Exhibit 10.13
UNISOURCE WORLDWIDE, INC.
PARTNERS' LOAN PROGRAM
Partners Loan Company ("PLC") is a Delaware corporation wholly-owned by
Unisource Worldwide, Inc. ("Unisource"). It is offering to make loans (in
multiples of $1,000) under the Partners' Loan Program (the "Program") to full-
time employees of Unisource or an Unisource subsidiary who are "Partners" of
Unisource (as designated by Unisource), upon the terms described in this
document.
Minimum principal amount: $5,000 (Subsequent additional loans may be in
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lesser multiples of $1,000).
Maximum principal amount: One-half of the salary and any bonus paid to the
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Partner by Unisource or a Unisource company during the most recent full calendar
year preceding the loan. Partners not employed with Unisource during the entire
preceding calendar year may borrow one-half of the greater of their salary and
any bonus for that year or their current annual salary. Salary and any bonus
shall be as shown on the Partner's Form W-2. A subsequent decline in
compensation will not affect the maximum amount of an existing loan but would
affect the maximum amount of a future loan.
Collateral security: Unisource Worldwide, Inc. stock owned of record and
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beneficially solely by the Partner or jointly with the Partner's spouse
(including any shares being purchased using the loan proceeds) with value of at
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least twice the principal amount of the loan, shall be pledged by the Partner
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(alone or with spouse) as collateral security for the loan. A Partner may not
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pledge stock purchased but not yet distributed or withdrawn under Unisource's
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stock purchase plans. Thus, stock purchased under the PSPP or RSP (or any other
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company-sponsored plan) may not be used until certificates for the stock have
been received, and a desire to obtain a loan shall not itself entitle the
Partner to accelerate receipt of such certificates. However, a Partner may use
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option stock which he or she will purchase using the proceeds of the loan
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itself. This requirement of "2 to 1 coverage" is the same as the present
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Federal Reserve 50% margin requirement.
Loans of Unisource Partners Outstanding as of December 31, 1996 under Alco
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Standard Corporation's Partners' Loan Program (and the Alco/IKON stock
collateralizing such loans) will be transferred to the Unisource Partners' Loan
Program effective January 1, 1997, and the terms of the Unisource Partners' Loan
Program will apply to such transferred loans. The Unisource dividend payable on
the Alco/IKON stock held as collateral for Unisource Partners' outstanding loans
will be received directly by PLC and will be held by PLC as collateral security
for such transferred loans in accordance with the terms of the Unisource
Partners' Loan Program. At the Partner's election, any Alco/IKON stock pledged
as security for such transferred loans may be replaced by the borrower's pledge
of Unisource stock.
Interest: 6% per year on the unpaid principal amount, payable quarterly as
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stated in the promissory note to be signed; i.e., interest payments are due no
later than the last business day of March, June, September, and December. A
special charge of $100 will be assessed against the account of each Partner
whose check is not received by the due date. A second late payment will result
in the loan being called and the Partner being permanently ineligible for any
future loans. If you find you cannot meet the due date, a reasonable extension
may be granted provided you request an extension on or before the due date.
Payment of principal upon demand: Periodic amortization is not required.
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Although PLC presently does not intend to act as long as the required
collateral-to-loan ratio is maintained and the Partner remains employed in good
standing by Unisource or a Unisource company, a demand for payment may be made
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at any time. If employment ceases for any reason other than death or
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disability, a demand for immediate payment should ordinarily be expected. If
employment ceases because of death or disability, PLC may agree (though it shall
not be obliged to do so) to receive regular principal payments over a period of
several years, as long as the collateral-to-loan ratio is maintained.
Maintenance of minimum collateral-to-loan ratio of greater than 1.25 to 1:
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If the price of Unisource common stock (or the price of Alco/IKON stock held by
PLC as security for any loan) declines, the Partner shall be responsible for
maintaining a ratio of greater than 1.25 to 1 between the value of the
collateral and the unpaid principal amount of the loan. While PLC will endeavor
to notify the Partner of a decline in the ratio toward 1.25 to 1, it shall not
be obliged to do so. If the ratio declines to 1.25 to 1 or
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below, PLC shall have the right without notice (which it presently intends to
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exercise) to sell or take ownership of all or a portion of the collateral,
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applying the proceeds of sale or the value of such collateral toward payment of
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the principal amount of the loan. To avoid such a result (which may involve,
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among other things, adverse tax effects for the Partner), the Partner may, prior
to PLC's taking such action, make a payment of principal and/or pledge
additional collateral to provide the required ratio of greater than 1.25 to 1.
Voluntary payments: The Partner may pay any part of the principal amount
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of the loan (in minimum amounts of $1,000 and in multiples of $100 above $1,000)
at any time without any premium or penalty.
Release of excess collateral: Prior to full payment of the loan, the
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Partner will ordinarily be entitled to have PLC release a portion of the
collateral to the extent that it exceeds the minimum required for a loan to
purchase margin stock under (a) the 2 to 1 ratio, or (b) if the Federal Reserve
imposes a higher ratio for the purchase of margin stock, the requirement which
is in effect at the time of the desired withdrawal, provided there has not
occurred any other change in applicable laws or regulations. Thus, absent such
a change and any increase in Federal Reserve margin requirements, a Partner
would ordinarily be able to have collateral released when the market value of
the Unisource stock has increased and/or loan prepayments have been made.
Purpose of loan; applicability of so-called "margin requirements": In
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requesting a loan, the Partner must complete a so-called "purpose statement"
(Federal Reserve Form G-3) in which the Partner indicates whether the loan is
for the purpose of purchasing or carrying a margin security (which includes
Unisource stock, Alco/IKON stock, other securities listed on national stock
exchanges, selected over-the-counter securities, convertible debt securities and
warrants). PLC has determined that it will conservatively treat all loans as
though they were "purpose" loans in regard to compliance with the minimum margin
requirements of the Federal Reserve and related matters (although PLC will not
permit withdrawals of collateral in as many circumstances as the Federal Reserve
might permit). Accordingly, PLC has provided guidance as to how the Form G-3
should be completed, and if the Partner plans to use the loan to purchase, carry
or avoid selling Unisource or Alco/IKON stock, he may properly indicate that it
is a "purpose" loan. If the Partner is unsure whether he may be considered to
be
making a "purpose" loan, he may properly resolve that uncertainty by treating
the loan as a "purpose" loan.
Regulation X: There is also a specific Federal Reserve requirement
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(Regulation X) which is applicable to the Partner borrowing from PLC. Since PLC
intends to treat all the loans as subject to Regulation G, the borrowing Partner
should have no concern about compliance with Regulation X.
Taxation: Under current law, any excess over 6% rate of interest charged
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by PLC and interest calculated using a specified federal rate will be considered
compensation and included on your W-2.
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If the applicable federal rate is 6% or below, no imputed interest would be
reportable on your W-2. When the federal rate is more than 6%, the amount
included on your W-2 would be calculated as follows:
Principal Loan Amount $20,000
Federal Interest Rate (example) 8%
Interest at Federal Rate $1,600
($20,000 at 8% for 12 months)
Less interest paid at 6% 1,200
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Reportable Income $ 400
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Termination of loans: variations in terms of loans: The management of PLC
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may decide to discontinue the making of loans at any time before they are
actually made, to change the interest rate as to any loans, to agree to various
terms for payment, to demand payment of any or all loans, and otherwise to vary
the terms of the loans, without regard to whether Partners are treated equally
or consistently. It is presently expected that loans will continue to be
available for an indefinite period, but there can be no assurance in this
regard.
There has been no determination as to the maximum frequency with which
loans may be requested by Partners who experience changes in circumstances, but
Partners are urged to be cognizant of the administrative difficulties which may
result from frequent changes. To the extent Partners receive more than one
loan, efforts will be made to consolidate the loans and the related paperwork
and recordkeeping.
Management: Administration: Loan applications and questions or
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communications in regard to the administration of the loan program should be
addressed to Unisource Shareholder Services, Box 834, Valley Forge, PA 19482,
(610) 296-4470.
The Note and Collateral Security Agreement to be filed with the application
will become effective if and when the loan is made, and if it is not made will
be promptly returned to the Partner along with any stock powers and stock
certificates.
Revised 10/22/96
UNISOURCE WORLDWIDE, INC.
PARTNERS LOAN COMPANY
In applying for a loan, a partner must complete the following
documents (enclosed herewith):
1. Application
2. Promissory Note
3. Collateral Security
Agreement (two copies)
4. Stock power for the collateral
5. Form G-3 ("purpose
statement")
All of the above, along with the stock certificates for the
collateral, should be mailed to:
KARIN PAVLIK
UNISOURCE WORLDWIDE, INC.
P. O. BOX 834
VALLEY FORGE, PA 19482
UNISOURCE WORLDWIDE, INC.
PARTNERS' LOAN PROGRAM
APPLICATION
I hereby request a loan from Unisource Worldwide, Inc. Partners Loan
Company ("PLC"). Enclosed are a Note, two copies of a Collateral Security
Agreement, stock power, "purpose statement" on Form G-3, and stock
certificate(s) (if they are not presently available, the source from which the
certificate(s) will be delivered is: ).
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The principal amount of the loan which I desire is $ (in multiples of
$1,000 and at least $5,000 if this is the initial loan). The aggregate of such
principal amount and the principal amount(s) of any presently outstanding
loan(s) (excluding LTIP loans) is $ and is not more than 50% of my
salary and any bonus (as shown on Form W-2) paid to me by Unisource Worldwide,
Inc. ("Unisource") or a Unisource company in calendar 19 (most recent full
calendar year) or, if I was not employed within Unisource during all of 19
then one-half of the greater of 19 W-2 salary and bonus from Unisource or a
Unisource company (most recent full calendar year) or my current annual salary.
The collateral security for the loan is to be Unisource or Alco/IKON stock
with value at the time the loan is made of at least twice the principal amount
of the loan. I understand that the amount of the loan may have to be adjusted
downward or the collateral may have to be liquidated or adjusted upward if the
stock price declines prior to the loan being made. Accordingly, I authorize PLC
to insert in the Note the date and principal amount of the loan (not to exceed
the desired amount indicated above). PLC is also authorized to insert the date
of the loan in the Collateral Security Agreement and in the stock power.
I also understand that a demand for payment may be made at any time.
Date:
Signature of Partner
Name of Employer (Unisource, Unisource
division or subsidiary).
Printed or typed name of Partner
THE FOLLOWING VERIFICATION MUST
BE COMPLETED BEFORE SENDING TO
PLC:
Home Address
The undersigned is aware of the salary
and any bonus paid to the Partner and hereby
verifies the accuracy of the foregoing state- City, State, Zip Code
ment of the Partner as to the aggregate principal
amount of all loans (excluding LTIP loans) not
exceeding one-half of the Partner's annual
Unisource compensation:
Signature of group or company president,
financial officer, paymaster or other knowl-
edgable person.
Printed or typed name of such person.
(revised 10/28/96)
UNISOURCE WORLDWIDE, INC.
PARTNERS' LOAN PROGRAM
PROMISSORY NOTE
$
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(Partners Loan Company will insert)
Principal amount of loan-
not to exceed desired amount
indicated in application)
FOR VALUE RECEIVED AND INTENDING TO BE LEGALLY BOUND HEREBY, the
undersigned hereby promise(s) to pay to the order of Partners Loan Company
("PLC"), Box 834, Valley Forge, Pennsylvania 19482, or at such other place as
the holder hereof may from time to time designate in writing, (a) the principal
amount indicated above on demand, upon not less than five days' written notice,
except as stated below, and (b) interest at 6% per year on the unpaid principal
amount payable March 31, June 30, September 30 and December 31 for each period
during which the loan is outstanding (based on a 360-day year). The undersigned
may pay any part of the principal amount of the loan (in minimum amounts of
$1,000 and in multiples of $100) without premium or penalty at any time.
If at any time the ratio of the market value of collateral securing this
obligation to the unpaid principal amount is 1.25 (or less) to 1, there shall be
considered to exist, without any notice being required, both a demand for
payment and a default in the payment of the principal amount. For this purpose,
the market value shall equal the number of shares held as collateral multiplied
by the most recent per share closing price reported on the Composite Tape (or
its successor).
If this Note is signed below by more than one person, this promise to pay
shall be the joint and several obligation of each of the undersigned persons.
This Note is executed by the undersigned as of the date of the
loan:
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(Partners Loan Company will insert)
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Signature of Partner
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Partner's Name - Printed or typed
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Signature of Spouse, if collateral is owned jointly
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Spouse's Name - Printed or typed
UNISOURCE WORLDWIDE, INC.
PARTNERS LOAN PROGRAM
COLLATERAL SECURITY AGREEMENT
FOR VALUE RECEIVED AND INTENDING TO BE LEGALLY BOUND HEREBY, the
undersigned Partner (which term as used herein includes the Partner's Spouse if
the collateral is owned jointly), the "Debtor" herein, grant(s) to Partners Loan
Company, a Delaware corporation which is the "Secured Party" herein, a security
interest in the collateral herein specified ("the collateral") to secure payment
of the principal of and any interest on any promissory note heretofore or
hereafter made by Partner in favor of PLC, together with all expenses of
collection including costs and reasonable attorneys' fees.
Collateral. The collateral shall be shares of stock of Unisource
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Worldwide, Inc. as evidenced by stock certificates which Partner shall have
pledged to PLC at any time prior to any default upon which PLC acts pursuant to
"Application of Collateral" below. The collateral shall include any shares
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resulting from any stock dividend, split or combination with respect to
previously pledged shares.
General. This agreement is intended to be a security agreement under the
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Uniform Commercial Code of the State of Delaware ("Code") and, except as may be
otherwise expressly provided herein, PLC shall have all the rights of a secured
party and Partner shall have all the rights of a debtor under the Code and any
other applicable law.
Application of Collateral. Upon any default under any promissory note
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(which shall include, without limitation, any instance in which there is a ratio
of 1.25 (or less) to 1 between the market value of the collateral and the unpaid
principal amount of the note), PLC may at its sole option either transfer to
itself ownership of all or a portion of the collateral and apply the value
toward payment of the principal amount of the note or sell to another party all
or a portion of the collateral and apply the proceeds thereof toward payment of
the principal amount of the note, and in either such event PLC shall also be
entitled to transfer or sell collateral to the extent required to pay any unpaid
interest to the date of principal payment. PLC shall not be obliged to make any
particular selection of collateral as between solely and jointly owned stock. A
sale may be made to any party including any corporation directly or indirectly
owned by the same shareholders as directly or indirectly own PLC ("related
corporation") or to any benefit plan administered for employees of a related
corporation. Upon any transfer of ownership to PLC or sale to a related
corporation or its employee benefit plan, the collateral shall be valued at the
most recent per share closing price reported on the Composite Tape (or its
successor) prior to the application of the collateral. Partner expressly
acknowledges that any application of collateral in accordance with one or more
of the foregoing provisions shall be considered commercially reasonable.
(revised 10/28/96)
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this agreement, which may be in two or more counterparts each of which shall be
considered an original, as of the date indicated below.
Secured
Party:
Debtor: PARTNERS LOAN COMPANY
BY:
(Partner) (Partners Loan Company will insert)
DATE:
(Spouse, if collateral is owned jointly) (Partners Loan Company will insert)
(revised 10/28/96)
UNISOURCE WORLDWIDE, INC.
PARTNERS' LOAN PROGRAM
Instructions for stock power:
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This should be completed whether or not the partner is now delivering the
stock as collateral security.
Please follow these instructions:
(a) leave the space blank after "unto"
(b) the number of shares which are to be collateral
(c) the certificate number(s) if the stock is presently available - more than
one certificate may be covered by this single stock power (if the stock
is not yet available, PLC will later insert the certificate number)
(d) the date: please leave blank as PLC will insert the date of the loan
(e) the signature(s)
(f) guarantee of the signature(s) by a broker, bank or trust company
(Partners Loan Company has specifically reviewed whether such guarantee
is desirable, and has reluctantly concluded that it is)
STOCK POWER:
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FOR VALUE RECEIVED, the undersigned
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hereby sell(s), assign(s) and transfer(s) unto (a)
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(b) Shares of the Common/Preferred
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Capital Stock of the Unisource Worldwide, Inc.
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standing in the undersigned's name(s) on the books of said
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corporation represented by Certificate No. (c)
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herewith and do hereby irrevocably constitute and appoint Partners Loan
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Company attorney to transfer the said stock on the books of the within
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named Company with full power of substitution in the premises.
(d) Dated: , 19 (e)
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(Partners Loan (Signature of Partner)
Company will insert)
(e)
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(f) (Signature of Partners spouse, if collateral is owned jointly)
(revised 10/28/96)