Document:

Exhibit
10.3

 

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 Eric A.
Blanchard (hereinafter referred to as the “Executive”).

 

WHEREAS,
the Companies and Executive are parties to an Executive Employment Agreement
dated December 1, 2006 (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 Executives 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 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 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 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.

 

“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

 

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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
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, 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 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

 

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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 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 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;
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, lease 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 because any Person acquired Beneficial
Ownership of more than the permitted amount of Voting Securities as a result of
the acquisition of Voting

 

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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 as a 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 fifty (50) miles from
its location on the date of a Change in Control, or (C) the relocation of
the Company’s corporate headquarters office outside of the metropolitan area in
which it is located on the date of a Change in Control. For purposes of this
Agreement, a Change of Control, alone, does not constitute Good Reason.
Furthermore, notwithstanding the above, the occurrence of any of the events
described above will not constitute Good Reason unless the 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.

 

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“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)

  
	
  “Code”

  	
   

  	
  Section 2

  
	
  “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)

  
	
  “Supplier”

  	
   

  	
  Section 6(d)(2)

  
	
  “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 (i) shall serve as Senior Vice President,
General Counsel and Secretary, (ii) shall report directly to the Chief
Executive Officer (the “Supervising Officer”);  (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 the Companies’ corporate headquarters office, unless another principal
place of

 

6

 

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’ Chief Executive Officer,
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 $306,329.76 (“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 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 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,
practices, policies and programs provided by the Company to senior executives
of the Companies at the same grade level (including, without limitation,
medical, prescription,

 

7

 

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 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 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 one and one-half (11/2) 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

 

8

 

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 (11/2) 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) 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 deferred compensation
pursuant to a “separation pay plan due to involuntary separation from service”
under Treas. Reg. §1.409A-1(b)(9)(iii);

 

9

 

 

(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 Executive’s then existing Base Salary. 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 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 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

 

10

 

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 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 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 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 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 Executive’s then existing Base
Salary, The Executive shall not be

 

11

 

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 expense
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 expense 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 and,
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.

 

(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 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

 

12

 

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 Good Reason, Disability or Retirement, 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 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 eighteen 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

 

13

 

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 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

 

14

 

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
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.

 

(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.

 

15

 

(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 expense
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 expense payable under this Section 5(k) shall not be
made before the date that is six months after the Termination Date.

 

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).

 

16

 

 

(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.

 

17

 

(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 the 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
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, 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

 

18

 

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 and/or Vendor 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 and (ii) insofar as the Executive may be employed by, or
acting for 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, whether during or after the Employment Period, 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 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 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

 

19

 

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 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.

 

20

 

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.

 

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:

 

21

 

If
to the Companies:

 

United
Stationers Inc.

United
Stationers Supply Co.

2200
E. Golf Road

Des
Plaines, IL 60016-1267

Attention:
President and Chief Executive Officer

 

If to the Executive: 

 

Eric
A. Blanchard

 

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

 

22

 

hereof
shall not be applicable to any dispute, controversy or question arising under,
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 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.

 

	
  EXECUTED
  ON:

  	
   

  	
  UNITED
  STATIONERS 1NC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  12/31,
  2008

  	
   

  	
   

  	
  By:

  	
  /s/
  Richard W. Gochnauer

  
	
   

  	
   

  	
   

  	
  Name:
  Richard W. Gochnauer

  
	
   

  	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  EXECUTED
  ON:

  	
   

  	
  UNITED
  STATIONERS SUPPLY CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  12/31,
  2008

  	
   

  	
   

  	
  By:

  	
  /s/
  Richard W. Gochnauer

  
	
   

  	
   

  	
   

  	
   

  	
  Name:
  Richard W. Gochnauer

  
	
   

  	
   

  	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  

 

23

 

	
  EXECUTED
  ON:

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  12/31,
  2008

  	
   

  	
  /s/
  Eric A. Blanchard

  
	
   

  	
   

  	
  Eric
  A. Blanchard

  

 

24Exhibit
10.5

 

EXECUTION COPY

 

FOURTH AMENDMENT
TO THE

TRANSFER AND ADMINISTRATION AGREEMENT

 

THIS
FOURTH AMENDMENT TO THE TRANSFER AND ADMINISTRATION AGREEMENT, dated as of March 30,
2010 (this “Amendment”), is entered into
by and among (i) UNITED STATIONERS RECEIVABLES, LLC (the “SPV”), (ii) UNITED
STATIONERS SUPPLY CO., as Originator (the “Originator”),
(iii) UNITED STATIONERS FINANCIAL SERVICES LLC, as Seller (the “Seller”) and as Servicer (the “Servicer”), (iv) ENTERPRISE
FUNDING COMPANY LLC, as a conduit investor (“Enterprise
Funding”) and (v) BANK OF AMERICA, NATIONAL ASSOCIATION, as
an Alternate Investor (“Alternate Investor”)
and Agent (the “Agent”).  Capitalized terms used and not otherwise
defined herein are used as defined in the Transfer and Administration
Agreement, including by reference therein, dated as of March 3, 2009 (as
amended, amended and restated, supplemented or otherwise modified through the
date hereof, the “Transfer Agreement”),
among the SPV, the Originator, the Seller, the Alternate Investors party
thereto, the Conduit Investors party thereto, the Class Agents party
thereto and the Agent.

 

WHEREAS,
the parties hereto desire to amend the Transfer Agreement in certain respects
as provided herein;

 

NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.           Amendments to the Transfer Agreement.  The following amendment is made to the
Transfer Agreement:

 

(a)           Section 6.1(a)(i)(a) of the Transfer Agreement is hereby
amended and restated in its entirety as follows:

 

“(a) Within ninety (90) days after the close of
the SPV’s and the Performance Guarantor’s fiscal years, (A) unaudited
financial statements, prepared in accordance with GAAP on a consolidated basis for
the SPV and (B) audited financial statements, prepared in accordance with
GAAP on a consolidated basis for the Performance Guarantor and its
Subsidiaries, in each case, including balance sheets as of the end of such
period, related statements of operations, shareholder’s equity and cash flows; provided
that the audited financial statements for the Performance Guarantor and its Subsidiaries
shall be accompanied by an unqualified audit report certified by independent
registered public accountants of national or regional recognition, acceptable
to the Agent, prepared in accordance with GAAP and by a certificate of said
accountants that, in the course of the foregoing, they have obtained no
knowledge of any Termination Event or Potential Termination Event, or if, in
the opinion of such accountants, any Termination Event or Potential Termination
Event shall exist, stating the nature and status thereof, and”

 

 

SECTION 2.           Effective Date.  This Amendment shall become effective as of the date (the “Effective Date”) that the Agent
shall have received counterparts hereof duly executed by each of the parties
hereto.

 

SECTION 3.           Representations and
Warranties.

 

Each of the Originator, the SPV, the Seller and the Servicer hereby
certifies that, subject to the effectiveness of this Amendment, each of the
representations and warranties set forth in the Transfer Agreement is true and
correct on the date hereof, as if each such representation and warranty were
made on the date hereof.

 

SECTION 4.           Transfer Agreement in Full Force and Effect as Amended.

 

Except as specifically amended hereby, the Transfer Agreement shall
remain in full force and effect.  All
references to the Transfer Agreement shall be deemed to mean the Transfer
Agreement as modified hereby.  The
parties hereto agree to be bound by the terms and conditions of the Transfer
Agreement, as amended by this Amendment, as though such terms and conditions
were set forth herein.

 

SECTION 5.           Consent of Performance Guarantor.

 

The Performance Guarantor hereby consents to
the amendments to the Transfer Agreement set forth in this Amendment.

 

SECTION 6.           Miscellaneous.

 

6.1           This Amendment may be executed in any number of counterparts, and by
the different parties hereto on the same or separate counterparts, each of
which when so executed and delivered shall be deemed to be an original
instrument but all of which together shall constitute one and the same
agreement.  Delivery of an executed
counterpart of a signature page by facsimile or other electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Amendment.  This Amendment shall
become effective upon the Agent’s receipt of counterparts of this Amendment,
duly executed by all parties hereto (including the Performance Guarantor).

 

6.2           The descriptive headings of the various sections of this Amendment are
inserted for convenience of reference only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.

 

6.3           This Amendment may not be amended or
otherwise modified except as provided in the Transfer Agreement.

 

6.4           Any provision in this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

2

 

6.5           THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

 

3

 

IN WITNESS WHEREOF, the parties
have caused this Amendment to be executed by their respective officers
thereunto duly authorized, as of the date first above written.

 

 

	
   

  	
   

  	
  UNITED STATIONERS
  RECEIVABLES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UNITED STATIONERS SUPPLY
  CO., as Originator

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UNITED STATIONERS
  FINANCIAL SERVICES LLC, as Seller and as Servicer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

[signatures
continued on next page]

 

Fourth
Amendment to TAA - United Stationers

 

S-1

 

	
   

  	
   

  	
  BANK OF AMERICA, NATIONAL
  ASSOCIATION,

  as an Alternate Investor and Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ENTERPRISE FUNDING, as a Conduit Investor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

[signatures
continued on next page]

 

Fourth
Amendment to TAA - United Stationers

 

S-2

 

Acknowledged
and consented to by:

 

	
   

  	
   

  	
  UNITED
  STATIONERS INC.,

  as the Performance Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

[end
of signatures]

 

Fourth
Amendment to TAA - United Stationers

 

S-3

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