Document:

Exhibit 10.4

 

PERFORMANCE GUARANTEE

 

THIS PERFORMANCE GUARANTEE
(this “Guarantee”), dated
as of March 3, 2009, is executed by United Stationers Inc., an Delaware
corporation (the “Performance Guarantor”)
in favor of United Stationers Receivables, LLC, an Illinois limited liability
company (together with its successors and assigns, “Recipient”).

 

RECITALS

 

1.                                       United
Stationers Supply Co., an Illinois corporation (the “Originator”) and United Stationers
Financial Services LLC, an Illinois limited liability company (the “Seller”) have entered into a
Receivables Sale Agreement, dated as of March 3, 2009 (as amended,
restated or otherwise modified from time to time, the “Sale Agreement”), pursuant to which
the Originator, subject to the terms and conditions contained therein, is
selling and/or contributing its respective right, title and interest in its
accounts receivable to the Seller.

 

2.                                       The Seller and
Recipient have entered into a Receivables Purchase Agreement, dated as of March 3,
2009 (as amended, restated or otherwise modified from time to time, the “Purchase Agreement”), pursuant to
which the Seller, subject to the terms and conditions contained therein, is
selling and/or contributing its right, title and interest in its accounts
receivable (consisting of the accounts receivable acquired by the Seller from
the Originator pursuant to the Sale Agreement) to Recipient.

 

3.                                       Performance
Guarantor owns (directly or indirectly) one hundred percent (100%) of the
capital stock and/or membership interests, as the case may be, of the
Originator, the Seller and Recipient, and each of the Originator and the
Seller, and accordingly, Performance Guarantor, is expected to receive
substantial direct and indirect benefits from the sale or contribution of
receivables to Recipient pursuant to the Purchase Agreement (which benefits are
hereby acknowledged).

 

4.                                       As an inducement
for Recipient to acquire such accounts receivable, Performance Guarantor has
agreed to guaranty the due and punctual performance by the Originator and the
Seller of their respective obligations under the Sale Agreement and the
Purchase Agreement, as well as the Seller’s Servicing Related Obligations (as
hereinafter defined).

 

5.                                       Performance
Guarantor wishes to guaranty the due and punctual performance by the Originator
and the Seller of their respective obligations under or in respect of the Sale
Agreement and the Purchase Agreement and Seller’s Servicing Related
Obligations, as provided herein.

 

AGREEMENT

 

NOW, THEREFORE, Performance Guarantor hereby
agrees as follows:

 

 

Section 1.  Definitions.  Capitalized terms used herein and not defined
herein shall the respective meanings assigned thereto in the Agreements (as
hereinafter defined).  In addition:

 

Guaranteed Obligations:  Collectively: 
(a) all covenants, agreements, terms, conditions and indemnities to
be performed and observed by the Originator or the Seller under and pursuant to
the Sale Agreement and each other document executed and delivered by the
Originator or the Seller pursuant to the Sale Agreement or any other
Transaction Document, including, without limitation, the due and punctual
payment of all sums which are or may become due and owing by the Originator or
the Seller under the Sale Agreement, whether for fees, expenses (including
counsel fees), indemnified amounts or otherwise, whether upon any termination
or for any other reason, (b) all covenants, agreements, terms, conditions
and indemnities to be performed and observed by the Seller under and pursuant
to the Purchase Agreement and each other document executed and delivered by the
Seller pursuant to the Purchase Agreement or any other Transaction Document,
including, without limitation, the due and punctual payment of all sums which
are or may become due and owing by the Originator or the Seller under the
Purchase Agreement, whether for fees, expenses (including counsel fees),
indemnified amounts or otherwise, whether upon any termination or for any other
reason and (c) all obligations (i) of the Seller as Servicer under
the Transfer and Administration Agreement, dated as of March 3, 2009 by
and among Recipient, the Originator, the Seller, Enterprise Funding Company,
LLC, Market Street Funding, LLC, PNC Bank, National Association and Bank of
America, National Association, as Agent (as amended, restated, modified,
supplemented, replaced or waived, the “TAA” and,
together with the Sale Agreement and the Purchase Agreement, the “Agreements”) or (ii) of the
Seller which arise pursuant to Section 7.2 or Section 9.6 of the TAA
following its termination as Servicer which relates to acts or omissions of it
as Servicer (all such obligations under this clause (c), collectively,
the “Servicing Related Obligations”).

 

Section 2.  Guaranty of
Performance of Guaranteed Obligations. 
Performance Guarantor hereby guarantees to Recipient, the full and
punctual payment and performance by the Originator and the Seller of their
respective Guaranteed Obligations.  This
Guarantee is an absolute, unconditional and continuing guaranty of the full and
punctual performance of all Guaranteed Obligations of the Originator and the
Seller under the Agreements and each other document executed and delivered by
the Originator or the Seller pursuant to the Agreements and is in no way
conditioned upon any requirement that Recipient first attempt to collect any
amounts owing by the Originator to the Seller or by the Seller to Recipient,
the Agent or any Investor from any other Person or resort to any collateral
security, any balance of any deposit account or credit on the books of
Recipient, the Agent or any Investor in favor of the Originator or the Seller
or any other Person or other means of obtaining payment.  Should the Originator or the Seller default
in the payment or performance of any of its Guaranteed Obligations, Recipient
(or its assigns) may cause the immediate performance by Performance Guarantor
of the Guaranteed Obligations and cause any payment Guaranteed Obligations to
become forthwith due and payable to Recipient (or its assigns), without demand
or notice of any nature (other than as expressly provided herein), all of which
are hereby expressly waived by Performance Guarantor.  Notwithstanding the foregoing, this Guarantee
is not a guarantee of the collection of any of the Receivables and Performance
Guarantor shall not be responsible for any Guaranteed Obligations to the extent
the failure to perform such Guaranteed Obligations by the Originator or the
Seller results from Receivables being uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor; provided
that nothing herein shall relieve the Originator 

 

2

 

or the Seller from performing in full its
Guaranteed Obligations under the Agreements or Performance Guarantor of its
Guarantee hereunder with respect to the full performance of such duties.

 

Section 3.  Performance
Guarantor’s Further Agreements to Pay. 
Performance Guarantor further agrees, as the principal obligor and not
as a guarantor only, to pay to Recipient (and its assigns), forthwith upon
demand in funds immediately available to Recipient, all reasonable costs and
expenses (including court costs and reasonable legal expenses) incurred or
expended by Recipient in connection with the Guaranteed Obligations, this
Guarantee and the enforcement thereof and of this Guarantee and the Guaranteed
Obligations, together with interest on amounts recoverable under this Guarantee
from the time when such amounts become due until payment, at a rate of interest
(computed for the actual number of days elapsed based on a 360 day year) equal
to the Prime Rate plus 2% per annum, such rate of interest changing when and as
the Prime Rate changes.

 

Section 4.  Waivers by
Performance Guarantor.  Performance
Guarantor waives notice of acceptance of this Guarantee, notice of any action
taken or omitted by Recipient (or its assigns) in reliance on this Guarantee,
and any requirement that Recipient (or its assigns) be diligent or prompt in
making demands under this Guarantee, giving notice of any Termination Event,
Potential Termination Event, other default or omission by the Originator or the
Seller or asserting any other rights of Recipient under this Guarantee.  Performance Guarantor warrants that it has
adequate means to obtain from the Originator and the Seller, on a continuing
basis, information concerning the financial condition of the Originator and the
Seller, and that it is not relying on Recipient to provide such information,
now or in the future.  Performance
Guarantor also irrevocably waives all defenses (1) that at any time may be
available in respect of the Guaranteed Obligations by virtue of any statute of
limitations, valuation, stay, moratorium law or other similar law now or
hereafter in effect or (2) that arise under the law of suretyship,
including impairment of collateral. 
Recipient (and its assigns) shall be at liberty, without giving notice
to or obtaining the assent of Performance Guarantor and without relieving
Performance Guarantor of any liability under this Guarantee, to deal with the
Originator and with each other party who now is or after the date hereof
becomes liable in any manner for any of the Guaranteed Obligations, in such
manner as Recipient in its sole discretion deems fit, and to this end Performance
Guarantor agrees that the validity and enforceability of this Guarantee,
including without limitation, the provisions of Section 7 hereof,
shall not be impaired or affected by any of the following:  (a) any extension, modification or
renewal of, or indulgence with respect to, or substitutions for, the Guaranteed
Obligations or any part thereof or any agreement relating thereto at any time; (b) any
failure or omission to enforce any right, power or remedy with respect to the
Guaranteed Obligations or any part thereof or any agreement relating thereto,
or any collateral securing the Guaranteed Obligations or any part thereof; (c) any
waiver of any right, power or remedy or of any Termination Event, Potential
Termination Event, or default with respect to the Guaranteed Obligations or any
part thereof or any agreement relating thereto; 
(d)  any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any other
obligation of any person or entity with respect to the Guaranteed Obligations
or any part thereof; (e) the enforceability or validity of the Guaranteed
Obligations or any part thereof or the genuineness, enforceability or validity
of any agreement relating thereto or with respect to the Guaranteed Obligations
or any part thereof; (f) the 

 

3

 

application of payments received from any
source to the payment of any payment obligations of the Originator or the
Seller or any part thereof or amounts which are not covered by this Guarantee
even though Recipient (or its assigns) might lawfully have elected to apply
such payments to any part or all of the payment obligations of the Originator
or the Seller to amounts which are covered by this Guarantee; (g) the
existence of any claim, setoff or other rights which Performance Guarantor may
have at any time against the Originator or the Seller in connection herewith or
any unrelated transaction; (h) any assignment or transfer of the
Guaranteed Obligations or any part thereof; or (i) any failure on the part
of the Originator or the Seller to perform or comply with any term of the
Agreements or any other document executed in connection therewith or delivered
thereunder, all whether or not Performance Guarantor shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (A) through
(I) of this Section 4.

 

Section 5.  Unenforceability
of Guaranteed Obligations Against Originator.  Notwithstanding (a) any change of
ownership of the Originator or the Seller or the insolvency, bankruptcy or any
other change in the legal status of the Originator or the Seller; (b) the
change in or the imposition of any law, decree, regulation or other
governmental act which does or might impair, delay or in any way affect the
validity, enforceability or the payment when due of the Guaranteed Obligations;
(c) the failure of the Originator or the Seller or Performance Guarantor
to maintain in full force, validity or effect or to obtain or renew when
required all governmental and other approvals, licenses or consents required in
connection with the Guaranteed Obligations or this Guarantee, or to take any
other action required in connection with the performance of all obligations
pursuant to the Guaranteed Obligations or this Guarantee; or (d) if any of
the moneys included in the Guaranteed Obligations have become irrecoverable
from the Originator or the Seller for any other reason other than final payment
in full of the payment obligations in accordance with their terms, this
Guarantee shall nevertheless be binding on Performance Guarantor.  This Guarantee shall be in addition to any
other guaranty or other security for the Guaranteed Obligations, and it shall
not be rendered unenforceable by the invalidity of any such other guaranty or
security.  In the event that acceleration
of the time for payment of any of the Guaranteed Obligations is stayed upon the
insolvency, bankruptcy or reorganization of the Originator or the Seller or for
any other reason with respect to the Originator or the Seller, all such amounts
then due and owing with respect to the Guaranteed Obligations under the terms
of the Agreements, or any other agreement evidencing, securing or otherwise
executed in connection with the Guaranteed Obligations, shall be immediately
due and payable by Performance Guarantor.

 

Section 6.  Representations
and Warranties.  Performance
Guarantor hereby represents and warrants to Recipient that:

 

(a)                         Existence
and Standing.  It (1) is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware, which is its sole jurisdiction of formation, (2) has all
corporate power and all licenses, authorizations, consents and approvals of all
Official Bodies required to carry on its business in each jurisdiction in which
its business is now and proposed to be conducted (except where the failure to
have any such licenses, authorizations, consents and approvals would not
individually or in the aggregate have a Material Adverse Effect) and (3) is
duly qualified to do business and is 

 

4

 

in good standing in every other jurisdiction
in which the nature of its business requires it to be so qualified, except
where the failure to be so qualified or in good standing would not have a
Material Adverse Effect.

 

(b)                        Authorization,
Execution and Delivery; Binding Effect; No Conflict.  The execution, delivery and performance by it
of this Guarantee and any other Transaction Document to which it is a party is (1) within
its organizational powers, (2) have been duly authorized by all necessary
organizational action, (3) require no action by or in respect of, or
filing with, any Official Body or official thereof, (4) do not contravene
or constitute a default under (a) its organizational documents, (b) any
Law applicable to it, (c) any contractual restriction binding on or
affecting it or its property or (d) any order, writ, judgment, award,
injunction, decree or other instrument binding on or affecting it or its
property, or (5) result in the creation or imposition of any Adverse Claim
upon or with respect to its property or the property of any of its Subsidiaries
(except as contemplated hereby), for purposes of clause (iv) hereof except
to the extent such failure would not be reasonably expected to have a Material
Adverse Effect. This Guarantee and the other Transaction Documents to which it
is a party have been duly executed and delivered and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
limiting rights of creditors generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or law).

 

(c)                         Financial
Statements.  Its consolidated
financial statements furnished by it to the Recipient for purposes of or in
connection with this Guarantee or any transaction contemplated hereby, taken as
a whole, is, and all such information hereafter furnished by it to the
Recipient will be, true, complete and accurate in every material respect, on
the date such information is stated or certified, and no such item contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.

 

(e)                         Taxes.  It has (1) timely filed all tax returns
(federal, state and local) required to be filed, (2) paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges except such taxes, if any, as are being contested in good faith and as
to which adequate reserves have been provided. No federal or state tax liens
have been filed and no claims are being asserted with respect to any such
taxes.

 

(f)                           Litigation
and Contingent Obligations.  Except
as disclosed in the filings made with the Securities and Exchange Commission,
it is not in violation of any order of any Official Body or arbitrator, except
where such violation would not be reasonably expected to have a Material
Adverse Effect on it or its Subsidiaries. 
There are no actions, suits, litigation or proceedings pending, or to
its knowledge, threatened, against or affecting it or any of its Material
Subsidiaries or their properties, in or before any Official Body or arbitrator,
which may, individually or in the aggregate, have a Material Adverse 

 

5

 

Effect on its or its Subsidiaries.  It does not have any material Contingent
Obligations not provided for or disclosed in the financial statements referred
to in Section 6(c).

 

(g)                        Disclosure
of the Transaction. The Performance Guarantor makes the representations and
agrees to the covenants set forth in Schedule 6.1(g) which are
incorporated herein by reference.

 

Section 7.  Subrogation;
Subordination.  Notwithstanding
anything to the contrary contained herein, until the Guaranteed Obligations are
paid in full Performance Guarantor:  (a) will
not enforce or otherwise exercise any right of subrogation to any of the rights
of Recipient, the Agent or any Investor against the Originator or the Seller, (b) hereby
waives all rights of subrogation (whether contractual, under Section 509
of the United States Bankruptcy Code, at law or in equity or otherwise) to the
claims of Recipient, the Agent and any Investor against the Originator or the
Seller and all contractual, statutory or legal or equitable rights of
contribution, reimbursement, indemnification and similar rights and “claims”
(as that term is defined in the United States Bankruptcy Code) which
Performance Guarantor might now have or hereafter acquire against the
Originator or the Seller that arise from the existence or performance of
Performance Guarantor’s obligations hereunder, (c) will not claim any
setoff, recoupment or counterclaim against the Originator or the Seller in
respect of any liability of Performance Guarantor to the Originator and (d) waives
any benefit of and any right to participate in any collateral security which
may be held by Recipient, the Agent or any Investor.  The payment of any amounts due with respect
to any indebtedness of the Originator or the Seller now or hereafter owed to
Performance Guarantor is hereby subordinated to the prior payment in full of
all of the Guaranteed Obligations. 
Performance Guarantor agrees that, after the occurrence of any default
in the payment or performance of any of the Guaranteed Obligations, Performance
Guarantor will not demand, sue for or otherwise attempt to collect any such
indebtedness of the Originator or the Seller to Performance Guarantor until all
of the Guaranteed Obligations shall have been paid and performed in full.  If, notwithstanding the foregoing sentence,
Performance Guarantor shall collect, enforce or receive any amounts in respect
of such indebtedness while any obligations are still unperformed or
outstanding, such amounts shall be collected, enforced and received by
Performance Guarantor as trustee for Recipient (and its assigns) and be paid
over to Recipient (or its assigns) on account of the Guaranteed Obligations
without affecting in any manner the liability of Performance Guarantor under
the other provisions of this Guarantee. 
The provisions of this Section 7 shall be supplemental to
and not in derogation of any rights and remedies of Recipient under any
separate subordination agreement which Recipient may at any time and from time
to time enter into with Performance Guarantor.

 

Section 8.  Termination
of Performance Guarantee. 
Performance Guarantor’s obligations hereunder shall continue in full
force and effect until all Aggregate Unpaids are finally paid and satisfied in
full and the TAA is terminated, provided  that this Guarantee
shall continue to be effective or shall be reinstated, as the case may be, if
at any time payment or other satisfaction of any of the Guaranteed Obligations
is rescinded or must otherwise be restored or returned upon the bankruptcy,
insolvency, or reorganization of the Originator or the Seller or otherwise, as
though such payment had not been made or other satisfaction occurred, whether
or not Recipient (or its assigns) is in possession of this Guarantee.  No invalidity, irregularity or
unenforceability by reason of the federal bankruptcy code or any insolvency or
other similar law, or any law or order of any government or agency thereof
purporting to reduce, amend or otherwise affect the 

 

6

 

Guaranteed Obligations shall impair, affect,
be a defense to or claim against the obligations of Performance Guarantor under
this Guarantee.

 

Section 9.  Effect of Bankruptcy.  This Guarantee shall survive the insolvency
of the  Originator or the Seller and the
commencement of any case or proceeding by or against the Originator or the
Seller under the federal bankruptcy code or other federal, state or other
applicable bankruptcy, insolvency or reorganization statutes.  No automatic stay under the federal
bankruptcy code with respect to the Originator or the Seller or other federal,
state or other applicable bankruptcy, insolvency or reorganization statutes to
which the Originator or the Seller is subject shall postpone the obligations of
Performance Guarantor under this Guarantee.

 

Section 10.  Setoff.  Regardless of the other means of obtaining
payment of any of the Guaranteed Obligations, Recipient (and its assigns) is
hereby authorized at any time and from time to time, without notice to
Performance Guarantor (any such notice being expressly waived by Performance
Guarantor) and to the fullest extent permitted by law, to set off and apply any
deposits and other sums against the obligations of Performance Guarantor under
this Guarantee, whether or not Recipient (or any such assign) shall have made
any demand under this Guarantee and although such obligations may be contingent
or unmatured.

 

Section 11.  Taxes. 
All payments to be made by Performance Guarantor hereunder shall be made
free and clear of any deduction or withholding. 
If Performance Guarantor is required by law to make any deduction or
withholding on account of tax or otherwise from any such payment, the sum due
from it in respect of such payment shall be increased to the extent necessary
to ensure that, after the making of such deduction or withholding, Recipient
receive a net sum equal to the sum which they would have received had no
deduction or withholding been made.

 

Section 12.  Further Assurances.  Performance Guarantor agrees that it will
from time to time, at the request of Recipient (or its assigns), provide
information relating to the business and affairs of Performance Guarantor as
Recipient may reasonably request. 
Performance Guarantor also agrees to do all such things and execute all
such documents as Recipient (or its assigns) may reasonably consider necessary
or desirable to give full effect to this Guarantee and to perfect and preserve
the rights and powers of Recipient hereunder.

 

Section 13.  Successors and Assigns.  This Guarantee shall be binding upon
Performance Guarantor, its successors and permitted assigns (to the extent
permitted under the Agreements), and shall inure to the benefit of and be
enforceable by Recipient and its successors and assigns. Performance Guarantor
may not assign or transfer any of its obligations hereunder without the prior
written consent of each of Recipient and the Agent. Without limiting the
generality of the foregoing sentence, Recipient may, in accordance with the
Transaction Documents, assign or otherwise transfer the Agreements, any other
documents executed in connection therewith or delivered thereunder or any other
agreement or note held by them evidencing, securing or otherwise executed in
connection with the Guaranteed Obligations, or sell participations in any
interest therein, to any other entity or other person, and such other entity or
other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to the Recipient herein.

 

7

 

Section 14.  Amendments and Waivers.  No amendment or waiver of any provision of
this Guarantee nor consent to any departure by Performance Guarantor therefrom
shall be effective unless the same shall be in writing and signed by Recipient,
the Agent and Performance Guarantor.  No
failure on the part of Recipient to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.

 

Section 15.  Notices.  All notices and other communications provided
for hereunder shall be made in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be addressed as
follows:  if to Performance Guarantor, at
the address set forth beneath its signature hereto, and if to Recipient, at the
addresses set forth beneath its signature hereto, or at such other addresses as
each of Performance Guarantor or any Recipient may designate in writing to the
other.  Each such notice or other communication
shall be effective (i) if given by telecopy, upon the receipt thereof, (ii) if
given by mail, three (3) Business Days after the time such communication
is deposited in the mail with first class postage prepaid or (iii) if
given by any other means, when received at the address specified in this Section 15.

 

Section 16.  GOVERNING LAW.  THIS GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED 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).

 

Section 17.  CONSENT TO JURISDICTION.  EACH OF PERFORMANCE GUARANTOR AND RECIPIENT
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE, THE
AGREEMENTS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED
THEREUNDER AND EACH OF THE PERFORMANCE GUARANTOR AND RECIPIENT HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.

 

Section 18.  Bankruptcy Petition.  Performance Guarantor hereby covenants and
agrees that, prior to the date that is one year and one day after the payment
in full of all outstanding senior indebtedness of the Conduit Investor, it will
not institute against, or join any other Person in instituting against, the
Conduit Investor any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States.

 

Section 19.  Miscellaneous.  This Guarantee constitutes the entire
agreement of Performance Guarantor with respect to the matters set forth
herein. The rights and remedies

 

8

 

herein provided are cumulative and not
exclusive of any remedies provided by law or any other agreement, and this
Guarantee shall be in addition to any other guaranty of or collateral security
for any of the Guaranteed Obligations. 
The provisions of this Guarantee are severable, and in any action or
proceeding involving any state corporate law, or any state or federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of Performance Guarantor hereunder
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of Performance Guarantor’s liability under this
Guarantee, then, notwithstanding any other provision of this Guarantee to the
contrary, the amount of such liability shall, without any further action by
Performance Guarantor or Recipient, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding.  Any provisions of this Guarantee
which are 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.  Unless otherwise specified, references herein
to “Section” shall mean a reference to sections of this Guarantee.

 

9

 

IN WITNESS WHEREOF, Performance Guarantor has caused this Guarantee to
be executed and delivered as of the date first above written.

 

	
   

  	
  UNITED STATIONERS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

Address for Notices:

 

United Stationers Inc.

One Parkway North,

Suite 100

Deerfield, Illinois 60015

Attention: Robert J. Kelderhouse, Treasurer

with a copy to: Eric A. Blanchard, General Counsel

Telephone: (847) 627-2585

Facsimile: (847) 627-7111

 

10

 

SCHEDULE 6.1(g)

 

Performance Guarantor—Disclosure
Representations and Covenants

 

Disclosure of the Transactions

 

1.                        The transactions referred to in
the Opinion (the “Transactions”) have been or will be publicly disclosed
as follows the Transactions will be addressed in notes relating to Performance
Guarantor’s securitization activities in its financial statements.

 

2.                        The footnotes that describe
Performance Guarantor’s securitization activities (which include the
Transactions) in Performance Guarantor’s consolidated financial statements
(which will include the Originator, the Seller and the SPV) will describe
Performance Guarantor’s securitization activities, will inform readers that
securitized assets (such as the Receivables) are isolated in special purpose
entities and support the securities issued by those entities.

 

3.                        Performance Guarantor will not
conceal any transfers contemplated by the agreements referred to on Schedule
II to the Opinion (the “Agreements”) from any interested party.  Although obligors on the Receivables will not
be affirmatively informed of the transfers of their obligations, Performance
Guarantor will not conceal the transfers from any obligor that inquires.  Also, (other than certain rebates and
allowances in respect of Receivables) the obligors are not expected to be
material creditors of Performance Guarantor.

 

Terms of the Transactions

 

4.                        Performance Guarantor’s
believes that its guaranty in the Performance Guarantee does not cause
Performance Guarantor to retain or assume the risk of nonpayment or other
material financial risks of the Receivables based in part on the belief that
the matters covered are unlikely to occur. 
The guaranty is not intended to cover material liabilities that are
reasonably likely to occur.

 

5.                        There are no agreements or
understandings between the SPV, on one hand, and Performance Guarantor, Seller
or Originator or any of Originator’s other affiliates that are relevant to the
Transactions other than the Agreements and any other agreements and understandings
specifically referenced in the Agreements. 
In particular, there are no other agreements or understandings pursuant
to which Performance Guarantor or another of its other affiliates (a) is
responsible for maintaining the SPV’s solvency or (b) provides recourse,
guarantees or otherwise retains or assumes financial risks with respect to the
Receivables.

 

Relationship Between Performance Guarantor
and the SPV

 

6.                        The SPV is a wholly-owned
subsidiary of Seller, Seller is a wholly owned subsidiary of Originator and
Originator is a wholly-owned subsidiary of Performance Guarantor, and the SPV
was formed for the special purpose of consummating the Transactions.

 

 

7.                        Performance Guarantor intends
to act in a manner that is consistent with the SPV’s separate and distinct
existence and will correct any known misunderstanding regarding its status as a
separate entity.

 

8.                        Seller prepares and maintains
separate corporate and financial records from the SPV that accurately reflect
its assets, liabilities and financial affairs. 
Performance Guarantor’s believes its assets and liabilities can be
readily and inexpensively segregated, ascertained and identified separate from
those of the SPV.  All transactions
between Performance Guarantor and the SPV, including monetary transactions, are
and will be properly reflected in Performance Guarantor’s books and records
Performance Guarantor believes that each will be on terms and conditions
consistent with those of an arm’s length transaction.

 

9.                        Performance Guarantor believes
that the consolidation of Performance Guarantor’s and the SPV’s business
operations would not result in any significant cost savings or in a
significantly greater efficiency or profitability of such combined business
operation.

 

10.                  Performance Guarantor and the SPV do
not intend to commingle their assets and liabilities, except that Seller, as
Servicer of the Receivables: (a) may temporarily commingle collections
pending identification and transfer to a collection account for the
Transactions; and (b) will retain books and records pertaining to the
Receivables.  Performance Guarantor does
not maintain joint bank accounts or other the SPV accounts to which the SPV has
independent access.

 

11.                  An integration of business functions
between Performance Guarantor and the SPV, if any, exists only to the extent
summarized in this paragraph.  The SPV is
operated for the exclusive purpose of purchasing Receivables from Seller.  The SPV will have no employees, and the SPV’s
day-to-day business operations with respect to the Receivables will be
conducted through Seller, in its capacity as Servicer, pursuant to the Transfer
and Administration Agreement and that under that agreement, Seller has limited
rights, in its capacity as Servicer, to enter into modifications of Receivables
on behalf of the SPV, and Seller is generally not permitted to resign as
Servicer.  Performance Guarantor and the
SPV may share some expenses, but these are not expected to be material and, in
any event, will be allocated between the entities on a basis reasonably related
to the cost of the services involved and each entity’s actual use of such
services.  Obligors on the Receivables
transferred to the SPV will not be notified that their Receivables have been
transferred to the SPV.

 

12.                  The SPV is held out to the public as
a separate entity apart from Performance Guarantor, including as described
under Part I: Description of the Transactions in the Opinion.

 

13.                  Performance Guarantor maintains its
own stationery and other business forms separate from the SPV’s and conducts
business in its own name (including, without limitation, its contracts and
written communications).

 

2

 

14.                  Performance Guarantor adheres in all
materials respects to corporate formalities in all transfers of assets and
other transactions between Originator and the SPV.  In general, Performance Guarantor observes
appropriate corporate formalities under applicable law.

 

15.                  Performance Guarantor does not
currently, and does not intend to, guaranty, and is not otherwise obligated to
repay, the SPV’s liabilities.

 

16.                  At closing, Performance Guarantor
will: (a) be solvent; (b) be adequately capitalized to conduct its
business and affairs as a going concern, considering the size and nature of its
business and intended purposes and taking into account pending and threatened
claims; and (c) intends to, and believes that it will be able to, pay its
debts as they mature.  As a result,
Performance Guarantor is intended to (and is reasonably believed to) be able to
survive as a stand-alone entity.

 

17.                  Performance Guarantor does not pay
the SPV’s expenses, except as specifically provided in the Agreements.  Any allocations of direct, indirect or
overhead expenses for items shared between Performance Guarantor and the SPV
are made among such entities to the extent practical on the basis of actual use
or value of services rendered and otherwise on a basis reasonably related to
actual use or the value of services rendered.

 

18.                  Performance Guarantor has not held
itself out, nor does it intend to do so in the future, as responsible for the
SPV’s debts.

 

3Exhibit 10.10

 

UNITED STATIONERS INC.

2004 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

First Name, Last Name

Address

City, State Zip

 

Dear <First Name>:

 

This Restricted
Stock Unit Award Agreement (this “Agreement”), dated September 1, 2008,
(the “Award Date”), is by and between <First Name, Last Name> (the “Participant”),
and United Stationers Inc., a Delaware corporation (the “Company”).  Any term capitalized but not defined in this
Agreement will have the meaning set forth in the Company’s 2004 Long-Term
Incentive Plan (the “Plan”).

 

In the exercise of
its discretion to grant awards under the Plan, the Committee has determined
that the Participant should receive a restricted stock unit award, on the
following terms and conditions:

 

1.                                       Grant.  The Company hereby grants to the Participant
a Restricted Stock Unit Award (the “Award”) of <#> restricted stock units (the “Units”), each Unit that
vests representing the right to receive one share of the Company’s common stock
as provided in Section 5 of this Agreement.  The Award will be subject to the terms and
conditions of the Plan and this Agreement.

 

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

 

3.                                       Vesting;
Effect of Date of Termination.  For
purposes of this Agreement, “Vesting Date” means any date, including the
Scheduled Vesting Date (as defined below), on which Units subject to this Award
vest as provided in this Section 3.

 

(a)                                    Except
as otherwise provided in paragraphs 3(b) through 3(f), the Participant’s
Units will vest on December 31, 2011 (the “Scheduled Vesting Date”) if the
Participant’s Date of Termination has not occurred before the Scheduled Vesting
Date, but only to the extent the Units have been earned during the period from January 1,
2009 to December 31, 2011 (the “Performance Period”) as provided in Section 4.  If the Participant’s Date of Termination
occurs for any reason before the Scheduled Vesting Date, the Participant’s
Units will be forfeited on and after the Participant’s Date of Termination,
except as provided in paragraphs 3(b) through 3(f).

 

(b)                                     If
the Participant’s Date of Termination occurs before the Scheduled Vesting Date
by reason of the Participant’s death or Permanent and Total Disability (as
defined in paragraph 3(g)), a portion of the then unvested Units will become
vested as of 

 

 

the Participant’s Date of
Termination.  That portion shall be equal
to the sum of (i) the number of Earned Units (as defined in Section 4),
if any, immediately prior to the Participant’s Date of Termination, and (ii) a
number of additional Units determined by multiplying the lesser of (A) one-third
of the total number of Units or (B) the number of Units not yet earned
immediately prior to the Participant’s Date of Termination, by a fraction, the numerator
of which shall be the number of whole months elapsed from the beginning of the
calendar year in which the termination of employment occurred to the Date of
Termination, and the denominator of which shall be twelve.  Any Units not vested as provided in this
paragraph shall be forfeited.

 

(c)                                      If
the Participant’s Date of Termination occurs before the Scheduled Vesting Date
by reason of the Participant’s Retirement (as defined in paragraph 3(j)), a
portion of the then unvested Units will become vested as of the end of the
calendar year in which the Participant’s Date of Termination occurs.  That portion shall be equal to the sum of (i) the
number of Earned Units, if any, immediately prior to the Participant’s Date of
Termination, and (ii) the number of additional Units that otherwise would
have been earned as provided in Appendix A during the calendar year in
which the termination occurred multiplied by a fraction, the numerator of which
shall be the number of whole months elapsed from the beginning of the calendar
year in which the termination of employment occurred to the Date of
Termination, and the denominator of which shall be twelve.  Settlement of the vested Units shall occur
within the first 90 days of the calendar year immediately following the
calendar year in which the Participant’s Date of termination occurs.  Any Units not vested as provided in this
paragraph shall be forfeited.

 

(d)                                     If
a Change of Control occurs after the Award Date and prior to both the Scheduled
Vesting Date and the Participant’s Date of Termination, then a portion of the
Units will become fully vested as of the date of such Change of Control.  That portion shall be equal to the sum of (i) the
number of Earned Units, if any, immediately prior to the date of the Change in
Control, and (ii) a number of additional Units equal to the greater of (A) 50%
of the number of Units not included in clause (i), or (B) an amount
determined by multiplying 50% of the number of Units not included in clause (i) by
the Performance Factor (determined as provided in Appendix A) for all
completed calendar years during the Performance Period prior to the date of the
Change in Control.  The Units that do not
vest in accordance with the previous sentence shall remain subject to the
vesting provisions of this Agreement, with all Units that have vested as a
result of the Change of Control deemed Earned Units for purposes of applying
the formula specified in Appendix A.

 

(e)                                  If,
prior to the Scheduled Vesting Date but within two years after a Change in Control
described in paragraph 3(d), the Participant’s Date of Termination occurs by
reason of the involuntary termination of the Participant’s employment by the
Company or its Subsidiaries without Cause or by the Participant for Good Reason
(as defined in paragraph 3(h)), all of the Units that did not vest as a result
of the 

 

2

 

Change of Control as provided in paragraph 3(d) will
vest as of the Participant’s Date of Termination.

 

(f)                                    If the Participant’s Date of Termination occurs
after the Award Date, before the Scheduled Vesting Date and during an
Anticipated Change of Control by reason of the involuntary termination of the
Participant’s employment by the Company or its Subsidiaries without Cause or by
the Participant for Good Reason, and a Change of Control then occurs within two
years following the Participant’s Date of Termination, a number of shares of
Stock equal to the number of Units forfeited on the Participant’s Date of
Termination (subject to paragraph 5.2(f) of the Plan) shall be issued to
the Participant on a fully vested basis within 90 days of the date of the
Change of Control.

 

(g)                                 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 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.

 

(h)                                 For
purposes of this Agreement, “Good Reason” shall mean:  (i) any material breach by the Company
of this Agreement or of any employment agreement with the Participant without
Participant’s written consent, (ii) any material reduction, without the
Participant’s written consent, in the Participant’s duties, responsibilities or
authority; provided, however, that for purposes of this clause (ii), neither (A) a
change in the Participant’s supervisor or the number or identity of the
Participant’s direct reports, nor (B) a change in the Participant’s title,
duties, responsibilities or authority as a result of a realignment or
restructuring of the Company’s executive organizational chart nor (C) a
change in the Participant’s title, duties, responsibilities or authority as a
result of a realignment or restructuring of the Company shall be deemed by
itself to materially reduce Participant’s duties, responsibilities or
authority, as long as, in the case of either (B) or (C), Participant
continues to report to either the supervisor to whom he or she reported
immediately prior to the Change of Control or a supervisor of equivalent
responsibility and authority; or (iii) without Participant’s written
consent: (A) a material reduction in the Participant’s base salary, (B) the
relocation of the Participant’s principal place of employment more than fifty
(50) miles from its location on the date of a Change in Control, or (C) the
relocation of the Company’s corporate headquarters office outside of the
metropolitan area in which it is located on the date of a Change in
Control.  For purposes of this Agreement,
a Change of Control, alone, does not constitute Good Reason.  Furthermore, notwithstanding the above, the
occurrence of any of the events described above will not constitute Good Reason
unless the Participant gives the Company written notice within thirty (30) days
after the initial occurrence of any of such events that the Participant
believes that such event constitutes Good 

 

3

 

Reason, and the Company thereafter fails to cure any
such event within sixty (60) days after receipt of such notice.

 

(i)                                     For
purposes of this Agreement, a Date of Termination shall be deemed to have
occurred only if on such date the Participant has also experienced a “separation
from service” as defined in the regulations promulgated under Code Section 409A.

 

(j)                                     For
purposes of this Agreement, “Retirement” means the Participant’s separation
from service (as defined in the regulations promulgated under Code Section 409A)
occurring after the earlier of (i) the Participant reaching age 65 or (ii) the
Participant reaching age 55 and having completed at least 10 years of Service
with the Company and its Subsidiaries.

 

(k)                                  For
purposes of this Agreement, a Change of Control shall be deemed to have
occurred only if such event would also be deemed to constitute a change in
ownership or effective control, or a change in the ownership of a substantial
portion of the assets, of the Company under Code Section 409A.

 

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

 

4.                                         Earned
Units.  The number of Units that the
Participant will be deemed to have earned (“Earned Units”) as of the end of
each calendar year occurring during the Performance Period (the end of each
such year being a “Determination Date”) will be determined by the extent to
which the Company has satisfied the performance-based objectives for the
calendar year or years ending on the applicable Determination Date as set forth
in Appendix A to this Agreement. 
The portion of the Units subject to this Award that will be deemed
Earned Units as of each Determination Date during the Performance Period will
be determined according to the formula specified in Appendix A, but in
no event will the cumulative number of Units that are deemed Earned Units as of
any Determination Date during the Performance Period exceed the total number of
Units subject to this Agreement.  Any
Units that are not earned as of either of the first two Determination Dates
during the Performance Period solely because of the failure to fully satisfy an
applicable performance-based objective shall remain eligible to be earned as of
a subsequent Determination Date during the Performance Period.

 

5.                                         Settlement
of Units.  After any Units vest pursuant to Section 3, and unless otherwise
provided in Section 3, the Company will promptly, but in no event later
than 90 days after the Vesting Date, cause to be issued to the Participant, or
to the Participant’s beneficiary or legal representative in the event of
Participant’s death, one share of Stock in payment and settlement of each
vested Unit.  Such issuance shall be
evidenced by a stock certificate or appropriate entry on the books of the
Company or a duly authorized transfer agent of the Company, shall be subject to
the tax withholding provisions of Section 6, and shall be in complete
satisfaction of such vested Units.  If
the Units that vest include a fractional Unit, the Company will round the
number of vested Units down 

 

4

 

to
the nearest whole Unit prior to issuance of the shares as provided herein.  Notwithstanding the foregoing, if any amount shall be payable with respect to
this Award as a result of the Participant’s “separation from service” at such
time as the Participant is a “specified employee” (as those terms are
defined in regulations promulgated under Code Section 409A) and such amount is subject to the provisions
of Code Section 409A, then no payment shall be made, except as permitted
under Code Section 409A, prior to the first day of the seventh calendar
month beginning after the Participant’s separation from service (or the date of
Participant’s earlier death), or as soon as administratively practicable
thereafter.

 

6.                                         Tax Matters.  The Committee may require
the Participant, or the alternate recipient identified in Section 5, to
satisfy any potential federal, state, local or other tax withholding
liability.  Such liability must be
satisfied at the time such Units vest and are settled in shares of Stock.  At the election of the Participant, and
subject to such rules and limitations as may be established by the
Committee from time to time, such withholding obligations may be satisfied: (A) through
a cash payment by the Participant, (B) through the surrender of shares of
Stock that the Participant already owns (provided, however, to the extent
shares described in this clause (B) 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.

 

7.                                         Compliance
with Laws.  Despite the provisions of
Section 5 hereof, the Company is not required to issue or deliver any
certificates for shares of Stock if at any time the Company determines that the
listing, registration or qualification of such shares upon any securities
exchange or under any law, the consent or approval of any governmental body or
the taking of any other action is necessary or desirable as a condition of, or
in connection with, the issuance or delivery of the shares hereunder in
compliance with all applicable laws and regulations, unless such listing,
registration, qualification, consent, approval or other action has been
effected or obtained, free of any conditions not acceptable to the Company.

 

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

 

5

 

9.                                         Nontransferability.  Except as otherwise provided by the Committee
or as provided in Section 5, and except with respect to shares of Stock
issued in settlement of vested Units, the Participant’s interests and rights in
and under this Agreement may not be assigned, transferred, exchanged, pledged
or otherwise encumbered other than as designated by the Participant by will or
by the laws of descent and distribution. 
Issuance of shares of Stock in settlement of Units will be made only to
the Participant; or, if the Committee has been provided with evidence
acceptable to it that the Participant is legally incompetent, the Participant’s
personal representative; or, if the Participant is deceased, to the designated
beneficiary or other appropriate recipient in accordance with Section 5
hereof.  The Committee may require
personal receipts or endorsements of a Participant’s personal representative,
designated beneficiary or alternate recipient provided for herein, and the
Committee shall extend to those individuals the rights otherwise exercisable by
the Participant with regard to any withholding tax election in accordance with Section 6
hereof.  Any effort to otherwise assign
or transfer any Units or any rights or interests therein or thereto under this
Agreement will be wholly ineffective, and will be grounds for termination by the
Committee of all rights and interests of the Participant and his or her
beneficiary in and under this Agreement.

 

10.                                   Administration
and Interpretation.  The Committee
has the authority to control and manage the operation and administration of the
Plan.  Any interpretations of the Plan by
the Committee and any decisions made by it under the Plan are final and binding
on the Participant and all other persons.

 

11.                                   Governing
Law.  This Agreement and the rights
and obligations hereunder shall be governed by and construed in accordance with
the laws of the state of Delaware, without regard to principles of conflicts of
law of Delaware or any other jurisdiction.

 

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

 

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

 

14.                                   Amendment
and Waiver.  This Agreement may be
amended in accordance with the provisions of the Plan, and may otherwise be
amended by written agreement between the Company and the Participant without
the consent of any other person.  No
course of 

 

6

 

conduct or failure or
delay in enforcing the provisions of this Agreement will affect the validity,
binding effect or enforceability of this Agreement.

 

IN WITNESS WHEREOF, the Company has duly executed this Agreement as of
the Award Date.

 

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  UNITED STATIONERS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  

  
	
   

  	
  Frederick B. Hegi, Jr.

  
	
   

  	
  Chairman of the Board

  

 

7

 

Page intentionally left blank.

 

8

 

Appendix A to

Restricted Stock Unit Award Agreement

 

Earned Units and Performance-Based Objectives

 

Performance Period:             January 1,
2009 through December 31, 2011

 

The determination of the number of Units that will be earned as of each
Determination Date during the Performance Period specified above as provided in
Section 4 of the Agreement will be determined as follows:

 

1.             The Company’s
Economic Profit (as defined below) for the period beginning on the first day of
the Performance Period and ending on the applicable Determination Date (the “Relevant
Period”) will be calculated.

 

2.             Based on that actual
Economic Profit, the Performance Factor for the Relevant Period will be
determined from the following table by determining where the Company’s actual
Economic Profit falls relative to the goals specified in the applicable column
of the table below, and then selecting the corresponding Performance
Factor.  If the Company’s actual Economic
Profit for any Relevant Period is between two amounts shown in the applicable
column of the table, the corresponding Performance Factor will be determined by
linear interpolation between the two relevant Performance Factors shown in the
table.  If actual Economic Profit for the
Relevant Period is less than or equal to the Threshold amount specified, the
Performance Factor is zero, and if it greater than the Maximum amount
specified, the Performance Factor will be equal to the percentage specified for
the Maximum amount.

 

	
   

  	
   

  	
  Company’s Cumulative Economic Profit Goals and Corresponding Performance Factors

  During the Portion of the Performance Period Ending on the Dates Indicated

  	
   

  
	
   

  	
   

  	
  December 31, 2009

  	
   

  	
  December 31, 2010

  	
   

  	
  December 31, 2011

  	
   

  
	
   

  	
   

  	
  EP Goal

  	
   

  	
  Perf. Factor

  	
   

  	
  EP Goal

  	
   

  	
  Perf. Factor

  	
   

  	
  EP Goal

  	
   

  	
  Perf. Factor

  	
   

  
	
  Maximum

  	
   

  	
  $-10M

  	
   

  	
  150

  	
  %

  	
  $-17M

  	
   

  	
  150

  	
  %

  	
  $-36M

  	
   

  	
  100

  	
  %

  
	
  Target

  	
   

  	
  $-24M

  	
   

  	
  100

  	
  %

  	
  $-39M

  	
   

  	
  100

  	
  %

  	
  $-36M

  	
   

  	
  100

  	
  %

  
	
  Threshold

  	
   

  	
  $-30M

  	
   

  	
  0

  	
  %

  	
  $-52M

  	
   

  	
  0

  	
  %

  	
  $-52M

  	
   

  	
  0

  	
  %

  

 

3.            The number of Earned
Units as of any Determination Date will be calculated using the following
formula:

 

(Performance Factor x Cumulative Unit Percentage x Number of Units
Awarded) — Number of Previously Earned Units

 

where:

 

·                  “Performance
Factor” is the percentage determined as provided in item 2 above;

 

·                  “Cumulative Unit
Percentage” is the percentage in the following table that corresponds to the
Determination Date marking the end of the Relevant Period:

 

	
  Determination Dates

  	
   

  	
  Cumulative Unit Percentage

  	
   

  
	
  December 31, 2009

  	
   

  	
  33 1/3%

  	
   

  
	
  December 31, 2010

  	
   

  	
  66 2/3%

  	
   

  
	
  December 31, 2011

  	
   

  	
  100%

  	
   

  

 

9

 

·                  “Number of Units
Awarded” is the number in Section 1 of the Agreement; and

 

·                  “Number of
Previously Earned Units” is the number of Units subject to the Award that had
already been determined to be Earned Units during the Performance Period prior
to the applicable Determination Date.

 

4.             For purposes of this Appendix A, the Company’s
“Economic Profit” for any period shall mean profit after applying a capital
charge based on the long-term weighted average cost of capital.  Profit is defined as after-tax EBIT.  Total capital used to calculate the capital
charge includes all assets and liabilities except for cash, debt (including
Asset Backed Securitization) and stockholders’ equity.  Adjustments are made to both profit and total
capital to remove the impact of LIFO expense and the amortization of intangible
assets associated with acquisitions.

 

5.             As
an example, to compute the number of Earned Units as of the first, second and
third Determination Dates, assume the following facts: (i) the Number of
Units Awarded was 15,000; (ii) the Company’s actual Economic Profit for
the relevant period ending on the first Determination Date was half-way between
the Threshold Amount and the Target Amount, resulting in a Performance Factor
of 50%; (iii) the Company’s actual Economic Profit for the relevant period
ending on the second Determination Date was half-way between the Target Amount
and the Maximum Amount, resulting in a Performance Factor of 125%; and (iv) the
Company’s actual Economic Profit for the relevant period ending on the third
Determination Date was above the Target Amount, resulting in a Performance
Factor of 100%.  Under these facts, the
number of additional Earned Units on each Determination Date would be:

 

	
  First Determination Date:

  	
  (50% x 33 1/3% x 15,000) – 0 = 2,500 Units

  
	
   

  	
   

  
	
  Second Determination Date:

  	
  (125% x 66 2/3% x 15,000) – 2,500 = 10,000 Units

  
	
   

  	
   

  
	
  Third Determination Date:

  	
  (100% x 100% x 15,000) – 12,500 = 2,500 Units

  

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}]]