Executive Employment Agreement

EXHIBIT 10.25


EXECUTIVE EMPLOYMENT AGREEMENT


THIS IS A VERY IMPORTANT LEGAL DOCUMENT WHICH MAY AFFECT YOUR RIGHTS
TO FUTURE EMPLOYMENT. AS A RESULT, YOU SHOULD REVIEW THE DOCUMENT CAREFULLY, AND FULLY UNDERSTAND ITS TERMS AND IMPLICATIONS, BEFORE SIGNING.


This Employment Agreement ("Agreement") effective April 1, 1997 is entered into between IKON OFFICE SOLUTIONS, INC., an Ohio corporation ("IKON" or the "Company"), with its principal place of business in Valley Forge, Pennsylvania, and Lynn Graham ("Executive").


In consideration of the mutual promises contained in this Executive Employment Agreement ("Agreement") including the following items, none of which would be conferred upon Executive absent execution of this Agreement: (1) a change in employment status from employment-at-will to employment for a fixed period of time in a new executive position, subject to the terms and conditions set forth below; and (2) additional good and valuable consideration including but not limited to that set forth in Addendum B of this Agreement, the parties to this Agreement ("Parties"), INTENDING TO BE LEGALLY BOUND, agree as follows:


ARTICLE I-TERMS OF EMPLOYMENT - -----------------------------


1.1 DUTIES.
------


1.1.1 DUTIES OF POSITION. IKON shall employ Executive as President of its
------------------ Document Services division. The Parties expressly agree that the position of President of the Document Services division of IKON Office Solutions is a key position and an executive position in the Company. Executive shall comply with his obligation set forth in this Employment Agreement and with all Company policies, now currently in force, or as may from time to time be unilaterally adopted and modified by the Company, whether or not reduced to writing. In addition, Executive shall have the following duties set forth in Addendum A of the Agreement which is hereby incorporated as if fully set forth herein.


Executive specifically recognizes and acknowledges that this position is one of trust and confidence and that, as a result, he will have access to, and may be given specialized education and confidential, proprietary information of the Company.


1.1.2 DUTY OF LOYALTY. Executive will (1) devote substantially appropriate
--------------- time, attention, and energies to the business of the Company and diligently perform all duties incident to his employment; (2) use his best efforts to promote the interests and goodwill of the Company; and (3) perform such other duties commensurate with his office as the President of IKON, or his assignees, from time to time assign him. Further, during the term of employment, Executive shall not engage in any activity to the detriment or embarrassment of the Company. By way of illustration and not as a limitation, Executive shall not discuss with any customer or potential customer of the Company, or any competitor of the Company, any plans by Executive or any other employees of the Company to leave the employment of the Company or to compete with the Company. Executive shall at all times in performance of his duties work in concert with, and take direction from the President of IKON.


1.2 TERM OF AGREEMENT. Unless terminated in accordance with Article 2, this
----------------- Agreement shall remain in force for a term of two and one-half (2 1/2) years from the effective date of this Agreement through September 30, 1999 ("Term").


1.3 COMPENSATION. During the Term of the Agreement, the Executive shall be
------------ compensated in accordance with the terms set forth in Addendum B of this Agreement which is incorporated as if fully set forth herein ("Total Compensation Package"). In the event the Company shall pay to Executive during the Term any compensation in excess of the Total Compensation Package provided for herein, the payment of such increased compensation shall not be deemed to be an amendment to this Agreement, and may be discontinued at any time without cause. Executive's Total Compensation Package shall be reviewed on a periodic basis (most likely, yearly) and shall remain consistent with and commensurate to those other executives of the Company in similar roles, always taking into consideration the total responsibilities of Executive to the Company as well as the overall revenue and operating income contributions of Executive's designated marketplaces. The Company shall have the right to further adjust the Executive's Total Compensation Package to reflect the actual performance of the Executive.


1.4 ADDITIONAL OBLIGATIONS OF EXECUTIVE. Executive understands that the
----------------------------------- obligations imposed under this Agreement are not exclusive, and that the Company may unilaterally, from time to time, impose additional reasonable obligations upon Executive consistent with his duties and position within the Company. If Company promotes Executive, or changes Executive's areas of responsibilities during the Term of this Agreement, Company, at its option, may require Executive to execute an Addendum describing the Executive's promotion, or change of areas of Executive's responsibilities.


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1.5 DISCOVERIES. Executive shall promptly disclose in writing to the Company
----------- any and all information, ideas, conceptions, inventions, discoveries, processes, methods, designs, and know-how, as well as all works of authorship (including computer programs) which are within the subject matter of copyright, which are conceived, originated, developed, made or acquired by Executive, either individually or jointly with others, during the period of Executive's employment with the Company or for one (1) year period thereafter and: (i) for which the Company provided either equipment, supplies, facilities, or confidential information; (ii) which were made or conceived on or partially on the Company's time; or (iii) which relate to IKON's business or the business that IKON is in the process of developing (collectively referred to as the "Vision Discoveries") and shall assign or offer to assign to Company any and all of Executive's rights in each Vision Discovery.


1.6 COPYRIGHTS. All Vision Discoveries which are within the subject matter of
---------- copyright shall be considered a "work for hire" granting the Company full ownership to the work and components and all rights comprised therein. Should any work or component thereof not fall within the definition of a "work for hire" under copyright law, the Executive hereby transfers and assigns or, if necessary, will transfer and assign to the Company full ownership of the copyright to the work or component thereof and all rights comprised therein. The Executive will sign all applications for registrations of such copyright, and perform all other acts necessary or convenient to carry out the terms of this Provision.


ARTICLE 2-TERMINATION OF AGREEMENT - ----------------------------------


2.1 TERMINATION BY THE COMPANY -- ENUMERATED REASONS. Company may, in its sole
------------------------------------------------ discretion, terminate Executive's employment at any time during the Term of the Agreement under the following circumstances:


(1) Executive fails to comply with any material Company Policy, either currently in force, or as may from time to time be adopted and modified by the company;


(2) the Executive's performance falls below 80% of the stated mutually agreed-upon operational and financial goals specifically applicable to Executive during any fiscal year time period;


(3) Executive breaches his obligations under the terms of this Agreement;


(4) the Executive has committed an act of dishonesty, moral turpitude; has exhibited material, gross, or substantial misfeasance or negligence in the performance of his duties, waste of corporate assets, illegal conduct, or conduct that is injurious to the Company, its reputation or goodwill or theft or has breached his duties of loyalty to the Company, including any duties specified under Article 1.1.2 hereunder or an act of insubordination to any of his supervisors.


It is specifically understood that, during the Term of the Agreement, Executive shall not be terminated pursuant to either 2.1 (1), (2) or (3) unless and until (a) Executive has received reasonable written notice from the Company of the applicable Company Policy, the operational and financial goals applicable to the Executive or the breach of obligation, and (b) Executive has had reasonable opportunity to comply with such Company Policy, contractual obligation or perform up to the standards, expectations or applicable goals set by Company. The Company may, however, immediately terminate Executive pursuant to 2.1 (4) without notice.


In the event of the termination of Executive under this Article 2.1, Executive's right to the compensation and benefits provided in Addendum B shall immediately terminate and/or cease to accrue, provided, however, that Executive shall receive (i) the unpaid portion, if any, of the Base Salary computed on a pro-rata basis to the date of termination of employment and (ii) any unpaid accrued benefits owed to the Executive in accordance with the terms of any Plan or Program referenced in Addendum B.


2.2. TERMINATION BY THE COMPANY -- NOT ENUMERATED REASONS. The Company may
---------------------------------------------------- terminate the employment of Executive during the Term for reasons other than those enumerated in Article 2.1. However, in such event, the Company shall be liable to Executive for the Base Salary compensation (but not unrealized bonuses) and other remaining benefits (as permitted for terminated employees under Company policy) provided in Addendum B for the remainder of the Term, and, to the extent not inconsistent with applicable law and/or the terms and conditions of any Plan or Program, all other remaining benefits (excluding bonuses) shall continue to accrue until the end of the Term, which shall constitute the full liquidated damages to which Executive is entitled. As an elaboration of the above, but in no event to be construed as a commitment, in such circumstances, the President of IKON shall recommend to the Board of Directors of IKON that Executive's remaining unvested stock options should be fully vested. Executive agrees that he shall not be entitled to any other remedy at law or in equity, including but not limited to general, special, punitive or exemplary damages and/or injunctive relief.


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Notwithstanding the foregoing, the amounts otherwise due pursuant to this Article 2.2 shall be reduced by the full amount of any and all income earned or received by the Executive during the remainder of the Term. Executive is obligated to report all such income to the Company.


2.3 DISABILITY AND DEATH
--------------------


2.3.1 DISABILITY. In the event that Executive is unable fully to
---------- perform his duties and responsibilities hereunder to the full extent required by the Company by reason of illness, injury or incapacity for ninety (90) consecutive days or ninety (90) working days during the Term, this Agreement may be terminated by Company and Company shall have no further liability or obligation to Executive for the compensation or benefits set forth in Addendum B, provided however, that Executive will be entitled to receive (i) salary continuation until the long-term disability benefit plan (if applicable) takes effect, (ii) the payments prescribed under any disability benefit plan which may be in effect for employees of the Company and in which he participated and (iii) any unpaid accrued benefits owed to the Executive in accordance with the terms of any Plan or Program referenced in Addendum B. For purposes of this paragraph 2.3.1, Executive's temporary inability to travel or maintain regular office hours because of illness, injury or incapacity will not be considered a failure or inability to perform his duties and responsibilities so long as Executive, through Telecommuting and alternate arrangements, otherwise fulfills his duties and responsibilities.


2.3.2. DEATH. In the event that Executive dies during the Term,
----- Company shall pay to his executors, legal representatives or administrators an amount equal to the installment of his Base Salary set forth in Addendum B for the month in which he dies, and for an additional two (2) months thereafter, and thereafter Company shall have no further liability or obligation pursuant to the Agreement to his executors, legal representatives, administrators, heirs or assigns or any other person claiming under or through him; provided however, that Executive's estate or designated beneficiaries shall be entitled to receive (i) the payment prescribed for such recipients under any death benefit plan which may be in effect for employees of the Company and in which Executive participated and (ii) any unpaid accrued benefits owed to the Executive in accordance with the terms of any Plan or Program referenced in Addendum B.


ARTICLE 3-RESTRICTION ON THE USE OF CONFIDENTIAL INFORMATION - ------------------------------------------------------------


3.1 SCOPE OF CONFIDENTIAL INFORMATION. Executive acknowledges that the Company
--------------------------------- is engaged in the business of sales, servicing, renting and leasing of copier equipment, facsimiles, micrographic equipment, computers, shredders, offset printing, typewriters, laser printers, word processing equipment and other related office products, the business of facilities management and state-of-the- art copying and/or scanning operations, the ongoing development and implementation of additional business segments providing outsourcing and networking sales and services, and the growth through acquisitions of entities engaged in any or all of the aforementioned businesses ("Company's Business"). Executive further recognizes that the Company's Business and its continued success depend upon the use and protection of a large body of confidential and proprietary information. Executive further acknowledges that he holds a position of trust and confidence by virtue of which he necessarily possesses, has access to and, as a consequence of his signing this Agreement, will continue to possess and have access to, highly valuable, confidential and proprietary information not known to employees of the Company at large or the public in general, and that it would be improper for him to make use of this information for the benefit of himself or others. ALL OF SUCH CONFIDENTIAL AND PROPRIETARY INFORMATION NOW EXISTING OR TO BE DEVELOPED IN THE FUTURE WILL BE REFERRED TO IN THIS AGREEMENT AS "COMPANY SECRETS". Company and Executive intend that the meaning of "Company Secrets" in this Agreement will be read as broadly as possible to include all information of any sort (whether merely remembered or embodied in a tangible medium) which (i) is related to Company's Business or potential future business and (ii) is not generally and publicly known. This includes, without specific limitation, information relating to the nature and operation of the Company's Business, the persons, firms and corporations which are customers or active prospects of the Company during Executive's employment by the Company, the Company's development transition and transformation plans, methodology and methods of doing business, strategic, acquisition, marketing and expansion plans, including plans regarding planned and potential acquisitions and sales, financial and business plans, employee lists, numbers and location of sales representatives, new and existing programs and services, support and those under development, prices and terms, customer service, integration processes requirements, costs of providing service, support and equipment and equipment maintenance costs.


3.2 EXECUTIVE'S DUTY NOT TO DISCLOSE CONFIDENTIAL INFORMATION. Executive will
--------------------------------------------------------- protect and preserve as confidential during his employment relationship with the Company and at all times after the termination of the employment relationship, all of the Company Secrets at any time known to Executive or at any time in Executive's possession or control. Executive understands that this Agreement includes an obligation not to disclose Company Secrets to employees within the Company who do not have a right or need to know the Company Secrets.


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Executive will, during his employment relationship with the Company and at all times after the termination of the employment relationship, neither disclose, use, nor allow any other person or entity to use in any way, except for the benefit of the Company and as directed by the Company, any of the Company Secrets.


3.3 RETURN OF CONFIDENTIAL INFORMATION. Executive will, prior to or upon
---------------------------------- leaving employment with the Company, deliver to the Company any and all records, items and media of any type (including, without limitation, all partial or complete copies of duplicates) containing or otherwise relating to any of the Company Secrets, whether prepared or acquired by, or provided to, Executive. Executive acknowledges that all such records, items and media are and at all times will be and remain the property of Company.


3.4 ADDITIONAL AGREEMENTS REQUIRED BY THIRD PARTIES. Executive will enter into
----------------------------------------------- and comply fully with any agreement reasonably required by any of the Company's affiliates, business partners, suppliers or contractors with respect to the protection of the confidential and proprietary information of such entities.


3.5 SEVERABILITY. Executive understands that the obligations imposed under
------------ this Restriction on the Use of Confidential Information are in addition to, and independent of, any Restriction on Post-Termination Employment imposed under this Agreement or any previously executed agreement concerning post-termination employment, impose separate and distinct obligations from the Restriction on Post-Termination Employment, and may be valid even if the Restriction on Post- Termination Employment is declared invalid, in whole or in part, in any judicial or quasi-judicial forum.


ARTICLE 4-RESTRICTION ON POST-TERMINATION EMPLOYMENT - ----------------------------------------------------


4.1 ACKNOWLEDGMENTS BY EXECUTIVE.
----------------------------


4.1.1. ACKNOWLEDGMENT OF PROTECTIBLE INTERESTS. Executive agrees that
--------------------------------------- the Company has a protectible interest in the Company Secrets, goodwill and specialized knowledge acquired by Executive during the course of his employment with Company.


4.1.2. ACKNOWLEDGMENT OF CONSIDERATION. Executive acknowledges that
------------------------------- the provisions of this Article 4 are in consideration of (1) a change in employment status from that of an at-will employee to employment for a fixed period of time, subject to discharge only for the reasons and under the terms and conditions set forth in this Agreement; and (2) additional good and valuable consideration as set forth in Addendum B of this Agreement including but not limited to the granting of specific stock options.


4.1.3. ABILITY TO EARN LIVELIHOOD. Executive expressly agrees and
--------------------------- acknowledges that the Restrictions contained in this Article 4 do not preclude Executive from earning a livelihood, nor does it unreasonably impose limitations on Executive's ability to earn a living. In addition, the Executive agrees and acknowledges that the potential harm to the Company of its non-enforcement outweighs any harm to the Executive of its enforcement by injunction or otherwise.


4.1.4. EXECUTIVE'S GEOGRAPHIC AREA. Executive's Geographic Area for
--------------------------- purposes of this Agreement is defined as the designated geographic territory (also referred to within the Company as marketplace(s)) that is or was under the Executive's management, control and/or responsibility during the two (2) year period immediately preceding the termination of Executive's employment. At present, Executive is responsible for all of North America.


4.2 POST-EMPLOYMENT RESTRICTIONS. Executive agrees that if Executive's
---------------------------- employment with the Company is terminated for cause, by voluntary resignation on the part of Executive, or without cause (whether by the Company, by Executive or otherwise), the Executive will not, without the express written consent of the Company, directly or indirectly, for a period of three (3) years from the date of termination, in any capacity whatsoever, including either as an employee, employer, officer, director, proprietor, partner, joint venturer, consultant, stockholder (except for investments of no greater than 5% of the total outstanding shares in any publicly funded company), on his behalf or on behalf of any other entity:


(1) solicit, sell to, divert, serve, accept or receive business, which
is similar to, or competitive with, the Company's Outsourcing Business,
from any entity which was a customer of IKON, or an active prospect of IKON
within the Executive's Geographic Area, or


(2) start-up, engage or manage in any business which competes with the
Company's Outsourcing Business within the Executive's Geographic Area, or


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(3) acquire, purchase, or work in any capacity whatsoever for or on
behalf of, any entity which has been identified as an actual or potential
acquisition of IKON during the two (2) year period immediately preceding
the termination of Executive's employment, or


(4) solicit, entice, or encourage any employee of the Company to leave
the Company or hire or employ any such employee, or


(5) Manage or work for a business or a portion of the business, of any
entity within the Executive's Geographic Area, engaged in a business which
is similar to, or competitive with, the Company's Outsourcing Business, or


(6) Work in any capacity whatsoever for Xerox Corporation or Danka
Corporation, or any subsidiaries or affiliates thereof.


For purposes of this paragraph 4.2, Company's Outsourcing Business is defined as the business of facilities management, business and litigation photo- copying, scanning, imaging, backfile conversion, printing, graphic design and fulfillment.


The foregoing restriction shall be in addition to (and to the extent of any conflict, shall control) any post-employment restriction contained in any Long-Term Incentive Plan applicable to Executive.


4.3 SEVERABILITY. Executive understands that the obligations imposed under
------------ this Restriction on Post-Termination Employment are in addition to, and independent of, any Restriction on the Use of Confidential Information imposed under this Agreement and any previously executed agreement concerning post- terminated employment, impose separate and distinct obligations from the Restriction on the Use of Confidential Information, and may be valid even if the Restriction on the Use of Confidential Information is declared invalid, in whole or in part, in any judicial or quasi-judicial forum.


ARTICLE 5-REMEDIES FOR BREACH - -----------------------------


5.1 INJUNCTIONS. In the event of a breach or threatened breach of any
----------- provision of Articles 3 or 4 of this Agreement, Executive acknowledges and agrees that the Company will suffer irreparable harm and further acknowledges and agrees that the Company's remedies at law are inadequate, and that the Company shall be entitled to an immediate injunction restraining such breach or potential breach as well as other equitable relief; but nothing herein shall be construed as prohibiting the Company from pursuing any other remedy available for such breach or threatened breach.


5.2 RESTITUTION. Notwithstanding anything in this Agreement or any other
----------- agreement between the parties to the contrary and in addition to any other rights or remedies the Company may have, if at any time Executive (whether during the Employment period or thereafter as provided herein) has violated any of his obligations contained in Articles 3 and 4 above, then the obligation of the Company to pay salary, vacation pay, bonus, incentive compensation or other form of pay or compensation, shall terminate, and from and after such termination neither the Executive, his beneficiary nor any of their legal representatives or distributee shall have any right to receive any payment(s) in connection therewith.


ARTICLE 6 -MISCELLANEOUS - ------------------------


6.1 ARBITRATION. Except as permitted or provided in the foregoing Article 5, in
------------ the event Executive's employment is terminated, and Executive contends that such termination was wrongful or otherwise in violation of his rights or privileges, express or implied, whether founded in fact or in law, or any other rights or privileges, or was in violation of any express or implied condition, term, or covenant, whether founded in law or in fact, including but not limited to the covenant of good faith and fair dealing, or otherwise in violation of law, Executive and Company agree to submit the above-described disputed matter to binding arbitration. Executive and Company further expressly agree that in any such arbitration, the exclusive maximum remedy which may be awarded by the arbitrator(s) shall be limited to back pay owing up to and including the date the arbitration award becomes final and reasonable attorney's fees and costs. Notwithstanding the above remedy, the parties further agree that in the event such arbitrator(s) determine that Executive was not terminated for cause, then the arbitrator(s) shall have the additional ability in a termination situation to award the remedy as described in Section 2.2 above. Executive agrees that he shall not be entitled to any other remedy at law or in equity, including but not limited to general, special, punitive or exemplary damages and/or injunctive relief.


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6.2 REFORMATION. The provisions and covenants contained herein are intended to
----------- be separate and divisible and if, for any reason, any one or more of such provisions or covenants should be held to be invalid and unenforceable in whole or in part, it is agreed that the same shall not be held to affect the validity or enforceability of any other provisions and covenants of this Agreement. In the event that any restriction set forth in this Agreement is determined by a Court to be unenforceable with respect to scope, time or geographical coverage, Executive agrees that such a restriction should be modified and narrowed so as to provide the maximum protection of the Company's legally protectible interests as described in this Agreement, and without negating or impairing any other restrictions or agreements set forth herein.


6.3 REASONABLENESS. Executive acknowledges that he has carefully read this
-------------- Agreement and has given careful consideration to the restraints imposed upon the Ex ...