Exhibit 10.4

amended and restated

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into effective as of ___________ (the “Effective Date”) by and among
ESSENDANT INC., a Delaware corporation (hereinafter, together with its
successors, referred to as “Holding”), ESSENDANT CO., an Illinois corporation
(hereinafter, together with its successors, referred to as the “Company”),
ESSENDANT MANAGEMENT SERVICES, LLC., an Illinois limited liability company
(hereinafter, together with its successors, referred to as “EMS”) (with Holding,
the Company, EMS, and their respective subsidiaries and affiliates including the
entity employing the Executive, and any successors thereto, hereinafter referred
to as the “Companies”), and _______________ (hereinafter referred to as the
“Executive”).

WHEREAS, the Companies and Executive are parties to an Executive Employment
Agreement dated December 31, 2012 (the “Prior Agreement”); and

WHEREAS, the Companies and Executive acknowledge and agree that it is in their
mutual best interests to amend and restate the Prior Agreement to clarify
certain provisions of the Agreement; and

WHEREAS, Executive is a key member of the management of the Companies and is
expected to devote substantial skill and effort to the affairs of the Companies,
and the Companies desire to recognize the significant personal contribution that
Executive makes and is expected to continue to make to further the best
interests of the Companies and their shareholders; and

 

WHEREAS, it is desirable and in the best interests of the Companies and its
shareholders to obtain the benefits of Executive’s services and attention to the
affairs of the Companies, and to provide inducement for Executive (1) to remain
in the service of the Companies in the event of any proposed or anticipated
Change of Control and (2) to remain in the service of the Companies in order to
facilitate an orderly transition in the event of a Change of Control; and

 

WHEREAS, it is desirable and in the best interests of the Companies and their
shareholders that Executive be in a position to make judgments and advise the
Companies with respect to any proposed Change of Control without regard to the
possibility that Executive’s employment may be terminated without compensation
in the event of a Change of Control; and

 

WHEREAS, Executive will have access to confidential, proprietary and trade
secret information of the Companies and their subsidiaries, and it is desirable
and in the best interests of the Companies and their shareholders to protect
confidential, proprietary and trade secret information of the Companies and
their subsidiaries, to prevent unfair competition by former executives of the
Companies following separation of their employment with the Companies and to
secure cooperation from former executives with respect to matters related to
their employment with the Companies; and

 

 

19362v1

--------------------------------------------------------------------------------

 

WHEREAS, it is desirable and in the best interests of the Companies and their
shareholders to obtain commitments from Executive with respect to Executive’s
service with the Companies, and to facilitate a smooth transition upon
separation from service for former executives.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, the parties agree as follows:

Section 1.Definitions.

(a)As used in this Agreement, the following terms have the respective meanings
set forth below:

“Accrued Benefits” means (i) all salary earned or accrued through the date the
Executive’s employment is terminated, (ii) reimbursement for any and all monies
expended by Executive in connection with the Executive’s employment for
reasonable and necessary out-of-pocket business expenses incurred by the
Executive in performance of services for the Companies through the date the
Executive’s employment is terminated, (iii) all accrued and unpaid annual
incentive compensation awards for the year immediately prior to the year in
which the Executive’s employment is terminated, and (iv) all other payments and
benefits payable on or after termination of employment to which the Executive is
entitled at the date of termination under the terms of any applicable
compensation arrangement or benefit plan or program of the Companies.  “Accrued
Benefits” shall not include any entitlement to severance pay or severance
benefits under any severance policy or plan generally applicable to the
Companies’ salaried employees.

“Affiliate” shall have the meaning given such term in Rule 12b-2 of the Exchange
Act.

“Board” shall mean, so long as Holding directly or indirectly owns all of the
outstanding Voting Securities (as hereinafter defined in the definition of
Change of Control) of the Companies, the board of directors of Holding.  In all
other cases, Board means the board of directors of the Company.

“Cause” shall mean (i) conviction of, or plea of nolo contendere to, a felony
(excluding motor vehicle violations); (ii) theft or embezzlement, or attempted
theft or embezzlement, of money or property or assets of the Companies; (iii)
illegal use of drugs; (iv) material breach of this Agreement or any
employment-related undertakings provided in a writing signed by the Executive
prior to or concurrently with this Agreement; (v) gross negligence or willful
misconduct in the performance of Executive’s duties; (vi) breach of any
fiduciary duty owed to the Companies, including, without limitation, engaging in
competitive acts while employed by the Companies; or (vii) the Executive’s
willful refusal to perform the assigned duties for which the Executive is
qualified as directed by the Executive’s Supervising Officer (as hereinafter
defined) or the Board; provided, that in the case of any event constituting
Cause within clauses (iv) through (vii) which is curable by the

2

 

 

 

 

 

--------------------------------------------------------------------------------

 

Executive, the Executive has been given written notice by the Companies of such
event said to constitute Cause, describing such event in reasonable detail, and
has not cured such action within thirty (30) days of such written notice as
reasonably determined by the Chief Executive Officer.  For purposes of this
definition of Cause, action or inaction by the Executive shall not be considered
“willful” unless done or omitted by the Executive (A) intentionally or not in
good faith and (B) without reasonable belief that the Executive’s action or
inaction was in the best interests of the Companies, and shall not include
failure to act by reason of total or partial incapacity due to physical or
mental illness.

“Change of Control” shall mean and include any of the following:

(a) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
“group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial
Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or
more of the combined voting power of Holding’s then outstanding voting
securities entitled to vote generally in the election of directors (“Voting
Securities”); provided, however, that the acquisition or holding of Voting
Securities by (i) Holding of any of its Subsidiaries, (ii) an employee benefit
plan (or a trust forming a part thereof) maintained by Holding or any of its
Subsidiaries, or (iii) any Person in which the Executive has a substantial
equity interest shall not constitute a Change of Control.  Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur solely because any
Person acquired Beneficial Ownership of more than the permitted amount of Voting
Securities as a result of (A) the issuance of Voting Securities by Holding in
exchange for assets (including equity interests) or funds with a fair value
equal to the fair value of the Voting Securities so issued or (B) the
acquisition of Voting Securities by Holding which, by reducing the number of
Voting Securities outstanding, increases the proportional number of shares
Beneficially Owned by such Person; provided that if a Change of Control would
occur (but for the operation of this sentence) as a result of the issuance of
Voting Securities or the acquisition of Voting Securities by Holding, and after
such issuance or acquisition, such Person becomes the Beneficial Owner of any
additional Voting Securities which increases the percentage of the Voting
Securities Beneficially Owned by such Person to more than 50% of the Voting
Securities of Holding, then a Change of Control shall occur;

(b) At any time during a period of two consecutive years, the individuals who at
the beginning of such period constituted the Board (the “Incumbent Board”) cease
for any reason to constitute more than 50% of the Board; provided, however, that
if the election, or nomination for election by Holding’s shareholders, of any
new director was approved by a vote of more than 50% of the directors then
comprising the Incumbent Board, such new director shall, for purposes of this
subsection (b), be considered as though such person were a member of the
Incumbent Board; provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of (i) either an actual “Election Consent” (as described in
Rule

3

 

 

 

 

 

--------------------------------------------------------------------------------

 

14a-11 promulgated under the Exchange Act) or other actual solicitation of
proxies or consents by or on behalf of a Person other than the Incumbent Board
(a “Proxy Contest”), or (ii) by reason of an agreement intended to avoid or
settle any actual or threatened Election Contest or Proxy Contest;

(c) Consummation of a merger, consolidation or reorganization or approval by
Holding’s shareholders of a liquidation or dissolution of Holding or the
occurrence of a liquidation or dissolution of Holding (“Business Combination”),
unless, following such Business Combination:

(i) the Persons with Beneficial Ownership of Holding, immediately before such
Business Combination, have Beneficial Ownership of more than 50% of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation (or in the election of
a comparable governing body of any other type of entity) resulting from such
Business Combination (including, without limitation, an entity which as a result
of such transaction owns Holding or all or substantially all of Holding’s assets
either directly or through one or more subsidiaries) (the “Surviving Company”)
in substantially the same proportions as their Beneficial Ownership of the
Voting Securities immediately before such Business Combination,

(ii) the individuals who were members of the Incumbent Board immediately prior
to the execution of the initial agreement providing for such Business
Combination constitute more than 50% of the members of the board of directors
(or comparable governing body of a noncorporate entity) of the Surviving
Company; and

(iii) no Person (other than Holding, any of its Subsidiaries or any employee
benefit plan (or any trust forming a part thereof) maintained by Holding, the
Surviving Company or any Person who immediately prior to such Business
Combination had Beneficial Ownership of 30% or more of the then Voting
Securities) has Beneficial Ownership of 30% or more of the then combined voting
power of the Surviving Company’s then outstanding voting securities; provided,
that notwithstanding this clause (iii), a Change of Control shall not be deemed
to occur solely because any Person acquired Beneficial Ownership of more than
30% of Voting Securities as a result of the issuance of Voting Securities by
Holding in exchange for assets (including equity interests) or funds with a fair
value equal to the fair value of the Voting Securities so issued; provided,
however that a Business Combination with a Person in which the Executive has a
substantial equity interest shall not constitute a Change of Control with
respect to such Person.

(d) The closing of any assignment, sale, conveyance, transfer, lease or other
disposition of all or substantially all of the assets of Holding to any Person
(other than a Person in which the Executive has a substantial equity interest
(in which case there shall not be a Change of Control with respect to such
Person) and other than a Subsidiary of Holding or other entity, the Persons with
Beneficial Ownership of which are the same Persons with Beneficial Ownership of
Holding and such

4

 

 

 

 

 

--------------------------------------------------------------------------------

 

Beneficial Ownership is in substantially the same proportions), or the
occurrence of the same.

Notwithstanding the foregoing, to the extent necessary to comply with the
requirements of Section 409A of the Code, the events that would otherwise
constitute a Change of Control hereunder shall not constitute a Change of
Control unless and until such events also constitute a “change in control event”
(as described in Treas. Reg. Section 1.409A-3(i)(5)(i)) with respect to Holding.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Good Reason” shall mean:  (i) any material breach by the Companies of this
Agreement without Executive’s written consent, or (ii) without Executive’s
written consent:  (A) a material reduction in the Executive’s Base Salary, or
(B) the relocation of the Executive’s principal place of employment more than
fifty (50) miles from its location on the Effective Date.  For purposes of this
Agreement, a Change of Control, alone, does not constitute Good
Reason.  Furthermore, notwithstanding the above, the occurrence of any of the
events described above will not constitute Good Reason unless (x) the Executive
gives the Companies written notice within thirty (30) days after the initial
occurrence of any of such events that the Executive believes that such event
constitutes Good Reason, and (y) the Companies thereafter fail to cure any such
event within sixty (60) days after receipt of such notice.

“Person” shall mean any natural person, firm, corporation, limited liability
company, trust, partnership, limited or limited liability partnership, business
association, joint venture or other entity and, for purposes of the definition
of Change of Control herein, shall comprise any “person”, within the meaning of
Sections 13(d) and 14(d) of the Exchange Act, including a “group” as therein
defined.

“Subsidiary” shall mean, with respect to any Person, any other Person of which
such first Person owns 20% or more of the economic interest in such Person or
owns or has the power to vote, directly or indirectly, securities representing
20% or more of the votes ordinarily entitled to be cast for the election of
directors or other governing Persons.

(b)The capitalized terms used in Section 5(j) have the respective meanings
assigned to them in such Section and the following additional terms have the
respective meanings assigned to them in the Sections hereof set forth opposite
them:

“Accounting Firm”Section 5(j)

“Agreement”Introduction

“Annual Bonus”Section 4(b)

“Base Salary”Section 4(a)

5

 

 

 

 

 

--------------------------------------------------------------------------------

 

“Bonus Plan”Section 4(b)

“Company”Introduction

“Companies”Introduction

“Confidential information or proprietary data”Section 6(a)(2)

“Customer”Section 6(d)(2)

“Disability”Section 5(c)

“Effective Date”Introduction

“Employment Period”Section 2

“EMS”Introduction

“Executive”Introduction

“Holding”Introduction

“Prior Agreement”First Recital

“Retirement”Section 5(f)

“Supervising Officer”Section 3(a)

“Supplier”Section 6(d)(2)

“Term” and “Termination Date”Section 2

Section 2.Term and Employment Period.  Subject to Section 19 hereof, the term of
this Agreement “Term” shall commence on the Effective Date of this Agreement and
shall continue until the effective date of termination of the Executive’s
employment hereunder pursuant to Section 5 of this Agreement. The period during
which the Executive is employed by the Companies pursuant to this Agreement is
referred to herein as the “Employment Period.”  The date on which termination of
the Executive’s employment hereunder shall become effective is referred to
herein as the “Termination Date.”  For purposes of Section 5 of this Agreement
only, the Termination Date shall mean the date on which a “separation from
service” has occurred for purposes of Section 409A of the Code.

 

Section 3.Duties.

(a)During the Employment Period, the Executive (i) shall serve as
______________________ of the Companies, (ii) shall report directly to an
officer of the Companies (the “Supervising Officer”) who shall be selected by
the Board or the Chief Executive Officer in its or his or her sole discretion,
(iii) shall, subject to and in accordance with the authority and direction of
the Board and/or the Supervising Officer have such authority and perform in a
diligent and competent manner such duties as may be assigned to the Executive
from time to time by the Board and/or the Supervising Officer and (iv) shall
devote the Executive’s best efforts and such time, attention, knowledge and
skill to the operation of the business and affairs of the Companies as shall be
necessary to perform the Executive’s duties.  During the Employment Period, the
Executive’s place of performance for the Executive’s duties and responsibilities
shall be at the Companies’ corporate headquarters office, unless another
principal place of performance is agreed in writing among the parties and except
for required travel by the Executive on the Companies’ business or as may be
reasonably required by the Companies.

(b)Notwithstanding the foregoing, it is understood during the Employment Period,
subject to any conflict of interest policies of the Companies, the Executive may
(i) serve in any capacity with any civic, charitable, educational or
professional organization provided that such service does not materially
interfere with the Executive’s duties and

6

 

 

 

 

 

--------------------------------------------------------------------------------

 

responsibilities hereunder, (ii) make and manage personal investments of the
Executive’s choice, and (iii) with the prior consent of the Companies’ Chief
Executive Officer, which shall not be unreasonably withheld, serve on the board
of directors of one (1) for-profit business enterprise.

Section 4.Compensation.  During the Employment Period, the Executive shall be
compensated as follows:

(a)the Executive shall receive from the Companies, at such intervals and in
accordance with the Companies’ payroll policies as may be in effect from time to
time, an annual salary (pro rata for any partial year) equal to $________ (“Base
Salary”).  The Base Salary shall be reviewed by the Board from time to time and
may, in the Board’s sole discretion, be increased when deemed appropriate by the
Board; if so increased, it shall not thereafter be reduced (other than an
across-the-board reduction applied in the same percentage at the same time to
all of the Companies’ senior executives at the same grade level);

(b)the Executive shall be eligible to earn an annual incentive compensation
award under the Companies’ management incentive or bonus plan, or a successor
plan thereto, as shall be in effect from time to time (the “Bonus Plan”),
subject to achievement of performance goals determined in accordance with the
terms of the Bonus Plan (such annual incentive compensation award, the “Annual
Bonus”), with such Annual Bonus to be payable in a cash lump sum at such time as
bonuses are ordinarily paid to the Companies’ senior executives at the same
grade level;

(c)the Executive shall be reimbursed, at such intervals and in accordance with
the Companies’ policies as may be in effect from time to time, for any and all
reasonable and necessary out-of-pocket business expenses incurred by the
Executive during the Employment Period for the benefit of the Companies, subject
to documentation in accordance with the Companies’ policies;

(d)the Executive shall be entitled to participate in all incentive, savings and
retirement plans, equity-based compensation plans, practices, policies and
programs applicable generally to other senior executives of the Companies at the
same grade level and as determined by the Board from time to time;

(e)the Executive and/or the Executive’s family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Companies to
senior executives of the Companies at the same grade level (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, and accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other executives of
the Companies at the same grade level;

(f)the Executive shall be entitled to not less than twenty (20) paid vacation
days per calendar year (pro rata for any partial year); and

7

 

 

 

 

 

--------------------------------------------------------------------------------

 

(g)the Executive shall be entitled to participate in the Companies’ other
executive fringe benefits and perquisites generally applicable to the Companies’
senior executives at the same grade level in accordance with the terms and
conditions of such arrangements as are in effect from time to time.

Section 5.Termination of Employment.

(a)All Accrued Benefits to which the Executive (or the Executive’s estate or
beneficiary) is entitled shall be payable within thirty (30) days following the
Termination Date, except as otherwise specifically provided herein or under the
terms of any applicable policy, plan or program, in which case the payment terms
of such policy, plan or program shall be determinative.

(b)Any termination by the Companies, or by the Executive, of the Employment
Period shall be communicated by written notice of such termination to the
Executive, if such notice is delivered by the Companies, and to the Companies,
if such notice is delivered by the Executive, each in compliance with the
requirements of Section 13 hereof.  Except in the event of termination of the
Employment Period by reason of Cause or the Executive’s death, the effective
date of the termination of Executive’s employment shall be no earlier than
thirty (30) days following the date on which notice of termination is delivered
by one party to the other in compliance with the requirements of Section 13
hereof.

(c)If the Employment Period is terminated, other than on or within two (2) years
following the date of a Change of Control, by the Executive for Good Reason such
that the Executive’s separation from service occurs within two years following
the initial existence of the condition giving rise to Good Reason, or by the
Companies for any reason other than Cause or the Executive’s death or permanent
disability, as defined in the Companies’ Board-approved disability plan or
policy as in effect from time to time (or, to the extent necessary to comply
with Section 409A of the Code, as defined in Treas. Reg. Section 1.409A-3(i)(4))
(“Disability”), then, as the Executive’s exclusive right and remedy in respect
of such termination:

(i)the Executive shall be entitled to receive from the Companies the Executive’s
Accrued Benefits in accordance with Section 5(a);

(ii)the Executive shall be entitled to an amount equal to one and one-half (1½)
times the Executive’s then existing Base Salary, to be paid in equal
installments over the eighteen (18) month period following the Termination Date,
but to the extent necessary to comply with Section 409A of the Code, in no event
shall such amount paid under this Section 5(c)(ii) prior to the first day of the
seventh month following the Termination Date exceed the lesser of (A) two (2)
times the maximum amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the calendar year in which the
Termination Date occurs, or (B) two (2) times the sum of Executive’s annualized
compensation based upon the annual rate of pay for services to the Companies for
the calendar year prior to the calendar year in which the Termination Date
occurs (adjusted for any increase during that year that was expected to continue
indefinitely if the

8

 

 

 

 

 

--------------------------------------------------------------------------------

 

Executive had not separated from service), consistent with the parties’
intention that the payments under this Section 5(c)(ii) constitute a “separation
pay plan due to involuntary separation from service” under Treas. Reg. §
1.409A-1(b)(9)(iii), subject to the requirements of Section 5(e), Section 5(h)
and Section 11;

(iii)the Executive shall be entitled to a payment in an amount equal to one and
one-half (1½) times his or her target Annual Bonus for the calendar year during
which the Termination Date occurs (or, if the target Annual Bonus for such year
has not been established as of the Termination Date or has been decreased from
the prior year’s target Annual Bonus, then the target Annual Bonus for the prior
year), to be paid at such time as the Annual Bonus award would otherwise be paid
in accordance with the Companies’ policies;  

(iv)the Executive shall be entitled to a lump-sum payment in an amount equal to
the pro-rata actual Annual Bonus award which would otherwise be payable for the
calendar year during which the Termination Date occurs, with such pro-rata
actual Annual Bonus award determined by multiplying the Annual Bonus award
amount by a fraction, the numerator of which is the number of days in the
calendar year of the Termination Date elapsed prior to the Termination Date and
the denominator of which is three hundred and sixty-five (365); such lump sum
payment to be made on the date that the Annual Bonus payments are made to other
participants in the Bonus Plan;

(v)so long as a timely election for continuation coverage is made by the
Executive, the Executive shall continue to be covered, upon the same terms and
conditions described in Section 4(e) hereof, by the medical and/or dental
insurance plans, programs and/or arrangements as in effect for similarly
situated active employees of the Companies, beginning on the Termination Date
and continuing until the earlier of:  (A) the eighteen (18) month anniversary
following the date of the Termination Date, and (B) the date the Executive
receives substantially equivalent coverage under the plans, programs and/or
arrangements of a subsequent employer, provided that Executive timely pays the
Executive’s portion of such coverage and otherwise remains eligible for such
coverage under applicable law, and provided further that if the Companies
determine that the coverage to be provided under this Section 5(c)(v) would
cause a self-insured plan maintained by the Companies to be in violation of the
nondiscrimination requirements of Section 105(h) of the Code, then such coverage
will be paid for by the Executive by means of the Companies reporting imputed
income to Executive on a monthly basis for the fair market value of such
coverage plus additional imputed amounts to pay any income tax at source on
resulting wages subject to FICA or the income tax withholding provisions of
federal or state tax law, including pyramiding wages and taxes (and the
Companies shall be responsible for depositing all applicable withholding amounts
in a timely manner with the appropriate tax authority);

(vi)the Executive shall receive a lump sum payment in an amount equal to the
amount the Companies would otherwise expend for 18 month’s coverage for its
share of the premiums for life and disability insurance plans or programs as in

9

 

 

 

 

 

--------------------------------------------------------------------------------

 

effect for Executive immediately prior to the Termination Date, payable to
Executive within ninety (90) days following the Termination Date; and

(vii)for the period commencing on the Termination Date and ending not later than
the last day of the second calendar year after the Termination Date, the
Executive shall be entitled to receive executive level career transition
assistance services provided by a career transition assistance firm selected by
the Executive and paid for by the Companies in an amount not to exceed
$35,000.  The Executive shall not be eligible to receive cash in lieu of
executive level career transition assistance services.  

(d)If during the Employment Period, a Change of Control occurs and the
Employment Period is terminated on or within two (2) years following the date of
such Change of Control by the Companies for any reason other than Cause or
Executive’s death or Disability or by the Executive for Good Reason, and, in the
case of Executive’s resignation for Good Reason, the Executive’s separation from
service occurs within two years following the initial existence of the condition
giving rise to Good Reason, then:

(i)the Executive shall be entitled to receive from the Companies the Executive’s
Accrued Benefits in accordance with Section 5(a);

(ii)the Executive shall be entitled to a lump-sum payment in an amount equal to
two (2) times the Executive’s then existing Base Salary, to be paid within
ninety (90) days following the Termination Date, subject to the requirements of
Section 5(e), Section 5(h) and Section 11;

(iii)the Executive shall be entitled to a lump-sum payment in an amount equal to
two (2) times the Executive’s target incentive compensation award for the
calendar year during which the Termination Date occurs, to be paid within ninety
(90) days following the Termination Date;

(iv)the Executive shall be entitled to a lump-sum payment to be paid within
ninety (90) days following the Termination Date in an amount equal to the
pro-rata target incentive compensation award for the calendar year during which
the Termination Date occurs.  Such pro-rata target incentive compensation award
shall be determined by multiplying the target incentive compensation award
amount by a fraction, the numerator of which is the number of days in the
calendar year of the Termination Date elapsed prior to the Termination Date and
the denominator of which is three hundred and sixty-five (365);

(v)so long as a timely election for continuation coverage is made by the
Executive, the Executive shall continue to be covered, upon the same terms and
conditions described in Section 4(e) hereof, by the medical and/or dental
insurance plans, programs and/or arrangements as in effect for similarly
situated active employees of the Companies, beginning on the Termination Date
and continuing until the earlier of:  (A) the eighteen (18) month anniversary
following the date of the Termination Date, and (B) the date the Executive
receives substantially

10

 

 

 

 

 

--------------------------------------------------------------------------------

 

equivalent coverage under the plans, programs and/or arrangements of a
subsequent employer, provided that Executive timely pays the Executive’s portion
of such coverage and otherwise remains eligible for such coverage under
applicable law, and provided further that if the Companies determine that the
coverage to be provided under this Section 5(d)(v) would cause a self-insured
plan maintained by the Companies to be in violation of the nondiscrimination
requirements of Section 105(h) of the Code, then such coverage will be paid for
by the Executive by means of the Companies reporting imputed income to Executive
on a monthly basis for the fair market value of such coverage plus additional
imputed amounts to pay any income tax at source on resulting wages subject to
FICA or the income tax withholding provisions of federal or state tax law,
including pyramiding wages and taxes (and the Companies shall be responsible for
depositing all applicable withholding amounts in a timely manner with the
appropriate tax authority);  

(vi)the Executive shall receive a lump sum payment in an amount equal to the
amount the Companies would otherwise expend for 24-month’s coverage for its
share of the premiums for life and disability insurance plans or programs as in
effect for Executive immediately prior to the Termination Date, payable to
Executive within ninety (90) days following the Termination Date;

(vii)the Executive shall receive a lump sum cash payment, payable to Executive
within ninety (90) days following the Termination Date, in an amount equal to
the additional benefit value (on a present value, differential basis) that would
be payable to Executive under the Companies’ defined benefit retirement plan if
the Executive had two (2) additional years of credit for purposes of age,
benefit service and vesting;

(viii)if the Executive’s outstanding equity-based incentive awards have not by
then fully vested pursuant to the terms of the Companies’ applicable
equity-based incentive plan(s) and applicable award agreement(s), then to the
extent permitted in those plan(s) and as provided in the applicable award
agreement(s), the Executive shall continue to vest in the Executive’s unvested
equity-based incentive awards following the Termination Date;

(ix)for the period commencing on the Termination Date and ending not later than
the last day of the second calendar year after the Termination Date, the
Executive shall be entitled to receive executive level career transition
assistance services provided by a career transition assistance firm selected by
the Executive and paid for by the Companies in an amount not to exceed
$35,000.  The Executive shall not be eligible to receive cash in lieu of
executive level career transition assistance services; and  

(x)the Executive shall be entitled to be reimbursed by the Companies for the
Executive’s reasonable attorneys’ fees, costs and expenses incurred in
conjunction with any dispute regarding Section 5(d) if Executive prevails in any
material respect in such dispute, provided that (A) the applicable statutes of
limitations shall not have expired for any claim arising from the dispute that
could be raised in a court of law; (B) Executive shall submit to the Companies
verification

11

 

 

 

 

 

--------------------------------------------------------------------------------

 

of legal expenses for reimbursement within 60 days from the date the expense was
incurred; (C) the Companies shall reimburse Executive for eligible expenses
promptly thereafter, but in any event not earlier than the first day of the
seventh month following the Termination Date and not later than December 31 of
the calendar year following the calendar year in which the expense was incurred;
(D) the expenses eligible for reimbursement during any given calendar year shall
not affect the expenses eligible for reimbursement in any other calendar year;
and (E) the right to reimbursement hereunder may not be liquidated or exchanged
for cash or any other benefit.

(e)Any amounts payable pursuant to Sections 5(c) and 5(d) above shall be
considered severance payments and, except for the Executive’s vested benefits
under the Companies’ employee benefit plans (other than severance plans), shall
be in full and complete satisfaction of the obligations of the Companies to the
Executive in connection with the termination of the Executive’s employment. Any
cash payment due under Section 5(c)(iii), (iv) and (vi)  or under Section
5(d)(ii), (iii), (iv), (vi), and (vii) is intended to constitute a short-term
deferral under Treas. Reg. § 1.409A-1(b)(4) and, accordingly, notwithstanding
any longer time period specified in Section 5(c) or (d), such payment shall be
made no later than two and one-half (2-1/2) months after the end of the calendar
year in which the right to the payment is no longer subject to a substantial
risk of forfeiture within the meaning of the regulations under Section 409A of
the Code, with payment in all cases being conditioned on satisfaction of the
requirements of Section 5(h).

(f)If the Employment Period is terminated as a result of the Executive’s death,
Disability or Retirement (as defined below), then the Executive shall be
entitled to (i) the Executive’s Accrued Benefits in accordance with Section
5(a), (ii) any benefits that may be payable to the Executive under any
applicable Board-approved disability, life insurance or retirement plan or
policy in accordance with the terms of such plan or policy, and (iii) a lump sum
payment in an amount equal to:

(A)in the event the Employment Period is terminated as a result of Executive’s
death or Disability, an amount equal to the pro-rata target Annual Bonus award
for the calendar year during which the Termination Date occurs by reason of the
Executive’s death or Disability. Such lump sum payment shall be determined by
multiplying the target Annual Bonus award amount by a fraction, the numerator of
which is the number of days in the calendar year of the Termination Date elapsed
prior to the Termination Date and the denominator of which is three hundred and
sixty-five (365); or

(B)in the event the Employment Period is terminated as a result of Executive’s
Retirement, an amount equal to the pro-rata actual Annual Bonus award for the
calendar year during which the Termination Date occurs by reason of the
Executive’s Retirement. Such lump sum payment shall be determined by multiplying
the actual Annual Bonus award amount by a fraction, the numerator of which is
the number of days in the calendar year of the Termination Date elapsed prior to
the Termination Date and the denominator of which is three hundred and
sixty-five (365).

12

 

 

 

 

 

--------------------------------------------------------------------------------

 

In the event the Employment Period is terminated as a result of Executive’s
death, such lump sum payment shall be made within 30 days following the
Termination Date; in the event the Employment Period is terminated as a result
of Executive’s Disability or Retirement, such lump sum payment shall be made on
the date that Annual Bonus payments are made to other participants in the Bonus
Plan, but in no case later than March 15 of the year following the year in which
the Termination Date occurs.  As used in this Agreement, “Retirement” shall mean
the Executive’s separation from service (as defined in the regulations
promulgated under Section 409A of the Code) occurring after the Executive
reaches age sixty (60) and having completed at least five (5) years of service
with the Companies.

(g)Notwithstanding anything else contained herein, if the Executive terminates
his employment for any reason other than Disability or Retirement and without
Good Reason, or the Companies terminate the Executive’s employment for Cause,
all of the Executive’s rights to payment from the Companies (including pursuant
to any plan or policy of the Companies) shall terminate immediately, except the
right to payment for Accrued Benefits in respect of periods prior to such
termination.

(h)Notwithstanding anything to the contrary contained in this Section 5, the
Executive shall be required to execute the Companies’ then current standard
release agreement as a condition to receiving any of the payments and benefits
provided for in Sections 5(c) and (d), excluding the Accrued Benefits in
accordance with Section 5(a), and no payments and benefits provided for in
Sections 5(c) and (d) other than the Accrued Benefits in accordance with Section
5(a) shall be payable to Executive unless all applicable consideration and
rescission periods for the release agreement have expired, Executive has not
rescinded the release agreement and Executive is in compliance with each of the
terms and conditions of such release agreement and this Agreement as of the date
of such payments and benefits.  It is acknowledged and agreed that the then
current standard release agreement shall not diminish or terminate the
Executive’s rights under this Agreement or the Indemnification Agreement
(identified in Section 16 below).

(i)In the event of a termination of the Executive’s employment entitling the
Executive to benefits under Section 5(c) or 5(d) above, subject to the
Executive’s affirmative obligations pursuant to Section 6, the Executive shall
be under no obligation to seek other employment or otherwise mitigate the
obligations of the Companies under this Agreement.

(j)Notwithstanding any provision to the contrary contained in this Agreement, if
the cash payments due and the other benefits to which Executive shall become
entitled under Section 5, either alone or together with other payments in the
nature of compensation to Executive which are contingent on a change in the
ownership or effective control of the Companies or in the ownership of a
substantial portion of the assets of the Companies or otherwise, would
constitute a “parachute payment” (as defined in Section 280G of the Code or any
successor provision thereto), such payments or benefits shall be reduced (but
not below zero) to the largest aggregate amount as will result in no portion
thereof being subject to the excise tax imposed under Section 4999 of the Code
(or any successor provision thereto) or being non-deductible to the Companies
for Federal Income Tax

13

 

 

 

 

 

--------------------------------------------------------------------------------

 

purposes pursuant to Section 280G of the Code (or any successor provision
thereto), provided, however, that the foregoing reduction will be made only if
and to the extent that such reduction would result in an increase in the
aggregate payment and benefits to be provided to Executive, determined on an
after-tax basis (taking into account the excise tax imposed pursuant to
Section 4999 of the Code, or any successor provision thereto, any tax imposed by
any comparable provision of state law, and any applicable federal, state and
local income taxes). Executive agrees to take such action as Employer reasonably
requests to mitigate or challenge the application of such tax, provided that
Employer shall supply such counsel and expert advice, including legal counsel
and accounting advice, as may reasonably be required, and shall be responsible
for the payment of such experts’ fees.  If requested by Executive or the
Companies, the determination of whether any reduction in payments or benefits to
be provided under this Section 5 or otherwise is required pursuant to this
Section 5(j) will be made by a national accounting firm selected and reimbursed
by the Companies from among the ten (10) largest accounting firms in the United
States as determined by gross revenues, not then-engaged as the Companies’
independent public auditor (the “Accounting Firm”), subject to Executive’s
consent (not to be unreasonably withheld) and the determination of such
Accounting Firm will be final and binding on all parties. In making its
determination, the Accounting Firm will allocate a reasonable portion of such
payments and benefits to the value of any personal services rendered following
the Change of Control and the value of any non-competition agreement or similar
agreements to the extent that such items reduce the amount of the parachute
payment. In the event that any payment or benefit intended to be provided under
this Section 5 or otherwise is required to be reduced pursuant to this Section
5(j), the Companies shall make such reduction first by reducing amounts payable
under Section 5(d)(i) and thereafter by reducing amounts payable under the
following Sections of this Agreement in the following order, as necessary to
achieve the reduction: 5(d)(iii), 5(d)(iv), 5(d)(vi), 5(d)(vii), and
5(d)(ii).  Amounts payable as reimbursements under Sections 5(d)(v) and 5(d)(x),
if any, shall not be subject to reduction. No modification of, or successor
provision to, Section 280G or Section 4999 subsequent to the date of this
Agreement shall, however, reduce the benefits to which the Executive would be
entitled under this Agreement in the absence of this Section 5(j) to a greater
extent than they would have been reduced if Section 280G and Section 4999 had
not been modified or superseded subsequent to the date of this Agreement,
notwithstanding anything to the contrary provided in the first sentence of this
Section 5(j).

 

Section 6.Further Obligations of the Executive.

(a)(1)During the Executive’s employment by the Companies, whether before or
after the Employment Period, and after the termination of Executive’s employment
by the Companies, the Executive shall not, directly or indirectly, disclose,
disseminate, make available or use any confidential information or proprietary
data of the Companies or any of their Subsidiaries, except as reasonably
necessary or appropriate for the Executive to perform the Executive’s duties for
the Companies, or as authorized in writing by the Board or as required by any
court or administrative agency (and then only after prompt notice to the
Companies to permit the Companies to seek a protective order).

(2)For purposes of this Agreement, “confidential information or proprietary
data” means information and data prepared, compiled, or acquired by or for

14

 

 

 

 

 

--------------------------------------------------------------------------------

 

the Executive during or in connection with the Executive’s employment by the
Companies (including, without limitation, information belonging to or provided
in confidence by any Customer, Supplier, trading partner or other Person to
which the Executive had access by reason of Executive’s employment with the
Companies) which is not generally known to the public or which could be
harmful  to the Companies or their Subsidiaries if disclosed to Persons outside
of the Companies.  Such confidential information or proprietary data may exist
in any form, tangible or intangible, or media (including any information
technology-related or electronic media) and includes, but is not limited to, the
following information of or relating to the Companies or any of their
Subsidiaries, Customers or Suppliers:

(i)Business, financial and strategic information, such as sales and earnings
information and trends, material, overhead and other costs, profit margins,
accounting information, banking and financing information, pricing policies,
capital expenditure/investment plans and budgets, forecasts, strategies, plans
and prospects.

(ii)Organizational and operational information, such as personnel and salary
data, information concerning the utilization or capabilities of personnel,
facilities or equipment, logistics management techniques, methodologies and
systems, methods of operation data and facilities plans.

(iii)Advertising, marketing and sales information, such as marketing and
advertising data, plans, programs, techniques, strategies, results and budgets,
pricing and volume strategies, catalog, licensing or other agreements or
arrangements, and market research and forecasts and marketing and sales training
and development courses, aids, techniques, instruction and materials.

(iv)Product and merchandising information, such as information concerning
offered or proposed products or services and the sourcing of the same, product
or services specifications, data, drawings, designs, performance
characteristics, features, capabilities and plans and development and delivery
schedules.

(v)Information about existing or prospective Customers or Suppliers, such as
Customer and Supplier lists and contact information, Customer preference data,
purchasing habits, authority levels and business methodologies, sales history,
pricing and rebate levels, credit information and contracts.

(vi)Technical information, such as information regarding plant and equipment
organization, performance and design, information technology and logistics
systems and related designs, integration, capabilities, performance and plans,
computer hardware and software, research and development objectives, budgets and
results, intellectual property applications, and other design and performance
data.

(b)All records, files, documents and materials, in whatever form and media,
relating to the Companies’ or any of their Subsidiaries’ business (including,
but not limited

15

 

 

 

 

 

--------------------------------------------------------------------------------

 

to, those containing or reflecting any confidential information or proprietary
data) which the Executive prepares, uses, or comes into contact with, including
the originals and all copies thereof and extracts and derivatives therefrom,
shall be and remain the sole property of the Companies or their
Subsidiaries.  Upon termination of the Executive’s employment for any reason,
whether during or after the Employment Period, the Executive shall immediately
return all such records, files, documents, materials and other property of the
Companies and their Subsidiaries in the Executive’s possession, custody or
control, in good condition, to the Companies.

(c)The Companies maintain, and Executive acknowledges and agrees, the Companies
have and will entrust Executive with proprietary information, strategies,
knowledge, customer relationships and know-how which would be detrimental to the
Companies’ interest in protecting relationships with Customers and/or Suppliers
if Executive were to provide services or otherwise participate in the operation
of a competitor of the Companies.  Therefore, during (i) the Executive’s
employment by the Companies, whether during or after the Employment Period, and
(ii) the eighteen (18) month period following the end of Executive’s employment
with the Companies, the Executive shall not in any capacity (whether as an
owner, employee, consultant or otherwise) at any time perform, manage,
supervise, or be responsible or accountable for anyone else who is performing
services -- which are the same as, substantially similar or related to the
services the Executive is providing, or during the last two years of the
Executive’s employment by the Companies has provided, for the Companies or their
Subsidiaries -- for, or on behalf of, any other Person who or which is (1) a
wholesaler of office products, including traditional office products, computer
consumable products, office furniture, janitorial and/or sanitation products,
food service paper/non-food products, audio/visual and business machines or such
other products whether or not related to the foregoing provided by the Companies
or their Subsidiaries during the last twelve (12) months of the Executive’s
employment with the Companies, whether during or after the Employment Period,
(2) a provider of services the same as or substantially similar to those
provided by the Companies or their Subsidiaries during the last twelve (12)
months of the Executive’s employment with the Companies, whether during or after
the Employment Period, or (3) engaged in a line of business other than described
in (1) or (2) hereinabove which is the same or substantially similar to the
lines of business engaged in by the Companies or their Subsidiaries, or to any
line of business which to the Executive’s knowledge is under active
consideration or planning by the Companies and their Subsidiaries, during the
last twelve (12) months of the Executive’s employment with the Companies,
whether during or after the Employment Period.  

(d)(1)During (i) the Executive’s employment by the Companies, whether during or
after the Employment Period, and (ii) the eighteen (18) month period following
the end of the Executive’s  employment with the Companies, the Executive shall
not at any time, directly or indirectly, solicit any Customer for or on behalf
of any Person other than the Companies or any of their Subsidiaries with respect
to the purchase of (A) office products, including traditional office products,
computer consumable products, office furniture, janitorial and/or sanitation
products, food service paper/non-food products, audio/visual and business
machines, or such other products whether or not related to the foregoing
provided by the Companies or their Subsidiaries to such Customer during the

16

 

 

 

 

 

--------------------------------------------------------------------------------

 

last twelve (12) months of the Executive’s employment with the Companies,
whether during or after the Employment Period, (B) services the same as or
substantially similar to those provided by the Companies or their Subsidiaries
to such Customer during the last twelve (12) months of the
Executive’s  employment with the Companies, whether during or after the
Employment Period or (C) products or services from a line of business other than
as described in (A) or (B) herein which are the same or substantially similar to
the products and services provided to such Customer from a line of business
engaged in by the Companies or their Subsidiaries during the last twelve (12)
months of the Executive’s  employment with the Companies, whether during or
after the Employment Period.  Without limiting the foregoing, (i) during the
Executive’s employment by the Companies, whether during or after the Employment
Period, and (ii) insofar as the Executive may be employed by, or acting for or
on behalf of, a Supplier at any time within the eighteen (18) month period
following the end of the Executive’s employment with the Companies, the
Executive shall not at any time, directly or indirectly, solicit any Customer to
switch the purchase of the products or services described hereinabove from the
Companies or their Subsidiaries to Supplier.  

(2) For purposes of this Agreement, a “Customer” is any Person who or which has
ordered or purchased by or from the Companies or any of their Subsidiaries (A)
office products, including traditional office products, computer consumable
products, office furniture, janitorial and/or sanitation products, food service
paper/non-food products, audio/visual and business machines or such other
products whether or not related to the foregoing, (B) services provided by or
from the Companies or any of their Subsidiaries or (C) products or services from
a line of business other than as described in (A) or (B) herein which are the
same or substantially similar to the products and services from a line of
business engaged in by the Companies or their Subsidiaries during the last
twelve (12) months of the Executive’s employment with the Companies, whether
during or after the Employment Period.  For purposes of this Agreement, a
“Supplier” is any Person who or which has furnished to the Companies or their
Subsidiaries for resale (A) office products, including traditional office
products, computer consumable products, office furniture, janitorial and/or
sanitation products, food service paper/non-food products, audio/visual and
business machines or such other products whether or nor related to the foregoing
(B) services provided by or from the Companies or any of their Subsidiaries or
(C) products or services from a line of business other than as described in (A)
or (B) herein which are the same or substantially similar to the products and
services from a line of business engaged in by the Companies or their
Subsidiaries during the last twelve (12) months of the Executive’s employment
with the Companies, whether during or after the Employment Period.

(e)During the Executive’s employment by the Companies, whether during or after
the Employment Period, and during the twenty-four (24) month period following
the end of the Executive’s employment with the Companies, the Executive shall
not at any time, directly or indirectly, induce or solicit any employee of the
Companies or any of their Subsidiaries for the purpose of causing such employee
to terminate his or her employment with the Companies or such Subsidiary.

17

 

 

 

 

 

--------------------------------------------------------------------------------

 

(f)The Executive shall not, directly or indirectly, make or cause to be made
(and shall prohibit the officers, directors, employees, agents and
representatives of any Person controlled by Executive not to make or cause to be
made) any disparaging, derogatory, misleading or false statement, whether orally
or in writing, to any Person, including members of the investment community,
press, and customers, competitors and advisors to the Companies, about the
Companies, their respective parents, Subsidiaries or Affiliates, their
respective officers or members of their boards of directors, or the business
strategy or plans, policies, practices or operations of the Companies, or of
their respective parents, Subsidiaries or Affiliates.

(g)If any court determines that any portion of this Section 6 is invalid or
unenforceable, the remainder of this Section 6 shall not thereby be affected and
shall be given full effect without regard to the invalid provision.  If any
court construes any of the provisions of Section 6(c), 6(d), 6(e) or 6(f) above,
or any part thereof, to be unreasonable because of the duration or scope of such
provision, such court shall have the power to reduce the duration or scope of
such provision and to enforce such provision as so reduced.

(h)During the Executive’s employment with the Companies, whether during or after
the Employment Period, and during the eighteen (18) month period following the
end of Executive’s employment with the Companies, the Executive agrees that,
prior to accepting employment with a Customer or Supplier of the Companies, the
Executive will give notice to the Chief Executive Officer of the Companies.  The
Companies reserve the right to make such Customer or Supplier aware of the
Executive’s obligations under Section 6 of this Agreement.  

(i)During and following Executive’s Employment Period, the Executive shall
furnish a copy of this Section 6 in its entirety to any prospective employer
prior to accepting employment with such prospective employer.  

(j)The Executive hereby acknowledges and agrees that damages will not be an
adequate remedy for the Executive’s breach of any provision of this Section 6,
and further agrees that the Companies shall be entitled to obtain appropriate
injunctive and/or other equitable relief for any such breach, without the
posting of any bond or other security, in addition to all other legal remedies
to which the Companies may be entitled.  

Section 7.Successors.  The Companies may assign their rights under this
Agreement to any successor to all or substantially all the assets of the
Companies, by merger or otherwise, and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Companies.  Any such
assignment by the Companies shall remain subject to the Executive’s rights under
Section 5 hereof.  The rights of the Executive under this Agreement may not be
assigned or encumbered by the Executive, voluntarily or involuntarily, during
the Executive’s lifetime, and any such purported assignment shall be void ab
initio.  Notwithstanding the foregoing, all rights of the Executive under this
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, estates, executors, administrators, heirs and
beneficiaries.  All amounts payable to the Executive hereunder shall be paid, in
the event of the Executive’s death, to the Executive’s estate, heirs or
representatives.

18

 

 

 

 

 

--------------------------------------------------------------------------------

 

Section 8.Third Parties.  Except for the rights granted to the Companies and
their Subsidiaries pursuant hereto (including, without limitation, pursuant to
Section 6 hereof) and except as expressly set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give any person other than the parties hereto and their successors and
permitted assigns any rights or remedies under or by reason of this Agreement.

Section 9.Enforcement.  The provisions of this Agreement shall be regarded as
divisible and, if any of said provisions or any part or application thereof is
declared invalid or unenforceable by a court of competent jurisdiction, the same
shall not affect the other provisions hereof, other parts or applications
thereof or the whole of this Agreement, but such provision shall be deemed
modified to the extent necessary to render such provision enforceable, and the
rights and obligations of the parties shall be construed and enforced
accordingly, preserving to the fullest permissible extent the intent and
agreements of the parties herein set forth.                

Section 10.Amendment.  Except as otherwise provided in this Section 10, this
Agreement may not be amended or modified at any time except by a written
instrument approved by the Board, and executed by the Companies and the
Executive; provided, however, that any attempted amendment or modification
without such approval and execution shall be null and void ab initio and of no
effect.  Notwithstanding the foregoing, effective upon 30 days’ notice to
Executive and without further consideration from the Companies, this Agreement
may be amended by the Companies in their sole discretion to the limited extent
they deem necessary and appropriate to conform the terms of this Agreement to
the requirements of any applicable laws, rules and regulations enacted or
promulgated after the Effective Date of this Agreement.  Any such amendments
shall preserve the value of any payments or benefits payable to Executive under
this Agreement to the extent practicable without defeating the purpose of the
amendment, as determined in the sole discretion of the Companies.

Section 11.Payment; Taxes and Withholding.  The Companies shall be responsible
as employer for payment of all cash compensation and severance payments provided
herein, and the Company shall cause the Companies to make such payments.  The
Executive shall not be entitled to receive any additional compensation from the
Companies for any services the Executive provides to the Companies.  The
Companies shall be entitled to withhold from any amounts to be paid to the
Executive hereunder any federal, state, local, or foreign withholding or other
taxes or charges which it is from time to time required to withhold.  The
Companies shall be entitled to rely on an opinion of counsel if any question as
to the amount or requirement of any such withholding shall arise.  Executive
shall be solely responsible for the payment of all taxes due and owing with
respect to wages, benefits, and other compensation provided to the Executive
hereunder.  This Agreement is intended to satisfy, or be exempt from, the
requirements of Section 409A(a)(2), (3) and (4) of the Code, including current
and future guidance and regulations interpreting such provisions, and should be
interpreted accordingly.  Notwithstanding anything in this Agreement to the
contrary, if any amount or benefit that would constitute non-exempt “deferred
compensation” for purposes of Section 409A of the Code would otherwise be
payable under this Agreement by reason of Executive’s “separation from service”
(as defined under Treas. Reg. Section 1.409A-1(h)) during a period in which
Executive is a “specified employee” (as defined in Code Section 409A(2)(B)(i)),
then: (i) the amount of such non-exempt deferred compensation that would
otherwise be payable during the six-month period immediately following
Executive’s separation from service will be accumulated through and paid
(without interest) or

19

 

 

 

 

 

--------------------------------------------------------------------------------

 

provided on the first day of the seventh month following Executive’s separation
from service or, if Executive dies during such period, within 30 days after
Executive’s death) (in either case, the “Required Delay Period”); and (ii) the
normal payment or distribution schedule for any remaining payments or
distributions will resume at the end of the Required Delay Period.  If Executive
is entitled to be paid or reimbursed for any taxable expenses under this
Agreement, including without limitation under Sections 5(c)(v) and 5(d)(v), and
such payments or reimbursements are includible in Executive’s federal taxable
income, the amount of such expenses reimbursable in any one calendar year shall
not affect the amount reimbursable in any other calendar year, and the
reimbursement of an eligible expense must be made no later than December 31 of
the year after the year in which the expense was incurred.  No right of
Executive to reimbursement of expenses under this Agreement, including without
limitation under Sections 5(c)(v) and 5(d)(v), shall be subject to liquidation
or exchange for another benefit.  For purposes of Section 409A of the Code, the
right to installment payments hereunder shall constitute the right of the
Executive to receive a series of separate and distinct payments.  

Section 12.Governing Law.  This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance with the laws of the
State of Illinois, without regard to principles of conflicts of law of Illinois
or any other jurisdiction.

Section 13.Notice.  Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when received and, if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, addressee
only, postage prepaid:

If to the Companies:

Essendant Inc.

Essendant Co.

Essendant Management Services, LLC

One Parkway North Blvd.

Suite 100

Deerfield, Illinois  60015-2559

Attention:  Chief Executive Officer

If to the Executive:  

At the Executive’s home address as set forth in the records of the Companies

 

or to such other address as the party to be notified shall have given to the
other in accordance with the notice provisions set forth in this Section 13.

Section 14.No Waiver.  No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at any time.

Section 15.Headings.  The headings contained herein are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.

20

 

 

 

 

 

--------------------------------------------------------------------------------

 

Section 16.Indemnification.  The provisions set forth in the Indemnification
Agreement appended hereto as Attachment A are hereby incorporated into this
Agreement and made a part hereof.  The parties agree that such Indemnification
Agreement remains in full force and effect.

Section 17.Execution in Counterparts.  This Agreement, including the
Indemnification Agreement, may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

Section 18.Arbitration.  Any dispute, controversy or question arising under, out
of, or relating to this Agreement (or the breach thereof), or, the Executive’s
employment with the Companies or termination thereof, shall be referred for
arbitration in Chicago, Illinois to a neutral arbitrator selected by the
Executive and the Companies (or if the parties are unable to agree on selection
of such an arbitrator, one selected by the American Arbitration Association
pursuant to its rules referred to below) and this shall be the exclusive and
sole means for resolving such dispute.  Such arbitration shall be conducted in
accordance with the National Rules for Resolution of Employment Disputes of the
American Arbitration Association.  Except as provided in Section 5(d)(x) above,
the arbitrator shall have the discretion to award reasonable attorneys’ fees,
costs and expenses to the prevailing party.  Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.  Nothing
in this Section 18 shall be construed so as to deny the Companies the right and
power to seek and obtain injunctive relief in a court of equity for any breach
or threatened breach by the Executive of any of the Executive’s covenants in
Section 6 hereof.  Moreover, this Section 18 and Section 12 hereof shall not be
applicable to any dispute, controversy or question arising under, out of, or
relating to the Indemnification Agreement.

Section 19.Survival.  Notwithstanding the stated Term of this Agreement, the
provisions of this Agreement necessary to carry out the intention of the parties
as expressed herein, including without limitation those in Sections 5, 6, 7, 16
and 18, shall survive the termination or expiration of this Agreement.

Section 20.Construction.  The parties acknowledge that this Agreement is the
result of arm’s-length negotiations between sophisticated parties each afforded
representation by legal counsel.  Each and every provision of this Agreement
shall be construed as though both parties participated equally in the drafting
of same, and any rule of construction that a document shall be construed against
the drafting party shall not be applicable to this Agreement.

Section 21.Free to Contract.  The Executive represents and warrants to the
Companies that the Executive is able freely to accept employment by the
Companies as described in this Agreement and that there are no existing
agreements, arrangements or understandings, written or oral, that would prevent
the Executive from entering into this Agreement, would prevent or restrict the
Executive in any way from rendering services to the Companies as provided herein
during the Employment Period or would be breached by the future performance by
the Executive of the Executive’s duties and responsibilities hereunder.  

Section 22.Entire Agreement.  This Agreement, including the Indemnification
Agreement and any other written undertakings by the Executive referred to
herein, supersedes all

21

 

 

 

 

 

--------------------------------------------------------------------------------

 

other agreements, arrangements or understandings (whether written or oral)
between the Companies and the Executive with respect to the subject matter of
this Agreement, including without limitation the Prior Agreement and the
Executive’s employment relationship with the Companies and any of their
Subsidiaries, and this Agreement contains the sole and entire agreement among
the parties hereto with respect to the subject matter hereof.

Section 23.Recovery of Payments.  The Companies may recover any cash or equity
awarded to Executive under this Agreement or any plan or program of the
Companies, or proceeds from the sale of such equity, to the extent required by
any rule of the Securities and Exchange Commission or any listing standard of
the Nasdaq Stock Market, including any rule or listing standard requiring
recovery of incentive compensation in connection with an accounting restatement
due to the Companies’ material noncompliance with any financial reporting
requirement under the securities laws, which recovery shall be subject to the
terms of any policy of the Companies implementing such rule or listing
standard. 

 

[Signature Page Follows]

22

 

 

 

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Agreement in one or more
counterparts, each of which shall be deemed one and the same instrument, as of
the last day and year written below, but effective as of the Effective Date.

EXECUTED ON:ESSENDANT INC.

______________________, 2016By: /s/Robert B. Aiken, Jr.
Name: Robert B. Aiken, Jr.
Title:  President and Chief Executive Officer

EXECUTED ON:ESSENDANT CO.

______________________, 2016By: /s/Robert B. Aiken, Jr.
Name: Robert B. Aiken, Jr.
Title:  President and Chief Executive Officer

EXECUTED ON:                                       ESSENDANT MANAGEMENT
SERVICES, LLC

______________________, 2016By: /s/Robert B. Aiken, Jr.
Name: Robert B. Aiken, Jr.
Title:  President and Chief Executive Officer

 

EXECUTED ON:EXECUTIVE

______________________, 2016_________________________________________

Name:  _____________________

 

23

 

 

 

 

 

--------------------------------------------------------------------------------

Exhibit 10.4

ATTACHMENT A

 

INDEMNIFICATION AGREEMENT

 

This INDEMNIFICATION AGREEMENT is made and entered into as of the ____ day of
__________, 20__ (the "Agreement"), by and between Essendant Inc., a Delaware
corporation (the "Company"), the director or executive officer of the Company
whose name appears on the signature page of this Agreement ("Indemnitee"), and
for purposes of Section 9 only, Essendant Co., an Illinois corporation and
wholly-owned subsidiary of the Company (“ECO”).

WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or executive officers or in other
capacities unless they are provided with reasonable protection through insurance
or indemnification against risks of claims and actions against them arising out
of their service to and activities on behalf of the corporations.

WHEREAS, the Board of Directors of the Company (the "Board") has determined that
the Company should act to assure its directors and executive officers that there
will be increased certainty of such protection in the future.

WHEREAS, it is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

WHEREAS, Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

WHEREAS, in consideration of the benefits received and to be received by the
Company in connection with actions taken and to be taken by the Board and by the
officers of the Company, the Company has determined that it is in the best
interest of the Company for the reasons set forth above to be a party to this
Agreement and to provide indemnification to the directors and executive officers
of the Company in connection with their service to and activities on behalf of
the Company and its subsidiaries.

WHEREAS, the Company acknowledges that for purposes of this Agreement the
directors and executive officers of the Company who enter into this Agreement
are serving in such capacities at the request of the Company.

WHEREAS, the Company further acknowledges that such directors and executive
officers are willing to serve, to continue to serve and to take on additional
service for or on behalf of the Company, thereby benefiting the Company and its
subsidiaries, on the condition that the Company enter into, and provide
indemnification pursuant to, this Agreement.

NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:

1.Definitions.

(a)For purposes of this Agreement:

 

19362v1

--------------------------------------------------------------------------------

 

            (i)"Affiliate" shall mean any corporation, partnership, joint
venture, trust or other enterprise in respect of which Indemnitee is or was or
will be serving directly or indirectly at the request of the Company.

           (ii)"Disinterested Director" shall mean a director of the Company who
is not or was not a party to the Proceeding in respect of which indemnification
is being sought by Indemnitee.

          (iii)"Expenses" shall include all reasonable attorneys' fees and
costs, retainers, court costs, transcripts, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees and all other disbursements or expenses
incurred in connection with asserting or defending claims.

           (iv)"Independent Counsel" shall mean a law firm or lawyer that
neither is presently nor in the past calendar year has been retained to
represent: (i) the Company or Indemnitee in any matter material to any such
party or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder in any matter material to such other party.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any law firm or person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing any
of the Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement. All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

           (v)"Losses" shall mean all liabilities, losses and claims (including
judgments, fines, penalties and amounts to be paid in settlement) incurred in
connection with any Proceeding.

          (vi)"Proceeding" shall include any threatened, pending or completed
action, suit, arbitration, mediation, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding, whether civil,
criminal, administrative or investigative.

2.Service by Indemnitee. Indemnitee agrees to begin or continue to serve the
Company or any Affiliate as a director or an executive officer. Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

3.Indemnification. The Company agrees to indemnify Indemnitee for, and hold
Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director or an executive officer of the Company
or in any capacity for an Affiliate at the request of the Company (collectively
referred to as a "Director or an Officer of the Company") to the fullest extent
permitted by the laws of the State of Delaware in effect on the date hereof or
as such laws may from time to time hereafter be amended to increase the scope of
such permitted indemnification. Without diminishing the scope of the
indemnification provided by this Section 3, the rights of indemnification of
Indemnitee provided hereunder shall include but shall not be limited to those
rights set forth hereinafter.

25

 

 

 

 

 

--------------------------------------------------------------------------------

 

4.Action or Proceeding Other Than an Action by or in the Right of the Company.
Indemnitee shall be entitled to the indemnification rights provided herein if
Indemnitee is a person who was or is made a party or is threatened to be made a
party to or is involved (including, without limitation, as a witness) in any
Proceeding, other than an action by or in the right of the Company, as the case
may be, by reason of (a) the fact that Indemnitee is or was a Director or an
Officer of the Company or (b) anything done or not done by Indemnitee in any
such capacity.

5.Actions by or in the Right of the Company. Indemnitee shall be entitled to the
indemnification rights provided herein if Indemnitee is a person who was or is a
party or is threatened to be made a party to or is involved (including, without
limitation, as a witness) in any Proceeding brought by or in the right of the
Company to procure a judgment in its favor by reason of (a) the fact that
Indemnitee is or was a Director or an Officer of the Company or (b) anything
done or not done by Indemnitee in any such capacity. Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses incurred or suffered
by Indemnitee or on Indemnitee's behalf in connection with the defense or
settlement of any Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company. Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Delaware law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company unless and only to the
extent that the Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such Losses and
Expenses which the Court of Chancery or such other court shall deem proper.

6.Indemnification for Losses and Expenses of Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been wholly successful on the merits or otherwise in any
Proceeding referred to in Section 3, 4 or 5 hereof on any claim, issue or matter
therein, Indemnitee shall be indemnified against all Losses and Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company agrees to indemnify Indemnitee to the
maximum extent permitted by law against all Losses and Expenses incurred by
Indemnitee in connection with each successfully resolved claim, issue or matter.
In any review or Proceeding to determine the extent of indemnification, the
Company shall bear the burden of proving any lack of success and which amounts
sought in indemnity are allocable to claims, issues or matters which were not
successfully resolved. For purposes of this Section and without limitation, the
termination of any such claim, issue or matter by dismissal with or without
prejudice shall be deemed to be a successful resolution as to such claim, issue
or matter.

7.Payment for Expenses of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was a Director or an Officer of the Company, a witness in any
Proceeding, the Company agrees to pay to Indemnitee all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection
therewith.

26

 

 

 

 

 

--------------------------------------------------------------------------------

 

8.Advancement of Expenses. All Expenses incurred by or on behalf of Indemnitee
(or reasonably expected by Indemnitee to be incurred by Indemnitee within three
months) in connection with any Proceeding shall be paid by the Company in
advance of the final disposition of such Proceeding within twenty days after the
receipt by the Company of a statement or statements from Indemnitee requesting
from time to time such advance or advances, whether or not a determination to
indemnify has been made under Section 10. Indemnitee's entitlement to such
advancement of Expenses shall include those incurred in connection with any
Proceeding by Indemnitee seeking an adjudication or award in arbitration
pursuant to this Agreement. The financial ability of Indemnitee to repay an
advance shall not be a prerequisite to the making of such advance. Such
statement or statements shall reasonably evidence such Expenses incurred (or
reasonably expected to be incurred) by Indemnitee in connection therewith and
shall include or be accompanied by a written undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified therefor pursuant to the terms of
this Agreement.

9.Guarantee.  In the event that the Company fails or is unable to perform any of
its payment obligations under the terms of this Agreement, ECO hereby
unconditionally guarantees that it will perform the obligations of the Company
and pay Indemnitee for any Losses or Expenses for which Indemnitee is entitled
to be indemnified or for Expenses to be advanced hereunder.  Such payment will
be made promptly upon request and without the necessity of a demand.

10.Procedure for Determination of Entitlement to Indemnification.

(a)When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 10), Indemnitee
shall submit a written request for indemnification to the Company. Determination
of Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 30 days after receipt by the Company of Indemnitee's written
request for indemnification. The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

(b)The entitlement of Indemnitee to indemnification under this Agreement shall
be determined in the specific case (1) by the Board by a majority vote of the
Disinterested Directors, even though less than a quorum, or (2) if there are no
Disinterested Directors, or if such Disinterested Directors so direct, by
Independent Counsel or (3) by the stockholders.

(c)In the event the determination of entitlement is to be made by Independent
Counsel, such Independent Counsel shall be selected by the Indemnitee, subject
to the approval of the Board, such approval not to be unreasonably
withheld.  Upon failure of the Indemnitee to so select such Independent Counsel
or upon failure of the Board to so approve, such Independent Counsel shall be
selected by the American Arbitration Association of New York, New York or such
other person as such Association shall designate to make such selection.

(d)If the determination made pursuant to Section 10(b) is that Indemnitee is not
entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 11 hereof.

27

 

 

 

 

 

--------------------------------------------------------------------------------

 

(e)If the person or persons empowered pursuant to Section 10(b) to make a
determination with respect to entitlement to indemnification shall have failed
to make the requested determination within 30 days after receipt by the Company
of such request, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be absolutely entitled to
such indemnification, absent (i) misrepresentation by Indemnitee of a material
fact in the request for indemnification or (ii) a final judicial determination
that all or any part of such indemnification is expressly prohibited by law.

(f)The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, adversely affect the rights of Indemnitee to indemnification hereunder
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, as the
case may be, or create a presumption that (with respect to any criminal action
or proceeding) Indemnitee had reasonable cause to believe that Indemnitee's
conduct was unlawful.

(g)For purposes of any determination of good faith hereunder, Indemnitee shall
be deemed to have acted in good faith if in taking such action Indemnitee relied
on the records or books of account of the Company or an Affiliate, including
financial statements, or on information supplied to Indemnitee by the officers
of the Company or an Affiliate in the course of their duties, or on the advice
of legal counsel for the Company or an Affiliate or on information or records
given or reports made to the Company or an Affiliate by an independent certified
public accountant or by an appraiser or other expert selected with reasonable
care to the Company or an Affiliate. The Company shall have the burden of
establishing the absence of good faith. The provisions of this Section 10(g)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

(h)The knowledge and/or actions, or failure to act, of any other director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

11.Remedies in Cases of Determination Not to Indemnify or to Advance Expenses.

(a)In the event that (i) a determination is made that Indemnitee is not entitled
to indemnification hereunder, (ii) advances are not made pursuant to Section 8
hereof or (iii) payment has not been timely made following a determination of
entitlement to indemnification pursuant to Section 10 hereof, Indemnitee shall
be entitled to seek a final adjudication either through an arbitration
proceeding or in an appropriate court of the State of Delaware or any other
court of competent jurisdiction of Indemnitee's entitlement to such
indemnification or advance.

(b)In the event a determination has been made in accordance with the procedures
set forth in Section 10 hereof, in whole or in part, that Indemnitee is not
entitled to indemnification, any judicial proceeding or arbitration referred to
in Section 11(a) shall be de novo and Indemnitee shall not be prejudiced by
reason of any such prior determination that Indemnitee is not entitled to
indemnification, and the Company shall bear the burdens of proof specified in
Sections 6 and 10 hereof in such proceeding.

28

 

 

 

 

 

--------------------------------------------------------------------------------

 

(c)If a determination is made or deemed to have been made pursuant to the terms
of Section 10 hereof or this Section 11 that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

(d)To the extent deemed appropriate by the court, interest shall be paid by the
Company to Indemnitee at a rate equal to the rate paid by the Company or its
subsidiaries to the principal senior secured lender thereto for amounts which
the Company indemnifies or is obliged to indemnify Indemnitee for the period
commencing with the date on which Indemnitee requested indemnification (or
reimbursement or advancement of any Expenses) and ending with the date on which
such payment is made to Indemnitee by the Company.

12.Expenses Incurred by Indemnitee to Enforce this Agreement. All Expenses
incurred by Indemnitee in connection with the preparation and submission of
Indemnitee's request for indemnification hereunder shall be borne by the
Company. In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee. If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which Indemnitee is entitled to
indemnification and for claims, issues or matters for which Indemnitee is not so
entitled.

13.Non-Exclusivity.  The rights of indemnification and to receive advances as
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may at any time be entitled under any law, certificate of
incorporation, by-law, other agreement, vote of stockholders or resolution of
directors or otherwise, both as to action in Indemnitee's official capacity and
as to action in another capacity while holding such directorship or office. To
the extent Indemnitee would be prejudiced thereby, no amendment, alteration,
rescission or replacement of this Agreement or any provision hereof shall be
effective as to Indemnitee with respect to any action taken or omitted by such
Indemnitee in Indemnitee's position with the Company or an Affiliate or any
other entity which Indemnitee is or was serving at the request of the Company
prior to such amendment, alteration, rescission or replacement.

14.Duration of Agreement. This Agreement shall apply to any claim asserted and
any Losses and Expenses incurred in connection with any claim asserted on or
after the effective date of this Agreement and shall continue until and
terminate upon the later of: (a) ten years after Indemnitee has ceased to occupy
any of the positions or have any of the relationships described in Section 3, 4
or 5 hereof; or (b) one year after the final termination of all pending or
threatened Proceedings of the kind described herein with respect to Indemnitee.
This Agreement shall be binding upon the Company and its successors and assigns
and shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

15.Maintenance of D&O Insurance.

29

 

 

 

 

 

--------------------------------------------------------------------------------

 

(a)The Company hereby covenants and agrees with Indemnitee that, so long as
Indemnitee shall continue to serve as a Director or an Officer of the Company
and thereafter so long as Indemnitee shall be subject to any possible claim or
threatened, pending or completed Proceeding, whether civil, criminal or
investigative, by reason of the fact that Indemnitee was a Director or an
Officer of the Company or any other entity which Indemnitee was serving at the
request of the Company, the Company shall maintain in full force and effect (i)
the directors' and officers' liability insurance issued by the insurer and
having the policy amount and deductible as currently in effect with respect to
directors and officers of the Company or any of its subsidiaries and (ii) any
replacement or substitute policies issued by one or more reputable insurers
providing in all respects coverage at least comparable to and in the same amount
as that currently provided under such existing policy (collectively, "D&O
Insurance").

(b)In all policies of D&O Insurance, Indemnitee shall be named as an insured in
such a manner as to provide Indemnitee the same rights and benefits, subject to
the same limitations, as are accorded to the Company's directors or officers
most favorably insured by such policy.

(c)Notwithstanding anything to the contrary set forth in (a) above, the Company
shall have no obligation to maintain D&O Insurance if the Company determines in
good faith that such insurance is not reasonably available, the premium cost for
such insurance is disproportionate to the amount of coverage provided or the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit.

(d)If the Company ceases to maintain D&O Insurance, the Company shall notify
Indemnitee in writing of such cessation within three (3) calendar days of the
earlier of (i) the date the Company determines to cease D&O Insurance or (ii)
the date D&O Insurance ceases.

16.Severability. Should any part, term or condition hereof be declared illegal
or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions hereof shall not be affected thereby, and the
illegal or unenforceable portions hereof shall be and hereby are redrafted to
conform with applicable law, while leaving the remaining portions hereof intact.

17.Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

18.Headings. Section headings are for convenience only and do not control or
affect meaning or interpretation of any terms or provisions hereof.

19.Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto.

20.No Duplicative Payment. The Company shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable hereunder if and to the
extent that Indemnitee has otherwise actually received such payment (net of
Expenses incurred in collecting such payment) under any insurance policy,
contract, agreement or otherwise.

21.Notices. All notices, requests, demands and other communications provided for
by this Agreement shall be in writing (including telecopier or similar writing)
and shall be deemed to have been given at the time when mailed, enclosed in a
registered or certified postpaid

30

 

 

 

 

 

--------------------------------------------------------------------------------

 

envelope, in any general or branch office of the United States Postal Service,
or sent by Federal Express or other similar overnight courier service, addressed
to the address of the parties stated below or to such changed address as such
party may have fixed by notice or, if given by telecopier, when such telecopy is
transmitted and the appropriate answer back is received.

(a)If to Indemnitee, to the address appearing on the signature page hereof.

(b)If to the Company, to:

Essendant Inc.
One Parkway North Blvd.
Suite 100

Deerfield, Illinois  60015-2559
Attention: General Counsel

22.Governing Law. The parties agree that this Agreement shall be governed by,
and construed and enforced in accordance with, the internal laws of the State of
Delaware without regard to its conflicts of law rules.

23.Construction.  The parties acknowledge that this Agreement is the result of
arm’s-length negotiations between sophisticated parties each afforded
representation by legal counsel.  Each and every provision of this Agreement
shall be construed as though both parties participated equally in the drafting
of same, and any rule of construction that a document shall be construed against
the drafting party shall not be applicable to this Agreement.

24.Entire Agreement. Subject to the provisions of Section 13 hereof, this
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter hereof. This Agreement may not be amended
or otherwise modified except in writing duly executed by all of the parties. A
waiver by any party of any breach or violation of this Agreement shall not be
deemed or construed as a waiver of any subsequent breach or violation thereof.

31

 

 

 

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

ESSENDANT INC.

 

By:

Name:  

Title:    

 

INDEMNITEE

 

By:

 

Name:  

Address:  

City and State:  

For the purposes of Section 9 only,

 

ESSENDANT CO.

 

By:

Name:  

Title:    

 

 

 

 

32