Exhibit 10.37


 


EXECUTIVE EMPLOYMENT AGREEMENT


 


THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), is made, entered into and effective as of December 31,
2008 (the “Effective Date”) by and
among UNITED STATIONERS INC., a Delaware corporation (hereinafter, together
with its successors, referred to as “Holding”),
UNITED STATIONERS SUPPLY CO., an Illinois corporation (hereinafter,
together with its successors, referred to as the “Company”,
and, together with Holding, the “Companies”), and
Stephen A. Schultz (hereinafter referred to as the “Executive”) and specifically, supersedes the Executive
Employment Agreement Executive entered into with the Companies on July 1, 2002.


 


WHEREAS, the Companies and Executive are
parties to an Executive Employment Agreement dated May 18, 2005 (the “Prior Agreement”), which the parties desire to amend and
restate in its entirety as set forth in this Agreement; and


 


WHEREAS, in October 2004, the American
Jobs Creation Act of 2004 (the “Act”) was
enacted, Section 885 of which Act added new provisions to the Internal
Revenue Code pertaining to deferred compensation and for which the Treasury
Department has issued final regulations and guidance regarding the deferred
compensation provisions of the Act permitting service providers and service
recipients a transition period to modify existing deferred compensation
arrangements to bring them into compliance with the Act; and


 


WHEREAS, the parties agree that it is in
their mutual best interests to modify, amend and clarify the terms and
conditions of the Prior Agreement, as set forth in this Agreement, with the
full intention of complying with the Act so as to avoid the additional taxes
and penalties imposed under the Act; 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 continue 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 


 


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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 Company and to secure cooperation from former executives
with respect to matters related to their employment with the Company; and


 


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 Company, 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 Company through the date the Executive’s
employment is terminated. (iii) all accrued and unpaid annul 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 Company. “Accrued Benefits” shall
not include any entitlement to severance pay or severance benefits under any
Company severance policy or plan generally applicable to the Company’s 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 owns all of the outstanding Voting Securities (as
hereinafter defined in the definition of Change of Control) of the Company, the
board of directors of Holding. In all other cases, Board means the board of
directors of the Company.


 


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“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 Company or any of its
Affiliates: (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 Company, including, without limitation,
engaging in competitive acts while employed by the Company; 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 Executive, the Executive has been given
written notice by the Companies of such event said to institute 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, an shall not
include failure to act by reason of total air partial incapacity due to
physical or mental illness.


 


“Change of Control” shall
meant (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 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 that if a Change of Control would
occur (but for the operation of this sentence) as a result of the issuance of
Voting Securities by Holding, and after such issuance of Voting Securities by
Holding, 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 Chang: of Control shall occur; (b) At
any time during a period of two consecutive years, the individuals who at the
beginning of such period reinstituted the Board (the “Incumbent Board”) cease for any reason to constitute
more than 50% of  the
Board; 


 


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provided, however, that if the election. or nomination for election by
Holding’s stockholders, 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 14a-11  promulgated unde(r) 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
reorganizations or approval by Holding’s stockholders 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, (2) 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 by of a
noncorporate entity) of the Surviving Company; and (3) 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 (3), a Change of Control
shall not be deemed to occur solely because any Person acquirer. 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
Security 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, or (d) Approval by Holding’s stockholders of an
agreement for the assignment, sale, conveyance, transfer, !case 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
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 Beneficial. Ownership is
in substantially the same proportions), or the occurrence of the same.
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely 


 


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because any Person acquired Beneficial Ownership of more than the
permitted amount of Voting Securities as a result of the  acquisition of  Voting
Securities by the Company 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 acquisition of Voting Securities by the Company, and after such
acquisition of Voting Securities by the Company, such Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the Voting Securities Beneficially Owned by such Person, then a
Change of Control shall occur.


 


“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, (ii) any material reduction, without the
Executive’s written consent, in the Executive’s duties, responsibilities or
authority; provided, however, that for purposes of this clause (ii), neither (A) a
change in the Executive’s Supervising Officer or the number or identity of the
Executive’s direct reports, nor (B) a change in the Executive’s title,
duties. responsibilities or authority was result of a realignment or
restructuring of the Companies’ executive organizational chart nor (C) a
change in the Executive’s title, duties, responsibilities or authority as a
result of a realignment or restructuring of the Companies shall necessarily be
deemed by itself to materially reduce
Executive’s duties, responsibilities or authority, as long as, in the
case of either (A), (B) or (C), Executive continues to report to either
the Chief Executive Officer or Chief Operating Officer of the Companies or to
the Supervising Officer to whom he reported immediately prior to the Change of
Control or a Supervising Officer of equivalent responsibility and authority, or
(iii) without Executive’s written consent: (A) a material reduction
in the Executive’s Base Salary, (B) the relocation of the Executive’s
principal place of employment more than fife (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, atone, 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 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 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 


 


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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 car other
governing Persons.


 


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


 


	
  Annual Bonus”

  	
  Section 4(b)

  
	
  “Base Salary”

  	
  Section 4(a)

  
	
  “Bonus Plan”

  	
  Section 4(b)

  
	
  “Confidential information or proprietary data”

  	
  Section 6(a)(2)

  
	
  “Customer”

  	
  Section 6(d)(2)

  
	
  “Disability”

  	
  Section 5(c)

  
	
  “Employment Period”

  	
  Section 2

  
	
  “Retirement”

  	
  Section 5(f)

  
	
  “Supervising Officer”

  	
  Section 3(a)

  
	
  “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 Internal
Revenue Code and the regulations and guidance thereunder (the “Code”).


 


Section 3,                                          Duties.


 


(a)                                  During the Employment
Period, the Executive (1) shall serve as Group President, Lagasse, Inc.
and ORS Nasco, Inc., a subsidiary 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 


 


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the Companies’ corporate headquarters office, unless
another principal place of performance is a(g)reed 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 responsibilities hereunder, (ii) make arid manage
personal investments of the Executive’s choice, and (iii) with the or
consent of the Companies’ Chief Executive Officer, which shall not be
unreasonably withheld, serve on the board of directors of one (1) far-profit
business enterprise.


 


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


 


(a)                                  the Executive shall
receive, at such intervals and in accordance with such Company payroll policies
as may be in effect from time to time, an annual salary (pro rata for any
partial year) equal to $380,000.16 (.”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)                                 during the Employment
Period, 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
he reimbursed, at such intervals anti in accordance with such Company 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 (i)ncentive, savings and retirement plans, stock
option 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. 


 


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practices, policies and programs provided by the Company 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


 


(g)                                 the Executive shall be entitled to
participate in the Company’s 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 he 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 prior to the expiration of the Term by the Companies for
any reason other than Cause or the Executive’s permanent disability, as defined
in the Companies’ Board-approved disability plan or policy as in effect from
time to time (“Disability”) and other than within two (2) years following
a Change of Control, then, as the Executive’s exclusive right and remedy in
respect of such termination:


 


(i)                                     the Executive
shall be entitled to receive from the Company 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 (1 1/2 ) 


 


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times the Executive’s then existing Base Salary, to be paid in such
intervals and at such times in accordance with the Company’s payroll practices
in effect from time to time over the eighteen (18) month period following the
Termination Date; but in no event shall such amount paid under this Section 5(c)(ii) exceed
the lesser of (A) $460,000.00 or (B) two (2) times 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 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);


 


(iii)                               in
the event that an amount equal to one and one-half times (11⁄2) the Executive’s
then-existing Base Salary exceeds the limitations of Subsections 5(c)(ii)(A) or
(B) above, then the Executive shall be entitled to an additional lump sum
payment equal to the difference between (x) one and one-half (11⁄2) times
the Executive’s then-existing Base Salary and (y) the amount payable to
Executive under Subsection 5(c)(ii), such lump sum payable to Executive on the
first regular payroll date of the Company to occur following the date that is
six months after the Termination Date;


 


(iv)                              the
Executive shall be entitled to a payment in an amount equal to one and one-half
(11⁄2) times the actual Annual Bonus award which would otherwise be payable for
the calendar year during which the Termination Date occurs, as if the Executive
had been employed for all of such calendar year based on actual performance, to
be paid at such time as the Annual Bonus award would otherwise be paid in
accordance with the Company’s policies;


 


(v)                                 the
Executive shall continue to be covered, upon the same terms and conditions
described in Section 4(e) hereof, by the same or equivalent medical
and/or dental insurance plans, programs and/or arrangements as in effect for
the Executive immediately prior to the Termination Date, beginning on the
Termination Date and continuing until the earlier of (A) the eighteen (18)
month anniversary following the date of the Executive’s 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 provided further that if the Company determines
that the coverage to be provided under this Section 5(c)(v) would
cause a self-insured plan maintained by the Company 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 Company
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 Company shall be responsible for depositing all applicable withholding
amounts in a timely manner with the appropriate tax authority), with the intent
that any amounts payable under this Section 5(c)(v) that are not
otherwise excluded from deferred compensation under Code Section 409A
shall be excluded from 


 


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deferred compensation pursuant to a “separation
pay plan due to involuntary separation from service” under Treas. Reg. §
1.409A-1(b)(9)(iii);


 


(vi)                              the
Executive shall receive a lump sum payment in an amount equal to the amount the
Company would otherwise expend for 18 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 thirty (30) 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 ten percent (10%) of the sum
of the Executive’s then existing Base Salary. The Executive shall not be
eligible to receive cash in lied of executive level career transition,
assistance services.


 


(d)                                 If during the
Employment Period, a Change of Control occurs and the Employment Period is
terminated by the Companies for any reason other than Cause or Disability or by
the Executive for Good Reason within
two (2) years from the date of such Change of Control, 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 Company 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 thirty (30) days
following the Termination Date;


 


(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 thirty (30) days
following the Termination
Date;


 


(iv)                                   the Executive shall
be entitled to a lump-sum payment to be paid within thirty (30)
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)                                      the Executive
shall continue to be covered, upon the same terms and 


 


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conditions described in Section 4(e) hereof,
by the same or equivalent medical and/or dental insurance plans, programs
and/or arrangements as in effect for the Executive immediately prior to the
Change of Control beginning on the Termination Date and continuing until the
earlier of: (A) the second anniversary following the date of the Executive’s
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 the Executive timely pays the Executive’s
portion of such coverage, and provided further that if the Company determines
that the coverage to be provided under this Section 5(d)(v) would
cause a self-insured plan maintained by the Company 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 Company
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 Company shall be responsible for depositing all applicable withholding
amounts in a timely manner with the appropriate tax authority), with the intent
that any amounts payable under this Section 5(d)(v) that are not
otherwise excluded from deferred compensation under Code Section 409A
shall be excluded from deferred compensation pursuant to a “separation pay plan
due to involuntary separation from service” under Treas. Reg. §
1.409A-1(b)(9)(iii);


 


(vi)                                   the Executive shall
receive a lump sum payment in an amount equal to the amount the Company 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 thirty
(30) days following the Termination Date;


 


(vii)                                the Executive shall
receive a lump sum cash payment, payable to Executive within thirty (30) 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 Company’s defined benefit retirement plan if he had two (2) additional
years of credit for purposes of
age, benefit service and vesting
under the Company’s defined
benefit retirement plan;


 


(viii)                             if the Executive’s
outstanding stock options have not by then, fully vested pursuant to the terms
of the Companies’ applicable stock option plans) and applicable option
agreement(s), then to the extent permitted in the Companies’ applicable stock option plan(s) and as
provided in the applicable stock option agreement(s), the Executive shall
continue to vest in the Executive’s unvested stock options 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 


 


11

















 


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 tees percent (10%) of the sum of the Executive’s then existing Base
Salary. 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 Company 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 Company verification of legal expenses for reimbursement
within 60 days from the date the expense was incurred; (C) the Company
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 anti, 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. The
Company shall deliver a Form 1099 to the Executive reflecting such
payments.


 


(f)                                    If
the Employment Period is terminated as a result of the Executive’s death,
Disability or retirement, as defined in the Companies’ Board-approved
retirement plan or policy, as in effect from time to time (“Retirement”), 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:


 


(i)                                          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 


 


12

















 


sixty-five
(365); or


 


(ii)                                       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).


 


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, such lump sum payment shall be made on the first regular payroll
date of the Company to occur following the date that is six months after the
Termination Date; and in the event the Employment Period is terminated as a
result of Executive’s Retirement, such lump sum payment shall be made on the
later of the date that Annual Bonus payments are made to other participants in
the plan or the first regular payroll date of the Company to occur following
the date that is six months after the Termination Date.


 


(g)                                 Notwithstanding
anything else contained herein, if the Executive terminates his employment for
any reason other than
Disability or Retirement and, if after a Change of Control, 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 and until 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.


 


(i)                                     In the event of a
termination of the Executive’s employment entitling the Executive to benefits
under Section 5(c) above, the Executive shall use reasonable efforts to
obtain employment suitable to his education, training and experience, and, upon
obtaining any such other employment
shall promptly notify the Companies thereof. The 


 


13

















 


remaining obligation of the Companies under Section 5(c) shall
be offset by any compensation earned by the Executive from such other
employment during the eighteenth month period commencing on his Termination
Date. Except as set forth in the first sentence of this Section 5(i) and
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(d),
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 Company or in the ownership of a substantial portion of the
assets of the Company 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 Company for Federal Income
Tax purposes pursuant to Section 280G of the Code (or any successor
provision thereto), provided, however, that no such reduction shall occur, and
this Section 5(j) shall not apply, in the event that the amount of
such reduction would be more than 10% of the aggregate value of such payments
and benefits.  The Companies shall in
good faith determine the amount of any reduction to be made pursuant to this Section 5(j),
and shall make such reduction by first 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).  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).


 


(k)                                  Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that Section 5(j) above does not apply and any payment or distribution of any
type to or in respect of the Executive made directly or indirectly, by the
Companies or by any other- party in connection with a Change of Control,
whether paid  or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (the “Total Payments”), is or will be
subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the “Code”)
or any interest or  penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are collectively referred to as
the “Excise Tax”), then the
Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Executive of all taxes (including any interest or
penalties imposed with 


 


14

















 


respect to such taxes) imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Total Payments.


 


(i)                                All
computations and determinations relevant to Section 5(k) and this
subsection 5(k)(i) shall 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 (the “Accounting Firm”),
subject to the Executive’s consent (not to be unreasonably
withheld), which .firm may be the Companies’ accountants. Such determinations
shall include whether any of the Total Payments are “parachute payments” (within the meaning of
Section 280G of the Code) In making the initial determination hereunder as
to whether a Gross-Up Payment is required, the Accounting Firm shall determine
that no Gross-Up Payment is required if the Accounting Firm is able to conclude
that no “Change of Control” has occurred
(within the meaning of Section 28OG of the Code). If the Accounting Firm
determines that a Gross-Up Payment is required, the Accounting Firm shall
provide its determination (the “Determination”), together with detailed
supporting calculations regarding the amount of any Gross-Up Payment and any
other relevant matter both to the Companies and the Executive by no later than
thirty (30) days following the Termination Date, if applicable, or such earlier
time as is requested by the Companies or the Executive (if the Executive
reasonably believes that any of the Total Patents may he subject to the Excise
Tax). if the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive and the Companies with a written
statement that such Accounting Firm has concluded that it is more likely than
not that no Excise Tax is payable (including the reasons therefor) and the
Executive is not required to report any Excise Tax on Executive’s federal
income tax return.


 


(ii)                             If a
Gross-Up Payment is determined to be payable, it shall be paid to the Executive
within twenty (20) clays after the Determination (and all accompanying
calculations and other material
supporting the Determination) is delivered to the Companies by the Accounting
Firm. Any determination by the Accounting Firm shall be binding upon the
Companies and the Executive, absent manifest error.


 


(iii)                          As a
result of  uncertainty in the application of Section 4999 of  the
Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments not made by the Companies should have
been made (“Underpayment”), or
that Gross-Up Payments will have been made by the Companies which should not
have been made (“Overpayments”). In
either such event, the Accounting Firm shall determine the amount of the
Underpayment or Overpayment that has occurred. In the case of an Underpayment,
the amount of such Underpayment (together with an amount which after payment of
all taxes thereon is equal to any interest and penalties payable by the
Executive as a result of such Underpayment) shall be promptly paid by the Companies
to or for the benefit of the Executive.


 


15

















 


(iv)                         In the
case of an Overpayment, the Executive shall, at the direction and expense of
the Companies, take such steps as are reasonably necessary (including the
filing of returns and claims for refund), follow reasonable instructions from,
and procedures established by, the Companies, and otherwise reasonably
cooperate with the Companies to Correct such. Overpayment, provided, however,
that the Executive shall not in any event be obligated to return to the
Companies an amount greater than the portion of the Overpayment that Executive
has retained after payment of all taxes thereon or has recovered as a refund
from the applicable taxing authorities.


 


(v)                            The
Executive shall notify the Companies in writing of any claim by the Internal
Revenue Service relating to the possible application of the Excise


 


Tax under Section 4999 of the Code to
any of the payments and amounts referred to herein and shall afford the Companies,
at their expense, the opportunity to control the defense of such claim (for the
sake of clarity, if the Internal Revenue Service is successful in any such
claim or the Executive reaches a final settlement with the Internal Revenue
Service with respect to such claim (after having afforded the Companies, at their
expense, the opportunity to control the defense of such claim), the amount of
the Excise Tax resulting from such successful
claim or settlement shall be
determinative as to whether or not there has been an Underpayment or an
Overpayment for purposes of subsection 5(k)(iii).


 


(vi)                         Without
limiting the intent of this Section 5(k) to make the Executive whole,
on an after-tax basis, from the application of the Excise Taxes, all
determinations by the Accounting Finn shall he made with a view to minimizing
the application of :Sections 28OG and 4999 of the Code of any of the Total
Payments, subject, however, to the following: the Accounting Firm shall make
its determination on the basis of “substantial authority” (within the meaning
of Section 6230 of the Code) and shall provide opinions to that effect to both the Companies and the Executive upon the request of
either of them.


 


(vii)                      Notwithstanding
any provision above to the contrary, any Gross-Up Payment payable under this Section 5(k) shall
be made by the end of the calendar year following the calendar year in which
the Executive remits the taxes.  Further,
notwithstanding any provision above to the contrary, any right to reimbursement
under this Section 5(k) of expenses incurred by Executive due to a
tax audit or litigation addressing the existence or amount of a tax liability
shall be made by the end of the calendar year following the calendar year in
which the taxes that are the subject of the audit or litigation are remitted,
or where as a result of the audit or litigation no taxes are remitted, the end
of the calendar year following the calendar year in which the audit is
completed or there is a final and non-appealable settlement or other resolution
of the litigation.  Any Gross-Up Payment
and any reimbursement of expenses payable under this Section 5(k) shall
not be made before the date that is six months after the Termination Date.


 


16














 


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 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, technique, 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 plants and development and delivery



 


17

















 


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 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 Company. 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 


 


18

















 


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 (l) 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 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 employee/ by,
or acting on 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 service from a
line of business engager/ in by the Companies or their Subsidiaries during the
last twelve (12) 


 


19

















 


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) produces 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.


 


(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 


 


20

















 


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.


 


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, either parts or applications thereof or the whole
of this Agreement, but such provision shall he deemed modified to the extent
necessary to render such
provision enforceable, and the rights and obligations of the parties shall he
construed and enforced accordingly, preserving to the fullest permissible
extent the intent and agreements of the parties herein set forth.


 


Section 10.                                   Amendment.
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.


 


Section 11.                                   Payment;
Taxes and Withholding.  The
Company shall he responsible as employer for payment of all cash compensation
and severance payments 


 


21

















 


provided herein and Holding shall use [he Company to make such
payments. The Executive shall not he entitled to receive any additional
compensation from either of the Companies for any services the Executive
provides to Holding or the
Companies’ Subsidiaries. The Company than 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 Company shall he 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 him 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.


 


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:


 


United Stationers Inc,


United Stationers Supply Co.


One Parkway North Blvd.


Suite 100


 


Attention: General Counsel


 


If to the Executive:


 


Stephen A. Schultz


 


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 breath 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.


 


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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 shall execute the Indemnification
Agreement contemporaneously with the execution of this Agreement.


 


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 resol(v)ing 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)(ix) 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 m d Section 12 hereof shall not be
applicable to any dispute, controversy or question arising unde(r), 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 


 


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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 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 pates hereto with respect to
the subject matter hereof.


 


*                                         *                                         *


 


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 day and year first written above.


 


	
  EXECUTED ON :

  	
  UNITED STATIONERS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  , 2008

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Richard W. Gochnauer

  
	
   

  	
   

  	
  Title:    President and Chief
  Executive

  
	
  Officer

  	
   

  
	
   

  	
   

  
	
  EXECUTED ON:

  	
  UNITED STATIONERS SUPPLY CO.

  
	
   

  	
   

  
	
   

  	
  , 2008

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Richard W. Gochnauer

  
	
   

  	
   

  	
  Title:    President and Chief
  Executive

  
	
  Officer

  	
   

  
	
   

  	
   

  
	
  EXECUTED ON:

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  , 2008

  	
   

  
	
   

  	
  Stephen A. Schultz

  



 


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