After weeks of wrangling, Xerox Corp. appears to have its house in order.
John Visentin, new CEO of Xerox Corp.
The Norwalk, CT-based imaging technologies giant informed Fujifilm that its previously-announced combination of Xerox and Fuji Xerox is being terminated, and the company has entered into a new settlement agreement with Carl Icahn and Darwin Deason that settles the pending proxy contest in connection with the company’s 2018 annual meeting of shareholders and Deason’s litigation against Xerox and its directors.
Three days following that announcement, Xerox said that its board of directors appointed John Visentin as CEO. Visentin was also elected vice chairman of the board of directors while Keith Cozza was elected chairman of the board. Xerox also announced that it will hold its 2018 annual shareholder meeting on July 31.
Last Sunday, Xerox told Fujifilm that the previously announced transaction agreement to combine Xerox with Fuji Xerox was being terminated in accordance with its terms due to, among other things, the failure by Fujifilm to deliver the audited financials of Fuji Xerox by April 15, and the material deviations reflected in the audited financials of Fuji Xerox, when delivered, from the unaudited financial statements of Fuji Xerox and its subsidiaries provided to Xerox prior to the date of the Subscription Agreement and taking into account other circumstances limiting the ability of the company, Fujifilm and Fuji Xerox to consummate a transaction.
Thereafter, Xerox entered into a new settlement agreement with Icahn and Deason. The settlement does not affect any claims of Deason or other Xerox shareholders against Fujifilm for aiding and abetting.
Under the terms of the settlement agreement, the following occurred:
- Xerox appointed five new members to its board of directors: Visentin, Cozza, Jonathan Christodoro, Nicholas Graziano and Scott Letier.
- Gregory Brown, Joseph Echevarria, Cheryl Krongard and Sara Martinez Tucker will continue to serve as members of the Xerox Board of Directors.
- Robert J. Keegan, Charles Prince, Ann N. Reese, William Curt Hunter, and Stephen H. Rusckowski each resigned from the Board of Directors of Xerox.
- Jeff Jacobson resigned from his role as Chief Executive Officer and as a member of the Board of Directors of Xerox.
As part of the agreement, Xerox and Icahn will withdraw their respective nominations of any other director candidates for election at the 2018 annual shareholder meeting. Xerox will continue to waive the advance notice bylaw to enable any Xerox shareholder to provide notice of intent to nominate directors for election at the 2018 Annual Meeting of Shareholders until June 13.
The new board of directors plans to meet immediately and, among other things, begin a process to evaluate all strategic alternatives to maximize shareholder value.
The former Board of Directors of Xerox provided the following statement:
“Over the past several weeks, the Xerox board has repeatedly requested that Fujifilm immediately enter into negotiations on improved terms for a proposed transaction. Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe. The Xerox Board believes that the transaction cannot reasonably be expected to be completed under these circumstances, particularly given the court’s injunction of the transaction and the lack of shareholder support for the transaction on current terms, as well as the unresolved accounting issues at Fuji Xerox.
“The board also considered the potential instability and business disruption during a proxy contest. Absent a viable, timely transaction with Fujifilm, the Xerox Board believes it is in the best interests of the company and all of its shareholders to terminate the proposed transaction and enter a new settlement agreement with Icahn and Deason. Under the agreement, the Xerox Board will be reconstituted to determine the best path forward to maximize value for Xerox shareholders.”
Carl Icahn provided the following statement:
“We are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm. With that behind us and new shareholder-focused leadership in place, today marks a new beginning for Xerox. We have often said that the most important person at a company (by far) is the CEO. We are therefore also pleased that John Visentin, a tried and true veteran in this area, will be taking the helm.”
Darwin Deason provided the following statement:
“With the limiting Fujifilm agreement terminated, Xerox is now positioned to conduct a true, robust strategic alternatives process. John Visentin has spent weeks preparing himself to run the company and speaking to numerous market participants regarding strategic alternatives. Xerox is fortunate to have someone with his experience and preparation to lead it through this exciting and transformative time.”
New Director Biographies:
Giovanni (John) Visentin was a senior advisor to the chairman of Exela Technologies and an operating partner for Advent International, where he provided advice, analysis and assistance with respect to operational and strategic business matters in the due diligence and evaluation of investment opportunities. Visentin was also a consultant to Icahn Capital in connection with a proxy contest at Xerox Corporation from March to May 2018. In October 2013, Visentin was named executive chairman and CEO of Novitex Enterprise Solutions following the acquisition of Pitney Bowes Management Services by funds affiliated with Apollo Global Management.
Jonathan Christodoro is a private investor. Christodoro served as a managing director of Icahn Capital LP, where he was responsible for identifying, analyzing and monitoring investment opportunities and portfolio companies, from July 2012 to February 2017. Prior to joining Icahn Capital, Christodoro served in various investment and research roles at P2 Capital Partners, LLC, Prentice Capital Management, LP and S.A.C. Capital Advisors, LP.
Keith Cozza has been the president and CEO of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, gaming, railcar, food packaging, metals, mining, real estate and home fashion, since February 2014. In addition, Cozza has served as COO of Icahn Capital LP, the subsidiary of Icahn Enterprises through which Carl C. Icahn manages investment funds, since February 2013.
Nicholas Graziano has served as portfolio manager of Icahn Capital, the entity through which Carl C. Icahn manages investment funds, since February 2018. Graziano was previously the founding partner and chief investment officer of the hedge fund Venetus Partners LP, where he was responsible for portfolio and risk management, along with day-to-day firm management, from June 2015 to August 2017. Prior to founding Venetus, Graziano was a partner and senior managing director at the hedge fund Corvex Management LP from December 2010 to March 2015.
A. Scott Letier has been managing director of Deason Capital Services LLC (DCS), the family office for Darwin Deason, since July 2014. Prior to joining DCS, Letier was the managing director of JFO Group LLC, the family office for the Jensen family from September 2006 to July 2014. Letier has more than 20 years of prior leadership roles serving as a private equity investment professional and chief financial officer, and began his career in the audit group at Ernst & Whinney (Now Ernst & Young).
