IKON Settles ERISA Litigation, Agrees to Modify 401(k) Plan
Press release from the issuing company
VALLEY FORGE, Pa.--May 14, 2002-- IKON Office Solutions announced today that it has reached an agreement to settle, subject to court approval, the ERISA class-action lawsuit brought against it and a number of individual defendants.
The litigation, the matter of Whetman, et al. v. IKON Office Solutions, Inc., has been disclosed in the Company's public filings with the Securities and Exchange Commission and contends that the Company and certain of its present and former officers, directors and employees breached fiduciary duties owed to participants in the Company's 401(k) plan during the period October 1995 through August 1998.
The Company is not making any monetary payment to the class to settle the lawsuit, and the settlement does not reflect any admission of liability by the Company.
The Company has agreed to make certain modifications to its 401(k) plan in order to allow participants greater flexibility with respect to investment of the employer match portion of their individual accounts.
Like the plans of many other companies, IKON's employer match is made in company stock and may not be transferred into other investment options available in the 401(k) plan until the employee attains the age of 55. Under the settlement employees who have been with the Company for at least two years will be permitted to place company matching funds in investment options other than IKON stock, subject to vesting schedules.
It is expected that plaintiffs' counsel will petition the court for an award of their fees and costs of litigation, which, if awarded, will be paid by the Company. Such payment is not expected to have a material financial impact on the Company.
In announcing the settlement, James J. Forese, Chairman and Chief Executive Officer, said, "We are very pleased with this settlement, which we believe is in the best interests of the Company and its employees and shareholders. In the past year, there has been a great deal of public discussion about high concentrations of employees' investment of retirement assets in employers' stock. The changes to our plan are in keeping with the growing trend to lift restrictions on investment of the employer match to allow greater diversification. The settlement allows the Company to address those legitimate concerns and, at the same time, put the expense and distraction of the litigation behind us."
WhatTheyThink is the global printing industry's leading independent media organization with both print and digital offerings, including WhatTheyThink.com, PrintingNews.com and WhatTheyThink magazine versioned with a Printing News and Wide-Format & Signage edition. Our mission is to provide cogent news and analysis about trends, technologies, operations, and events in all the markets that comprise today’s printing and sign industries including commercial, in-plant, mailing, finishing, sign, display, textile, industrial, finishing, labels, packaging, marketing technology, software and workflow.