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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 22, 1996
ALCO STANDARD CORPORATION
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(Exact name of registrant as specified in its charter)
OHIO File No. 1-5964 23-0334400
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
P.O. Box 834, Valley Forge, Pennsylvania 19482
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Registrant's telephone number, including area code: (610) 296-8000
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On October 22, 1996, the Registrant entered into the Amended and
Restated 1996 Support Agreement (the "1996 Support Agreement") with its leasing
subsidiary, IKON Capital, Inc. The 1996 Support Agreement supersedes and
replaces the 1994 Support Agreement, which was filed as Exhibit 10.16 to the
Registrant's Form 10-K dated September 30, 1994.
On November 8, 1996, the Board of Directors declared a special dividend
of 100% of the common stock of Unisource Worldwide, Inc. ("Unisource"), the
Registrant's wholly-owned subsidiary. The dividend is payable on December 31,
1996 to the shareholders of record of Alco common stock on December 13, 1996.
Distribution of the dividend is subject to several conditions, all of which the
Registrant anticipates will be satisfied prior to the record date for the
distribution, including, but not limited to, the effectiveness of Unisource's
Form 10 Registration Statement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
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(10) Amended and Restated 1996 Support Agreement
(99) Press Release dated November 8, 1996
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALCO STANDARD CORPORATION
By: /s/ Michael J. Dillon
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Michael J. Dillon
Vice President and Controller
Dated: November 11, 1996
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Index to Exhibit
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(10) Amended and Restated 1996 Support Agreement
(99) Press Release dated November 8, 1996
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Exhibit (10)
Amended and Restated
1996 SUPPORT AGREEMENT
By and Between
Alco Standard Corporation
and
IKON Capital, Inc.
SUPPORT AGREEMENT, dated as of this 22nd day of October, 1996 by and
between ALCO STANDARD CORPORATION, an Ohio Corporation ("Alco") and IKON
CAPITAL, INC., a Delaware corporation ("IKON Capital"). Alco, in corporation of
$10 and other good and valuable consideration, receipt and adequacy of which is
hereby acknowledged, and to induce IKON Capital to provide leasing services
with respect to products sold and serviced by ALco, hereby agrees with IKON
Capital as set forth below.
1. Pretax Interest Coverage. From and after the execution of this
Support Agreement, Alco will, within 45 days after the last day of each quarter
end period of IKON Capital, make, or cause to be made, a determination of the
ratio of Income Before Interest Expense and Taxes to Interest Expense for the
most recent four quarter end periods on a rolling basis. If said ratio of
Income Before Interest Expense and Taxes to Interest Expense shall be less than
1.25 to 1, Alco will, within 10 days after the date of such determination, pay
to IKON Capital a fee (the "Support Fee") in an amount at least sufficient to
increase said ratio of Income Before Interest Expense and Taxes to 1.25 to 1.
2. Debt to Equity. From and after the execution of this Support
Agreement, Alco will, within 45 days after the last day of each quarter end
period, make, or cause to be made such payment to IKON Capital as shall be
necessary to enable IKON Capital to have a debt to equity ratio not to exceed 6
to 1 determined in accordance with generally accepted accounting principles.
3. Maintenance of Net Worth. From and after the execution of this
Support Agreement, Alco will, at all times, make, or cause to be made such
payment to IKON Capital as shall be necessary to enable IKON Capital to have a
Tangible Net Worth of at least one dollar ($1.00).
4. Ownership. From and after the execution of this Support Agreement,
Alco will maintain 100 percent direct or indirect ownership of IKON Capital,
except in the event that this Agreement is assigned by Alco pursuant to
Section 7.
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5. Definitions. As used in this Agreement, the following terms have the
meanings indicated:
"Interest Expense" of IKON Capital and its subsidiaries shall mean the most
recent four quarter end periods on a rolling basis interest charges on the
aggregate principal amount of consolidated indebtedness of IKON Capital and its
subsidiaries, including intercompany debt owed to Alco determined in accordance
with generally accepted accounting principles.
"Income Before Interest Expense and Taxes" shall mean the
consolidated net income of IKON Capital and its subsidiaries for the most
recent four quarter end periods on a rolling basis determined in accordance
with generally accepted accounting principles, except that such
determination shall be made before any deduction for Interest Expense or
provisions for taxes in respect of income.
"Tangible Net Worth" shall be determined in accordance with generally
accepted accounting principles and shall mean an amount equal to the
capital stock and surplus accounts (including retained earnings) of IKON
Capital and its subsidiaries after deducting therefrom the book amount of
all assets of IKON Capital and its subsidiaries which would be treated as
intangible assets, all determined on a consolidated basis.
6. Termination Amendment and Waiver. This agreement, or any term,
covenant, agreement or condition hereof may be amended or terminated by either
party hereto upon not less than ninety (90) days written notice and provided
that either: (i) all the outstanding debt of IKON Capital is repaid, or (ii)
approval of 2/3 of the debtholders (not including Alco, IKON Capital or
affiliates of Alco or IKON Capital) for all amounts outstanding covered by this
Support Agreement is obtained.
7. Assignment. This Agreement (or any rights herein) may not be assigned
by Alco unless: (i) all the outstanding debt of IKON Capital is repaid, or (ii)
approval of 2/3 of the debtholders (not including Alco, IKON Capital or
affiliates of Alco or IKON) for all amounts outstanding covered by this Support
Agreement is obtained.
8. Successors and Assigns. This Agreement shall inure to the benefit of
the parties hereto, their respective successors and permitted assigns, and to
the benefit of and is enforceable by IKON Capital debtholders. All IKON Capital
debtholders shall be third party beneficiaries of this Support Agreement
provided that third party rights of such debt holders shall be limited to: (i)
right to demand that IKON Capital enforce its rights under this Agreement, (ii)
the right to proceed against Alco Standard on behalf of IKON Capital to enforce
IKON Capital's rights under this agreement if IKON Capital fails or refuses to
take timely action to enforce IKON Capital's rights hereunder following demand
for such enforcement by such debtholders
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9. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
Executed this 22nd day of October, 1996.
ALCO STANDARD
CORPORATION
By /s/ O. Gordon Brewer, Jr.
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O. Gordon Brewer, Jr.
Vice President-Finance
Accepted and agreed to by
IKON CAPITAL,INC.
By /s/ Richard P. Maier
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Richard P. Maier
President
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Exhibit (99)
News Release
Contact
Suzanne C. Shenk Martha A. Buckley
Manager, Investor Relations Director, Corporate Communications
610-993-3526 610-993-3609
ALCO DECLARES DIVIDEND OF UNISOURCE SHARES
AND REGULAR QUARTERLY DIVIDENDS
Valley Forge, Pennsylvania - November 8, 1996 - The board of directors
of Alco Standard Corporation (NYSE:ASN) today took action which will create a
new, independent public company by declaring a special dividend of 100% of the
common stock of Unisource Worldwide, Inc. to Alco shareholders.
Unisource is the largest marketer and distributor of paper products and
supply systems in the North America. Fiscal 1996 revenues were $7 billion. Alco
also operates IKON Office Solutions, a leading office technology solutions
company with annual revenues exceeding $4 billion. Alco had announced earlier
this year its intention to separate its two businesses.
The distribution date for the dividend, which will consist of one share
of Unisource common stock for every two shares of Alco common stock, will be
December 31, 1996 to shareholders of record December 13. Alco shareholders need
not take any action in order to receive the Unisource shares.
-more-
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The Alco board approved the regular quarterly cash dividend of $.14 per
common share. The dividend is payable December 10, 1996 to holders of record
November 20, 1996.
Regular dividends to shareholders of Series BB serial preferred stock of
record December 18, 1996 will be paid January 1, 1997.
Alco Standard Corporation, headquartered in Valley Forge, Pennsylvania,
operates IKON Office Solutions, one of the world's leading office technology
solutions companies, with operations in the US, Canada, Mexico, the United
Kingdom and the European continent
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