining any records necessary in connection with the Plan;
(b) making calculations under the Plan;
(c) interpreting the provisions of the Plan; and
(d) otherwise administering the Plan in accordance with its terms.
17. CLAIMS PROCEDURES. At any time the Administrator makes a
determination adverse to a Participant or beneficiary with respect to a claim
for payment or participation under the Plan, the Administrator shall notify the
claimant in writing of such determination, setting forth:
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(a) the specific reason for such determination;
(b) a reference to the specific provision or provisions of the Plan on
which such determination is based;
(c) a description of any additional material or information necessary
to perfect the claim, and an explanation of the reason that such material is
required; and
(d) an explanation of the rights and procedures set forth in this
Paragraph 17.
A person who receives notice of an adverse determination by the
Administrator with respect to a claim may request, within 60 days of receipt of
such notice, that the Committee review the Administrator's determination. This
request may be made on behalf of a claimant by a duly authorized representative.
The claimant or representative may review pertinent documents and submit issues
and comments with respect to the controversy to the Committee. The Committee
shall render a decision within 60 days of a request for review (or within 120
days under special circumstances), which decision shall be in writing and shall
set forth the specific reasons for the decision reached and the specific
provisions of the Plan on which the decision is based. A copy of the ruling
shall be forwarded to the claimant.
18. EMPLOYEE BENEFIT PLANS. This Plan shall not in any way affect a
Participant's right to participate in any pension, profit-sharing, incentive,
thrift, group health insurance, stock option, termination pay or similar plan of
IKON, which is now in effect or may hereafter be adopted, to the extent that the
Participant is entitled to participate under the applicable terms and provisions
of such plan, except that the amounts deferred herein shall not be included in
determining a Participant's benefits under any retirement plans qualified under
section 401(a) of the Internal Revenue Code. Deferrals under this Plan will be
included as compensation for purposes of calculating the level of contributions
under IKON's Partners' Stock Purchase Plan.
19. AMENDMENT. The Board of Directors of IKON shall have the power to
amend this Plan at any time; provided, however, that, except as set forth in
Paragraphs 20, 21 and 22, no amendment or termination of the Plan shall have a
material adverse effect upon a Participant unless he consents to such amendment
or termination in writing.
20. TERMINATION. This Plan shall remain in effect until terminated by the
Board of Directors of IKON. The Board of Directors of IKON shall have the right
to terminate the Plan in whole or in part, for any reason, including pursuant to
a determination that proposed or pending tax law changes or other events cause,
or are likely in the future to cause, the Plan to have an adverse financial
impact upon IKON. In such event, IKON shall have no liability or obligation
under the Plan or the Participant's Election Form (or any other document),
provided that IKON distributes to each Participant, in a lump sum payment, the
balance in his cash deferral account and stock deferral account, valued as of
the end of the month in which such termination occurs. Distributions from a
Participant's stock deferral account will be made (i) in shares of IKON common
stock (and cash in lieu of fractional shares) for stock units credited to the
account, unless the Participant elects, subject to the approval of the Plan
Administrator, to receive such distribution in cash, and (ii) in cash for all
other items credited to the account.
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21. ACCELERATION. IKON shall have the right at any time to cause the
payment of all amounts thereafter due to a Participant to be paid in a single
lump sum or in such other accelerated manner as IKON shall deem appropriate.
The amount of any lump sum payment shall be the value of a Participant's cash
deferral account and stock deferral account, valued as of the end of the month
following IKON's determination to accelerate payments. If IKON accelerates
payment to more than 70% of all Participants pursuant to this provision, it must
accelerate payment to all Participants under the Plan in a comparable manner.
22. CHANGE IN CONTROL. In the event of a Change in Control (as defined
below), the Plan shall terminate, and the Participant shall receive, in a lump
sum payment, the balance in his cash deferral account and stock deferral
account, valued as of the end of the month in which such Change in Control
occurs. Distributions from a Participant's stock deferral account will be made
in (i) shares of stock (and cash in lieu of fractional shares) for stock units
credited to the account, unless the Participant elects, subject to the approval
of the Plan Administrator, to receive such distribution in cash, and (ii) in
cash for all other items credited to the account.
For purposes of this Plan, the term "Change in Control" shall mean any
of the following events:
(A) any Person, together with its affiliates and associates (as
such terms are used in Rule 12b-2 of the Exchange Act), is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 15% or more of the then outstanding shares of IKON common stock;
or
(B) the following individuals cease for any reason to constitute
a majority of the number of directors then serving: individuals who, on
September 30, 1997, constituted the Board and any new director whose appointment
or election by the Board or nomination for election by IKON's shareholders was
approved by a vote of at least a majority of the directors then still in office
who either were directors on September 30, 1997 or whose appointment, election
or nomination for election was previously so approved; or
(C) IKON consolidates with, or merges with or into, any other
Person (other than a wholly owned subsidiary of IKON), or any other Person
consolidates with, or merges with or into, IKON, and, in connection therewith,
all or part of the outstanding shares of common stock shall be changed in any
way or converted into or exchanged for stock or other securities or cash or any
other property; or
(D) a transaction or series of transactions in which, directly or
indirectly, IKON shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer) assets (i) aggregating more than
50% of the assets (measured by either book value or fair market value) or (ii)
generating more than 50% of the operating income or cash flow of IKON and its
subsidiaries (taken as a whole) to any other Person or group of Persons.
Notwithstanding the foregoing, no "Change in Control" shall be deemed
to have occurred if there is consummated any transaction or series of integrated
transactions immediately
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following which the record holders of IKON common stock immediately prior to
such transaction or series of transactions own a majority of the outstanding
voting shares and in substantially the same proportion in an entity which owns
all or substantially all of the assets of IKON immediately following such
transaction or series of transactions.
The term "Person" in the foregoing definition shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include (i) IKON or any
of its affiliates (as defined in Rule 12b-2 promulgated under the Exchange Act),
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of IKON or any of its affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of IKON in substantially the
same proportions as their ownership of IKON stock.
23. MISCELLANEOUS.
(a) The existence of this Plan and the Elections Forms hereunder, and
any actions undertaken pursuant hereto, shall not confer upon the Participant
any right to continued employment by IKON.
(b) This Plan shall be administered under and in accordance with the
laws of the Commonwealth of Pennsylvania, in which IKON's principal place of
business is located.
(c) The terms of this Plan and the Election Forms and other documents
executed in accordance herewith shall be binding upon IKON, its successors and
assigns, and each Participant, his heirs and legal representatives.
(d) Any taxes imposed on a Participant shall be the sole
responsibility of the Participant. IKON shall have the right to deduct from any
amounts payable under the Plan any federal, state or local taxes required to be
deducted or withheld from such payments.
(e) No expenses of administering the Plan shall be charged against the
Participants or any payments made hereunder, except that IKON may, in its
discretion, allocate certain taxes to the accounts of Participants.
(f) As used herein, the singular shall include the plural, the
masculine shall include the feminine, and vice versa.
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