Xerox chief executive Jeff Jacobson and six of the company's other board members have agreed to resign in order to avoid an impending proxy contest and settle a lawsuit brought by activist investors including Carl Icahn.
Icahn and Darwin Deason – two of Xerox's three largest individual shareholders – had objected to a proposed takeover of the company by Fujifilm Holdings. A New York judge granted an injunction Friday against the merger, ruling that Xerox and Fuji had failed to disclose some important parts of their decades-old joint venture to the public.
"Following the court's decision last week to enjoin Xerox's proposed combination with Fuji Xerox, the board considered the significant risk and uncertainty of a prolonged litigation," Xerox's current board of directors said late Tuesday in a statement. "As a result, the Xerox Board of Directors determined that an immediate resolution of the pending litigation and proxy contest is in the best interest of our company and all stakeholders."
As part of the agreement, all of Deason's litigation against Xerox and its directors will be discontinued. Deason's lawsuit alleged that Jacobson had pursued a deal with Fujifilm even after the company's board had advised him to stop negotiations, a claim that the company has denied.
The new board plans to meet immediately and evaluate strategic alternatives, including terminating or restructuring the proposed transaction with Fujifilm.
Jacobson will be replaced as chief executive by John Visentin, who has served as a senior consultant to Icahn Enterprises since March, where he focused on exploring strategic alternatives for Xerox. No stranger to the channel, Visentin spent nearly three years as solution provider Presidio's chairman. He also previously led HP Enterprise Services for 16 months and IBM's Integrated Technology Services business unit in North America for three-and-a-half years.
Visentin will also serve as vice chairman of Xerox's board, and will be joined on the board of directors by Icahn Enterprises chief executive Keith Cozza, who will become chairman. Cozza has been part of Icahn Enterprises since February 2013, and rose to the chief executive role one year later.
"With new leadership in place, we believe Xerox will be much better positioned to take advantage of multiple potential value-enhancing opportunities, including restructuring its relationship with Fujifilm," Icahn said in a statement.
Also stepping down is current Xerox board chairman Robert Keegan, who has served on Xerox's board since 2010 following a long career at Eastman Kodak. Jacobson had similarly been with Eastman Kodak prior to joining Xerox in February 2012. He rose to the CEO position in January 2017 following the split of business process services company Conduent.
The separation of Conduent essentially undid Xerox's US$6.4 billion acquisition of solution provider Affiliated Computer Systems (ACS) in February 2010. ACS was founded and led for more than two decades by Deason, who become a major Xerox shareholder as a result of that acquisition.
"With John Visentin at the helm, receiving support and guidance from Carl Icahn and me, I am confident the alternatives for Xerox and its shareholders will be fully and expeditiously maximized," Deason said in a statement.
Going forward, Xerox will have nine board members, six of whom will be joining as part of this settlement. In addition to Cozza and Visentin, the new board members include: Icahn Capital Portfolio Manager Nicholas Graziano, Deason Capital Services Managing Director Scott Letier; Prodigy Pictures CEO Jay Firestone, and Nevada Strategic Credit Investments CEO Randolph Reed.
Just three of Xerox's ten current board members will retain a director position with the company. They are: Motorola Solutions CEO Gregory Brown; former Deloitte LLP CEO Joseph Echevarria; and former Rothschild Asset Management CEO Cheryl Krongard.