Exhibit 10.36


 


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
RICHARD W. GOCHNAUER, currently a resident of Winnetka, IL (hereinafter
referred to as the “Executive”).


 


WHEREAS, the Companies and Executive are parties to an Executive
Employment Agreement dated July 22, 2002 and amended as of January 1,
2003 and December 31, 2003 (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 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 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 I.                                             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 annual 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 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.


 


“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; (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 Board (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
constitute 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, and shall not include
failure to act by reason of total or partial incapacity due to physical or
mental illness.


 


“Change of Control” shall
mean (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, 


 


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that in determining whether a Change of Control has occurred, Voting
Securities which are held or acquired by (i) Holding of any of its
subsidiaries or (ii) an employee benefit plan (or a trust forming a part
thereof) maintained by Holding or any of its subsidiaries 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 Change
of Control shall occur; (b) At any time during a period of two consecutive
years, the individuals who at the beginning of such period constituted the Board
(the “incumbent Board”) cease for
any reason to constitute more than 50% of the Board; 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 under 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 reorganization 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: (1) 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 Baud 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 body 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 acquired
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 Securities so issued; or (d) Approval by
Holding’s stockholders of an agreement for the assignment, sale, conveyance,
transfer, lease or other disposition of all or substantially all of the assets
of Holding to any Person (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 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 


 


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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), a change
in the number or identity of the Executive’s direct reports shall not be deemed
by itself to materially reduce Executive’s duties, responsibilities or
authority as long as Executive continues to report to either the Chief
Executive Officer or Board of the Companies prior to the end of the first
quarter of the calendar year 2003 and thereafter or such earlier date as the
Executive begins serving as President and Chief Executive Officer of the
Companies solely to the Board of the Companies, 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 fifty
(50) miles from its location on the Effective Date of this Agreement, or (C) the
relocation of the Company’s corporate headquarters office outside of the
Chicago, IL metropolitan area. 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 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 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 or other
governing Persons.


 


(b) The capitalized terms used in Section 5(j) have the
respective meanings assigned to them in such Section and the following
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)

  
	
  “Term” and “Termination Date”

  	
  Section 2

  



 


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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 (i) shall serve as the President and
Chief Executive Officer of the Companies, (ii) shall report directly to
the Board, (iii) shall, subject to and in accordance with the authority
and direction of the Board, 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 (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 the Companies’
corporate headquarters office, unless another principal place of performance is
agreed 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 and manage personal investments of
the Executive’s choice, and (iii) with the prior consent of the Companies’
Board, which shall not be unreasonably withheld, serve on the board of
directors of one (1) for-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 $900,000.00 (“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 senior grade level;


 


5

















 


(c)                                       the Executive
shall be reimbursed, at such intervals and 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 incentive, savings and retirement
plans, stock option plans, practices, policies and programs applicable
generally to other senior executives of the Companies at the senior 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,
practices, policies and programs provided by the Company to senior executives
of the Companies at the senior 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 senior grade level;


 


(f)                                         the Executive
shall be entitled to 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 senior 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 be 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, Good Reason 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
Executive for Good Reason or 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 two (2) times the Executive’s then
existing Base Salary, to be paid in such intervals and at such times in accordance with the 


 


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Company’s payroll practices in
effect from time to time over the twenty-four (24) 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 two (2) times 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) two (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 two (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 be entitled to a lump-sum payment in an amount equal to the pro-rata
actual Annual Bonus award which would otherwise be payable for the calendar
year during which the Termination Date occurs, with such pro-rata actual Annual
Bonus award determined by multiplying the 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); such lump sum payment to 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;


 


(vi)                                   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 twenty-four (24) 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) 


 


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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);


 


(vii)                                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;


 


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


 


(ix)                                     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 five (5) additional years of
credit for purposes of age, benefit service and vesting;


 


(x)                                        for purposes of
any outstanding equity-based compensation award agreement with the Companies to
which the Executive is a party as of the Termination Date, Executive shall be
credited with five (5) additional years of service for purposes of
determining whether the definition of “Retirement” contained in any such award
agreement has been satisfied; and


 


(xi)                                     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 twenty percent (20%) of
the sum of (i) the Executive’s then existing Base Salary and (ii) the
target incentive compensation award for the calendar year during which the
Termination Date occurs. The Executive shall not be eligible to receive cash in
lieu 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, each 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 three (3) 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 three (3) times the
greater of (A) the target incentive compensation award for the calendar
year during 


 


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which the Termination Date occurs or (B) the average of the
Executive’s Annual Bonuses for the three (3) prior calendar years, 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 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 third
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 36-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 eight (8) additional years of credit for purposes of age,
benefit service and vesting;


 


(viii)                        if the Executive’s outstanding
stock options have not by then fully vested pursuant to the terms of the
Companies’ applicable stock option plan(s) 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 Executive’s unvested
stock options following the Termination Date;


 


(ix)                                for purposes of any
outstanding equity-based compensation award agreement with the Companies to
which the Executive is a party as of the Termination Date, Executive shall be 


 


9

















 


credited with five (5) additional years of service for purposes of
determining whether the definition of “Retirement” contained in any such award
agreement has been satisfied;


 


(x)                                   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 twenty percent (20%) of
the sum of (i) the Executive’s then existing Base Salary and (ii) the
target incentive compensation award for the calendar year during which the
Termination Date occurs. The Executive shall not be eligible to receive cash in
lieu of executive level career transition assistance services; and


 


(xi)                                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)                                  Except
for Executive’s vested benefits under the Companies’ employee benefit plans,
any amounts payable pursuant to Sections 5(c) and 5(d) above shall be
considered severance payments
and 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.


 


(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 (1) the
Executive’s Accrued Benefits in accordance with Section 5(a), (2) 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, (3) a credit of five (5) additional
years of service for purposes of determining whether the definition of “Retirement”
contained in any outstanding equity-based compensation award agreement with the
Companies to which the Executive is a party as of the Termination Date has been
satisfied, and (4) 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 (A) 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 pro-rata award to 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 sixty-five (365), plus (B) 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 five (5) additional years of credit for purposes of age,
benefit service and vesting; or


 


10

















 


(ii)                                  in the event the
Employment Period is terminated as a result of Executive’s Retirement, an
amount equal to: (A) 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 pro-rata award to 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); plus (B) 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 five (5) additional years of credit for purposes of age, benefit
service and vesting.


 


(iii)                               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 voluntarily terminates
employment 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
and the Executive’s vested benefits under the Companies’ employee benefit
plans.


 


(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 be a mutual release and shall not
diminish or terminate the Executive’s rights under this Agreement or the
Indemnification Agreement.


 


(i)                                     Upon
termination of the Executive’s employment with the Companies, 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 


 


11

















 


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, 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 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 280G 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 Payments may be 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) days after the Determination (and
all accompanying calculations and other material supporting the Determination)
is delivered to the Companies by the Accounting
Firm. Any 


 


12

















 


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 (“Overpayment?).  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 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.


 


(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
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 Firm shall be made with a view to minimizing the application
of Sections 280G 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.


 


13














 


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, techniques, 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 plans and development and delivery 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.


 


14

















 


(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)                                  During
the twenty-four (24) month period following the end of the Executive’s
employment with the Companies, the Executive shall not within the United States
and Canada in any capacity (whether as an owner, employee, consultant or
otherwise) 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 provided for the Companies or
their Subsidiaries during the last two years of the Executive’s employment by
the Companies — 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 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 (1) or (2) hereinabove which is the
same or substantially similar to the lines 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.


 


(d)                                 (1) During
(i) the Executive’s employment by the Companies, whether during or after
the Employment Period, and (ii) 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, solicit any Customer
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 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 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 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, for or on behalf of any Person other
than the Companies or any of their Subsidiaries. Also, (i) during the
Executive’s employment by the Companies, whether during or after the Employment
Period and (ii) for the twenty-four (24) month period following the end of
the Executive’s employment with the Companies, if the Executive is employed by
a Supplier, 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 


 


15

















 


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 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. 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) 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 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 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, hire away, 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 twenty-four (24) 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 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 


 


16

















 


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, other parts or applications thereof or the whole
of this Agreement, but such provision shall be deemed modified to the extent
necessary to render such provision enforceable, and the rights and obligations
of the parties shall be 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 be responsible as employer for
payment of all cash compensation and severance payments provided herein and
Holding shall cause the Company to make such payments. The Executive shall not
be 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 shall 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 be 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.


 


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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


Deerfield, IL 60015-2559


Attention: General Counsel


 


If to the Executive:


 


Richard W. Gochnauer


 


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 breach 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.


 


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 resolving 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)(x) 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 and Section 12 hereof shall not be
applicable to any dispute, controversy or question arising under, out of, or
relating to the Indemnification Agreement.


 


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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 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 parties 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.


 


	
   

  	
  UNITED STATIONERS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Frederick B. Hegi 

  
	
   

  	
   

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNITED STATIONERS SUPPLY CO.

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Richard W. Gochnauer

  



 


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