Exhibit 10.42


 


UNITED STATIONERS INC.

2004 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

SECTION 16 OFFICERS


 


Dear
Steve:


 


This
Restricted Stock Unit Award Agreement (this “Agreement”), dated as March 4,
2008, (the “Award Date”), is by and between Stephen Schultz (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 grant awards under the Plan, the Committee
has determined that the Participant should receive a restricted stock unit
award, on the following terms and conditions:


 


1.             Grant. The Company
hereby grants to the Participant a Restricted Stock Unit Award (the “Award”) of
3,000 restricted stock units (the “Units”), each Unit representing the right to
receive up to two shares of the Company’s common stock as provided in Section 4
of this Agreement. The Award will be subject to the terms and conditions of the
Plan and this Agreement.


 


2.             No Rights as a Stockholder.   The Units granted pursuant to this Award do
not entitle the Participant to any rights of a stockholder of the Company’s
Stock. The Participant’s rights with respect to the Units shall remain
forfeitable at all times until satisfaction of the vesting conditions set forth
in Section 3 of this Agreement.


 


3.             Vesting; Effect of Date of
Termination.   So long as
the Participant’s Date of Termination has not yet occurred, the Participant’s
Units will vest in accordance with the following schedule:


 


	
  Scheduled
  Vesting Date

  	
   

  	
  Percentage of Total Units To Vest

  	
   

  
	
  December 31, 2008

  	
   

  	
  25%

  	
   

  
	
  December 31, 2009

  	
   

  	
  25%

  	
   

  
	
  December 31, 2010

  	
   

  	
  25%

  	
   

  
	
  December 31, 2011

  	
   

  	
  25%

  	
   

  



 


If
the Participant’s Date of Termination occurs for any reason before any
Scheduled Vesting Date, the Participant’s Units that are not yet vested
immediately prior to such Date of Termination 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 before a Scheduled Vesting Date by
reason of the Participant’s death or Permanent and Total Disability (as defined
below), a Pro Rata Portion of the then unvested Units will become vested as of
the Participant’s Date of Termination. As used herein, the “Pro Rata Portion”
of the Units shall be determined by multiplying the number of unvested Units
immediately prior to the Participant’s Date of Termination by a fraction, the
numerator of which shall be the number of whole months elapsed between the most
recent Scheduled Vesting Date prior to the Date of Termination (or the Award Date,
if no Scheduled Vesting Date has yet occurred) and the Date of Termination, and
the denominator of which shall be the number of whole months between the most
recent Scheduled Vesting Date prior to the Date of Termination (or the Award
Date, if no Scheduled Vesting Date has yet occurred) and the final Scheduled
Vesting Date.


 


(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 Units that were not yet vested
immediately prior to the Change of Control will then become fully vested as of
the date of such event; and (ii) the portion of such unvested Units 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), but with the remaining scheduled vesting percentages
in the table at the beginning of this Section proportionately reduced.


 


(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 the
involuntary termination of the Participant’s employment by the Company or its
Subsidiaries without Cause or by the Participant for Good Reason (as defined
below), the Units that were not yet vested under this Agreement immediately
prior to such Date of Termination will be fully vested as of the Participant’s
Date of Termination.


 


(d)           If the
Participant’s Date of Termination occurs after the Award Date and during an
Anticipated Change of Control by reason of the involuntary 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 would have
been issuable in settlement of the Units that were forfeited on the Date of
Termination had those Units been vested on the Date of Termination (such number
of shares determined in accordance with paragraph 4(c) below) shall be
granted to the Participant on a fully vested basis as of the date of the Change
of Control (but in no event later than March 15 of the year following the
calendar year in which the Change of Control occurs).


 


(e)           For purposes of
this Agreement, the term “Permanent and Total Disability” means the Participant’s
inability, due to illness, accident, injury, physical or mental


 


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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.


 


(f)            For purposes of this
Agreement, “Good Reason” shall mean: (i) any material breach by the
Company of this Agreement or of any employment agreement with the Participant without
Participant’s written consent, (ii) any material reduction, without the
Participant’s written consent, in the Participant’s duties, responsibilities or
authority; provided, however, that for purposes of this clause (ii), neither (A) a
change in the Participant’s supervisor or the number or identity of the
Participant’s direct reports, nor (B) a change in the Participant’s title,
duties, responsibilities or authority as a result of a realignment or
restructuring of the Company’s executive organizational chart nor (C) a
change in the Participant’s title, duties, responsibilities or authority as a
result of a realignment or restructuring of the Company shall be deemed by
itself to materially reduce Participant’s duties, responsibilities or
authority, as long as, in the case of either (B) or (C), Participant
continues to report to either the supervisor to whom he or she reported
immediately prior to the Change of Control or a supervisor of equivalent
responsibility and authority; or (iii) without Participant’s written
consent: (A) a material reduction in the Participant’s base salary, (B) the
relocation of the Participant’s principal place of employment more than fifty
(50) miles from its location on the date of a Change in Control, or (C) the
relocation of the Company’s corporate headquarters office outside of the
metropolitan area in which it is located on the date of a Change in Control.
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 the
Participant gives the Company written notice within thirty (30) days after the
initial occurrence of any of such events that the Participant believes that
such event constitutes Good Reason, and the Company thereafter fails to cure
any such event within sixty (60) days after receipt of such notice.


 


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


 


4.             Number of Shares to be
Received.   The
number of shares of Stock that the Participant will be entitled to receive in
settlement of each Unit upon its vesting will be determined as follows:


 


(a)           Each calendar
year beginning with the year ending December 31, 2008 and ending with the
year ending December 31, 2011 will be considered a performance period for
purposes of this Award. As of the end of each performance period, the number of
shares of Stock to be issued in settlement of the number of Units scheduled to
vest as of the end of that performance period (the “Share Settlement


 


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Amount”)
will be determined and fixed by multiplying the number of Units that vest on
the applicable Scheduled Vesting Date by the Share Adjustment Factor (defined
below).


 


(b)           The Share Adjustment Factor
for any performance period is the multiple (calculated to two decimal places)
determined by comparing EBIT(1) for ORS Nasco, Inc. for that performance
period to the EBIT threshold, target and maximum amounts for that performance
period as established by the Committee, in the manner prescribed in Appendix A
to this Agreement. The target EBIT amounts for ORS Nasco Inc. for each
performance period are set forth in Appendix A.


 


(c)           If any Units vest before
their Scheduled Vesting Date pursuant to paragraphs 3(a), (b) or (c), then
the number of shares of Stock to be issued in settlement of such Units will be
determined by multiplying such number of Units by the Share Adjustment Factor
for the last completed performance period (or by 1 if no performance period has
been completed at that time).


 


5.             Settlement of Units.   After any Units vest pursuant to Section 3,
the Company will promptly, but in no event later than March 15 of the year
following the calendar year in which such Units vest, cause to be issued to the
Participant, or to the Participant’s beneficiary or legal representative in the
event of Participant’s death, shares of Stock in payment and settlement of such
vested Units in the amount determined in accordance with Section 4. Such
issuance shall be evidenced by a stock certificate or appropriate entry on the
books of the Company or a duly authorized transfer agent of the Company, shall
be subject to the tax withholding provisions of Section 6, and shall be in
complete satisfaction of such vested Units. If the Units that vest include a
fractional Unit, the Company will round the number of vested Units down to the
nearest whole Unit prior to issuance of the shares as provided herein.


 


6.             Tax Matters.


 


(a)           The Committee may require
the Participant, or the alternate recipient identified in Section 5, to
satisfy any potential federal, state, local or other tax withholding liability.
Such liability must be satisfied at the time such Units vest and are settled in
shares of Stock. 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)


 






(1) For purposes of this
Agreement, “EBIT” will be derived from the diluted earnings per share as
reported in the Company’s audited financial statements for the reported year
and adjusted for the same items used in adjusting Net Income results for the
United Stationers Management Incentive Plan purposes. EBIT is calculated as
total gross margin less total operating expenses. The calculation of EBIT shall
exclude the impacts of any intercompany sales and any acquisition accounting
items, including amortization of intangible assets, depreciation expenses
associated with any fixed asset step up to fair value and impact of any
inventory step up to fair value.


 


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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.


 


(b)           The Award evidenced by this
Agreement and the issuance of shares of Stock in settlement of vested Units is
not intended to provide and does not provide for the deferral of compensation
within the meaning of Section 409A of the Code. The Participant shall have
no power to affect the timing of such settlement.


 


7.             Compliance with
Laws.   Despite the provisions of Section 5
hereof, the Company is not required to issue or deliver any certificates for
shares of Stock if at any time the Company determines that the listing,
registration or qualification of such 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 issuance or delivery of the 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 shares of Stock
issued in settlement of vested Units, the 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 the Participant by will or
by the laws of descent and distribution. Issuance of shares of Stock in
settlement of Units 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


 


5

















 


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 6
hereof. Any effort to otherwise assign or transfer any Units 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:

  	
  /s/
  F. B. Hegi

  
	
   

  	
  Frederick
  B. Hegi, Jr.

  
	
   

  	
  Chairman
  of the Board

  



 


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Appendix A


 


Determination of Share Adjustment Factor


 


For
any performance period, the Share Adjustment Factor shall be determined in
accordance with the following table:


 


	
  ORS Nasco, Inc. EBIT for the Applicable

  Performance Period

  	
   

  	
  Share Adjustment Factor(1)

  	
   

  
	
  Lower of 85% of Target
  EBIT(2) or prior year’s actual EBIT (Threshold)(3)

  	
   

  	
  0

  	
   

  
	
  Target EBIT

  	
   

  	
  1.00

  	
   

  
	
  130% of Target EBIT (Maximum)

  	
   

  	
  2.00

  	
   

  



 






(1)
If ORS Nasco, Inc. EBIT for the applicable performance period is between
Threshold and Target EBIT or between Target and Maximum EBIT, the applicable
Share Adjustment Factor will be determined by linear interpolation between the
applicable Share Adjustment Factors shown in the table.


 


(2) For purposes of
this Agreement, “EBIT” will be derived from the diluted earnings per share as
reported in the Company’s audited financial statements for the reported year
and adjusted for the same items used in adjusting Net Income results for the
United Stationers Management Incentive Plan purposes. EBIT is calculated as the
total gross margin less total operating expenses. The calculation of EBIT shall
exclude the impacts of any intercompany sales and any acquisition accounting
items, including amortization of intangible assets, depreciation expenses
associated with any fixed asset step up to fair value and impact of any
inventory step up to fair value.


 


(3) Threshold
performance will be the lower of 85% of target EBIT or prior year’s actual
EBIT.


 


Target ORS Nasco, Inc. EBIT


 


	
  Year Ending

  	
   

  	
  Target ORS Nasco, Inc. EBIT

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  21,324,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  24,411,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  28,245,000

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  31,145,000

  	
   

  



 


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