EXHIBIT 10.1

 

Essendant Inc.

Annual Cash Incentive Award Plan

For Section 16 Officers

 

Essendant, Inc. maintains the 2015 Long-Term Incentive Plan, as amended and
restated effective May 20, 2015, and as the same may be subsequently amended,
restated or modified (the “LTIP”), under which the Human Resources Committee of
the Company’s Board of Directors (“Committee”) has the discretion to grant Cash
Incentive Awards (“Awards”). The Committee wishes to exercise its discretion to
grant Awards pursuant to the terms and conditions of the LTIP and this Annual
Cash Incentive Award Plan (the “CIP”), which is hereby amended and restated by
the Committee effective as of January 1, 2018, for the purpose of granting
Awards (subject to the terms and conditions of the LTIP).

Any term that is capitalized but not defined in this CIP will have the meaning
set forth in the LTIP.

 

1.

Eligibility. For any Performance Period (as defined in Section 3 below), the
Committee shall determine and designate those officers of the Company for
purposes of Section 16 of the Securities Exchange Act of 1934 (“Section 16
Officers”) and who will be granted an Award under this CIP and such persons
shall be “Participants” in this CIP for that Performance Period.

 

2.

Awards. Unless otherwise designated by the Committee pursuant to Section 6
below, Awards made under this CIP are subject to the maximum Award amounts
specified in the LTIP. Any Award granted under this CIP will be evidenced by a
separate writing and subject to the terms and conditions of the LTIP and this
CIP.

 

3.

Performance Period. The Performance Period for an Award granted under this CIP
shall be the calendar year specified by the Committee in the separate writing
evidencing the Award.

 

4.

Performance Measurement. Payment of Awards granted under this CIP will be
conditioned upon the achievement of one or more performance measures during the
applicable Performance Period. The applicable performance measures will be (a)
determined by the Committee, and (b) set forth in the separate writing
evidencing the Award.

 

5.

Employment on Last Day of Performance Period. Except as otherwise provided in
Section 6 below or in a superseding Employment Agreement, a Participant must be
actively employed by the Company on the last day of the Performance Period to
receive any payment due for that Performance Period for a final Award determined
under Section 7 below.

 

6.

Partial Year Participation. The Committee may allow an individual who transfers
into or out of an eligible position (Section 16 Officers) or who terminates
employment under certain circumstances during a Performance Period to
participate in the CIP for that Performance Period on a prorated basis. In such
a case, the Participant’s final Award will be prorated as reasonably determined
by the Committee, but generally based on the Participant’s compensation earned
during the Performance Period by the Participant at each applicable, position,
salary and bonus level. Situations in which proration may be appropriate
include, but are not limited to: (a) new hire, (b) transfer from a position that
does not meet the eligibility criteria to a position that meets the eligibility
criteria, (c) transfer from a position that does meet the eligibility criteria
to a position that does not meet the eligibility criteria, (d) changes in the
conditions of participation such as target incentive level, salary, leave of
absence, etc. during the Performance Period, and (e) terminations under certain
circumstances which are described below. In the case of prorated Awards, the
Participant’s final Award will be the sum of all prorated Awards.

 

a.

Terminations – Except as otherwise provided in any written employment agreement
between the Participant and the Company or in the Essendant Inc. Executive
Severance Plan (or any successor plan thereto), if a Participant’s employment
terminates during a Performance Period due to death, disability (as defined by
the Social Security Administration), retirement (which is a voluntary
termination of employment by the Participant on or after reaching age 60 if the
Participant also has at least five years of service with the Company) or a
reduction in force to be determined by the Company in its sole discretion,

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the Participant shall be eligible to receive a prorated portion of the Award as
determined based on actual performance through the end of the Performance Period
in accordance with Section 7 below.

 

b.

Leaves of Absence - Incentive compensation, including any Award payable under
the CIP, is prorated based on the number of days a Participant takes an unpaid
leave of absence during the incentive measurement timeframe (i.e., the
Performance Period) unless otherwise required by state law. A leave day where a
Participant only receives benefit payments (e.g., short term disability, long
term disability and workers’ compensation) is deemed unpaid for the purpose of
determining incentive pay. An approved intermittent, partial leave day is deemed
paid for the purpose of determining incentive compensation.

 

7.

Adjustment of Performance Measure Targets and Determination and Payment of Final
Awards – The Committee has the right to adjust the performance measure targets
(either up or down) during the Performance Period if it determines that external
changes or other unanticipated business conditions have materially affected the
fairness of the targets or unduly influenced the Company’s ability to meet them.
The Committee also has the right to adjust the performance measure targets
during the Performance Period in the event an extraordinary and unanticipated
corporate event such as a Change of Control requires that the CIP be amended to
provide for a Performance Period consisting of less than twelve months.
Notwithstanding the foregoing, the Committee has the right to adjust Awards in
accordance with the LTIP.

As soon as practicable after the close of the Performance Period, the Committee
will review performance against the previously established performance measures
and approve final Awards for each Participant who remains actively employed by
the Company on the last day of the Performance Period (or who satisfies the
provisions of Section (6)). A Participant will be eligible to receive payment
with respect to an Award only to the extent that, (a) the performance measures
for such Award are achieved, and (b) it is determined that all or some portion
of the Participant’s Award has been earned for the Performance Period. The
Company will pay the final Awards in cash as soon as administratively
practicable, but no later than March 15th of the calendar year following the
calendar year in which the last day of the Performance Period occurred, in
accordance with each Participant’s payroll election (i.e., direct deposit or pay
card) at the time the Award is distributed. Final Awards shall be a liability of
the Company on the last day of the Performance Period.

 

 

8.

No Right to Employment. Nothing herein confers upon a Participant any right to
continue in the employ of the Company or any Subsidiary.

 

9.

Administration and Interpretation. The Committee has the authority to control
and manage the operation and administration of the LTIP and this CIP. Any
interpretations of the LTIP or this CIP by the Committee and any decisions made
by it under the LTIP or this CIP are final and binding on the Participant and
all other persons.

 

10.

Governing Law. This CIP and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the state of Delaware,
without regard to principles of conflicts of law of Delaware or any other
jurisdiction.

 

11.

Controlling Terms and Conditions. Notwithstanding anything in this CIP to the
contrary, the terms of this CIP shall be subject to all of the terms and
conditions of the LTIP (as it may be amended in accordance with its terms), a
copy of which may be obtained by the Participant from the office of the
Secretary of the Company. In addition, this CIP and the Participant’s rights
hereunder shall be subject to all interpretations, determinations, guidelines,
rules and regulations adopted or made by the Committee from time to time
pursuant to the LTIP and this CIP. The LTIP (along with this CIP and any
individual Award granted to a Participant) supersedes any and all prior oral and
written discussions, commitments, undertakings, representations or agreements
(including, without limitation, any terms of any employment offers, discussions
or agreements) involving cash incentive Awards.

 

 

12.

Recovery of Payments. Notwithstanding any contrary provision of this CIP, the
Companies may recover any Award granted or paid under the CIP, to the extent
required by the terms of any clawback or compensation recovery policy adopted by
the Companies.

 

 

13.

Amendment and Termination. This CIP may be amended or terminated in accordance
with the provisions of the LTIP, and may otherwise be amended or terminated by
the Company without the consent of any other person, provided that this CIP
shall not be amended or terminated in any manner that would be inconsistent with
Section 409A of the Code (to the extent applicable).