Ousted Xerox CEO and board members are back

ROCHESTER,NY Meet the new Xerox bosses, same as the old Xerox bosses. At least for now.

Adeal that would have removed Xerox CEO Jeffrey Jacobsonand some of the company’s board members has lapsed, leaving the company’s leadership team in place for the time being.

The turnaround in the continuing corporate strugglecomes just days after Xerox saidJacobson and half of the boardhad agreed to step down. The shake-up waspart of a settlement deal activistinvestorshareholders Carl Icahn and Darwin Deason, who had grown increasingly unhappy with the company’s direction.

That agreement had been scheduled to take effect on Thursday. Xerox shares closed down 3.6% at $28.31 as investor concern over the company’s futures deepened.

“Xerox and its Board of Directors recognize the uncertainty caused by the developments of the past several days among the companys investors and other stakeholders,” the company said in a statement toinvestors after the deal fell apart.

“The Xerox Board and management team remain focused on driving continued improvement in financial and operational performance, and will consider all options to create value for the company and its shareholders,” the company statement added.

Icahn and Deason blasted the latest development in a joint statement of their own:

“On Thursday night, the settlement agreement we entered into with Xerox and a unanimous Xerox Board earlier this week expired without the Xerox Board permitting the agreement to take effect, once again intentionally violating their fiduciary duties to Xerox shareholders by pursuing their own brazen self-interest.”

Icahn and Deasonhave laid siege to Xerox in recent months, pushing for a proxy fight at the company’s annual meeting and filing lawsuits that took aim at the company’s relationship with Fujifilm Holdings. They sought to end Xerox’sdecades-old joint venture with Fuji, as well as scrap a proposed merger thatwould have given the Japanese technology company majority control of Xerox.

In a lawsuit filed last month, Deason alleged thatJacobson continued negotiating with Fujifilm on the deal even after the board of directors instructed him to stopand after the boardhadcommenced a search for his replacement.

Deason also accused the board of rushing to approve the transaction when there was no reason to, other than to head off a potential proxy battle with Icahn.

“Over the next few months, we intend to see that ‘massively conflicted’Jeff Jacobson and old guard directors like Bob Keegan, Ann Reese and Chuck Prince, who have already done so much damage to the company, and are continuing to do more damage with these actions, are held fully and personally liable for their misconduct,” Icahn and Deason added in their statement. “Similarly, we intend to see that Fujifilm is held fully liable as an aider and abettor of the continuing breaches of fiduciary duties by those directors.”

Check back for more on this developing story.

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