Exhibit 10.3

 

UNITED STATIONERS INC.
2004 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
SECTION 16 OFFICERS

 

Participant Name

Participant Address

Participant City, State, Zip

 

Dear First Name:

 

This Restricted Stock Award Agreement (this “Agreement”), dated as Effective
Date Indicated in Resolution (the “Award Date”), is by and between Participant
Name (the “Participant”), and United Stationers Inc., a Delaware corporation
(the “Company”). Any term capitalized but not defined in this Agreement will
have the meaning set forth in the Company’s 2004 Long-Term Incentive Plan (the
“Plan”).

 

In the exercise of its discretion to issue stock of the Company, the Committee
has determined that the Participant should receive a restricted stock award, on
the following terms and conditions:

 

1.                                       Grant. The Company hereby grants to the
Participant a Restricted Stock Award (the “Award”) of x,xxx shares of Stock (the
“Restricted Shares”). This Restricted Stock Award is intended to be “Performance
Based Compensation” as defined under plan to meet the requirements for Section
162(m) of the Internal Revenue Code. The Award will be subject to the terms and
conditions of the Plan and this Agreement. The Award constitutes the right,
subject to the terms and conditions of the Plan and this Agreement, to
distribution of the Restricted Shares.

 

2.                                       Stock Certificates. The Company will
issue certificates for, or cause its transfer agent to maintain a book entry
account reflecting the issuance of, the Restricted Shares in the Participant’s
name. The Secretary of the Company, or the Company's transfer agent, will hold
the certificates for the Restricted Shares, or cause such Restricted Shares to
be maintained as restricted shares in a book entry account, until the Restricted
Shares either vest or are forfeited. Any certificates that are issued for
Restricted Shares will bear a legend, and any book entry accounts that are
maintained therefor will have an appropriate notation, in accordance with
Section 6 hereof. The Participant's right to receive the Award hereunder is
contingent upon the Participant's execution and delivery to the Secretary of the
Company of all stock powers or other instruments of assignment (including a
power of attorney), each endorsed in blank with a guarantee of signature if
deemed necessary or appropriate by the Company, which would permit transfer to
the Company of all or a portion of the Restricted Shares in the event such
Restricted Shares are forfeited in whole or in part. The Company, or its
transfer agent, will distribute to the Participant (or, if applicable, the
Participant's designated beneficiary or other appropriate recipient in
accordance with Section 5 hereof) certificates evidencing ownership of vested
Restricted Shares as and when provided in Sections 4 and 5 hereof.

 

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3.                                       Rights as Stockholder. On and after the
Award Date, and except to the extent provided in Section 9 hereof, the
Participant will be entitled to all of the rights of a stockholder with respect
to the Restricted Shares, including the right to vote the Restricted Shares, the
right to receive dividends and other distributions payable with respect to the
Restricted Shares, and the right to participate in any capital adjustment
applicable to all holders of Stock; provided, however, that a distribution with
respect to shares of Stock, other than any regular cash dividend which will be
paid at the same time as all other shareholders, will be deposited with the
Company and will be subject to the same restrictions as the Restricted Shares.
If the Participant forfeits any rights he or she may have under this Award in
accordance with Section 4 hereof, the Participant shall, on the day following
the event of forfeiture, no longer have any rights as a stockholder with respect
to any and all Restricted Shares not then vested and so forfeited, or any
interest therein, and the Participant shall no longer be entitled to receive
dividends on or vote any such Restricted Shares as of any record date occurring
thereafter.

 

4.                                       Vesting; Effect of Date of Termination.
The Participant's Restricted Shares will vest in three annual increments of
one-third of the Restricted Shares on each of the first three anniversaries of
the Award Date; provided that the Participant’s Date of Termination has not
occurred before the vesting date and provided further that the Company’s
cumulative Earnings Per Share(1) for the four calendar quarters immediately
proceeding the vesting date exceed $1.00 per share. If the Participant’s Date of
Termination occurs for any reason before all of the Participant's Restricted
Shares have become vested under this Agreement, the Participant's Restricted
Shares that have not theretofore become vested will be forfeited on and after
the Participant's Date of Termination, 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, a
Pro Rata Portion of the Restricted Shares that have not otherwise vested under
this Agreement will then become vested as of the Participant's Date of
Termination. As used herein, the “Pro Rata Portion” of the then unvested
Restricted Shares shall be determined by multiplying the total number of
Restricted Shares then remaining unvested by a fraction, the numerator of which
shall be the number of whole months elapsed from the Award Date to

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(1)  ”Earnings Per Share” shall mean United Stationers’ Earnings Per Share as
reported in its consolidated financial statements adjusted to eliminate: (1) the
cumulative effect of changes in accounting policy (which include changes in
generally accepted accounting principles) adopted by United Stationers for the
relevant performance year; (2) expenses classified as “Provisions for
Restructuring”; (3) expenses related to “Goodwill Amortization”; (4) gains
and/or losses classified as “Discontinued Operations”; (5) accelerated
amortization of capitalized software; (6) the impacts of “Corporate
Transactions”, such as stock splits, dividends and recapitalizations; and (7)
gains or losses classified as “Extraordinary Items”, which may include: (A) the
net impact of acquisitions and divestitures completed during the period; (B)
gains or losses on the extinguishment of debt; (C) losses resulting from a newly
enacted law or regulation; and (D) other expenses or losses that are unusual in
nature or infrequent in occurrence.

 

In each instance, the above-referenced adjustment to Earnings Per Share must be
in accordance with generally accepted accounting principles and appear on the
face of United Stationers’ Statement of Consolidated Earnings contained in
United Stationers’ Consolidated Financial Statements for such performance year.

 

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the Date of Termination, and the denominator of which shall be the number of
whole months between the Award Date and the normal vesting date provided in the
first sentence of this Section 4.

 

(b)                                 If a Change of Control occurs after the
Award Date and prior to the Participant's Date of Termination, then (i) 50% of
the Restricted Shares that have not otherwise vested under this Agreement will
then become fully vested as of the date of such event; and (ii) the portion of
the Restricted Shares that does not vest in accordance with the preceding clause
(i) shall be subject to the vesting provisions of this Agreement without regard
to the acceleration of vesting under clause (i).

 

(c)                                  If a Change of Control occurs after the
Award Date and prior to the Participant's Date of Termination and, during the
two-year period following the date of such Change of Control, 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, the Restricted Shares that have not otherwise
vested under this Agreement will be fully vested as of the Participant's Date of
Termination.

 

(d)                                 If the Participant's Date of Termination
occurs during an Anticipated Change of Control by reason of termination of the
Participant’s employment by the Company or its Subsidiaries without Cause or by
the Participant for Good Reason, and a Change of Control then occurs within two
years following the Participant's Date of Termination, the number of shares
(subject to paragraph 5.2(f) of the Plan) that were forfeited under this
Agreement on the Date of Termination shall be granted to the Participant on a
fully vested basis as of the date of the Change of Control.

 

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 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.

 

Except as otherwise specifically provided, the Company will not have any further
obligations to the Participant under this Agreement if the Participant’s
Restricted Shares are forfeited as provided herein.

 

5.                                       Terms and Conditions of Distribution.
The Company, or its transfer agent, will distribute to the Participant
certificates for any portion of the Restricted Shares which becomes vested in
accordance with this Agreement within 30 days after the vesting thereof. If the
Participant dies before the Company has distributed certificates for any vested
portion of the Restricted Shares, the Company will distribute certificates for
that vested portion of the Restricted Shares and, to the extent provided under
Section 4 hereof, the remaining balance of the Restricted Shares which become
vested upon the Participant’s death to the beneficiary designated by the
Participant on a form provided by the Company for this

 

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purpose. If the Participant failed to designate a beneficiary, the Company will
distribute certificates for such Restricted Shares in accordance with the
Participant's will or, if the Participant did not have a will, in accordance
with the laws of descent and distribution.

 

Notwithstanding the foregoing, the Committee may require the Participant, or the
alternate recipient identified in the preceding paragraph, to satisfy any
potential federal, state, local or other tax withholding liability. Such
liability must be satisfied at the time such Restricted Shares become
“substantially vested” (as defined in the regulations issued under Section 83 of
the Code). At the election of the Participant, and subject to such rules and
limitations as may be established by the Committee from time to time, such
withholding obligations may be satisfied: (A) through a cash payment by the
Participant, (B) through the surrender of shares of Stock that the Participant
already owns (provided, however, to the extent shares described in this clause
(B) are used to satisfy more than the minimum statutory withholding obligation,
as described below, then payments made with shares of Stock in accordance with
this clause (B) shall be limited to shares held by the Participant for not less
than six months prior to the payment date), (C) through the surrender of shares
of Stock to which the Participant is otherwise entitled in respect of the Award
under this Agreement; provided, however, that such shares under this clause (C)
may be used to satisfy not more than the minimum statutory withholding
obligation of the Company or applicable Subsidiary (based on minimum statutory
withholding rates for federal, state and local tax purposes, including payroll
taxes, that are applicable to such supplemental taxable income), or (D) any
combination of (A), (B) and (C); provided, however, that the Committee shall
have sole discretion to disapprove of an election pursuant to any of clauses
(B)-(D) and that the Committee may require that the method of satisfying such an
obligation be in compliance with Section 16 of the Exchange Act (if the
Participant is subject thereto) and any other applicable laws and the respective
rules and regulations thereunder. Any fraction of a share of Stock which would
be required to satisfy such an obligation will be disregarded and the remaining
amount due will be paid in cash by the Participant.

 

The Company will not be required to make any distribution of any portion of the
Restricted Shares under this Section 5 (i) before the first date that such
portion of the Restricted Shares may be distributed to the Participant without
penalty or forfeiture under federal or state laws or regulations governing short
swing trading of securities, or (ii) at any other time when the Company or the
Committee reasonably determines that such distribution or any subsequent sale of
the Restricted Shares would not be in compliance with other applicable
securities or other laws or regulations. In determining whether a distribution
would result in any such penalty, forfeiture or noncompliance, the Company and
the Committee may rely upon information reasonably available to them or upon
representations of the Participant or the Participant’s legal or personal
representative.

 

6.                                       Legend on Stock Certificates. If one or
more certificates for all or any portion of the Restricted Shares are issued in
the Participant's name under this Agreement before such Restricted Shares become
vested, the certificates shall bear the following legend, or any alternate
legend that counsel to the Company believes is necessary or desirable, to
facilitate compliance with applicable securities or other laws:

 

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“The securities represented by this Certificate are subject to certain
restrictions on transfer specified in the Restricted Stock Award Agreement dated
as of [the Award Date] between the issuer (the “Company”) and the holder named
on this Certificate, and the Company reserves the right to refuse the transfer
of such securities, whether voluntary, involuntary or by operation of law, until
such conditions have been fulfilled with respect to such transfer. A copy of
such conditions shall be furnished by the Company to the holder hereof upon
written request and without charge.”

 

If any such Restricted Shares are not represented by certificate(s) prior to
their vesting, but are instead maintained by the Company’s transfer agent in
uncertificated form in a book entry account, the account shall bear an
appropriate notation to the effect that the Restricted Shares included therein
are subject to the restrictions of this Agreement. Whether maintained in
certificated or uncertificated book entry form, the Company may instruct its
transfer agent to impose stop transfer instructions with respect to any such
unvested Restricted Shares.

 

The foregoing legend or notation and stop transfer instructions will be removed
from the certificates evidencing or account maintained for all or any portion of
the Restricted Shares after the conditions set forth in Sections 4 and 5 hereof
have been satisfied as to such Restricted Shares.

 

7.                                       Delivery of Certificates. Despite the
provisions of Sections 4 and 5 hereof, the Company is not required to issue or
deliver any certificates for Restricted Shares if at any time the Company
determines that the listing, registration or qualification of such Restricted
Shares upon any securities exchange or under any law, the consent or approval of
any governmental body or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of the
Restricted Shares hereunder in compliance with all applicable laws and
regulations, unless such listing, registration, qualification, consent, approval
or other action has been effected or obtained, free of any conditions not
acceptable to the Company.

 

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

 

9.                                       Nontransferability. Except as otherwise
provided by the Committee or as provided in Section 5, and except with respect
to vested shares, the Participant's interests and rights in and under this
Agreement are not assignable or transferable other than as designated by the
Participant by will or by the laws of descent and distribution. Distribution of
Restricted Shares will be made only to the Participant; or, if the Committee has
been provided with evidence acceptable to it that the Participant is legally
incompetent, the Participant’s personal representative; or, if the Participant
is deceased, to the designated beneficiary or other appropriate recipient in
accordance with Section 5 hereof. The Committee may require personal receipts or
endorsements of a Participant’s personal representative, designated beneficiary
or alternate recipient provided for herein, and the Committee shall extend to
those individuals the rights otherwise exercisable by the Participant with
regard to any withholding tax election in accordance with Section 5 hereof. Any
effort to otherwise assign or transfer any Restricted Shares (before they are

 

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distributed) 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 the Participant and his or her beneficiary in and
under this Agreement.

 

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

 

11.                                 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.

 

12.                                 Sole Agreement. Notwithstanding anything in
this Agreement to the contrary, the terms of this Agreement shall be subject to
all of 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 the Participant
from the office of the Secretary of the Company. In addition, this Agreement 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 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).

 

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

 

14.                                 Amendment and Waiver. This Agreement may be
amended in accordance with the provisions of the Plan, and may otherwise be
amended by written agreement between the Company and the 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.

 

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IN WITNESS WHEREOF, the Company has duly executed this Agreement as of the Award
Date.

 

 

 

VERY TRULY YOURS,

 

 

 

UNITED STATIONERS INC.

 

 

 

 

 

By:

 

 

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Frederick B. Hegi, Jr.

 

Chairman of the Board

 

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