Document:

esnd-ex101_177.htm

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made, entered into and effective as of July 22, 2015 (the “Effective Date”) by and among 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”, 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 Executive, and any successors thereto, hereinafter referred to as the “Companies”), and Robert B. Aiken, Jr. (hereinafter referred to as the “Executive”). 

 WHEREAS, the Companies and Executive are parties to an offer of employment in the form of a letter agreement dated July 22, 2015 (the “Offer of Employment”); and

WHEREAS, the Companies and Executive acknowledge and agree that it is in their mutual best interests to enter into an Executive Employment Agreement; and

WHEREAS, Executive will be a key member of the management of the Companies and is expected to devote substantial skill and effort to the affairs of the Companies, and the Companies desire to recognize the significant personal contribution that Executive makes and is expected to continue to make to further the best interests of the Companies and their shareholders; and

 

WHEREAS, it is desirable and in the best interests of the Companies and its shareholders to obtain the benefits of Executive’s services and attention to the affairs of the Companies, and to provide inducement for Executive (1) to remain in the service of the Companies in the event of any proposed or anticipated Change of Control and (2) to remain in the service of the Companies in order to facilitate an orderly transition in the event of a Change of Control; and

 

WHEREAS, it is desirable and in the best interests of the Companies and their shareholders that Executive be in a position to make judgments and advise the Companies with respect to any proposed Change of Control without regard to the possibility that Executive’s employment may be terminated without compensation in the event of a Change of Control; and

 

WHEREAS, Executive will have access to confidential, proprietary and trade secret information of the Companies and their subsidiaries, and it is desirable and in the best interests of the Companies and their shareholders to protect confidential, proprietary and trade secret information of the Companies and their subsidiaries, to prevent unfair competition by former executives of the Companies following separation of their employment with the Companies and to secure cooperation from former executives with respect to matters related to their employment with the Companies; and 

 

WHEREAS, it is desirable and in the best interests of the Companies and their shareholders to obtain commitments from Executive with respect to Executive’s service with the Companies, and to facilitate a smooth transition upon separation from service for former executives.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, the parties agree as follows:

Section 1.Definitions.

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(a)As used in this Agreement, the following terms have the respective meanings set forth below:

“Accrued Benefits” means (i) all salary earned or accrued through the date the Executive’s employment is terminated, (ii) reimbursement for any and all monies expended by Executive in connection with the Executive’s employment for reasonable and necessary out-of-pocket business expenses incurred by the Executive in performance of services for the Companies through the date the Executive’s employment is terminated, (iii) all accrued and unpaid annual incentive compensation awards for the year immediately prior to the year in which the Executive’s employment is terminated, and (iv) all other payments and benefits payable on or after termination of employment to which the Executive is entitled at the date of termination under the terms of any applicable compensation arrangement or benefit plan or program of the Companies.  “Accrued Benefits” shall not include any entitlement to severance pay or severance benefits under any severance policy or plan generally applicable to the Companies’ salaried employees.

“Affiliate” shall have the meaning given such term in Rule 12b-2 of the Exchange Act.

“Board” shall mean, so long as Holding directly or indirectly owns all of the outstanding Voting Securities (as hereinafter defined in the definition of Change of Control) of the Companies, the board of directors of Holding.  In all other cases, Board means the board of directors of the Company.

“Cause” shall mean (i) conviction of, or plea of nolo contendere to, a felony (excluding motor vehicle violations); (ii) theft or embezzlement, or attempted theft or embezzlement, of money or property or assets of the Companies; (iii) illegal use of drugs; (iv) material breach of this Agreement or any employment-related undertakings provided in a writing signed by the Executive prior to or concurrently with this Agreement; (v) gross negligence or willful misconduct in the performance of Executive’s duties; (vi) breach of any fiduciary duty owed to the Companies, including, without limitation, engaging in competitive acts while employed by the Companies; or (vii) the Executive’s willful refusal to perform the assigned duties for which the Executive is qualified as directed by the Board; provided, that in the case of any event constituting Cause within clauses (iv) through (vii) which is curable by the Executive, the Executive has been given written notice by the Companies of such event said to constitute Cause, describing such event in reasonable detail, and has not cured such action within thirty (30) days of such written notice as reasonably determined by the board of directors of Holding.  For purposes of this definition of Cause, action or inaction by the Executive shall not be considered “willful” unless done or omitted by the Executive (A) intentionally or not in good faith and (B) without reasonable belief that the Executive’s action or inaction was in the best interests of the Companies, and shall not include failure to act by reason of total or partial incapacity due to physical or mental illness.

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

(a) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of the combined voting power of Holding’s then outstanding voting securities entitled to vote generally in the election of directors (“Voting Securities”); provided, however, that the acquisition or holding of 

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Voting Securities by (i) Holding of any of its Subsidiaries, (ii) an employee benefit plan (or a trust forming a part thereof) maintained by Holding or any of its Subsidiaries, or (iii) any Person in which the Executive has a substantial equity interest shall not constitute a Change of Control.  Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of (A) 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 (B) 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; 

(b) At any time during a period of two consecutive years, the individuals who at the beginning of such period constituted the Board (the “Incumbent Board”) cease for any reason to constitute more than 50% of the Board; provided, however, that if the election, or nomination for election by Holding’s 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 (b), be considered as though such person were a member of the Incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of (i) either an actual “Election Consent” (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by reason of an agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest; 

(c) Consummation of a merger, consolidation or reorganization or approval by Holding’s 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: 

(i) the Persons with Beneficial Ownership of Holding, immediately before such Business Combination, have Beneficial Ownership of more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity) resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns Holding or all or substantially all of Holding’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) in substantially the same proportions as their Beneficial Ownership of the Voting Securities immediately before such Business Combination, 

(ii) 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 

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(iii) 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 (iii), a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided, however that a Business Combination with a Person in which the Executive has a substantial equity interest shall not constitute a Change of Control with respect to such Person. 

(d) 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 Executive 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.  

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Good Reason” shall mean:  (i) any material breach by the Companies of this Agreement without Executive’s written consent, (ii) without Executive’s written consent, any change in Executive’s title or position as Chief Executive Officer reporting directly to the Board of the Companies, or any change pursuant to which Executive is not the senior most officer of the Companies (other than any non-executive chairman), or (iii) without Executive’s written consent: (A) a material reduction in the Executive’s Base Salary, or (B) the relocation of the Executive’s principal place of employment more than fifty (50) miles from its location on the Effective Date.  For purposes of this Agreement, a Change of Control, alone, does not constitute Good Reason.  Furthermore, notwithstanding the above, the occurrence of any of the events described above will not constitute Good Reason unless the Executive gives the Companies written notice within thirty (30) days after the initial occurrence of any of such events that the Executive believes that such event constitutes Good Reason, and the Companies thereafter fail to cure any such event within sixty (60) days after receipt of such notice.

“Person” shall mean any natural person, firm, corporation, limited liability company, trust, partnership, limited or limited liability partnership, business association, joint venture or other entity and, for purposes of the definition of Change of Control herein, shall comprise any “person”, within the meaning of Sections 13(d) and 14(d) of the Exchange Act, including a “group” as therein defined.

“Subsidiary” shall mean, with respect to any Person, any other Person of which such first Person owns 20% or more of the economic interest in such Person or owns or has the power to vote, directly or indirectly, securities representing 20% or more of the votes ordinarily entitled to be cast for the election of directors or other governing Persons.

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

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“Annual Bonus”Section 4(b)

“Base Salary”Section 4(a)

“Bonus Plan”Section 4(b)

“Code”Section 2

“Confidential information or proprietary data”           Section 6(a)(2)

“Customer”Section 6(d)(2)

“Disability”Section 5(c)

“Employment Period”Section 2

“Retirement”Section 5(f)

“Supervising Officer”Section 3(a)

“Supplier”Section 6(d)(2)

“Term” and “Termination Date”Section 2

Section 2.Term and Employment Period.  Subject to Section 19 hereof, the term of this Agreement “Term” shall commence on the Effective Date of this Agreement and shall continue until the effective date of termination of the Executive's employment hereunder pursuant to Section 5 of this Agreement. The period during which the Executive is employed by the Companies pursuant to this Agreement is referred to herein as the “Employment Period.”  The date on which termination of the Executive's employment hereunder shall become effective is referred to herein as the “Termination Date.”  For purposes of Section 5 of this Agreement only, the Termination Date shall mean the date on which a “separation from service” has occurred for purposes of Section 409A of the Internal Revenue Code and the regulations and guidance thereunder (the “Code”). 

 

Section 3.Duties.

(a)During the Employment Period, the Executive (i) shall serve as President and Chief Executive Officer, of the Companies, (ii) shall report directly to the Board, (iii) shall, subject to and in accordance with the authority and direction of the Board, have such authority and perform in a diligent and competent manner such duties as may be assigned to the Executive from time to time by the Board and (iv) shall devote the Executive’s best efforts and such time, attention, knowledge and skill to the operation of the business and affairs of the Companies as shall be necessary to perform the Executive’s duties.  During the Employment Period, the Executive’s place of performance for the Executive’s duties and responsibilities shall be at the Companies’ corporate headquarters office, unless another principal place of performance is agreed in writing among the parties and except for required travel by the Executive on the Companies’ business or as may be reasonably required by the Companies.

(b)Notwithstanding the foregoing, it is understood during the Employment Period, subject to any conflict of interest policies of the Companies, the Executive may (i) serve in any capacity with any civic, charitable, educational or professional organization provided that such service does not materially interfere with the Executive’s duties and responsibilities hereunder, (ii) make and manage personal investments of the Executive’s choice, and (iii) with the prior consent of the Board, which shall not be unreasonably withheld, serve on the board of directors of one (1) for profit business enterprise.

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

(a)the Executive shall receive from the Companies, at such intervals and in accordance with the Companies’ payroll policies as may be in effect from time to time, an annual salary (pro rata for any partial year) equal to $800,000 (“Base Salary”).  The Base Salary shall be reviewed by the Board from time to time and may, in the Board’s sole discretion, be increased 

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when deemed appropriate by the Board; if so increased, it shall not thereafter be reduced (other than an across-the-board reduction applied in the same percentage at the same time to all of the Companies’ senior executives at the senior executive grade level);

(b)the Executive shall be eligible to earn an annual incentive compensation award under the Companies’ management incentive or bonus plan, or a successor plan thereto, as shall be in effect from time to time (the “Bonus Plan”), subject to achievement of performance goals determined in accordance with the terms of the Bonus Plan (such annual incentive compensation award, the “Annual Bonus”), with such Annual Bonus to be payable in a cash lump sum at such time as bonuses are ordinarily paid to the Companies’ senior executives; 

(c)the Executive shall be reimbursed, at such intervals and in accordance with the Companies’ policies as may be in effect from time to time, for any and all reasonable and necessary out-of-pocket business expenses incurred by the Executive during the Employment Period for the benefit of the Companies, subject to documentation in accordance with the Companies’ policies;

(d)the Executive shall be entitled to participate in all incentive, savings and retirement plans, equity-based compensation plans, practices, policies and programs applicable generally to other senior executives of the Companies and as determined by the Board from time to time;

(e)the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Companies to senior executives of the Companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, and accidental death and travel accident insurance plans and programs) to the extent applicable generally to other executives of the Companies at the same grade level;

(f)the Executive shall be entitled to not less than twenty-six (26) days of paid time off per calendar year (pro rata for any partial year); and

(g)the Executive shall be entitled to participate in the Companies’ other executive fringe benefits and perquisites generally applicable to the Companies’ senior executives at the same grade level in accordance with the terms and conditions of such arrangements as are in effect from time to time.

Section 5.Termination of Employment.

(a)All Accrued Benefits to which the Executive (or the Executive’s estate or beneficiary) is entitled shall be payable within thirty (30) days following the Termination Date, except as otherwise specifically provided herein or under the terms of any applicable policy, plan or program, in which case the payment terms of such policy, plan or program shall be determinative.

(b)Any termination by the Companies, or by the Executive, of the Employment Period shall be communicated by written notice of such termination to the Executive, if such notice is delivered by the Companies, and to the Companies, if such notice is delivered by the Executive, each in compliance with the requirements of Section 13 hereof.  Except in the event of termination of the Employment Period by reason of Cause or the Executive’s death, the effective date of the termination of Executive’s employment shall be no earlier than thirty (30) days following the date on which notice of termination is delivered by one party to the other in compliance with the requirements of Section 13 hereof.

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(c)If the Employment Period is terminated, other than on or within two (2) years following the date of a Change of Control, by the Executive for Good Reason such that the Executive’s separation from service occurs within two years following the initial existence of the condition giving rise to Good Reason, or by the Companies for any reason other than Cause or the Executive’s death or permanent disability, as defined in the Companies’ Board-approved disability plan or policy as in effect from time to time (“Disability”), then, as the Executive’s exclusive right and remedy in respect of such termination:

(i)the Executive shall be entitled to receive from the Companies the Executive’s Accrued Benefits in accordance with Section 5(a);

(ii)the Executive shall be entitled to an amount equal to two (2) times the Executive’s then existing Base Salary, to be paid in such intervals and at such times in accordance with the Companies’ payroll practices in effect from time to time over the twenty-four (24) month period following the Termination Date, but in no event shall such amount paid under this Section 5(c)(ii) exceed the lesser of (A) two (2) times the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year in which the Executive’s Termination Date occurs, or (B) two (2) times the sum of Executive’s annualized compensation based upon the annual rate of pay for services to the Companies for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service), consistent with the parties’ intention that the payments under this Section 5(c)(ii) constitute a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

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

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

(v)the Executive shall be entitled to a lump-sum payment in an amount equal to the pro-rata actual Annual Bonus award which would otherwise be payable for the calendar year during which the Termination Date occurs, with such pro-rata actual Annual Bonus award determined by multiplying the Annual Bonus award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365); such lump sum payment to be made on the date that Annual Bonus payments are made to other participants in the plan;

(vi)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive 

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immediately prior to the Termination Date, beginning on the Termination Date and continuing until the earlier of:  (A) the twenty-four (24) month anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer, provided that Executive timely pays the Executive’s portion of such coverage, and provided further that if the Companies determine that the coverage to be provided under this Section 5(c)(vi) would cause a self-insured plan maintained by the Companies to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Companies reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Companies shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority); 

 (vii)the Executive shall receive a lump sum payment in an amount equal to the amount the Companies would otherwise expend for 24 months’ coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within ninety (90) days following the Termination Date; and

(viii)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition assistance services provided by a career transition assistance firm selected by the Executive and paid for by the Companies in an amount not to exceed ten percent (10%) of the Executive’s then existing Base Salary.  The Executive shall not be eligible to receive cash in lieu of executive level career transition assistance services.  

(d)If during the Employment Period, a Change of Control occurs and the Employment Period is terminated on or within two (2) years following the date of such Change of Control by the Companies for any reason other than Cause or Executive’s death or Disability or by the Executive for Good Reason, and, in the case of Executive’s resignation for Good Reason, the Executive’s separation from service occurs within two years following the initial existence of the condition giving rise to Good Reason, then:

(i)the Executive shall be entitled to receive from the Companies the Executive’s Accrued Benefits in accordance with Section 5(a);

(ii)the Executive shall be entitled to a lump-sum payment in an amount equal to three (3) times the Executive’s then existing Base Salary, to be paid within ninety (90) days following the Termination Date, subject to the requirements of both Section 5(e) and Section 11;

(iii)the Executive shall be entitled to a lump-sum payment in an amount equal to three (3) times the Executive’s target incentive compensation award for the calendar year during which the Termination Date occurs, to be paid within ninety (90) days following the Termination Date;

(iv)the Executive shall be entitled to a lump-sum payment to be paid within ninety (90)  days following the Termination Date in an amount equal to the pro-rata target 

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incentive compensation award for the calendar year during which the Termination Date occurs.  Such pro-rata target incentive compensation award shall be determined by multiplying the target incentive compensation award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365);

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Change of Control, beginning on the Termination Date and continuing until the earlier of: (A) the third anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer, provided that Executive timely pays the Executive’s portion of such coverage, and provided further that if the Companies determine that the coverage to be provided under this Section 5(d)(v) would cause a self-insured plan maintained by the Companies to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Companies reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Companies shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority); 

	

	
(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Companies would otherwise expend for 36-months’ coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within ninety (90) days following the Termination Date;

(vii)the Executive shall receive a lump sum cash payment, payable to Executive within ninety (90) days following the Termination Date, in an amount equal to the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Companies’ defined benefit retirement plan if the Executive had three (3) additional years of credit for purposes of age, benefit service and vesting; 

(viii)if the Executive’s outstanding equity-based incentive awards have not by then fully vested pursuant to the terms of the Companies’ applicable equity-based incentive plan(s) and applicable award agreement(s), then to the extent permitted in those plan(s) and as provided in the applicable award agreement(s), the Executive shall continue to vest in the Executive’s unvested equity-based incentive awards following the Termination Date;

(ix)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition assistance services provided by a career transition assistance firm selected by the Executive and paid for by the Companies in an amount not to exceed ten percent (10%) of the Executive’s then existing Base Salary.  The Executive shall not be eligible to receive cash in lieu of executive level career transition assistance services; and  

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(x)the Executive shall be entitled to be reimbursed by the Companies for the Executive’s reasonable attorneys’ fees, costs and expenses incurred in conjunction with any dispute regarding Section 5(d) if Executive prevails in any material respect in such dispute, provided that (A) the applicable statutes of limitations shall not have expired for any claim arising from the dispute that could be raised in a court of law; (B) Executive shall submit to the Companies verification of legal expenses for reimbursement within 60 days from the date the expense was incurred; (C) the Companies shall reimburse Executive for eligible expenses promptly thereafter, but in any event not earlier than the first day of the seventh month following the Termination Date and not later than December 31 of the calendar year following the calendar year in which the expense was incurred; (D) the expenses eligible for reimbursement during any given calendar year shall not affect the expenses eligible for reimbursement in any other calendar year; and (E) the right to reimbursement hereunder may not be liquidated or exchanged for cash or any other benefit. 

(e)Any amounts payable pursuant to Sections 5(c) and 5(d) above shall be considered severance payments and, except for the Executive’s vested benefits under the Companies’ employee benefit plans (other than severance plans), shall be in full and complete satisfaction of the obligations of the Companies to the Executive in connection with the termination of the Executive’s employment.    Any cash payment due under Section 5(c)(iv), (v), and (vii)  or under Section 5(d)(ii), (iii), (iv), (vi), and (vii) is intended to constitute a short-term deferral under Treas. Reg. § 1.409A-1(b)(4) and, accordingly, notwithstanding any longer time period specified in Section 5(c) or (d), such payment shall be made no later than two and one-half (2-1/2) months after the end of the calendar year in which the right to the payment is no longer subject to a substantial risk of forfeiture within the meaning of the regulations under Section 409A of the Code, with payment in all cases being conditioned on satisfaction of the requirements of Section 5(h). 

(f)If the Employment Period is terminated as a result of the Executive’s death, Disability or Retirement (as defined below), then the Executive shall be entitled to (i) the Executive’s Accrued Benefits in accordance with Section 5(a), (ii) any benefits that may be payable to the Executive under any applicable Board-approved disability, life insurance or retirement plan or policy in accordance with the terms of such plan or policy, and (iii) a lump sum payment in an amount equal to:

(A)in the event the Employment Period is terminated as a result of Executive’s death or Disability, an amount equal to the pro-rata target Annual Bonus award for the calendar year during which the Termination Date occurs by reason of the Executive’s death or Disability. Such lump sum payment shall be determined by multiplying the target Annual Bonus award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365); or 

(B)in the event the Employment Period is terminated as a result of Executive’s Retirement, an amount equal to the pro-rata actual Annual Bonus award for the calendar year during which the Termination Date occurs by reason of the Executive’s Retirement. Such lump sum payment shall be determined by multiplying the actual Annual Bonus award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365).

In the event the Employment Period is terminated as a result of Executive’s death, such lump sum payment shall be made within 30 days following the Termination Date; in the event the 

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Employment Period is terminated as a result of Executive’s Disability, such lump sum payment shall be made on the first regular payroll date of the Companies to occur following the date that is six months after the Termination Date; and in the event the Employment Period is terminated as a result of Executive’s Retirement, such lump sum payment shall be made on the date that Annual Bonus payments are made to other participants in the plan.  As used in this Agreement, “Retirement” shall mean the Executive’s separation from service (as defined in the regulations promulgated under Section 409A of the Code) occurring after the earlier of (i) the Executive reaching age sixty-five (65) or (ii) the Executive reaching age fifty-five (55) and having completed at least ten (10) years of service with the Companies.

(g)Notwithstanding anything else contained herein, if the Executive terminates his employment for any reason other than Disability or Retirement and without Good Reason, or the Companies terminate the Executive’s employment for Cause, all of the Executive’s rights to payment from the Companies (including pursuant to any plan or policy of the Companies) shall terminate immediately, except the right to payment for Accrued Benefits in respect of periods prior to such termination. 

(h)Notwithstanding anything to the contrary contained in this Section 5, the Executive shall be required to execute the Companies’ then current standard release agreement as a condition to receiving any of the payments and benefits provided for in Sections 5(c) and (d), excluding the Accrued Benefits in accordance with Section 5(a), and no payments and benefits provided for in Sections 5(c) and (d) other than the Accrued Benefits in accordance with Section 5(a) shall be payable to Executive unless all applicable consideration and rescission periods for the release agreement have expired, Executive has not rescinded the release agreement and Executive is in compliance with each of the terms and conditions of such release agreement and this Agreement as of the date of such payments and benefits.  With respect to any amount payable under Section 5(c)(iii), if the requirements of this paragraph are not met prior to the date on which payment is to be made under Section 5(c)(iii), the Executive shall forfeit the right to payment under Section 5(c)(iii).  It is acknowledged and agreed that the then current standard release agreement shall not diminish or terminate the Executive’s rights under this Agreement or the Indemnification Agreement (identified in Section 16 below).

(i)In the event of a termination of the Executive’s employment entitling the Executive to benefits under Section 5(c) above, subject to the Executive’s affirmative obligations pursuant to Section 6, the Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Companies under this Agreement.

(j)Notwithstanding any provision to the contrary contained in this Agreement, if the cash payments due and the other benefits to which Executive shall become entitled under Section 5, either alone or together with other payments in the nature of compensation to Executive which are contingent on a change in the ownership or effective control of the Companies or in the ownership of a substantial portion of the assets of the Companies or otherwise, would constitute a “parachute payment” (as defined in Section 280G of the Code or any successor provision thereto), such payments or benefits shall be reduced (but not below zero) to the largest aggregate amount as will result in no portion thereof being subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or being non-deductible to the Companies for Federal Income Tax purposes pursuant to Section 280G of the Code (or any successor provision thereto), provided, however, that the foregoing reduction will be made only if and to the extent that such reduction would result in an increase in the aggregate payment and benefits to be provided to Executive, determined on an after-tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, or any successor provision thereto, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income taxes). 

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Executive agrees to take such action as Employer reasonably requests to mitigate or challenge the application of such tax, provided that Employer shall supply such counsel and expert advice, including legal counsel and accounting advice, as may reasonably be required, and shall be responsible for the payment of such experts’ fees.  If requested by Executive or the Companies, the determination of whether any reduction in payments or benefits to be provided under this Section 5 or otherwise is required pursuant to this Section 5(j) 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 Executive’s consent (not to be unreasonably withheld) and the determination of such independent accounting firm will be final and binding on all parties. In making its determination, the independent accountant will allocate a reasonable portion of such payments and benefits to the value of any personal services rendered following the Change in 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. In the event that any payment or benefit intended to be provided under this Section 5 or otherwise is required to be reduced pursuant to this Section 5(j), the Companies shall make such reduction first by reducing amounts payable under Section 5(d)(i) and thereafter by reducing amounts payable under the following Sections of this Agreement in the following order, as necessary to achieve the reduction: 5(d)(iii), 5(d)(iv), 5(d)(vi), 5(d)(vii), and 5(d)(ii).  Amounts payable as reimbursements under Sections 5(d)(v) and 5(d)(x), if any, shall not be subject to reduction.  No modification of, or successor provision to, Section 280G or Section 4999 subsequent to the date of this Agreement shall, however, reduce the benefits to which the Executive would be entitled under this Agreement in the absence of this Section 5(j) to a greater extent than they would have been reduced if Section 280G and Section 4999 had not been modified or superseded subsequent to the date of this Agreement, notwithstanding anything to the contrary provided in the first sentence of this Section 5(j). 

 

Section 6.Further Obligations of the Executive.

(a)(1)During the Executive’s employment by the Companies, whether before or after the Employment Period, and after the termination of Executive’s employment by the Companies, the Executive shall not, directly or indirectly, disclose, disseminate, make available or use any confidential information or proprietary data of the Companies or any of their Subsidiaries, except as reasonably necessary or appropriate for the Executive to perform the Executive’s duties for the Companies, or as authorized in writing by the Board or as required by any court or administrative agency (and then only after prompt notice to the Companies to permit the Companies to seek a protective order).

(2)For purposes of this Agreement, “confidential information or proprietary data” means information and data prepared, compiled, or acquired by or for the Executive during or in connection with the Executive’s employment by the Companies (including, without limitation, information belonging to or provided in confidence by any Customer, Supplier, trading partner or other Person to which the Executive had access by reason of Executive’s employment with the Companies) which is not generally known to the public or which could be harmful  to the Companies or their Subsidiaries if disclosed to Persons outside of the Companies.  Such confidential information or proprietary data may exist in any form, tangible or intangible, or media (including any information technology-related or electronic media) and includes, but is not limited to, the following information of or relating to the Companies or any of their Subsidiaries, Customers or Suppliers:

(i)Business, financial and strategic information, such as sales and earnings information and trends, material, overhead and other costs, profit margins, accounting 

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information, banking and financing information, pricing policies, capital expenditure/investment plans and budgets, forecasts, strategies, plans and prospects.

(ii)Organizational and operational information, such as personnel and salary data, information concerning the utilization or capabilities of personnel, facilities or equipment, logistics management techniques, methodologies and systems, methods of operation data and facilities plans.

(iii)Advertising, marketing and sales information, such as marketing and advertising data, plans, programs, techniques, strategies, results and budgets, pricing and volume strategies, catalog, licensing or other agreements or arrangements, and market research and forecasts and marketing and sales training and development courses, aids, techniques, instruction and materials.

(iv)Product and merchandising information, such as information concerning offered or proposed products or services and the sourcing of the same, product or services specifications, data, drawings, designs, performance characteristics, features, capabilities and plans and development and delivery schedules. 

(v)Information about existing or prospective Customers or Suppliers, such as Customer and Supplier lists and contact information, Customer preference data, purchasing habits, authority levels and business methodologies, sales history, pricing and rebate levels, credit information and contracts.

(vi)Technical information, such as information regarding plant and equipment organization, performance and design, information technology and logistics systems and related designs, integration, capabilities, performance and plans, computer hardware and software, research and development objectives, budgets and results, intellectual property applications, and other design and performance data. 

(b)All records, files, documents and materials, in whatever form and media, relating to the Companies’ or any of their Subsidiaries’ business (including, but not limited to, those containing or reflecting any confidential information or proprietary data) which the Executive prepares, uses, or comes into contact with, including the originals and all copies thereof and extracts and derivatives therefrom, shall be and remain the sole property of the Companies or their Subsidiaries.  Upon termination of the Executive’s employment for any reason, whether during or after the Employment Period, the Executive shall immediately return all such records, files, documents, materials and other property of the Companies and their Subsidiaries in the Executive’s possession, custody or control, in good condition, to the Companies.

(c)The Companies maintain, and Executive acknowledges and agrees, the Companies have and will entrust Executive with proprietary information, strategies, knowledge, customer relationships and know-how which would be detrimental to the Companies’ interest in protecting relationships with Customers and/or Suppliers if Executive were to provide services or otherwise participate in the operation of a competitor of the Companies.  Therefore, during (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the twenty-four (24) month period following the end of Executive’s employment with the Companies, the Executive shall not in any capacity (whether as an owner, employee, consultant or otherwise) at any time perform, manage, supervise, or be responsible or accountable for anyone else who is performing services -- which are the same as, substantially similar or related to the services the Executive is providing, or during the last two years of the Executive’s employment by the Companies has provided, for the Companies or their Subsidiaries -- for, or on behalf of, any 

13

other Person who or which is (1) a wholesaler of office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (2) a provider of services the same as or substantially similar to those provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, or (3) engaged in a line of business other than described in (1) or (2) hereinabove which is the same or substantially similar to the lines of business engaged in by the Companies or their Subsidiaries, or to any line of business which to the Executive’s knowledge is under active consideration or planning by the Companies and their Subsidiaries, during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.  

(d)(1)During (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the twenty-four (24) month period following the end of the Executive’s  employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer for or on behalf of any Person other than the Companies or any of their Subsidiaries with respect to the purchase of (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines, or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (B) services the same as or substantially similar to those provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s  employment with the Companies, whether during or after the Employment Period or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services provided to such Customer from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s  employment with the Companies, whether during or after the Employment Period.  Without limiting the foregoing, (i) during the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) insofar as the Executive may be employed by, or acting for or on behalf of, a Supplier at any time within the twenty-four (24) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer to switch the purchase of the products or services described hereinabove from the Companies or their Subsidiaries to Supplier.  

(2) For purposes of this Agreement, a “Customer” is any Person who or which has ordered or purchased by or from the Companies or any of their Subsidiaries (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing, (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.  For purposes of this Agreement, a “Supplier” is any Person who or which has furnished to the Companies or their Subsidiaries for resale (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, 

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audio/visual and business machines or such other products whether or nor related to the foregoing (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.

(e)During the Executive’s employment by the Companies, whether during or after the Employment Period, and during the twenty-four (24) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, induce or solicit any employee of the Companies or any of their Subsidiaries for the purpose of causing such employee to terminate his or her employment with the Companies or such Subsidiary.

(f)The Executive shall not, directly or indirectly, make or cause to be made (and shall prohibit the officers, directors, employees, agents and representatives of any Person controlled by Executive not to make or cause to be made) any disparaging, derogatory, misleading or false statement, whether orally or in writing, to any Person, including members of the investment community, press, and customers, competitors and advisors to the Companies, about the Companies, their respective parents, Subsidiaries or Affiliates, their respective officers or members of their boards of directors, or the business strategy or plans, policies, practices or operations of the Companies, or of their respective parents, Subsidiaries or Affiliates.

(g)If any court determines that any portion of this Section 6 is invalid or unenforceable, the remainder of this Section 6 shall not thereby be affected and shall be given full effect without regard to the invalid provision.  If any court construes any of the provisions of Section 6(c), 6(d), 6(e) or 6(f) above, or any part thereof, to be unreasonable because of the duration or scope of such provision, such court shall have the power to reduce the duration or scope of such provision and to enforce such provision as so reduced.

(h)During the Executive’s employment with the Companies, whether during or after the Employment Period, and during the twenty-four (24) month period following the end of Executive’s employment with the Companies, the Executive agrees that, prior to accepting employment with a Customer or Supplier of the Companies, the Executive will give notice to the Chief Executive Officer of the Companies.  The Companies reserve the right to make such Customer or Supplier aware of the Executive’s obligations under Section 6 of this Agreement.  

(i)During and following Executive’s Employment Period, the Executive shall furnish a copy of this Section 6 in its entirety to any prospective employer prior to accepting employment with such prospective employer.  

(j)The Executive hereby acknowledges and agrees that damages will not be an adequate remedy for the Executive’s breach of any provision of this Section 6, and further agrees that the Companies shall be entitled to obtain appropriate injunctive and/or other equitable relief for any such breach, without the posting of any bond or other security, in addition to all other legal remedies to which the Companies may be entitled.  

Section 7.Successors.  The Companies may assign their rights under this Agreement to any successor to all or substantially all the assets of the Companies, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Companies.  Any such assignment by the Companies shall remain subject to the Executive’s rights under Section 5 hereof.  The rights of the Executive under this Agreement may not be assigned or encumbered by the Executive, 

15

voluntarily or involuntarily, during the Executive’s lifetime, and any such purported assignment shall be void ab initio.  Notwithstanding the foregoing, all rights of the Executive under this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, estates, executors, administrators, heirs and beneficiaries.  All amounts payable to the Executive hereunder shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs or representatives.

Section 8.Third Parties.  Except for the rights granted to the Companies and their Subsidiaries pursuant hereto (including, without limitation, pursuant to Section 6 hereof) and except as expressly set forth or referred to herein, nothing herein expressed or implied is intended or shall be construed to confer upon or give any person other than the parties hereto and their successors and permitted assigns any rights or remedies under or by reason of this Agreement.

Section 9.Enforcement.  The provisions of this Agreement shall be regarded as divisible and, if any of said provisions or any part or application thereof is declared invalid or unenforceable by a court of competent jurisdiction, the same shall not affect the other provisions hereof, other parts or applications thereof or the whole of this Agreement, but such provision shall be deemed modified to the extent necessary to render such provision enforceable, and the rights and obligations of the parties shall be construed and enforced accordingly, preserving to the fullest permissible extent the intent and agreements of the parties herein set forth.                 

Section 10.Amendment.  Except as otherwise provided in this Section 10, this Agreement may not be amended or modified at any time except by a written instrument approved by the Board, and executed by the Companies and the Executive; provided, however, that any attempted amendment or modification without such approval and execution shall be null and void ab initio and of no effect.  Notwithstanding the foregoing, effective upon 30 days’ notice to Executive and without further consideration from the Companies, this Agreement may be amended by the Companies in their sole discretion to the limited extent they deem necessary and appropriate to conform the terms of this Agreement to the requirements of any applicable laws, rules and regulations enacted or promulgated after the Effective Date of this Agreement.  Any such amendments shall preserve the value of any payments or benefits payable to Executive under this Agreement to the extent practicable without defeating the purpose of the amendment, as determined in the sole discretion of the Companies.

Section 11.Payment; Taxes and Withholding.  The Companies shall be responsible as employer for payment of all cash compensation and severance payments provided herein, and the Company shall cause the Companies to make such payments.  The Executive shall not be entitled to receive any additional compensation from the Companies for any services the Executive provides to the Companies.  The Companies shall be entitled to withhold from any amounts to be paid to the Executive hereunder any federal, state, local, or foreign withholding or other taxes or charges which it is from time to time required to withhold.  The Companies shall be entitled to rely on an opinion of counsel if any question as to the amount or requirement of any such withholding shall arise.  Executive shall be solely responsible for the payment of all taxes due and owing with respect to wages, benefits, and other compensation provided to the Executive hereunder.  This Agreement is intended to satisfy, or be exempt from, the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.  Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable under this Agreement by reason of Executive’s “separation from service” (as defined under Treas. Reg. Section 1.409A-1(h)) during a period in which Executive is a “specified employee” (as defined in Code Section 409A(2)(B)(i)), then: (i) the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately following Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such 

16

period, within 30 days after Executive's death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.  If Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement, including without limitation under Sections 5(c)(vi) and 5(d)(v), and such payments or reimbursements are includible in Executive’s federal taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred.  No right of Executive to reimbursement of expenses under this Agreement, including without limitation under Sections 5(c)(vi) and 5(d)(v), shall be subject to liquidation or exchange for another benefit.  

Section 12.Governing Law.  This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to principles of conflicts of law of Illinois or any other jurisdiction.

Section 13.Notice.  Notices given pursuant to this Agreement shall be in writing and shall be deemed given when received and, if mailed, shall be mailed by United States registered or certified mail, return receipt requested, addressee only, postage prepaid:

If to the Companies:

Essendant Inc.

Essendant Co.

Essendant Management Services LLC

One Parkway North Blvd.

Suite 100

Deerfield, Illinois  60015-2559

Attention:  General Counsel

If to the Executive:  

Robert B. Aiden, Jr.

714 Washington Ave.

Wilmette, IL 60091

 

 

 

 

or to such other address as the party to be notified shall have given to the other in accordance with the notice provisions set forth in this Section 13.

Section 14.No Waiver.  No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at any time.

Section 15.Headings.  The headings contained herein are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement.

Section 16.Indemnification.  The provisions set forth in the Indemnification Agreement appended hereto as Attachment A are hereby incorporated into this Agreement and made a part hereof.  

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Section 17.Execution in Counterparts.  This Agreement, including the Indemnification Agreement, may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 18.Arbitration.  Any dispute, controversy or question arising under, out of, or relating to this Agreement (or the breach thereof), or, the Executive’s employment with the Companies or termination thereof, shall be referred for arbitration in Chicago, Illinois to a neutral arbitrator selected by the Executive and the Companies (or if the parties are unable to agree on selection of such an arbitrator, one selected by the American Arbitration Association pursuant to its rules referred to below) and this shall be the exclusive and sole means for resolving such dispute.  Such arbitration shall be conducted in accordance with the National Rules for Resolution of Employment Disputes of the American Arbitration Association.  Except as provided in Section 5(d)(x) above, the arbitrator shall have the discretion to award reasonable attorneys’ fees, costs and expenses to the prevailing party.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Nothing in this Section 18 shall be construed so as to deny the Companies the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the Executive’s covenants in Section 6 hereof.  Moreover, this Section 18 and Section 12 hereof shall not be applicable to any dispute, controversy or question arising under, out of, or relating to the Indemnification Agreement.

Section 19.Survival.  Notwithstanding the stated Term of this Agreement, the provisions of this Agreement necessary to carry out the intention of the parties as expressed herein, including without limitation those in Sections 5, 6, 7, 16 and 18, shall survive the termination or expiration of this Agreement.

Section 20.Construction.  The parties acknowledge that this Agreement is the result of arm’s-length negotiations between sophisticated parties each afforded representation by legal counsel.  Each and every provision of this Agreement shall be construed as though both parties participated equally in the drafting of same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this Agreement.

Section 21.Free to Contract.  The Executive represents and warrants to the Companies that the Executive is able freely to accept employment by the Companies as described in this Agreement and that there are no existing agreements, arrangements or understandings, written or oral, that would prevent the Executive from entering into this Agreement, would prevent or restrict the Executive in any way from rendering services to the Companies as provided herein during the Employment Period or would be breached by the future performance by the Executive of the Executive’s duties and responsibilities hereunder.  

Section 22.Entire Agreement.  This Agreement, including the Indemnification Agreement and any other written undertakings by the Executive referred to herein, supersedes all other agreements, arrangements or understandings (whether written or oral) between the Companies and the Executive with respect to the subject matter of this Agreement, including without limitation any prior agreement and the Executive’s employment relationship with the Companies and any of their Subsidiaries, and this Agreement contains the sole and entire agreement among the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement does not supersede the terms of the Offer of Employment dated July 22, 2015.

Section 23.Recovery of Payments.  The Companies may recover any cash or equity awarded to Executive under this Agreement or any plan or program of the Companies, or proceeds from the sale of such equity, to the extent required by the Company’s Clawback Policy or any rule of the Securities and Exchange Commission or any listing standard of the Nasdaq Stock Market, including any rule or listing standard requiring recovery of incentive compensation in connection with an accounting restatement due 

18

to the Companies’ material noncompliance with any financial reporting requirement under the securities laws, which recovery shall be subject to the terms of any policy of the Companies implementing such rule or listing standard. 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement in one or more counterparts, each of which shall be deemed one and the same instrument, as of the day and year first written above.

 

EXECUTED ON :ESSENDANT INC.

July 22, 2015By : /s/ Charles K. Crovitz
Name: Charles K. Crovitz
Title: Chairman of the Board of Directors

EXECUTED ON:ESSENDANT CO.

July 22, 2015By: /s/ Eric A. Blanchard
Name: Eric A. Blanchard
Title: Senior Vice President, General Counsel and Secretary

EXECUTED ON:                                       ESSENDANT MANAGEMENT SERVICES LLC

July 22, 2015By: /s/ Eric A. Blanchard
Name: Eric A. Blanchard
Title: Senior Vice President, General Counsel and Secretary

EXECUTED ON:EXECUTIVE 

July 22, 2015/s/ Robert B. Aiken, Jr.

Name:  Robert B. Aiken, Jr.

Title: President and Chief Executive Officer

 

#8893

19EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 
 SEPARATION
AND GENERAL RELEASE AGREEMENT 
 This Separation and General Release Agreement (“Agreement”) is made and entered by and among
Kurt C. Hall (“Hall”) and National CineMedia, Inc. (“NCM Inc.” or the “Company”) and National CineMedia, LLC (“NCM LLC”). 

WHEREAS, Hall and the Company are parties to an Employment Agreement dated as of February 13, 2007 (the “Employment Agreement”)
and a First Amendment to Employment Agreement dated as of December 30, 2008 (the “First Amendment”); and 
 WHEREAS, Hall has
received from the Company certain equity awards including without limitation shares of restricted common stock of the Company, stock options, and/or units of common stock of the Company (collectively “Equity Awards”); and 

WHEREAS, concurrently with the execution of this Agreement, Hall has entered into a Consulting Agreement (the “Consulting
Agreement”) with the Company, to become effective upon Hall’s Resignation Date of employment, pursuant to which Hall will provide certain consulting services to the Company and to the Board of Directors as an independent contractor during
the time period set forth therein; and 
 WHEREAS, the Company and Hall wish to set forth certain promises, agreements, and understandings
in this Agreement. 
 NOW THEREFORE in consideration of the mutual covenants set forth herein, Hall and the Company agree as follows: 

1. Hall will resign his employment with the Company and from all offices, positions, directorship, chairmanship, and/or fiduciary
responsibilities of any nature or description with the Company, NCM LLC and each of their respective subsidiaries, and each of their respective employee benefit plans, effective as of the start date of Hall’s successor (the “Resignation
Date”). Hall’s resignation is pursuant to Section 6.2 of the Employment Agreement 

 2. In full and final satisfaction of any amounts due or which could be due Hall pursuant to the
Employment Agreement or otherwise, it is agreed as follows: 
 (a) The Company will pay Hall any unpaid performance bonus as set forth in the
2015 Performance Plan earned or awarded from prior periods as if Hall had worked for the entire 2015 year, including any stretch bonus, if applicable, payable at such time as performance bonuses are paid to other Company officers and unpaid annual
base salary at the rate currently in effect accrued or to be accrued through the Resignation Date; 
 (b) The Company will pay Hall an amount
equal to two times Hall’s 2015 base salary plus one times his 2015 Target Bonus (100% of 2015 base salary), less any required taxes, deductions or withholding, payable in a lump sum on the on first business day after the expiration of six
months following the Resignation Date; 
 (c) If the Resignation Date occurs during 2016, the Company will continue to pay Hall his base
salary at the 2015 rate in accordance with the Company’s usual pay practices through the Resignation Date and will pay a lump sum equal to the pro-rated sum (the “2016 Pro-Rated Bonus”) of: (i) a performance bonus and
(ii) if applicable, a stretch bonus, each as defined and earned under the 2016 performance plan, provided that the Company establishes a 2016 performance plan for officers. Such amount shall be pro-rated for calendar year 2016 by a fraction,
the numerator of which is the number of days during which Hall was employed by the Company in 2016 and the denominator of which is 365. The 2016 Pro-Rated Bonus will be less any required taxes, deductions or withholding and will be paid to Hall at
the same time the 2016 performance bonus and stretch bonus, if any, is paid to other officers of the Company; 

  
 2 

 (d) All rights with respect to any Equity Awards will be determined under the terms and
conditions of the applicable Equity Awards and agreements and the National CineMedia, Inc. 2007 Equity Incentive Plan (the “Equity Plan”), and unless otherwise stated in the applicable Equity Awards or Consulting Agreement, all Equity
Awards will terminate under the terms of the applicable award agreements and the Equity Plan; except as follows: 
 (i) provided that Hall
performs the services required under the terms of the Consulting Agreement subject to Paragraph 2(d)(iv) below, Hall’s resignation pursuant to Section 6.2 of the Employment Agreement shall not be considered a termination of
“Service” (as that term is defined under the Equity Plan) with respect to the Equity Awards and therefore, the Equity Awards that vest based on Hall’s continued Service shall continue to vest in accordance with their terms and
conditions during the period that Hall performs the services required under the terms of the Consulting Agreement, subject to Paragraph 2(d)(iv) below; 

(ii) the applicable award agreements that provide for an Equity Award that vests based on the satisfaction of performance criteria (a
“Performance-Based Equity Award”) during a performance period shall be amended as follows: 
 (1) 37.5% of the shares subject to
the total Equity Award granted in 2013 shall vest on January 16, 2016, provided that Hall’s Service continues through and on January 16, 2016 (subject to Paragraph 2(d)(iv) below), without regard to whether the applicable performance
criteria is satisfied; 
 (2) 100% of the shares subject to the Performance-Based Equity Award granted in 2014 and 2015 shall vest in 1/3
increments on each of the first three anniversaries of the original applicable date of grant, beginning on the first anniversary of the original applicable grant date, provided that Hall’s Service continues through and on each

  
 3 

 
applicable vesting date (which would result in 67% of the total number of shares subject to the Performance-Based Equity Award granted in 2014 being vested on January 15, 2016 and 33% of the
total number of shares subject to the Performance-Based Equity Award granted in 2015 being vested on January 21, 2016), subject to Paragraph 2(d)(iv) below without regard to whether the applicable performance criteria is satisfied; 

(iii) the applicable award agreements that provide for a non-qualified stock option Equity Award granted in 2006, 2010, 2011 and 2012 (the
“Option Equity Awards”) shall be amended to provide that the term of the Option Equity Awards shall not expire on account of a termination of Hall’s Service; 

(iv) all award agreements that provide for an Equity Award shall be amended to provide that if the Consulting Agreement is terminated without
Cause (as defined under the Consulting Agreement) prior to the expiration of the term of the Consulting Agreement, or if the Consulting Agreement is terminated by Hall for Good Reason (as defined under the Consulting Agreement), all of Hall’s
then unvested Equity Awards shall become immediately vested. 
 (e) The Company will reimburse Hall for as yet unreimbursed expenses he may
have incurred prior to the Resignation Date, pursuant to its expense reimbursement policy and Hall will be paid for any accrued but unused vacation days, within 60 days following the Resignation Date; 

(f) The Company shall pay to Hall a lump sum amount equal to the pre-tax amount that the Company would have paid to the providers of the
current medical, health and life insurance plans maintained by the Company (the Benefit Plans) for twenty-four months of Hall’s coverage thereunder grossed up by 35% to take into the account the additional taxes that

  
 4 

 
would be owed by Hall, which amount shall be paid within thirty (30) days of the Resignation Date. In addition, the Company shall pay Hall the amount that the Company would have paid on his
behalf to the Company 401(k) Plan for the twenty-four month period immediately following the Resignation Date, within thirty (30) days of the Resignation Date, which amount shall be grossed up by 35% to take into account the taxes that would be
owed by Hall. 
 3. Hall understands and agrees that he is receiving compensation, payments and/or benefits and agreements under this
Agreement that are in excess of those to which he is now, or to which in the future he may be entitled, from the Company and/or Company Releasees (as defined in Paragraph 5), and that such compensation, payments, benefits and agreements are being
provided to him in consideration of his acceptance and execution of, and in reliance upon his representations in, this Agreement, which becomes irrevocable within thirty (30) days of the Resignation Date. Hall acknowledges that such
consideration is adequate and satisfactory to him. 
 4. Except for the payments and benefits provided for in this Agreement, or as expressly
provided in the Consulting Agreement, and any 401(k) plan or other vested benefits due to Hall pursuant to the terms and conditions of any employee benefit plan in which Hall was a participant on or prior to the Resignation Date, Hall acknowledges
and agrees that he is entitled to no other compensation, payments, benefits or agreements from the Company and/or the Company Releasees (as defined in Paragraph 5) of any kind or nature whatsoever, including, without limitation, pursuant to the
Employment Agreement, pursuant to the First Amendment, pursuant to the Equity Awards, and/or for salary, tips, severance pay, fringe benefits, vacation pay, bonuses, incentive compensation, sick pay, insurance, disability insurance, medical
benefits, paid or unpaid leave, severance, vesting of equity awards, performance award or payments or 

  
 5 

 
any other allowance, payment, grant, award or benefit of any nature or description, provided however that nothing herein shall affect Hall’s rights to indemnification, advancement, defense
or reimbursement pursuant to any applicable D&O policies or any similar insurance policies, the Company’s amended and restated by-laws as amended or applicable law. Notwithstanding the foregoing, Hall shall continue to be indemnified by his
existing indemnity agreement, dated February 13, 2007 (the “Indemnification Agreement”). 
 5. (a) In further consideration of
the covenants undertaken herein by the Company, including, without limitation, the payments and benefits described in this Agreement, except for the obligations set forth in the Indemnification Agreement, Hall hereby waives, releases and forever
discharges the Company and any of its predecessors, parents, subsidiaries, affiliates, and related companies including but not limited to NCM Inc., NCM LLC, and all of his, its and/or their respective past and present parents, subsidiaries and
affiliates and all of their past and present employees, directors, officers, members, attorneys, representatives, insurers, agents, shareholders, successors, and assigns (individually and collectively “Company Releasees”) from and with
respect to any and all legally waivable claims, grievances, injuries, controversies, agreements, covenants, promises, debts, accounts, actions, causes of action, suits, arbitrations, sums of money, attorneys’ fees, costs, damages, or any right
to any monetary recovery or any other personal relief, whether known or unknown, in law or in equity, by contract, tort or pursuant to federal, state or local statute, regulation, ordinance or common law, which Hall now has, ever had, or may
hereafter have, based upon or arising from any fact or set of facts, whether known or unknown to Hall, from the beginning of time until the Effective Date of this Agreement, as defined in Paragraph 17. Without limiting the generality of the
foregoing, this waiver, release, and discharge includes any claim or right asserted or which could have been 

  
 6 

 
asserted by Hall against the Company and/or based upon or arising under any federal, state or local tort, fair employment practices, equal opportunity, or wage and hour laws, including, but not
limited to, the common law of the State of Colorado, Title VII of the Civil Rights Act of 1964, the Colorado Anti-Discrimination Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, 42 U.S.C. Section 1981, the
Equal Pay Act, the Fair Labor Standards Act, the Colorado Wage Act, and the Employee Retirement Income Security Act, including all amendments thereto. 

Notwithstanding the generality of the foregoing, nothing herein constitutes a release or waiver by Hall of: (i) any claim or right that
may arise after the Effective Date of this Agreement, as defined in Paragraph 17; (ii) any claim or right Hall may have under this Agreement; (iii) any 401(k) benefits or other vested benefits due to Hall pursuant to the terms and
conditions of any Company employee benefit plan in which Hall was a participant on or prior to the Resignation Date; and (iv) any claim or right Hall may have pursuant to indemnification, advancement, defense or reimbursement pursuant to any
applicable D&O policies, any similar insurance policies, or the Indemnification Agreement, the Company’s amended and restated by-laws as amended or applicable law. 

(b) Hall represents and affirms that (i) he has not commenced, maintained, prosecuted, or participated in any complaint, claim or action
against the Company and/or the Company Releasees, in any court or before any administrative, investigative or arbitral body or agency, (ii) that to the best of Hall’s knowledge and belief, there is no outstanding claim or demand for relief
against the Company and/or the Company Releasees by Hall or any person, organization, or entity acting on Hall’s behalf, and (iii) that Hall will not in the future commence, maintain, prosecute or participate in any complaint, claim of any
nature or description or action, 

  
 7 

 
against the Company or any Company Releasee for any claim released herein in any court or before any administrative, investigative or arbitral body or agency. Notwithstanding the foregoing, this
Agreement does not extend to those rights, which as a matter of law cannot be waived. 
 (c) In further consideration of the covenants
undertaken herein by Hall, the Company hereby waives, releases and forever discharges Hall and his heirs, representatives, attorneys, agents, successors, and assigns from and with respect to any and all legally waivable claims, grievances, injuries,
controversies, agreements, covenants, promises, debts, accounts, actions, causes of action, suits, arbitrations, sums of money, attorneys’ fees, costs, damages, or any right to any monetary recovery or any other personal relief, whether known
or unknown, in law or in equity, by contract, tort or pursuant to federal, state or local statute, regulation, ordinance or common law, which the Company now has, ever had, or may hereafter have, based upon or arising from any fact or set of facts,
whether known or unknown to the Company, from the beginning of time until the Effective Date of this Agreement, as defined in Paragraph 17, other than claims that the Company does not know of, or have reason to know of, for misappropriation of
material assets by Hall. 
 6. Neither this Agreement, nor anything contained in it, shall constitute or shall be used as an admission or as
evidence of any liability or wrongdoing whatsoever by or attributable to the Company or the Company Releasees. The Company and the Company Releasees deny any liability whatsoever to Hall and/or that it or they have violated any agreement with Hall,
or any duty or obligation owed him, derived from any source whatever whether statutory, regulatory, contractual or otherwise. Neither this Agreement, nor anything contained in it, shall be introduced in any proceeding in any forum of any nature or
description except to enforce this Agreement or to defend against any claim relating to the subject matter of the releases contained herein or as required by court order, subpoena, or other legal process. 

  
 8 

 7. Hall, his agents, attorneys, heirs, executors, administrators, and assigns agree that this
Agreement, and any and all matters concerning Hall’s separation from the Company, except information which prior to time of disclosure was in the public domain, will be regarded as privileged communications between the parties, and that they
will not reveal, disseminate by publication of any sort, or release in any manner or means this Agreement or any matters, factual or legal, concerning this Agreement or Hall’s separation to any other person or entity, except as required by
legal process (in which case, Hall agrees to promptly provide written notice of said legal process as set forth below prior to the production of the requested information). Notwithstanding the foregoing, Hall may reveal the relevant terms of this
Agreement to his spouse, attorneys, accountants, financial advisors and governmental authorities. 
 8. (a) Hall agrees that he will not
engage in any wrongful conduct that is injurious to the Company and its subsidiaries’ officers and directors’ reputation and interest, including but not limited to, disparaging, inducing or encouraging others to disparage or bring claims
against the Company and its subsidiaries’ officers and directors, or making or causing to be made any statement that is critical of or otherwise maligns the business reputation of the Company and its subsidiaries’ officers and directors,
except if testifying truthfully under oath pursuant to any lawful court order or subpoena responding to any request of the Company’s Board of Directors or their designees, or as otherwise required by law (“Required Disclosure”),
provided that Hall shall provide prior notice of a Required Disclosure as far in advance as reasonably practicable under the circumstances of a Required Disclosure (unless prohibited by law), so that the Company may intervene, appear or otherwise
object, including by requesting confidential hearing or treatment at the Company’s sole expense. 

  
 9 

 (b) The Company (through its and its’ subsidiaries’ officers and directors) will not
engage in any wrongful conduct that is injurious to Hall’s reputation and interest, including but not limited to, disparaging, inducing or encouraging others to disparage or bring claims against Hall, or making or causing to be made any
statement that is critical of or otherwise maligns the business reputation of Hall, except pursuant to a Required Disclosure, provided that the Company shall provide prior notice of a Required Disclosure as far in advance as reasonably practicable
under the circumstances of a Required Disclosure (unless prohibited by law), so that Hall may intervene, appear or otherwise object, including by requesting confidential hearing or treatment at Hall’s sole expense, except to the extent Hall is
otherwise entitled to indemnification under the Indemnification Agreement. 
 9. Under the Consulting Agreement, among other things, Hall
agrees that he will cooperate with the Company, its subsidiaries and affiliates, and any of their officers, directors, shareholders, or employees, and perform such services as set forth in the Consulting Agreement. 

10. The rights and obligations of the Parties hereunder shall be construed and enforced in accordance with, and shall be governed by, the laws
of the State of Colorado, without regard to principles of conflict of laws. 
 11. This Agreement constitutes and contains the entire
agreement and understanding between Hall and the Company concerning the subject matters addressed herein and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject
matter hereof. This is an integrated document. It is understood and agreed that except for Paragraphs 7 (Indemnification), 12 (Non-Disclosure of Confidential 

  
 10 

 
Information and Non-Competition), and 14 (Survival) (but solely as Paragraph 14 relates to Paragraphs 7 and 12), of the Employment Agreement which shall survive according to their respective
terms, the Employment Agreement and First Amendment shall terminate and be null and void and of no further effect, from on and after the effective date of this Agreement. 

12. This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the efficacy of a signed original.
Photographic and facsimiled copies of such signed counterparts may be used in lieu of the originals for any purpose. 
 13. If any provision
of this Agreement or the application thereof is held invalid, such invalidation shall not affect other provisions or applications of this Agreement and to this end, the provisions of this Agreement are declared to be severable. 

14. Each party has cooperated in the drafting and preparation of this Agreement. Hence, in any construction or interpretation of this
Agreement, the same shall not be construed against any party on the basis that the party was the drafter. 
 15. This Agreement cannot be
modified except in writing signed by all parties. 
 16. Hall hereby acknowledges: 

(a) he has been advised to consult with an attorney before signing this Agreement; 

(b) he has obtained independent legal advice from an attorney of his choice with respect to this Agreement, or has knowingly and voluntarily
chosen not to do so; 
 (c) he freely, voluntarily and knowingly entered into this Agreement after due consideration; 

(d) he has had a minimum of twenty-one (21) days to review and consider this Agreement; 

  
 11 

 (e) he has a right to revoke this Agreement by notifying Gene Hardy, National CineMedia, Inc.,
9110 E. Nichols Ave., Suite 200, Centennial, CO 80112 in writing within seven (7) days after Hall signed the Agreement; 
 (f) In
exchange for his waivers, releases and commitments set forth herein, including his waiver and release of all claims arising under the Age Discrimination in Employment Act, the payments, benefits and other considerations that he is receiving pursuant
to this Agreement exceed any payment, benefit or other thing of value to which he would otherwise be entitled, and are just and sufficient consideration for the waivers, releases and commitments set forth herein. 

17. This Agreement shall become effective upon the expiration of the revocation period provided for in Paragraph 16(e) above. 

18. This Agreement and Release shall inure to the benefit of and shall be binding upon the Company and/or the Company Releasees and all their
respective successors and assigns, and any entity with which they may merge or consolidate or to which they may sell all or substantially all their or its assets, and Hall agrees that he may not sell or otherwise assign rights, obligations or
benefits under this Agreement (except to his estate upon Hall’s death) and any attempt to do so shall be void; Hall further covenants and agrees that he has not assigned or otherwise transferred any claim released in this Agreement, in whole or
party, to any person or entity. 
 19. By signing this Agreement, Hall affirms that upon the termination of the Consulting Agreement he shall
return to the Company all keys, credit cards, if any, ID cards, and beepers, and that, as soon as practicable after the date of this Agreement, he shall return or destroy any and all original and duplicate copies of all his work product and of
files, calendars, books, records, notes, notebooks, manuals, computer disks, diskettes, and any other magnetic and other media materials he has in his possession or under his control which contains confidential or proprietary information of the
Company. 

  
 12 

 20. The parties agree that the amounts and benefit payable hereunder are either exempt from or
compliant with Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other guidance promulgated thereunder (“Section 409A”), and the parties agree not to take any position inconsistent with
such agreement for any reporting purposes, whether internal or external, and to cause their affiliates, successors and assigns not to take any such inconsistent position. Notwithstanding anything in this Agreement to the contrary, any payments or
benefits due hereunder that constitute non-exempt “deferred compensation” (as defined in Section 409A) that are otherwise payable by reason of Hall’s “separation from service” (as defined in Section 409A) will not
be paid or provided to Hall until Hall has undergone a separation from service, which the parties agree shall occur on the Resignation Date. If, and only if, Hall is a “specified employee” (as defined in Section 409A) and a payment or
benefit provided for in this Agreement would be subject to additional tax under Section 409A if such payment or benefit is paid within six (6) months after Hall’s Resignation Date, then such payment or benefit shall not be paid (or
commence) during the six-month period immediately following Hall’s Resignation Date except as provided in the immediately following sentence. In such an event, any payment or benefits that otherwise would have been made or provided during such
six-month period and that would have incurred such additional tax under Section 409A shall instead be paid to Hall in a lump-sum cash payment on the first business day following the expiration of six months after the Resignation Date, or, if
earlier, within 10 days following the date of Hall’s death. Hall’s right to receive any installment payments under this 

  
 13 

 
Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment as
permitted under Section 409A. If Hall is entitled to any reimbursement of expenses or in-kind benefits that are includable in Hall’s federal gross taxable income, the amount of such expenses reimbursable or in-kind benefits provided in any
one calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits to be provided in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after
the year in which the expense was incurred. Hall’s right to reimbursement of expenses or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit. 

Notwithstanding any provision of this Agreement to the contrary, the Company, and its respective officers, directors, employees and
representatives, neither represent nor warrant the tax treatment under any federal, state, local, or foreign laws or regulations thereunder (individually and collectively referred to as the “Tax Laws”) of any payment or benefits
contemplated by this Agreement including, but not limited to, when and to what extent such payments or benefits may be subject to tax, penalties and interest under the Tax Laws. Moreover, Hall will indemnify and hold the Company harmless against the
payment of taxes, interest, penalties, fines, or other liabilities or costs that may be assessed by the Internal Revenue Service, or any other taxing authority and/or any other governmental agency (whether federal, state, or local), in connection
with payments under this Agreement, except for any employer share of FICA, Medicare, FUTA, or state unemployment or disability contributions which a government agency may determine is due or any penalties or fines that may be assessed by the
Internal Revenue Service against the Company for failing to timely withhold and deposit income or employment taxes with respect to amounts payable to Hall under this Agreement. 

  
 14 

 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this Agreement
to be executed as of the dates set for below. 
  

							
	Dated: October 16, 2015	 		 		 	/s/ Kurt C. Hall
		 		 		 	  
 Kurt C. Hall

 

		 		 		 	 NCM Inc.
  

	Dated: October 18, 2015	 		 		 	 /s/ Scott Schneider

		 		 		 	By: Scott Schneider
		 		 		 	  
 NCM LLC

				
	Dated: October 18, 2015	 		 		 	 /s/ Scott Schneider

		 		 		 	By: Scott Schneider

  
 15

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