Exhibit 10.3

ESSENDANT INC.
2015 LONG-TERM INCENTIVE PLAN

Cash Retention Award Agreement

This Award Agreement (this “Agreement”), dated [INSERT DATE] (the “Award Date”),
is by and between [INSERT NAME] (the “Participant”), and Essendant Inc., a
Delaware corporation (the “Company”). Any term capitalized but not defined in
this Agreement will have the meaning set forth in the Essendant Inc. 2015
Long-Term Incentive Plan (the “Plan”).

In the exercise of its discretion, the Committee (and to the extent applicable,
the Board) has determined that Participant should receive a Cash Incentive Award
pursuant to the Plan, on the following terms and conditions:

1.

Grant. The Company hereby grants to Participant an award (the “Award”) of
$[INSERT AMOUNT]. The Award will be subject to the terms and conditions set
forth in the Plan and this Agreement.

2.

Vesting; Effect of Date of Termination. The Award will vest on [INSERT DATE]
(the “Scheduled Vesting Date”), provided that (i) the Participant’s Date of
Termination has not occurred before the Scheduled Vesting Date, and (ii) the
cumulative Earnings Per Share (as defined in paragraph 2(d)) of the Company for
any four consecutive calendar quarters occurring between the Award Date and the
Scheduled Vesting Date is at least $[INSERT AMOUNT] per share. If the
Participant’s Date of Termination occurs for any reason before the Participant’s
Award has vested under this Agreement, or if the Company fails to satisfy the
Earnings Per Share requirement set forth in the preceding sentence, then in
either case the Award will be forfeited on and after the Participant’s Date of
Termination or the Scheduled Vesting Date, as applicable, in all cases subject
to the following:

 

(a)

If the Participant’s Date of Termination occurs by reason of the Participant’s
death or Permanent and Total Disability (as defined in paragraph 2(c)), a
portion of the Award will become vested as of the Participant’s Date of
Termination. That portion of the Award shall be determined by multiplying the
amount of the Award by a fraction, the numerator of which shall be the number of
whole months elapsed from July 1, 2017, to the Date of Termination, and the
denominator of which shall be thirty (30).

 

 

(b)

If, prior to the Scheduled Vesting Date, the Participant’s Date of Termination
occurs by reason of termination of the Participant’s employment by the Company
or its Subsidiaries without Cause or by the Participant for Good Reason, then
the Award will be fully vested as of the Participant’s Date of Termination.

 

(c)

For purposes of this Agreement, the term “Permanent and Total Disability” means
the Participant’s inability, due to illness, accident, injury, physical or
mental incapacity or other disability, effectively to carry out his or her
duties and obligations as an employee of the Company or its Subsidiaries or to
participate effectively and actively as an employee of the Company or its
Subsidiaries for 90 consecutive days or shorter periods aggregating at least 180
days (whether or not consecutive) during any twelve-month period.
Notwithstanding the foregoing, to the extent necessary to cause the Award to
comply with the requirements of Code Section 409A, “Permanent and Total
Disability” shall mean a “disability” as described in Treasury Regulations
Section 1.409A-3(i)(4).

 

(d)

“Earnings Per Share” will be as adjusted and reported in the Company’s quarterly
earnings releases in the table setting forth reconciliations of non-GAAP
financial measures and re-calculated based on accounting standards promulgated
by the Financial Accounting Standards Board or similar accounting standards body
in place as of December 31, 2016, and adjusted to eliminate the effects of any
and all of the following (net of any tax effects) to the extent not already
included in the aforementioned table: (i) write-offs of previously capitalized
financing costs; (ii) subsidiary charitable contributions to the Essendant
Charitable Foundation; (iii) projected impacts on financial

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results of any acquisition or disposition (including liquidation of at least 90%
of the assets) of any business during the four calendar quarters immediately
preceding the applicable Scheduled Vesting Date as reflected in the final
financial valuation of the transaction presented to the Board prior to the
Board’s approval of the transaction; (iv) impairment of goodwill and other
intangible assets (as defined by ASC 350); (v) curtailment, settlement or
termination of any of the Company’s pension plans (as defined in ASC 715); (vi)
litigation or claim judgments and settlements, including impacts from the
ongoing negotiations of the Telephone Consumer Protection Act of 1991
litigation; (vii) restructuring costs (as defined by ASC 420); (viii)
establishment of allowances for doubtful accounts related to specific customer
accounts receivable or prepaid rebates that materially impact the Company’s
financial statements; and (ix) consulting fees and expenses related to the
Company’s transformation program.

Except as otherwise specifically provided, the Company will not have any further
obligations to Participant under this Agreement if the Award is forfeited as
provided herein.

3.

Settlement. If all or any portion of the Award becomes pursuant to Section 2,
the vested portion of the Award shall be paid to the Participant promptly
following the Scheduled Vesting Date or Date of Termination, as applicable.

4.

Restrictive Covenants; Recovery of Payments. Notwithstanding any contrary
provision of this Agreement, the Company may recover amounts paid in respect of
the Award to the extent required by the terms of any clawback or compensation
recovery policy adopted by the Company. Furthermore, and in consideration of the
grant of the Award under the terms of this Agreement and in recognition of the
fact that Participant has received and will receive Confidential Information (as
defined in paragraph 4(e)(iv)) during Participant’s Service (as defined in
paragraph 4(e)(v)), Participant agrees to be bound by the restrictive covenants
set forth in paragraphs 4(a), 4(b), 4(c), and 4(d), below (the “Restrictive
Covenants”). In addition, but subject to the last sentence of this paragraph,
Participant agrees that if Participant violates any provision of such
Restrictive Covenants, then (i) the unvested portion of this Award shall
immediately become null and void, and (ii) any amount paid to Participant
hereunder at any time during the three-year period immediately preceding the
date on which such violation occurred shall, upon demand from the Company at any
time after discovery of the violation of a Restrictive Covenant or other
imposition of a claw back, be repaid to the Company. Subject to the last
sentence of this paragraph and any applicable limitations of Code Section 409A,
by accepting this Agreement, Participant consents to a deduction from any
amounts the Company owes Participant from time to time (including amounts owed
to Participant as wages or other compensation, fringe benefits, or vacation pay,
as well as any other amounts owed to Participant by the Company), to the extent
of the amounts Participant owes the Company under this Section 4. Whether or not
the Company elects to make any set-off in whole or in part, if the Company does
not recover by means of set-off the full amount Participant owes pursuant to
this Section 4, Participant hereby agrees to pay immediately the unpaid balance
to the Company. Notwithstanding the foregoing, if and to the extent that a
violation of a Restrictive Covenant is curable at the time of discovery by the
Company, Participant will not be deemed to have violated such Restrictive
Covenant unless and until the Company gives Participant written notice of such
violation and Participant fails to cure such violation within 30 calendar days
after receipt of such written notice.

 

(a)

Confidential Information. Participant acknowledges that during the course of his
or her Service, he or she has received and will receive Confidential
Information. Participant further acknowledges that he or she has received a copy
of the Company’s Confidentiality and Nondisclosure Policy. Participant
acknowledges and agrees that it is his or her responsibility to protect the
integrity and confidential nature of the Confidential Information, both during
and after his or her Service, and Participant shall not directly or indirectly
use, disclose, disseminate, or otherwise make available any such Confidential
Information, either during or after the term of his or her Service, except as
necessary for the performance of his or her duties to the Company or as
expressly permitted in writing by the Company.

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(b)

Competitive Activities. During Participant’s Service and for two years after the
termination of Participant’s Service for any reason whatsoever, Participant
shall not engage in any Competitive Activity (as defined in paragraph
4(e)(iii)). Participant’s obligations under this paragraph 4(b) shall apply in
any geographic territory in which the Company conducts its business during the
term of Participant’s Service. In the event that any portion of this paragraph
4(b) shall be determined by any court of competent jurisdiction to be
unenforceable because it is unreasonably restrictive in any respect, it shall be
interpreted to extend over the maximum period of time for which it reasonably
may be enforced and to the maximum extent for which it reasonably may be
enforced in all other respects, and enforced as so interpreted, all as
determined by such court in such action. Participant acknowledges the
uncertainty of the law in this respect and expressly stipulates that this
Agreement is to be given the construction that renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible
under applicable law.

 

(c)

Non-Solicitation. During Participant’s Service and for two years after the
termination of Participant’s Service for any reason whatsoever, Participant
shall not:

 

(i)

solicit, induce or attempt to solicit or induce any employee, consultant, or
independent contractor of the Company (each, a “Service Provider”) to leave or
otherwise terminate such Service Provider’s relationship with the Company, or in
any way interfere adversely with the relationship between any such Service
Provider and the Company;

 

(ii)

solicit, induce or attempt to solicit or induce any Service Provider to work
for, render services to, provide advice to, or supply Confidential Information
or trade secrets of the Company to any third person, firm, or entity;

 

(iii)

employ, or otherwise pay for services rendered by, any Service Provider in any
business enterprise with which Participant may be associated, connected or
affiliated;

 

(iv)

call upon, induce or attempt to induce any current or potential customer,
vendor, supplier, licensee, licensor or other business relation of the Company
for the purpose of soliciting or selling products or services in direct
competition with the Company or to induce any such person to cease or refrain
from doing business with the Company, or in any way interfere with the
then-existing or potential business relationship between any such current or
potential customer, vendor, supplier, licensee, licensor or other business
relation and the Company;

 

(v)

call upon any entity that is a prospective acquisition candidate that
Participant knows or has reason to know was called upon by the Company or for
which the Company made an acquisition analysis for the purpose of acquiring such
entity; or

 

(vi)

assist, solicit, or encourage any other person, directly or indirectly, in
carrying out any activity set forth above that would be prohibited by any of the
provisions of this Agreement if such activity were carried out by Participant.
In particular, Participant will not, directly or indirectly, induce any Service
Provider of the Company to carry out any such activity.

 

(d)

Other Restricted Activities. During Participant’s Service and for two years
after the later of (i) termination of Participant’s Service for any reason
whatsoever or (ii) the Scheduled Vesting Date, Participant shall not engage in
any other activity that is inimical, contrary or harmful to the interests of the
Company including, but not limited to, (A) conduct related to Participant’s
Service for which either criminal or civil penalties against Participant may be
sought, (B) violation of Company policies, including, without limitation, the
Company’s insider trading policy, or (C) participating in a hostile takeover
attempt.

 

(e)

Definitions. For purposes of this Section 4, the following terms shall have the
following definitions:

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(i)

The term “Company” shall include any Subsidiary of the Company that may exist at
a given time.

 

(ii)

The term “Competing Business” shall mean any business activities that are
directly or indirectly competitive with the business conducted by the Company or
its Subsidiaries at or prior to the date of the termination of Participant’s
Service, all as described in the Company’s periodic reports filed pursuant to
the Exchange Act (e.g., the Company’s Annual Report on Form 10-K) or other
comparable publicly disseminated information.

 

(iii)

The term “Competitive Activity” shall mean directly or indirectly investing in,
owning, operating, financing, controlling, or providing services to a Competing
Business if the nature of such services are the same as or similar in position
scope and geographic scope to any position held by Participant during the last
two years of his or her employment with the Company, such that Participant’s
engaging in such services on behalf of a Competing Business does or may pose
competitive harm to the Company, provided that passive investments of less than
a 2% ownership interest in any entity that is a Competing Business will not be
considered to be a “Competitive Activity.”

 

(iv)

The term “Confidential Information” has the meaning set forth in the Company’s
Confidentiality and Nondisclosure Policy. Confidential Information includes not
only information contained in written or digitized Company documents but also
all such information that Participant may commit to memory during the course of
his or her Service. “Confidential Information” does not include information that
is available in reasonably similar form to the general public through no fault
of Participant, or that was received by Participant outside of the Company,
without an obligation of confidentiality.

 

(v)

Participant will be deemed to be in “Service” to the Company so long as he or
she renders continuous services on a periodic basis to the Company in the
capacity of an employee, director, consultant, independent contractor, or other
advisor (but, in the case of Participant’s continued Service as a consultant,
independent contractor, or other advisor, only as determined by the Committee or
the Board, in its sole and absolute discretion, following Participant’s initial
Service as an employee or director).

 

(f)

Equitable Relief; Enforceability. By accepting this Agreement and the Award
granted hereby, Participant agrees that the Restrictive Covenants set forth in
this Section 4 are reasonable and necessary to protect the legitimate interests
of the Company. In the event a violation of any of the restrictions contained in
this Section 4 is established, the Company shall be entitled to seek enforcement
of the provisions of this Section 4 through proceedings at law or in equity in
any court of competent jurisdiction, including preliminary and permanent
injunctive relief. In the event of a violation of any provision of paragraphs
(b), (c), or (d) of this Section 4, the period for which those provisions would
remain in effect shall be extended for a period of time equal to that period
beginning when such violation commenced and ending when the activities
constituting such violation have been finally terminated in good faith.
Participant is aware that there may be defenses to the enforceability of the
Restrictive Covenants set forth in this Section 4, based on time or territory
considerations, and Participant knowingly, consciously, intentionally, entirely
voluntarily, and irrevocably waives any and all such defenses and agrees that he
or she will not assert the same in any action or other proceeding brought by the
Company for the purpose of enforcing the Restrictive Covenants.

 

(g)

DTSA Disclosure. Participant is hereby advised of the following protections
provided by the Defend Trade Secrets Act of 2016, 18 U.S. Code § 1833(b), and
nothing in this Agreement shall be deemed to prohibit the conduct expressly
protected by 18 U.S. Code § 1833(b):

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(i)

An individual shall not be held criminally or civilly liable under any Federal
or State trade secret law for the disclosure of a trade secret that (A) is made
(1) in confidence to a Federal, State, or local government official, either
directly or indirectly, or to an attorney; and (2) solely for the purpose of
reporting or investigating a suspected violation of law; or (B) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such
filing is made under seal.

 

(ii)

An individual who files a lawsuit for retaliation by an employer for reporting a
suspected violation of law may disclose the trade secret to the attorney of the
individual and use the trade secret information in the court proceeding, if the
individual (A) files any document containing the trade secret under seal; and
(B) does not disclose the trade secret, except pursuant to court order.

5.

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

6.

Nontransferability. Except as otherwise provided by the Committee or as provided
in Section 2, and except with respect to cash delivered in settlement of the
Award, Participant’s interests and rights in and under this Agreement may not be
assigned, transferred, exchanged, pledged or otherwise encumbered other than as
designated by Participant by will or by the laws of descent and
distribution. Issuance of cash in settlement of the Award will be made only to
Participant; or, if the Company has been provided with evidence acceptable to it
that Participant is legally incompetent, Participant’s personal representative;
or, if Participant is deceased, to the designated beneficiary or other
appropriate recipient in accordance with the Company’s applicable
procedures. The Company may require personal receipts or endorsements of a
Participant’s personal representative, designated beneficiary or alternate
recipient provided for herein. Any effort to otherwise assign or transfer any
Award or any rights or interests therein or thereto under this Agreement will be
wholly ineffective, and will be grounds for termination by the Committee of all
rights and interests of Participant and his or her beneficiary in and under this
Agreement.

7.

Administration and Interpretation. The Committee has the authority to control
and manage the operation and administration of the Award and to make all
interpretations and determinations necessary or appropriate for the
administration of this Agreement, including the enforcement of any recovery of
payments pursuant to Section 4 or otherwise. Any interpretations of the terms of
the Plan or this Agreement by the Committee and any decisions made by it are
final and binding on Participant and all other persons. Any inconsistency
between this Agreement and the terms of the Plan shall be resolved in favor of
the terms of the Plan except to the extent such resolution would result in a
violation of Code Section 409A.

8.

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 Delaware,
without regard to principles of conflicts of law of Delaware or any other
jurisdiction.

9.

Sole Agreement. Notwithstanding anything in this Agreement to the contrary, the
terms of this Agreement shall conform with the terms and conditions of the Plan
(as the same may be amended in accordance with its terms), a copy of which may
be obtained by Participant from the office of the Secretary of the Company. In
addition, this Agreement and 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 Plan. This Agreement
is the entire agreement between the parties to it with respect to the subject
matter hereof, and 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
between the parties).

10.

Binding Effect. This Agreement will be binding upon and will inure to the
benefit of the Company and Participant and, as and to the extent provided herein
and in the Plan, their respective heirs, executors, administrators, legal
representatives, successors and assigns.

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11.

Amendment and Waiver. This Agreement may be amended as described in the Plan,
and may otherwise be amended by written agreement between the Company and
Participant without the consent of any other person. No course of conduct or
failure or delay in enforcing the provisions of this Agreement will affect the
validity, binding effect or enforceability of this Agreement.

12.

Section 162(m) Compliance. To the greatest extent it is reasonably appropriate,
the Award represented by this Agreement is intended to be “performance-based
compensation” as defined under the Plan to meet the requirements for Section
162(m) of Code, and shall be administered pursuant to such intent. Consistent
with Section 162(m) of the Code, the Committee shall not have the discretionary
right to increase the value of the Award.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company and Participant have duly executed this
Agreement effective as of the Award Date.

 

ESSENDANT INC.

PARTICIPANT

By:

______________________________

Charles Crovitz

[[FIRSTNAME]] [[LASTNAME]]

Chairman of the Board

 

 

 

 

[Signature Page to Cash Retention Award Agreement]

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