EXHIBIT 10.114
AGREEMENT
This AGREEMENT (the "Agreement"), made and entered into as of the
18th day of November, 1996, by and between THOMAS W. STURGESS ("Sturgess")
and UNITED STATIONERS SUPPLY CO., an Illinois corporation (sometimes
hereinafter referred to as "Supply") and UNITED STATIONERS INC., a Delaware
corporation (sometimes hereinafter referred to as "Parent" and, together with
Supply, sometimes hereinafter collectively referred to as the "Company").
WITNESSETH
WHEREAS, the Company and Sturgess are parties to that certain
Employment Agreement dated as of January 1, 1996, (the "Employment Agreement");
WHEREAS, Company and Sturgess desire to terminate Sturgess's
employment with Company under the Employment Agreement upon the terms and
conditions set forth below;
NOW, THEREFORE, in consideration of the mutual premises herein contained
and other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. RESIGNATION; TERMINATION OF EMPLOYMENT; SERVICES AS DIRECTOR.
Sturgess acknowledges that as of November 18, 1996, he has resigned as (i) an
officer (including the offices of President, Chairman of the Board and Chief
Executive Officer of Parent) and employee of Company, (ii) an officer, director
and employee of all subsidiaries of Parent (including Supply). whether or not
wholly owned by Company and whether owned directly or indirectly by Company
(collectively, the "Subsidiaries") and (iii) a member of any committees on which
he may have served for any of the Subsidiaries. The Employment Agreement and
any other understandings or agreements between the Company or any Subsidiary are
hereby terminated and of no further force and effect, except as otherwise
expressly set forth herein. Sturgess shall continue to serve as a member of
the Board of Directors of Parent until his successor is elected and duly
qualified or until removed in accordance with the bylaws of the Company. Unless
mutually agreed or unless requested by an appropriate officer of the Company,
Sturgess agrees not to take or attempt to take any further action on behalf of
or purportedly on behalf of the Company or any Subsidiary, except in his
capacity as a member of the Board of Directors of the Company.
2. BENEFITS. In consideration of his covenants herein contained,
Sturgess will receive the following payments, all of which will be subject to
applicable federal and state withholding taxes:
a. SALARY. The Company agrees to pay to Sturgess his current base
salary at the annual rate of $495,000, in accordance with the Company's normal
payment schedule for senior executives, through December 31, 1996.
b. BONUS. The Company agrees to pay to Sturgess the bonus
Sturgess would have received in respect of fiscal year 1996 under Section 2(c)
of the Employment Agreement if Sturgess had continued as an employee of the
Company under the Employment Agreement through December 31, 1996.
c. ACCRUED VACATION. The Company agrees to pay to Sturgess in
accordance with the Company's customary policies for his earned unused vacation
time through the date hereof. Such payment will be made by the Company to
Sturgess within 10 days of the date hereof.
d. OTHER BENEFITS. Sturgess will be permitted to participate in the
Company's medical and dental plans in which Sturgess currently participates to
the extent such plans remain in effect (and in any plan which replaces any such
plan which is discontinued) at regular rates until December 31, 1999, provided
Sturgess is eligible to participate under the terms of such plans, and in the
event Sturgess is not eligible to participate in any such plan, the Company
shall use its best efforts to provide substantially similar coverages for
Sturgess. All other employee benefits for Sturgess, including, without
limitation, any of the benefit plans, programs and policies set forth on
Exhibit A to the Employment Agreement not expressly continued pursuant to this
Agreement, shall cease on the date hereof.
3. OPTIONS.
a. CANCELED OPTION. Sturgess agrees that the option for 120,000
shares of Company Common Stock referenced in Section 9 of the Employment
Agreement shall terminate effective as of the date hereof and such option is
hereby canceled and shall be of no further force and effect.
b. CONTINUED OPTION. The option for 240,000 shares of Company
Common Stock referenced in Section 8 of the Employment Agreement shall remain in
effect, in accordance with the terms of that certain Management Equity Plan
Stock Option Agreement, dated January 1, 1996 (the "Stock Agreement"), as such
Stock Agreement is amended as hereinafter set forth, which amendments have been
approved by the Compensation Committee of the Company's Board of Directors and
are hereby agreed to by Sturgess:
A. Clauses (i), (ii) and (iii) of Section 3 of the Stock Agreement
are hereby deleted and the following new clauses (i) and (ii) are
substituted therefor:
"(i) Options for 160,000 shares after the occurrence of an Event;
and
(ii) Options for 80,000 shares on or after the earliest date, if
any, that both (1) the Company shall, on or prior to
September 30, 1997,
have acquired, been acquired by, entered into a joint venture
with or otherwise engaged in a business combination with, an
entity designated in writing as an "entity" for the purposes
of the application of this Section 3(ii) by the Compensation
Committee of the Board of Directors of the Company; provided that
a definitive agreement with respect to such transaction shall
have been entered into by the Company and such entity not later
than March 31, 1997; and (2) an Event has occurred.
B. Section 5 of the Stock Agreement is hereby deleted.
4. COOPERATION AND CONSULTING SERVICES. From and after the date
hereof through December 31, 1999, Sturgess shall cooperate and consult
reasonably on a non-full-time basis with the Company and its employees,
agents and representatives to assist the businesses and operations of the
Company, including. without limitation, cooperation with the transition of
management. Such cooperation shall also include, without limitation,
Sturgess' provision of any information (in connection with legal proceedings
or otherwise) relating to his activities while an employee of the Company.
Compensation for such cooperation and consulting services provided hereunder
shall be determined on a project by project basis and on the basis of good
faith negotiations between the Company and Sturgess.
5. CONFIDENTIAL INFORMATION.
a. GENERAL. Sturgess acknowledges the Company's exclusive ownership
of all information useful in the Company's business (including its dealings with
suppliers, customers and other third parties, whether or not a true "trade
secret"), which at the time or times concerned is not generally known to persons
engaged in businesses similar to those conducted by the Company and which has
been or is from time to time disclosed to, discovered by, or otherwise known by
Sturgess as a consequence of his prior employment by or future consulting
services to the Company or service on the Board of Directors of the Company
(including information conceived, discovered or developed by Sturgess during his
employment with or engagement as consultant by the Company or with Associated
Stationers, Inc. or service on the Board of Directors of
(i) The identity, purchase and payment patterns of, and special
relations with, the Company's customers;
(ii) The identity, net prices and credit terms of, and special
relations with, the Company's suppliers;
(iii) The Company's inventory selection and management techniques;
(iv) The Company's product development and marketing plans; and
(v) The Company's finances, except to the extent publicly disclosed.
b. PROPRIETARY MATERIALS. The term "Proprietary Materials" shall mean
all business records, documents, drawings, writings, software, programs and
other tangible things which were or are created or received by or for the
Company in furtherance of its business, including, by or but not limited to,
those which contain Confidential Information. For example, Proprietary
Materials include, but are not limited to the following especially sensitive
types of materials: applications software, the data bases of Confidential
Information maintained in connection with such software, and printouts generated
from such data bases; market studies and strategic plans; customer, supplier and
employee lists; contracts and correspondence with customers and suppliers;
documents evidencing transactions with customers and suppliers; sales calls
reports, appointment books, calendars, expense statements and the like,
reflecting conversations with any company, customer or supplier, architectural
plans; and purchasing, sales and policy manuals. Proprietary Materials also
include, but are not limited to, any such things which are created by Sturgess
or with Sturgess' assistance and all notes, memoranda and the like prepared
using the Proprietary Materials and/or Confidential Information.
c. INVENTIONS. While some of the information contained in Proprietary
Materials may have been known to Sturgess prior to employment with the Company,
or may now or in the future be in the public domain, Sturgess acknowledges that
the compilation of that information contained in the Proprietary Materials has
or will cost the Company a great effort and expense, and affords persons to whom
Proprietary Materials are disclosed, including Sturgess, a competitive advantage
over persons who do not know the information or have the compilation of the
Proprietary Materials. Sturgess further acknowledges that Confidential
Information and Proprietary Materials include commercially valuable trade
secrets and automatically become the Company's exclusive property when they are
conceived, created or received. Sturgess shall report to the Company fully and
promptly, orally (or, at the Company's request, in writing) all discoveries,
inventions and improvements, whether or not patentable, and all other ideas,
developments, processes, techniques, designs and other information which may be
of benefit to the Company, which Sturgess conceived, made or developed during
his employment with the Company or conceives, makes or develops in connection
with the provisions of any consulting services on behalf of the Company (whether
or not during working hours or with the use or assistance of Company facilities,
materials or personnel, and which either (i) relate to or arise out of any part
of the Company's business in which Sturgess participates, or (ii) incorporate or
make use of Confidential Information or Proprietary materials) (all items
referred to in this Section 5(c) being sometimes collectively referred to herein
as the "Intellectual Property") All Intellectual Property shall be deemed
Confidential Information of the Company, and any writing or other tangible
things describing, referred to, or containing Intellectual Property shall be
deemed the Company's Proprietary Materials. At the request of the Company,
during or after the term of employment or consultancy, Sturgess (or after
Sturgess' death, Sturgess' personal representative) shall, at the expense of the
Company, make, execute and deliver all papers, assignments, conveyances,
installments or other documents, and perform or cause to be performed such other
lawful acts, and give such testimony, as the Company deems necessary or
desirable to protect the Company's ownership rights and Intellectual Property.
d. CONFIDENTIAL DUTIES. Sturgess shall, except as may be required by
law, during the term of service on the Company's Board of Directors or
engagement as a consultant by the Company, and thereafter for the longest time
permitted by applicable law:
(i) Comply with all of the Company's instructions (whether oral or
written) for preserving the confidentiality of Confidential
Information and Proprietary Materials.
(ii) Use Confidential Information and Proprietary Materials only at
places designated by the Company, in furtherance of the Company's
business, and pursuant to the Company's directions.
(iii) Exercise appropriate care to advise other employees of the
Company (and, as appropriate, subcontractors) of the sensitive nature
of Confidential Information and Proprietary Materials prior to their
disclosure, and to disclose the same only on a need-to-know basis.
(iv) Not copy all or any part of Proprietary Materials, except as the
Company directs.
(v) Not sell, give, loan or otherwise transfer any copy of all or any
part of Proprietary Materials to any person who is not an employee of
the Company, except as the Company directs.
(vi) Not publish, lecture on or otherwise disclose to any person who
is not an employee of the Company, except as the Company directs, all
or any part of Confidential Information or Proprietary Materials.
(vii) Not use all or any part of any Confidential Information or
Proprietary Materials for the benefit of any third party without
the Company's written consent.
Upon the termination of Sturgess' consultation and board services for
whatever reason, Sturgess (or in the event of death, Sturgess' personal
representative) shall promptly surrender to the Company the original and all
copies of Proprietary Materials (including all notes, memoranda and the like
concerning or derived therefrom), whether prepared by Sturgess or others, which
are then in Sturgess' possession or control. Records or payments made by the
Company to or for the benefit of Sturgess, Sturgess' copy of this Agreement and
other such things lawfully possessed by Sturgess which relate solely to taxes
payable by Sturgess, benefits due to Sturgess or the terms of Sturgess' prior
employment with the Company, shall not be deemed Proprietary Materials for
purposes of this Section 5.
6. NON-COMPETITION.
a. During Sturgess' service as a consultant hereunder, and during
the two year period following the expiration of such period of service as a
consultant), Sturgess shall not, in
any way, directly or indirectly, (i) manage, operate, control (or participate
in any of the foregoing), accept employment or a consulting position with or
otherwise advise or assist or be connected with or directly or indirectly own
or have any other interest in or right with respect to (other than through
ownership of not more than 1 % of the outstanding shares of a corporation's
stock which is listed on a national securities exchange) any enterprise
(other than for the Company or for the benefit of the Company) which is a
wholesaler of office products having annual sales in excess of $1 ,000,000 or
(ii) take any non-privileged action, disparage, dissipate or negatively
affect the goodwill, business, prospects, or reputation of the Company or its
relationships with its employees, customers, suppliers. competitors, vendors,
stockholders, lenders, prospective investors, prospective purchasers of any
businesses or assets of the Company or others.
b. Notwithstanding Section 6(a), following the date hereof, Sturgess may
be engaged in the business of selling office products at retail and Sturgess may
be engaged by any company whose principal business is the manufacture of office
products.
c. Sturgess recognizes that the foregoing limitations are reasonable and
properly required for the adequate protection of the business of the Company. If
any such limitations are deemed to be unreasonable by a court having
jurisdiction of the matter and parties, Sturgess hereby agrees and submits to
the reduction of any such limitations or such territory or time as to such court
shall appear reasonable.
d. If Sturgess shall be in violation of any of the foregoing restrictive
covenants and if the Company seeks relief from such breach in any court or other
tribunal, such covenants shall be extended for a period of time equal to the
pendency of such proceedings, including all appeals.
e. Sturgess agrees that the remedy at law for any breach of the
provisions of Section 5 or this Section 6 shall be inadequate and that the
Company shall be entitled to injunctive relief in addition to any other remedies
it may have.
7. REPRESENTATIONS AND WARRANTIES OF STURGESS. Sturgess has the full
right, power and authority to enter into this Agreement. This Agreement has
been duly and validly executed and delivered by Sturgess and constitutes a valid
and binding obligation on his part, enforceable against him in accordance with
its terms. The execution, delivery and performance of this Agreement will not,
with or without the giving of notice or the passage of time or both, (a) violate
any judgment, injunction or order of any court, arbitrator or governmental
agency applicable to Sturgess, or (b) conflict with, result in the breach of any
provision of or constitute a default under any agreement or instrument to which
Sturgess is a party or by which he may be bound.
8. REPRESENTATIONS AND WARRANTIES OF COMPANY. Parent and Supply hereby
represent and warrant that they are corporations duly organized and validly
existing in good standing under the laws of the State of Delaware and Illinois,
respectively, and have all requisite corporate power and authority to enter into
and perform all of its obligations under this Agreement. The execution,
delivery and performance of this Agreement by the Company and all
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on its part. This Agreement has been duly executed
and delivered by the Company and constitutes a valid and binding obligation
on its part, enforceable against it in accordance with its terms. The
execution, delivery and performance of this Agreement will not, with or
without the giving of notice or the passage of time or both, (a) violate any
judgment, injunction or order of any court, arbitrator or governmental agency
applicable to the Company, or (b) conflict with, result in the breach of any
provision of or constitute a default under any agreement or instrument to
which the Company is a party or by which it may be bound.
9. RELEASE. Effective immediately, Sturgess releases and discharges
the Company, each subsidiary and affiliate of the Company and each present
and former director, officer and employee of the Company or any subsidiary or
affiliate of the Company (collectively "Company Affiliates") from all manner
of claims, actions, causes of action or suits, in law or in equity, which
Sturgess has or hereafter can, shall or may have against the Company or
Company Affiliates or any of them by reason of any matter, cause or thing
whatsoever, arising out of an event or matter occurring prior to the date
hereof, including any action arising from or during his employment with the
Company, resulting from his termination of such employment or related to his
status as a shareholder, officer, employee or participant in any Company
employee benefit plan, except for any claims or action Sturgess may have that
results from a breach of the Company's obligations under this Agreement or a
failure by the Company to perform its obligations under this Agreement. From
and after the date hereof, Sturgess agrees and covenants not to sue or
initiate arbitration, or threaten suit or arbitration against, or make any
claim against, the Company or any Company Affiliate for or alleging any of
the claims, actions, causes of action or suits as discussed above. Sturgess
acknowledges that this release includes but is not limited to all claims
arising under federal, state or local laws prohibiting employment
discrimination and all claims growing out of any legal restrictions on the
Company's right to terminate its employees. This release specifically
encompasses all claims of employment discrimination based on race, color,
religion, sex, handicap and national origin, as provided under Title VII of
the Civil Rights Act of 1964, as amended, the 1991 Civil Rights Act, all
claims of discrimination based on age, as provided under the Age
Discrimination in Employment Act of 1967, as amended, all claims of
discrimination based on handicap, as provided in the Americans with
Disabilities Act, as amended. Notwithstanding anything hereto to the
contrary, Sturgess shall not be deemed to have released the Company's
obligation to Sturgess, if any, under indemnification provisions of the
Company's charter or bylaws, whether or not covered by insurance, or any
rights Sturgess may have under any directors' and officers' liability policy.
Nothing herein shall limit Sturgess's ability to seek contribution from
directors for liabilities for claims brought by third parties who are
unrelated to Sturgess. The Company and the Company Affiliates hereby release
Sturgess from all claims, actions, causes of action or suits, in law or in
equity, which the Company or the Company Affiliates have or hereafter can,
shall or may have against Sturgess by reason of any matter, cause of action
or thing whatsoever, arising out of an event or matter occurring prior to the
date hereof, including any alleged breach by Sturgess of the Employment
Agreement or based on his actions as an employee, officer or director of the
Company or a Company Affiliate, except for matters relating to a breach of
fiduciary duty by Sturgess of which the Company is not now aware.
10. MISCELLANEOUS.
a. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the Company, its successors and assigns, and
Sturgess, his heirs, personal representatives, successors and assigns.
b. SURVIVAL. All representations and warranties contained
in this Agreement shall survive the execution and delivery hereof.
c. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to injunctive relief to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction,
this being in addition to any other remedy to which they are entitled under
this Agreement or at law or in equity. In addition, a party that is
required to enforce the terms and provisions of this Agreement and is
successful therein shall be reimbursed by the other party for all costs and
expenses, including reasonable legal fees, that it may incur with respect
to such enforcement.
d. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the Company and Sturgess relating to the subject matter
hereof and there are no terms other than those contained herein. This
Agreement may not be modified or amended except in a writing signed by the
parties hereto.
e. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without
giving effect to principles of conflicts of law.
f. COUNTERPARTS. This Agreement may be executed in counterparts,
which together shall constitute one and the same agreement.
g ENFORCEABILITY. If any provision of this Agreement shall
be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions, because it conflicts with any
provisions of any constitution, statute, rule or public policy, or for any
reason, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions of
this Agreement invalid, inoperative or unenforceable to any extent
whatever. If any provision of this Agreement shall be held or deemed to
impose restrictions which are too broad, too lengthy or otherwise
unreasonable, the parties hereto agree to be bound by a court's decision as
to what restrictions would be reasonable and acknowledge that such court
has the authority and discretion to make such a determination.
h. ACKNOWLEDGMENT BY STURGESS. Sturgess hereby acknowledges
that he has carefully read and fully understands all the provisions of this
Agreement. He further acknowledges that this Agreement sets forth the
entire agreement between himself and the Company with respect to the
subject matter of this Agreement. Finally, Sturgess hereby acknowledges
that, in considering whether to sign this Agreement, he has not relied upon
any representation or statement, written or oral, not set forth in this
Agreement and that he has not been threatened or coerced into signing this
Agreement by any official of the Company and that he has read, understood,
and fully and voluntarily accepts the terms of this Agreement.
i. CAPTIONS. The captions herein are for purposes of
identification only and shall not be considered in construing this
Agreement.
j. NOTICES. All notices hereunder shall be given in writing
and sent to the party for whom such is intended by hand delivery or United
States certified or registered mail, return receipt requested, postage
prepaid, or overnight courier service, addressed to the party for whom
intended at the following respective addresses;
If to the Company: United Stationers Supply Co.
2200 East Golf Road
Des Plaines, IL 60016
Attn: Executive Vice President
and Chief Financial Officer
If to Sturgess: Thomas W. Sturgess
c/o Wingate Partners
750 North St. Paul/Suite #1200
Dallas, TX 75201
or to such other persons and/or at such other addresses as may be
designated by written notice served in accordance with the provisions
hereof. Such notices shall be deemed to have been served, if hand
delivered, on the day delivered, and if mailed, on the third day following
the date deposited in the mail. Urgent notices shall be given by Telex or
cable to the same addresses and confirmed by mail as provided above. All
notices sent by Telex or cable shall be deemed to have been served upon
receipt of the Telex or cable, but only if in fact confirmed by mail
promptly after dispatch of the Telex or cable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
UNITED STATIONERS INC.
UNITED STATIONERS SUPPLY CO.
By: /s/ F. B. Hegi, Jr.
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Name: F. B. HEGI, JR.
Title: CHAIRMAN, EXECUTIVE COMMITTEE
/s/ Thomas W. Sturgess
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THOMAS W. STURGESS