Document:

esnd-ex109_64.htm

Exhibit 10.9

 

ESSENDANT INC.
2015 LONG-TERM INCENTIVE PLAN
2017 Restricted Stock Award Agreement with EPS Minimum

 

This Restricted Stock Award Agreement (this “Agreement”), dated as of _____, 2017 (the “Award Date”), is by and between [[FIRSTNAME]] [[LASTNAME]] (the “Participant”), and Essendant Inc., a Delaware corporation (the “Company”). Any term capitalized but not defined in this Agreement will have the meaning set forth in the Company’s 2015 Long-Term Incentive Plan (the “Plan”). In the exercise of its discretion to deliver stock of the Company, the Committee has determined that the Participant should receive a restricted stock award, on the following terms and conditions:

 

	
1.
	
Grant. The Company hereby grants to the Participant a Restricted Stock Award (the “Award”) of [[SHARESGRANTED]] shares of Stock (the “Restricted Shares”). The Award will be subject to the terms and conditions of the Plan and this Agreement. The Award constitutes the right, subject to the terms and conditions of the Plan and this Agreement, to distribution of the Restricted Shares.

 

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

 

	
3.
	
Rights as Stockholder. On and after the Award Date, and except to the extent provided in this Section 3 and in Section 10 below, the Participant will be entitled to all of the rights of a stockholder with respect to the Restricted Shares, including the right to vote the Restricted Shares, the right to receive dividends and other distributions payable with respect to the Restricted Shares, and the right to participate in any capital adjustment applicable to all holders of Stock. The Participant will not, however, have the right to receive any regular cash dividend with respect to Restricted Shares that are not yet vested as of the applicable dividend record date, and hereby waives his or her right to receive such dividends with respect to unvested Restricted Shares. Any dividend or distribution other than a regular cash dividend that is payable or distributable with respect to Restricted Shares that are not yet vested as of the applicable payment date will be deposited with the Company and will be subject to the same restrictions, vesting conditions and other terms of this Agreement to which the underlying Restricted Shares are subject. If the Participant forfeits any rights he or she may have under this Award in accordance with Section 4 hereof, the Participant shall, on the day following the event of forfeiture, no longer have any rights as a stockholder with respect to any and all Restricted Shares not then vested and so forfeited, or any interest therein, and the Participant shall no longer be entitled to receive dividends on or vote any such Restricted Shares as of any record date occurring thereafter.

 

 

 

	
4.
	
Vesting; Effect of Date of Termination. The Participant’s Restricted Shares will vest in three annual increments of one-third of the Restricted Shares on each of March 1, 2018, March 1, 2019, and March 1, 2020 (the “Scheduled Vesting Dates”), provided that the Participant’s Date of Termination has not occurred before a Scheduled Vesting Date, and provided further that the Company’s cumulative Earnings Per Share (as defined in paragraph 4(g)) for the four calendar quarters immediately preceding an applicable Scheduled Vesting Date exceeds $0.50 per share. If the Participant’s Date of Termination occurs for any reason before all of the Participant’s Restricted Shares have become vested under this Agreement, the Participant’s Restricted Shares that have not theretofore become vested will be forfeited on and after the Participant’s Date of Termination, subject to the following:

 

	
 
	
(a)
	
If, prior to a Change of Control, the Participant’s Date of Termination occurs by reason of the Participant’s death or Permanent and Total Disability (as defined in paragraph 4(e)), a portion of the Restricted Shares that have not otherwise vested under this Agreement will become vested as of the Participant’s Date of Termination. That portion of the then unvested Restricted Shares shall be determined by multiplying (i) the number of Restricted Shares eligible to vest on the next Scheduled Vesting Date following the Date of Termination by (ii) a fraction, the numerator of which shall be the number of whole months elapsed from the Scheduled Vesting Date immediately prior to the Date of Termination (or the Award Date if there was no Scheduled Vesting Date prior to the Date of Termination) to the Date of Termination, and the denominator of which shall be twelve.

 

	
 
	
(b)
	
If the Participant’s Date of Termination occurs by reason of the Participant’s Retirement (as defined in paragraph 4(f)), then the unvested Restricted Shares at that time will continue to vest on the remaining Scheduled Vesting Dates to the extent that the Restricted Shares have been earned based on the Company’s achievement of the Earnings Per Share goal specified in Section 4 for the four calendar quarters immediately preceding any such Scheduled Vesting Date, but only if the following conditions have been satisfied: (i) the Participant has provided the Company with written notice of his or her intent to retire at least 3 months prior to the Participant’s Date of Termination (but such advance notice shall not be required if Retirement occurs as a result of Participant’s involuntary termination of employment without Cause, Participant’s death or Permanent and Total Disability, or Participant’s termination of employment for Good Reason); and (ii) the Participant executes a release of claims and an agreement not to compete in such forms as the Company may reasonably prescribe, and such release and agreement have become fully effective within 60 days following the Participant’s Date of Termination. If the conditions described in the preceding sentence are not satisfied, any unvested Restricted Shares shall be forfeited.

 

	
 
	
(c)
	
If a Change of Control occurs either (i) after the Award Date and prior to the Participant’s Date of Termination, or (ii) after the Participant’s Retirement but prior to full vesting hereunder, and if following the Change of Control the surviving company assumes and continues in full force and effect the Company’s rights and obligations under this Agreement or substitutes for this Agreement a substantially similar award for the surviving company’s stock, then (A) 50% of the Restricted Shares that have not otherwise vested under this Agreement will become fully vested as of the date of such event; and (B) the portion of the Restricted Shares that does not vest in accordance with the preceding clause (A) shall be subject to the vesting provisions of this Agreement without regard to the acceleration of vesting under clause (A). If following the applicable Change of Control the surviving company does not assume and continue in full force and effect the Company’s rights and obligations under this Agreement or substitute for this Agreement a substantially similar award for the surviving company’s stock, then 100% of the Restricted Shares that have not otherwise vested under this Agreement will become fully vested as of the date of such event. For the avoidance of doubt, the provisions of this paragraph 4(c) will apply after the Participant’s Retirement only if the conditions set forth in paragraph 4(b) have been satisfied in connection with such Retirement.

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(d)
	
If a Change of Control occurs after the Award Date and prior to the Participant’s Date of Termination, and if following the Change of Control the surviving company assumes and continues in full force and effect the Company’s rights and obligations under this Agreement or substitutes for this Agreement a substantially similar award for the surviving company’s stock, and if, during the two-year period following the date of such Change of Control the Participant’s Date of Termination occurs by reason of termination of the Participant’s employment by the Company or its Subsidiaries without Cause or by the Participant for Good Reason, then the Restricted Shares that have not otherwise vested under this Agreement will be fully vested as of the Participant’s Date of Termination.

 

	
 
	
(e)
	
For purposes of this Agreement, the term “Permanent and Total Disability” means the Participant’s inability, due to illness, accident, injury, physical or mental incapacity or other disability, effectively to carry out his or her duties and obligations as an employee of the Company or its Subsidiaries or to participate effectively and actively as an employee of the Company or its Subsidiaries for 90 consecutive days or shorter periods aggregating at least 180 days (whether or not consecutive) during any twelve-month period.

 

	
 
	
(f)
	
For purposes of this Agreement, “Retirement” means the Participant’s termination of employment (as described in the definition of “Date of Termination” in the Plan) occurring after the Participant has reached age 60 and, as of such Date of Termination, has completed at least five years of continuous Service with the Company and its Subsidiaries 

 

	
 
	
(g)
	
“Earnings Per Share” will be as adjusted and reported in the Company’s quarterly earnings releases in the table setting forth reconciliations of non-GAAP financial measures and re-calculated based on accounting standards promulgated by the Financial Accounting Standards Board or similar accounting standards body in place as of December 31, 2016, and adjusted to eliminate the effects of any and all of the following (net of any tax effects) to the extent not already included in the aforementioned table: (i) write-offs of previously capitalized financing costs; (ii) subsidiary charitable contributions to the Essendant Charitable Foundation; (iii) projected impacts on financial results of any acquisition or disposition (including liquidation of at least 90% of the assets) of any business during the four calendar quarters immediately preceding the applicable Scheduled Vesting Date as reflected in the final financial valuation of the transaction presented to the Board prior to the Board’s approval of the transaction; (iv) impairment of goodwill and other intangible assets (as defined by ASC 350); (v) curtailment, settlement or termination of any of the Company’s pension plans (as defined in ASC 715); (vi) litigation or claim judgments and settlements, including impacts from the ongoing negotiations of the Telephone Consumer Protection Act of 1991 litigation; (vii) restructuring costs (as defined by ASC 420); (viii) establishment of allowances for doubtful accounts related to specific customer accounts receivable or prepaid rebates that materially impact the Company’s financial statements; and (ix) consulting fees and expenses related to the Company’s transformation program.

 

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

 

	
5.
	
Terms and Conditions of Distribution. The Company, or its transfer agent, will distribute to the Participant certificates for, or cause its transfer agent to maintain a book entry account reflecting the Participant’s unrestricted ownership of, any portion of the Restricted Shares which becomes vested in accordance with this Agreement within 30 days after the vesting thereof (except that, to the extent the Participant in eligible for Retirement, such distribution will occur no later than the first March 15 occurring after the applicable Scheduled Vesting Date). If the Participant dies before the Company has distributed certificates (or its transfer agent has made the proper book entry) for any vested portion of the Restricted Shares, the Company will distribute certificates (or its transfer agent 

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will make the proper book entry) for that vested portion of the Restricted Shares and, to the extent provided under Section 4 hereof, the remaining balance of the Restricted Shares which become vested upon the Participant’s death to or for the beneficiary designated by the Participant, or if no such beneficiary has been designated, to the Participant’s estate.

 

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

 

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

 

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

 

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

 

If any such Restricted Shares are not represented by certificate(s) prior to their vesting, but are instead maintained by the Company’s transfer agent in uncertificated form in a book entry account, the account shall bear an appropriate notation to the effect that the Restricted Shares included 

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therein are subject to the restrictions of this Agreement. Whether maintained in certificated or uncertificated book entry form, the Company may instruct its transfer agent to impose stop transfer instructions with respect to any such unvested Restricted Shares.

 

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

 

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

 

	
8.
	
Restrictive Covenants; Recovery of Payments. Notwithstanding any contrary provision of this Agreement, the Company may recover the Award granted or paid under this Agreement to the extent required by the terms of any clawback or compensation recovery policy adopted by the Company. Furthermore, and in consideration of the grant of the Award under the terms of this Agreement and in recognition of the fact that Participant has received and will receive Confidential Information (as defined in paragraph 8(e)(iv)) during Participant’s Service (as defined in paragraph 8(e)(v)), Participant agrees to be bound by the restrictive covenants set forth in paragraphs 8(a), 8(b), 8(c), and 8(d), below (the “Restrictive Covenants”). In addition, but subject to the last sentence of this paragraph, Participant agrees that if Participant violates any provision of such Restrictive Covenants, then (i) all unvested Restricted Shares shall immediately be forfeited back to the Company, and (ii) any Restricted Shares that have vested at any time during the three-year period immediately preceding the date on which such violation occurred shall immediately be forfeited back to the Company (collectively, the “Forfeited Shares”). Subject to the last sentence of this paragraph, Participant hereby agrees that upon demand from the Company at any time after discovery of the violation of a Restrictive Covenant or imposition of a claw back, (A) Participant shall pay to the Company an amount equal to the proceeds Participant has received from any sales or distributions of Forfeited Shares, and (B) if Participant still holds all or any part of the Forfeited Shares at the time the Company makes such demand, Participant shall either (1) deliver to the Company all such unsold Forfeited Shares or (2) pay to the Company the aggregate fair market value of such Forfeited Shares as of the date of the Participant’s receipt of the Company’s demand. Subject to the last sentence of this paragraph and any applicable limitations of Code Section 409A, by accepting this Agreement, Participant consents to a deduction from any amounts the Company owes Participant from time to time (including amounts owed to Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to Participant by the Company), to the extent of the amounts Participant owes the Company under this Section 8. Whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount Participant owes pursuant to this Section 8, Participant hereby agrees to pay immediately the unpaid balance to the Company. Notwithstanding the foregoing, if and to the extent that a violation of a Restrictive Covenant is curable at the time of discovery by the Company, Participant will not be deemed to have violated such Restrictive Covenant unless and until the Company gives Participant written notice of such violation and Participant fails to cure such violation within 30 calendar days after receipt of such written notice.

	
 
	
(a)
	
Confidential Information. Participant acknowledges that during the course of his or her Service, he or she has received and will receive Confidential Information. Participant further acknowledges that he or she has received a copy of the Company’s Confidentiality and Nondisclosure Policy. Participant acknowledges and agrees that it is his or her responsibility to protect the integrity and confidential nature of the Confidential Information, 

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both during and after his or her Service, and Participant shall not directly or indirectly use, disclose, disseminate, or otherwise make available any such Confidential Information, either during or after the term of his or her Service, except as necessary for the performance of his or her duties to the Company or as expressly permitted in writing by the Company.

 

	
 
	
(b)
	
Competitive Activities. During Participant’s Service and for two years after the termination of Participant’s Service for any reason whatsoever (including Retirement), Participant shall not engage in any Competitive Activity (as defined in paragraph 8(e)(iii)). Participant’s obligations under this paragraph 8(b) shall apply in any geographic territory in which the Company conducts its business during the term of the Participant’s Service. In the event that any portion of this paragraph 8(b) shall be determined by any court of competent jurisdiction to be unenforceable because it is unreasonably restrictive in any respect, it shall be interpreted to extend over the maximum period of time for which it reasonably may be enforced and to the maximum extent for which it reasonably may be enforced in all other respects, and enforced as so interpreted, all as determined by such court in such action. Participant acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement is to be given the construction that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law. 

 

	
 
	
(c)
	
Non-Solicitation. During Participant’s Service and for two years after the termination of Participant’s Service for any reason whatsoever, Participant shall not:

 

	
 
	
(i)
	
solicit, induce or attempt to solicit or induce any employee, consultant, or independent contractor of the Company (each, a “Service Provider”) to leave or otherwise terminate such Service Provider’s relationship with the Company, or in any way interfere adversely with the relationship between any such Service Provider and the Company;

 

	
 
	
(ii)
	
solicit, induce or attempt to solicit or induce any Service Provider to work for, render services to, provide advice to, or supply Confidential Information or trade secrets of the Company to any third person, firm, or entity;

 

	
 
	
(iii)
	
employ, or otherwise pay for services rendered by, any Service Provider in any business enterprise with which Participant may be associated, connected or affiliated;

 

	
 
	
(iv)
	
call upon, induce or attempt to induce any current or potential customer, vendor, supplier, licensee, licensor or other business relation of the Company for the purpose of soliciting or selling products or services in direct competition with the Company or to induce any such person to cease or refrain from doing business with the Company, or in any way interfere with the then-existing or potential business relationship between any such current or potential customer, vendor, supplier, licensee, licensor or other business relation and the Company; 

 

	
 
	
(v)
	
call upon any entity that is a prospective acquisition candidate that Participant knows or has reason to know was called upon by the Company or for which the Company made an acquisition analysis for the purpose of acquiring such entity; or

 

	
 
	
(vi)
	
assist, solicit, or encourage any other person, directly or indirectly, in carrying out any activity set forth above that would be prohibited by any of the provisions of this Agreement if such activity were carried out by Participant. In particular, Participant will not, directly or indirectly, induce any Service Provider of the Company to carry out any such activity.

 

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(d)
	
Other Restricted Activities. During Participant’s Service and for two years after the termination of Participant’s Service for any reason whatsoever, Participant shall not engage in any other activity that is inimical, contrary or harmful to the interests of the Company including, but not limited to, (i) conduct related to Participant’s Service for which either criminal or civil penalties against Participant may be sought, (ii) violation of Company policies, including, without limitation, the Company’s insider trading policy, or (iii) participating in a hostile takeover attempt.

 

	
 
	
(e)
	
Definitions. For purposes of this Section 8, the following terms shall have the following definitions:

 

	
 
	
(i)
	
The term “Company” shall include any Subsidiary of the Company that may exist at a given time.

 

	
 
	
(ii)
	
The term “Competing Business” shall mean any business activities that are directly or indirectly competitive with the business conducted by the Company or its Subsidiaries at or prior to the date of the termination of Participant’s Service, all as described in the Company’s periodic reports filed pursuant to the Exchange Act (e.g., the Company’s Annual Report on Form 10-K) or other comparable publicly disseminated information. 

 

	
 
	
(iii)
	
The term “Competitive Activity” shall mean directly or indirectly investing in, owning, operating, financing, controlling, or providing services to a Competing Business if the nature of such services are the same as or similar in position scope and geographic scope to any position held by Participant during the last two years of his or her employment with the Company, such that Participant’s engaging in such services on behalf of a Competing Business does or may pose competitive harm to the Company, provided that passive investments of less than a 2% ownership interest in any entity that is a Competing Business will not be considered to be a “Competitive Activity.”

 

	
 
	
(iv)
	
The term “Confidential Information” has the meaning set forth in the Company’s Confidentiality and Nondisclosure Policy. Confidential Information includes not only information contained in written or digitized Company documents but also all such information that Participant may commit to memory during the course of his or her Service. “Confidential Information” does not include information that is available in reasonably similar form to the general public through no fault of Participant, or that was received by Participant outside of the Company, without an obligation of confidentiality.

 

	
 
	
(v)
	
Participant will be deemed to be in “Service” to the Company so long as he or she renders continuous services on a periodic basis to the Company in the capacity of an employee, director, consultant, independent contractor, or other advisor (but, in the case of Participant’s continued Service as a consultant, independent contractor, or other advisor, only as determined by the Committee or the Board, in its sole and absolute discretion, following Participant’s initial Service as an employee or director). 

 

	
 
	
(f)
	
Equitable Relief; Enforceability. By accepting this Agreement and the Restricted Shares granted hereby, Participant agrees that the Restrictive Covenants set forth in this Section 8 are reasonable and necessary to protect the legitimate interests of the Company. In the event a violation of any of the restrictions contained in this Section 8 is established, the Company shall be entitled to seek enforcement of the provisions of this Section 8 through proceedings at law or in equity in any court of competent jurisdiction, including preliminary and permanent injunctive relief. In the event of a violation of any provision of subsection (b), (c), or (d) of this Section 8, the period for which those provisions would remain in effect 

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shall be extended for a period of time equal to that period beginning when such violation commenced and ending when the activities constituting such violation have been finally terminated in good faith. Participant is aware that there may be defenses to the enforceability of the Restrictive Covenants set forth in this Section 8, based on time or territory considerations, and Participant knowingly, consciously, intentionally, entirely voluntarily, and irrevocably waives any and all such defenses and agrees that he or she will not assert the same in any action or other proceeding brought by the Company for the purpose of enforcing the Restrictive Covenants.

 

	
 
	
(g)
	
DTSA Disclosure. Participant is hereby advised of the following protections provided by the Defend Trade Secrets Act of 2016, 18 U.S. Code § 1833(b), and nothing in this Agreement shall be deemed to prohibit the conduct expressly protected by 18 U.S. Code § 1833(b): 

 

	
 
	
(i)
	
An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (1) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

 

	
 
	
(ii)
	
An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order. 

 

	
9.
	
No Right to Employment. Nothing herein confers upon the Participant any right to continue in the employ of the Company or any Subsidiary.

 

	
10.
	
Nontransferability. Except as otherwise provided by the Committee or as provided in Section 5, and except with respect to vested shares, the Participant’s interests and rights in and under this Agreement are not assignable or transferable other than as designated by the Participant by will or by the laws of descent and distribution. Distribution of Restricted Shares will be made only to the Participant; or, if the Committee has been provided with evidence acceptable to it that the Participant is legally incompetent, the Participant’s personal representative; or, if the Participant is deceased, to the designated beneficiary or other appropriate recipient in accordance with Section 5 hereof. The Committee may require personal receipts or endorsements of a Participant’s personal representative, designated beneficiary or alternate recipient provided for herein, and the Committee shall extend to those individuals the rights otherwise exercisable by the Participant with regard to any withholding tax election in accordance with Section 5 hereof. Any effort to otherwise assign or transfer any Restricted Shares (before they are distributed) or any rights or interests therein or thereto under this Agreement will be wholly ineffective, and will be grounds for termination by the Committee of all rights and interests of the Participant and his or her beneficiary in and under this Agreement.

 

	
11.
	
Administration and Interpretation. The Committee has the authority to control and manage the operation and administration of the Plan and to make all interpretations and determinations necessary or appropriate for the administration of the Plan and this Agreement, including the enforcement of any recovery of payments pursuant to Section 8 or otherwise. Any interpretations of the Plan or this Agreement by the Committee and any decisions made by it under the Plan or this Agreement are final and binding on the Participant and all other persons. Any inconsistency between this Agreement and the Plan shall be resolved in favor of the Plan.

 

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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 Delaware, without regard to principles of conflicts of law of Delaware or any other jurisdiction.

 

	
13.
	
Sole Agreement. Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to all of the terms and conditions of the Plan (as the same may be amended in accordance with its terms), a copy of which may be obtained by the Participant from the office of the Secretary of the Company. In addition, this Agreement and the Participant’s rights hereunder shall be subject to all interpretations, determinations, guidelines, rules and regulations adopted or made by the Committee from time to time pursuant to the Plan. This Agreement is the entire agreement between the parties to it with respect to the subject matter hereof, and supersedes any and all prior oral and written discussions, commitments, undertakings, representations or agreements (including, without limitation, any terms of any employment offers, discussions or agreements between the parties). 

 

	
14.
	
Binding Effect. This Agreement will be binding upon and will inure to the benefit of the Company and the Participant and, as and to the extent provided herein and under the Plan, their respective heirs, executors, administrators, legal representatives, successors and assigns.

 

	
15.
	
Amendment and Waiver. This Agreement may be amended in accordance with the provisions of the Plan, and may otherwise be amended by written agreement between the Company and the Participant without the consent of any other person. No course of conduct or failure or delay in enforcing the provisions of this Agreement will affect the validity, binding effect or enforceability of this Agreement.

 

	
16.
	
Section 162(m) Compliance. To the greatest extent it is reasonably appropriate, the Award represented by this Agreement is intended to be “performance-based compensation” as defined under the Plan to meet the requirements for Section 162(m) of Code, and shall be administered pursuant to such intent. Consistent with Section 162(m) of the Code, the Committee (a) shall not have the discretionary right to increase the value of the Award, and (b) shall have the right to exercise negative discretion to reduce the value of the Award below the amount that might otherwise be payable hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company and the Participant have duly executed this Agreement as of the Award Date.

 

	
 
	

	
 

 

		
	
ESSENDANT INC.
	
PARTICIPANT

	
By: /s/ Charles Crovitz

 
	
 

 

______________________________

	
Charles Crovitz

Chairman of the Board 

CHICAGO/#2962076.3 

 
	
 [[FIRSTNAME]] [[LASTNAME]]

 

 

Page 10 of 10esnd-ex1010_63.htm

Exhibit 10.10

Essendant Inc. Executive Severance Plan

1.Severance Plan for Executives

The Essendant Inc. Executive Severance Plan as set forth herein (the “Plan”) is an amendment and restatement of the United Stationers Inc. Executive Severance Plan (the “Prior Plan”), intended to provide certain eligible employees of Essendant Inc., a Delaware corporation (hereinafter, together with its successors, referred to as “Holding”), Essendant Co., an Illinois corporation (hereinafter, together with its successors, referred to as the “Company”), and Essendant Management Services LLC, an Illinois limited liability company (hereinafter, together with its successors, referred to as “EMS”) (with Holding, the Company, EMS and their respective subsidiaries and affiliates, including the entity employing the Eligible Employee, and any successors thereto, hereinafter referred to as the “Companies”) severance benefits in the event of such employee’s Eligible Termination or Eligible Change of Control Termination under the terms and conditions set forth in the Plan. The Plan is intended to cover all Eligible Employees regardless of jurisdiction, but shall be subject to local laws and regulations and thereby tailored in its application, as required.

The Plan shall take effect on July 14, 2016 for Eligible Employees who were not covered by the Prior Plan, and on January 1, 2017 for Eligible Employees who, on July 14, 2016 were covered by the Prior Plan.  

2.Key Definitions

	
a.
	
“Accrued Obligations” means, as of any date, the sum of an Eligible Employee’s accrued but unpaid base salary, accrued but unpaid annual bonus from a prior year, any accrued but unpaid vacation pay or PTO, unreimbursed expenses for which proper documentation is provided, and any other vested amounts and benefits that are to be paid or provided to the Eligible Employee by the Companies under any of the Companies’ employee plans (other than the Plan or any defined benefit or defined contribution plan, whether or not qualified under Section 401(a) of the Code), but which have not yet been paid or provided (as applicable).

b.“Board” means the Board of Directors of Holding.

c.“Cause” shall mean the Eligible Employee’s (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 Companies; (iii) illegal use of drugs; (iv) material breach of this Plan or any employment-related undertakings provided in a writing signed by the Eligible Employee at any time; (v) gross negligence or willful misconduct in the performance of Eligible Employee’s duties; (vi) breach of any fiduciary duty owed to the Companies, including, without limitation, engaging in competitive acts while employed by the Companies; or (vii) the Eligible Employee’s willful refusal to perform the assigned duties for which the Eligible Employee is qualified as directed by the Board or the executive officer to whom the Eligible Employee directly reports (or as directed by the Board, in the case of the Chief Executive Officer of Holding or the Company; provided, that in the case of any event constituting Cause which is curable by the Eligible Employee, the Eligible Employee 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 of Holding. For purposes of this definition of Cause, action or inaction by the Eligible Employee shall not be considered “willful” unless done or omitted by the Eligible Employee (i) intentionally or not in good faith and (ii) without reasonable belief that the Eligible Employee’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. 

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d.“Change of Control” shall mean and include any of the following:

(i) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Securities Exchange Act of 1934 (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 (A) Holding of any of its Subsidiaries, (B) an employee benefit plan (or a trust forming a part thereof) maintained by Holding or any of its Subsidiaries, or (C) any Person in which the Eligible Employee 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 (D) 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 (E) the acquisition of Voting Securities by Holding 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 issuance of Voting Securities or the acquisition of Voting Securities by Holding, and after such issuance or acquisition, 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;

(ii) 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 shareholders, 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 (ii), 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 (A) 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 (B) by reason of an agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest; 

(iii) Consummation of a merger, consolidation or reorganization or approval by Holding’s shareholders of a liquidation or dissolution of Holding or the occurrence of a liquidation or dissolution of Holding (“Business Combination”), unless, following such Business Combination: (A) 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, (B) 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 (C) 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 (C), 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 

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Combination with a Person in which the Eligible Employee has a substantial equity interest shall not constitute a Change of Control with respect to such Person; or 

(iv) The closing of any 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 Eligible Employee has a substantial equity interest (in which case there shall not be a Change of Control with respect to such Person) 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.   

e.“COBRA” means the continuation coverage required to be made available to terminating employees of the Companies pursuant to Section 4980B of the Code and Sections 601 through 608 of ERISA.

f.“Code” shall mean the Internal Revenue Code of 1986, as amended.

g.“Committee” shall mean the Human Resources Committee of the Board, which shall have the authority to delegate ministerial matters to employees who are not Eligible Employees.

h.“Effective Date” shall mean the applicable date the Plan takes effect with respect to an Eligible Employee.

i.“Eligible Employee” shall mean a regular full-time salaried employee of the Companies, or any of its affiliates, who does not have an individual employment agreement with the Companies, and who is a member of management and of the Senior Leadership Team of Holding.

j.“Eligible Change of Control Termination” shall mean during the Protection Period (i) an involuntary termination of an Eligible Employee’s employment without Cause; (ii) a voluntary termination by the employee for Good Reason but only to the extent the Eligible Employee’s termination occurs within two years following the initial existence of the condition giving rise to Good Reason.  An Eligible Employee shall not be deemed to have had an Eligible Change of Control Termination until such Eligible Employee has incurred a separation from service as defined in Treasury Regulation §1.409A-1(h).  Moreover, the date of the Eligible Termination shall not be delayed beyond the date such a separation from service has occurred.

k.“Eligible Termination” shall mean (i) an involuntary termination of employment by reason of a reduction in force program, job elimination, or unsatisfactory performance in the execution of an Eligible Employee’s duties, or (ii) a voluntary termination by the Eligible Employee for Good Reason, but only to the extent the Eligible Employee’s termination occurs within two years following the initial existence of the condition giving rise to Good Reason.  An Eligible Termination shall not include (A) a unilateral resignation without Good Reason; (B) a termination by the Company for Cause; or (C) a termination occurring during the Protection Period.  An Eligible Employee shall not be deemed to have had an Eligible Termination until such Eligible Employee  has incurred a separation from service as defined in Treasury Regulation §1.409A-1(h).  Moreover, the date of the Eligible Termination shall not be delayed beyond the date such a separation from service has occurred.

l.“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

m.“Good Reason” shall mean any of the following:  (i) any material breach by the Companies of this Plan without Eligible Employee’s written consent, or (ii) without Eligible Employee’s written consent: (A) a material reduction in the Eligible Employee’s Base Salary, or (B) the relocation of the Eligible Employee’s principal place of employment more than fifty (50) miles from its location immediately prior to such relocation. Notwithstanding the above, the occurrence of any of the events described above will not constitute Good Reason unless the Eligible Employee gives the Companies written notice within thirty (30) days after the initial occurrence of any of such events that the Eligible Employee 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.  

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n.“Protection Period” shall mean the two-year period following a Change of Control.

o.“Release Agreement” shall mean the Companies’ then-current standard form of release  which, if executed by the Eligible Employee, will acknowledge his or her termination of employment with the Companies and release the Companies from liability for any claims.

p.“Target Bonus Opportunity” shall mean the Eligible Employee’s target annual incentive amount under the Companies’ Annual Cash Incentive Award Plan (“CIP”) for the year in which the Eligible Termination occurs, or, if the target annual incentive for such year has been decreased from the prior year’s target annual incentive or has not been established as of the date of the Eligible Termination, then the target annual incentive for the prior year.

3.General Severance Benefits on an Eligible Termination.

Upon an Eligible Termination, the Eligible Employee shall be entitled to his or her Accrued Obligations.  In addition, in consideration of the Eligible Employee’s timely execution and non-revocation of a Release Agreement and the Restrictive Covenants Agreement in accordance with Section 5, the Eligible Employee shall be entitled to receive from the Companies benefits as set forth below. Unless otherwise noted, payments will be made in a lump sum on the 90th day following the employee’s Eligible Termination, or if earlier, on March 15 of the year following the year in which the Eligible Termination occurs.

a.Cash Severance: cash severance in the amount of the severance multiple shown in the table below, multiplied by the sum of the employee’s annual base salary (using the employee’s salary rate in effect at the time of termination, or, if greater, such salary rate in effect at any time in the 12 months prior to such termination) and Target Bonus Opportunity.  Such cash severance shall be paid in equal installments in the form of payroll continuation in accordance with the Company’s regular payroll periods, over a period equal to the applicable payment period shown in the following table. 

			
	
Position
	
Severance Multiple
	
Payment Period

	
CEO of Holding or the Company
	
2.0
	
24 months

	
EVP/SVP/President of Holding
	
1.5
	
18 months

 

For the avoidance of doubt, if an individual listed in the table above is a party to an individual employment agreement with the Companies, then such individual shall not be eligible for benefits under this Plan and shall not be considered an Eligible Employee for purposes of the Plan.

b.Pro Rata Bonus: a bonus in an amount equal to the actual bonus which would have been payable under the CIP for the year of the Eligible Termination, based on actual performance, had such Eligible Employee remained employed through the end of the year of such termination, multiplied by a fraction the numerator of which is the number of full months of employment during the calendar year of termination and the denominator of which is 12. Such bonus shall be payable at the time otherwise payable under the CIP, had employment not terminated. 

c.Welfare Benefits Continuation: provided the Eligible Employee timely elects COBRA coverage, an amount sufficient to cover the employer portion of medical benefits for a period of 18 months at the levels in effect for the Eligible Employee and his or her eligible dependents immediately prior to termination of employment.

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d.Outplacement Services: an amount sufficient to cover outplacement benefits for a period of 24 months, subject to a maximum amount of (i) $35,000 for Eligible Employees other than the CEO of Holding or the Company, and (ii) $60,000 for the CEO of Holding or the Company.  For the avoidance of doubt, if an individual described in the table above is a party to an individual employment agreement with the Companies, then such individual shall not be eligible for benefits under this Plan and shall not be considered an Eligible Employee for purposes of the Plan.

4.Change-of-Control Severance Benefits on an Eligible Change of Control Termination.

Upon an Eligible Change of Control Termination, the Eligible Employee shall be entitled to his or her Accrued Obligations.  In addition, in consideration of the Eligible Employee’s timely execution and non-revocation of a Release Agreement and the Restrictive Covenants Agreement in accordance with Section 5, the Eligible Employee shall be entitled to receive from the Companies benefits as set forth below. Unless otherwise noted, payments will be made in a lump sum on the 90th day following the employee’s termination:

a.Cash Severance: cash severance in the amount of the Severance Multiple shown in the table below, multiplied by the sum of the employee’s annual base salary and Target Bonus Opportunity;

			
	
Position
	
Severance Multiple
	
Payment Period

	
CEO of Holding or the Company
	
3.0
	
36 months

	
EVP/SVP/President of Holding
	
2.0
	
24 months

 

Notwithstanding the foregoing, if the events that constitute a Change of Control hereunder do not constitute a “change in control event” (as described in Treas. Reg. Section 1.409A-3(i)(5)(i)) with respect to Holding, the cash severance shall not be paid in a lump sum, but shall be paid in equal installments as compensation continuation, over the payment period indicated above, on the Company’s regular payroll dates.  For the avoidance of doubt, if an individual listed in the table above is a party to an individual employment agreement with the Companies, then such individual shall not be eligible for benefits under this Plan and shall not be considered an Eligible Employee for purposes of the Plan.

b.Pro Rata Bonus: a bonus in an amount equal to the Eligible Employee’s Target Bonus Opportunity multiplied by a fraction the numerator of which is the number of full months of employment during the calendar year of termination and the denominator of which is 12;

c.Welfare Benefits Continuation: provided the Eligible Employee timely elects COBRA coverage, an amount sufficient to cover the employer portion of medical benefits for a period of 18 months at the levels in effect for the employee and his or her eligible dependents immediately prior to termination of employment.

d.Outplacement Services: an amount sufficient to cover outplacement benefits for a period of 24 months, subject to a maximum amount of (i) $35,000 for Eligible Employees other than the CEO of Holding or the Company, and (ii) $60,000 for the CEO of Holding or the Company.  For the avoidance of doubt, if an individual described in the table above is a party to an individual employment agreement with the Companies, then such individual shall not be eligible for benefits under this Plan and shall not be considered an Eligible Employee for purposes of the Plan.

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e.Golden Parachute Excise Taxes: In connection with the excise tax imposed by Section 4999 of the Code, the Plan will provide for the “Best Net” so that Eligible Employee’s aggregate severance payments and benefits under the Plan (and all other plans, programs or arrangements providing benefits or payments that would be aggregated to determine whether the Code Section 4999 tax would apply) would be reduced (but not below $0) to $1.00 less than that amount which would trigger the Code Section 4999 excise tax if such reduction would result in such Eligible Employee receiving a greater after-tax benefit than Eligible Employee would receive if the full severance benefits (and all other payments and benefits aggregated therewith to determine whether the code Section 4999 tax would apply) were paid (i.e., the aggregate severance payments and benefits that Eligible Employee receives will be either the full amount of severance payments and benefits or an amount of severance payments and benefits reduced to the extent necessary so that the Eligible Employee incurs no excise tax, whichever results in the Eligible Employee receiving the greater amount, taking into account applicable federal, state and local income, employment and other applicable taxes, as well as the excise tax).  If requested by the Eligible Employee or the Companies, the determination of whether any reduction in payments or benefits to be provided under this Section 4 or otherwise is required pursuant to this Section 4(e) will 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, not then-engaged as the Companies’ independent public auditor (the “Accounting Firm”), subject to the Eligible Employee’s consent (not to be unreasonably withheld) and the determination of such Accounting Firm will be final and binding on all parties. In making its determination, the Accounting Firm will allocate a reasonable portion of such payments and benefits to the value of any personal services rendered following the Change of Control and the value of any non-competition agreement or similar agreements to the extent that such items reduce the amount of the parachute payment. To the extent permitted under Code Section 409A, such reduction shall first be applied to any severance payments payable under the Plan, in reverse order of receipt, then to the vesting on any equity, with underwater stock options first net withholding, and thereafter any in-the-money stock options starting from the stock options with smallest spread between fair market value and exercise price, and thereafter any restricted stock or restricted stock units.

5.Restrictive Covenants

Notwithstanding anything to the contrary in this Plan, eligibility for receipt of benefits under this Plan shall be contingent upon the Eligible Employee executing and delivering (i) a Release Agreement following the date of the Eligible Termination or Eligible Change of Control Termination that, within 60 days of such Eligible Termination or Eligible Change of Control Termination, has become irrevocable by the Eligible Employee and (ii) a restrictive covenants and cooperation agreement (the “Restrictive Covenants Agreement”) that, within 60 days of the Eligible Termination, has become irrevocable. The date on which the Restrictive Covenants Agreement becomes irrevocable under this subparagraph shall be referred to as the Restrictive Covenants Effective Date. If the Eligible Employee fails to timely execute and deliver the Release Agreement or the Restrictive Covenants Agreement, then the Companies shall have no obligation to pay or provide the benefits provided under this Plan.  

6.Administration and Miscellaneous

a.Withholding Taxes. The Companies may withhold from all payments or benefits due to the Eligible Employee hereunder or under any other plan or arrangement of the Companies all taxes which, by applicable federal, state, local or other law, the Companies determine  is required to be withheld therefrom. 

b.Code Section 409A. To the extent it provides deferred compensation, it is intended that the Plan comply with the provisions of Code Section 409A.  The Plan will be administered and interpreted in a manner consistent with this intent, and any provision that would cause the Plan to fail to satisfy Code Section 409A will have no force and effect until amended to comply therewith (which amendment may be retroactive to the extent permitted by Code Section 409A).  Notwithstanding anything contained herein to the contrary, to the extent required to avoid accelerated taxation and/or 

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tax penalties under Code Section 409A, payment of the amounts payable under the Plan that would otherwise be payable during the six-month period after the date of termination shall instead be paid on the first business day of the first month after the expiration of such six-month period, without interest.  In addition, for purposes of the Plan, each amount to be paid and each installment payment shall be construed as a separate, identified payment for purposes of Code Section 409A.  With respect to expenses eligible for reimbursement under the terms of this Plan, (i) the amount of such expenses eligible for reimbursement in any taxable year shall not affect the expenses eligible for reimbursement in another taxable year and (ii) any reimbursements of such expenses shall be made no later than the end of the calendar year following the calendar year in which the related expenses were incurred, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Code Section 409A. 

c.ERISA.  To the extent the Plan provides deferred compensation, it is an unfunded plan primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.  As such, this Plan shall be exempt from the participation and vesting requirements of Part 2 of Title I of the ERISA, the funding requirements of Part 3 of Title I of ERISA, and the fiduciary requirements of Part 4 of Title I of ERISA.

d.Claims Procedure.  

(1)Filing for a Claim.  Each individual eligible for benefits under this Plan (“Claimant”) may submit his or her application for benefits (“Claim”) to the Committee (or to such other person as may be designated by the Committee) in writing in such form as is provided or approved by the Committee or its delegate.  A Claimant shall have no right to seek review of a denial or benefits, or to bring any action in any court to enforce a Claim, prior to his filing a Claim and exhausting his rights to review hereunder. When a Claim has been filed properly, it shall be evaluated and the Claimant shall be notified of the approval or the denial of the Claim within 90 days after the receipt of such Claim.  A Claimant shall be given a written notice in which the Claimant shall be advised as to whether the Claim is granted or denied, in whole or in part.  If a Claim is denied, in whole or in part, the notice shall contain (i) the specific reasons for the denial, (ii) references to pertinent provisions of this Plan on which the denial is based, (iii) a description of any additional material or information necessary to perfect the Claim and an explanation of why such material or information is necessary, and (iv) the Claimant’s right to seek review of the denial.

(2)Review of Claim Denial.  If a Claim is denied, in whole or in part, or if a Claim is neither approved nor denied within the 90-day period specified above, the Claimant shall have the right, within 60 days after receipt of such denial (or after such 90-day period without approval or denial of the Claim), (i) to request that the Committee (or its delegate) review the denial or the failure to approve or deny the Claim, (ii) to review pertinent documents, and (iii) to submit issues and comments in writing to the Committee or its delegate.  Within 60 days after  such request is received, the Committee (or its delegate) shall complete its review and give the Claimant written notice of its decision.  The Committee shall include in its notice to Claimant the specific reasons for its decision and references to provisions of this Plan on which its decision is based.

(3)Statute of Limitations.  To the extent a Claim is denied, in whole or in part, pursuant to this Section 6.d., any civil action related to such Claim must be brought within 180 days of the earlier of (i) the date the Committee denies the reviewed Claim, or (ii) the expiration of the 60-day period after the review request is received.

e.Waiver of Breach. No waiver by any party hereto of a breach of any provision of the Plan by any other party, or of compliance with any condition or provision of the Plan to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party of any similar or dissimilar provisions and conditions at the same or any prior or subsequent time.  The failure of any party hereto to take any action by reason of such breach will not deprive such parry of the right to take action at any time while such breach continues

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f.Amendment and Termination. The Board may amend or terminate the Plan at any time; provided, however that no amendment of the Plan which is adopted on or after a Change of Control or during the 180-day period immediately preceding a Change of Control shall directly or indirectly adversely affect any Eligible Employee’s rights and benefits under the Plan without the written consent of such Eligible Employee  and further provided, that the Plan may not be terminated with respect to an Eligible Employee after the Eligible Employee’s Eligible Termination or Eligible Change of Control Termination; and further provided, that upon and after a Change of Control, the Plan may not be terminated prior to the second anniversary of the occurrence of such Change of Control. Notwithstanding the foregoing, the Board may unilaterally amend the Plan to comply with Section 6(b).

g.Administration. The Committee shall be responsible for administering this Plan. The Committee has the exclusive right, power and authority, in its sole and absolute discretion, to administer and interpret the Plan and other Plan documents. The Committee has all powers reasonably necessary to carry out its responsibilities under the Plan, including but not limited to the sole and absolute discretionary authority to (i) administer the Plan according to its terms and to interpret Plan policies and procedures; (ii) resolve and clarify inconsistencies, ambiguities and omissions in the Plan document and among and between the Plan document and other related documents; (iii) take all actions and make all decisions regarding questions of coverage, eligibility and entitlement to benefits, and benefit amounts; (iv) process and approve or deny all claims for benefits; and (v) employ attorneys, consultants, accounts, agents and other individuals, any of whom may be an employee of the Companies, and the Committee, the Companies, and their officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such individuals.  All actions taken by the Committee, and all interpretations and determinations made by the Committee on any disputes arising under the Plan, including but not limited to questions of construction, interpretation and administration shall be final, conclusive and binding upon the Eligible Employees, the Companies, and all other persons having an interest in or under the Plan. Any determination made by the Committee shall be given deference in the event the determination is subject to judicial review and shall be overturned by a court of law only if it is arbitrary and capricious. 

h.Binding Agreement; Successors. In the event of any Change of Control, the provisions of this Plan shall be binding upon the surviving corporation, and such surviving corporation shall be treated as Holding and the Company. This Plan shall inure to the benefit of and be enforceable by the Eligible Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If an Eligible Employee dies while any amounts would be payable to the Eligible Employee hereunder had the Eligible Employee continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to such person or persons appointed in writing by the Eligible Employee to receive such amounts or, if no person is so appointed, to the Eligible Employee’s estate.

i.Non-Alienation of Benefits.  Benefits payable under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, before actually being received by the Eligible Employee, and any such attempt to dispose of any right to benefits payable under this Plan shall be void.  Notwithstanding anything in this Plan to the contrary, an order determined by the Committee to be a Qualified Domestic Relations Order under ERISA shall be complied with.

j.Unfunded Plan. Eligible Employees shall have no right, title or interest whatsoever in or to any investments that the Companies may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Companies and any Eligible Employee, beneficiary, legal representative or any other individual. To the extent that any individual acquires a right to receive payments under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Companies. All payments to be made hereunder shall be paid from the general funds of the Companies, and no special or separate fund shall be 

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established, and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan.

k.Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

l.Non-duplication of Benefits; Recoupment.   Payments and benefits provided under the Plan shall be in lieu of any termination or severance payments or benefits for which the Eligible Employee may be eligible under any of the plans or policies of the Companies or any agreement between an individual and any of the Companies, or under the Worker Adjustment Retraining Notification Act of 1988 or any similar statute or regulation.  Any amounts paid or provided under the Plan shall be subject to the Companies' policies regarding recoupment as in effect from time to time.

m.Governing Law and Interpretation.   The law of the State of Illinois shall govern this Plan without giving effect to its conflict of law principles. Should a court of competent jurisdiction find that any provision of this Plan is void, voidable, illegal, or unenforceable, no other provision shall be affected thereby and the balance shall be interpreted in a manner that gives effect to the intent of the parties. The normal rules of construction hold that all ambiguities are construed against the drafting party will not apply to the interpretation of this Plan. 

[Signature Page Follows]

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Exhibit 10.10

Executed this 18th day of July, 2016.

		
	
 

Essendant Inc.

 

By:___________________________

Its: President and Chief Executive Officer
	
 

Essendant Management Services LLC

 

By:____________________________

Its: President and Chief Executive Officer

 

Essendant Co.

 

By:_________________________

Its: President and Chief Executive Officer

85662799\V-8

 

 

 
 

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