EXHIBIT 9
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") made and entered into as of
the 13th day of February, 1995, by and between UNITED STATIONERS INC., a
Delaware corporation ("USI"), UNITED STATIONERS SUPPLY CO., an Illinois
corporation ("Supply Co.") (USI and Supply Co. are collectively referred to
herein as the "Company"), and ERGIN USKUP ("Employee") shall be effective upon
the occurrence of a Change in Control (as defined herein).
WITNESSETH:
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WHEREAS, the Employee is currently employed with the Company pursuant
to such terms and conditions as described in letters dated January 7, 1994 and
February 10, 1994 and an interoffice correspondence dated October 19, 1994 all
from Robert H. Cornell, Vice President-Human Resources, to the Employee
(collectively referred to as the "Letter Agreement"); and
WHEREAS, USI is contemplating entering into a transaction which would
result in a Change in Control; and
WHEREAS, it is in the best interests of the Company and the
shareholders of USI that the Employee continue to concentrate on the conduct of
the business of the Company, perform all duties in the best interests of the
shareholders of USI and be encouraged to maintain the employment relationship
with the Company after the Change in Control; and
WHEREAS, USI and the Employee desire to amend the Letter Agreement to
provide appropriate incentives for the Employee to continue to perform the
Employee's duties and responsibilities with respect to the Company, thereby
promoting the stability of the business of the Company both before and after the
occurrence of a Change in Control.
NOW THEREFORE, for valuable consideration which the parties
acknowledge, the Employee and the Company agree that in the event of the
occurrence of a Change in Control on or before December 31, 1995, as defined in
this Agreement, the Letter Agreement shall cease to have further effect, and
this Agreement shall become effective as of the date on which the Change in
Control occurs, as follows:
1. Duties and Extent of Services. The Employee is hereby employed by
the Company to perform the duties of Vice President, MIS-Chief Information
Officer in the Chicago metropolitan area. Subject to the authority of the Board
of Directors of the Company during the term of employment ("Term of Employment")
(as defined in Section 2), the Employee shall have the title, status and duties
of Vice President, MIS-Chief Information Officer. However, the Employee's title
and/or duties, and/or the officer to whom the Employee reports may be changed so
long as after such
change the Employee will continue to have a status comparable to that which he
enjoyed prior to such change. The Employee shall devote all of his normal
business time, skill and attention to the affairs and activities of the Company
and shall have no other employment. Within 30 days after a date on which the
Change in Control occurs, the Company shall notify the Employee whether the
Company will negotiate to continue the Employee's relationship with the Company
following the expiration of the Term of Employment. Furthermore, if the
Employee does not enter into a new employment or consulting agreement with the
Company pursuant to such terms as the Employee and the Company may mutually
agree prior to the last 90 days of the Term of Employment, then the Employee's
duties during such 90 day period shall be limited to that of an executive in a
transition status with reasonable personal time off to conduct a job search,
interview with potential employers and organize personal affairs.
2. One Year Term or Severance on Change in Control. Term. Unless
the Company notifies the Employee in writing within the first 30 days of the
Change in Control that the Employee's employment with the Company is terminated,
the Employee shall have a Term of Employment which shall continue from and after
the date on which the Change in Control occurred until the first anniversary of
the date on which the Change in Control occurred, unless sooner terminated by
either party in accordance with the provisions of this Agreement. If the
Employee's employment with the Company is terminated pursuant to the preceding
sentence, the Employee shall be entitled to receive and the Company shall pay to
the Employee the Severance Payment as provided in Section 3(f).
3. Compensation.
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(a) Salary. During the Term of Employment, the Company shall pay to
the Employee, as compensation for all services rendered by the Employee under
this Agreement, a base salary ("Salary") at an annual gross rate of not less
than $175,000 per annum subject to review from time to time in the discretion of
the Board of Directors.
(b) Additional Compensation. During the Term of Employment, the
Employee shall be entitled to participate in pension plans, tax-qualified profit
sharing plans and deferred compensation plans not less favorable (in terms of
dollar value benefit to the Employee) than such plans to which the Employee was
entitled immediately preceding the date on which the Change in Control occurred
and shall be provided a similar bonus opportunity as provided the Employee in
the aggregate under the management incentive, executive bonus, stock option and
other similar incentive compensation plans of the Company immediately preceding
the date on which the Change in Control occurred. Exhibit A sets forth a list
of all such plans in which the
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Employee is a participant. The compensation received by the Employee for any
fiscal year, pursuant to such plans and reportable by the Employee as income
during such fiscal year under the Internal Revenue Code of 1986, as amended,
decreased by any moving expense reimbursements, vacation pay or similar
extraordinary item and increased by the amount of any contribution to the
Company's 401(k) plan made by the Employee shall be known as "Additional
Compensation".
(c) Fringe Benefits. During the Term of Employment, the Employee
shall also be entitled, at the Company's expense, to additional or fringe
benefits, such as paid vacations, use of a Company car, medical and dental
benefits, life insurance, and other emoluments and benefits available to
officers or senior executives of the Company not less favorable (in terms of
dollar value benefit to the Employee) than those to which the Employee was
entitled immediately prior to the date on which the Change in Control occurred.
Exhibit B sets forth a list of fringe benefits to which the Employee was
entitled immediately prior to the date on which the Change in Control occurred.
(d) Benefits Trust. To secure the payment to the Employee of the
"Stay Bonus", as defined below in Sections 3(e), the Company will establish a
trust to be known as the USI the Employee Benefits Trust (the "Trust") and
provide for the Employee to be a beneficiary thereof. The Company will cause to
be furnished to the trustee thereunder (the "Trustee") an irrevocable letter of
credit, and the trust agreement establishing the Trust will require the Trustee
to draw on such letter of credit to pay the Stay Bonus or the Severance to the
Employee at such time as the Employee becomes entitled to such amounts pursuant
to Sections 3(e) or (f) or pursuant to Section 10(b)(iii). To receive
distributions from the Trust, the Employee shall furnish the Trustee with any
notices described in the Trust Agreement.
(e) Stay Bonus. During the first 120 days of the Term of Employment,
the Company and the Employee shall in good faith attempt to negotiate a mutually
satisfactory incentive compensation opportunity commensurate with the Employee's
responsibilities and position. If:
(i) the Term of Employment has expired and the Company and the
Employee have not agreed, for any reason, upon a mutually satisfactory
written incentive compensation opportunity ("Incentive Opportunity") for
the Employee, which Incentive Opportunity is signed by the Employee and
contains an acknowledgement by the Employee that the signed Incentive
Opportunity is an Incentive Opportunity within the meaning of this Section
3(e)(i) of this Agreement;
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(ii) the Employee is terminated by the Company other than for cause
pursuant to Section 10(c); or
(iii) the Employee terminates voluntarily with good reason pursuant to
Section 10(a);
then, upon the execution and delivery of the Release and Agreement to the
Trustee attached hereto as Exhibit C, the Employee shall be entitled to receive
a distribution from the Trust, in an aggregate amount equal to ONE HUNDRED
SEVENTY-FIVE THOUSAND DOLLARS ($175,000) payable in an initial installment of
EIGHTY THOUSAND TWO HUNDRED EIGHTEEN DOLLARS AND SIXTY-FOUR CENTS ($80,218.64)
and 11 equal monthly installments each in an amount equal to EIGHT THOUSAND SIX
HUNDRED SIXTEEN DOLLARS AND FORTY-NINE CENTS ($8,616.49), with the first
installment commencing within one month after the date on which the Employee
becomes entitled thereto.
(f) Severance Payment. If the Employee's employment with the Company is
terminated pursuant to Section 2(a), then, upon the execution and delivery of
the Release and Agreement to the Trustee attached hereto as Exhibit C, the
Employee shall be entitled to receive a distribution from the Trust, in an
aggregate amount equal to THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000)
("Severance Payment") payable in an initial installment of ONE HUNDRED FIFTY-ONE
THOUSAND EIGHT HUNDRED TWENTY AND SEVENTY-SEVEN CENTS ($151,820.77) and 23 equal
monthly installments each in an amount equal to EIGHT THOUSAND SIX HUNDRED
SIXTEEN AND FORTY-NINE CENTS ($8,616.49), with the first installment commencing
within one month after the date on which the Employee becomes entitled thereto.
4. Reimbursement of Expenses. In addition to compensation, the Employee
shall be entitled to reimbursement for ordinary and necessary out-of-pocket
business expenses which are incurred and paid by him on behalf of the Company,
including, without limitation, that portion of country club and social club
fees, dues and expenses incurred by the Employee for business purposes.
Reimbursement shall be made following submission by the Employee to the Company
of such vouchers as may be satisfactory to the Company.
5. Vacation. During the Term of Employment, the Employee shall be
entitled to paid vacation pursuant to the following schedule:
(a) Two weeks of paid vacation per year during the Employee's 2nd through
5th years of employment; and
(b) Three weeks of paid vacation per year during the Employee's 6th
through 11th years of employment; and
(c) Four weeks of paid vacation per year after the Employee's 11th year of
employment.
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In addition, the Employee shall be entitled to two personal holidays in each
calendar year during the Term of Employment.
6. Proprietary Rights.
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(a) the Employee 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
the Employee as a consequence of his employment by the Company (including
information conceived, discovered or developed by the Employee during his
employment with the Company) ("Confidential Information"). Confidential
Information includes, but is not limited to the following especially sensitive
types of information:
(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) 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
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created by the Employee or with the Employee's assistance and all notes,
memoranda and the like prepared using the Proprietary Materials and/or
Confidential Information.
(c) While some of the information contained in Proprietary Materials may
have been known to the Employee prior to employment with the Company, or may now
or in the future be in the public domain, the Employee 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 the Employee, a competitive
advantage over persons who do not know the information or have the compilation
of the Proprietary Materials. The Employee 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. The Employee 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 the Employee conceives, makes or
develops during the Term of Employment (whether or not during working hours or
with 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
the Employee participates, or (ii) incorporate or make use of Confidential
Information or Proprietary Materials) (all items referred to in this Section
6(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, referring
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, the Employee (or after the Employee's death, the Employee's
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.
7. Confidentiality Duties. The Employee shall, except as may be required
by law, during the Term of Employment and thereafter for the longest time
permitted by applicable law:
(a) Comply with all of the Company's instructions (whether oral or written)
for preserving the confidentiality of Confidential Information and Proprietary
Materials.
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(b) 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.
(c) 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.
(d) Not copy all or any part of Proprietary Materials, except as the
Company directs.
(e) 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.
(f) 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.
(g) 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 the Term of Employment for whatever reason, the Employee
(or in the event of death, the Employee's 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 the Employee or others, which are then in the
Employee's possession or control. Records of payments made by the Company to or
for the benefit of the Employee, the Employee's copy of this Agreement and other
such things, lawfully possessed by the Employee which relate solely to taxes
payable by the Employee, employee benefits due to the Employee or the terms of
the Employee's employment with the Company, shall not be deemed Proprietary
Materials for purposes of this Section 7.
8. Non-Competition
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(a) During the two year period following the Term of Employment, the
Employee shall not, in any way, directly or indirectly, 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
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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.
(b) Notwithstanding Section 8(a), following the Term of Employment, the
Employee may be engaged in the business of selling office products at retail and
the Employee may be engaged by any company whose principal business is the
manufacture of office products.
(c) the Employee 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, the Employee hereby agrees and
submits to the reduction of any such limitations to such territory or time as to
such court shall appear reasonable.
(d) If the Employee 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) the Employee agrees that the remedy at law for any breach of the
provisions of Sections 6 or 7 or this Section 8 shall be inadequate and that the
Company shall be entitled to injunctive relief in addition to any other remedies
it may have.
9. Disability.
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(a) If the Employee becomes disabled (determined in accordance with Section
9(c) during the Term of Employment by reason of illness, accident or any other
cause, the Company shall have the right to appoint a physician or physicians to
(i) examine the Employee at reasonable intervals from time to time in connection
with such disability and (ii) deliver to the Company: (A) a certificate
("Initial Certificate") certifying whether or not such disability occurred and,
if so, the date on which it commenced ("Onset Date"); and (B) if the condition
of disability continues uninterrupted for the one hundred eighty day period
beginning on the Onset Date and ending on the one hundred eighty first day
thereafter, a certificate ("Final Certificate") certifying that fact. The
Employee shall cooperate fully with such physician(s). If the Employee disputes
the determination of such physician(s) as set forth in either the Initial
Certificate or the Final Certificate or both, the Employee shall have the right
to appoint another physician to examine him and determine the same matters. If
the physicians appointed by the Company and by the Employee do not agree, such
physicians shall jointly appoint a third-party physician to examine the Employee
and
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determine the same matters. The determination of the third-party physician
shall be binding on the Company and the Employee.
(b) If the Company receives an Initial Certificate and a Final Certificate
with respect to the Employee complying with the provisions of Section 9(a), the
Company may terminate the Term of Employment effective upon written notice to
the Employee of such termination. The Employee shall be promptly provided with
a copy of all communications, including, without limitation, all certificates,
between the Company and any physicians(s) appointed by the Company pursuant to
this Section 9.
(c) The standard to be applied by any physician appointed in accordance
with this Section 9 shall be as follows: the Employee will be deemed disabled
if on the applicable Onset Date the Employee is unable to render for the Company
services of substantially the kind and nature, and to substantially the extent,
being rendered by him pursuant to this Agreement during the fiscal quarter next
preceding the Onset Date.
(d) During the period between the delivery of the Initial Certificate and
the Final Certificate, the Term of Employment shall continue and the Employee
shall continue to receive the same benefits he would have been entitled to
receive had there been no Initial Certificate.
10. Termination and Benefits. The Term of Employment is subject to
------------------------
termination as follows:
(a) The Term of Employment may be terminated by the Employee for good
reason immediately upon written notice to the Company. The term "good reason"
in this Section 10(a) shall mean:
(i) the reduction of the Employee's Salary;
(ii) the exclusion of the Employee from, or the diminution in the
Employee's participation in, any profit sharing, pension, supplemental
benefit or other deferred compensation plans, to which the Employee was
entitled to immediately preceding the date on which the Change in Control
occurred, or any diminution in the aggregate bonus opportunity as provided
the Employee under the management incentive, executive bonus, stock option
and similar incentive compensation plans of the Company immediately
preceding the date on which the Change in Control occurred; or
(iii) any diminution in the fringe benefits listed in Exhibit B as
enjoyed by the Employee immediately prior to the date on which the Change
in Control occurred; or
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(iv) any material diminution in expense reimbursement benefits enjoyed
by the Employee, as enjoyed by the Employee immediately prior to the date
on which the Change in Control occurred; or
(v) any material change in the Employee's duties or title which has
the effect of materially reducing the Employee's status within the Company;
provided, however, that any change in the office or officer to whom the
Employee reports, or in the Employee's duties or title which does not
diminish the Employee's status within the Company, shall not be deemed
"good reason" for the Employee's termination; or
(vi) any relocation of the Company's headquarters outside of the
Chicago metropolitan area; or
(vii) the breach by the Company of any of its covenants or obligations
under this Agreement.
(b) If the Term of Employment is terminated by the Employee for good reason
pursuant to Section 10(a) or by the Company other than for cause, the Employee
shall be entitled to and the Company shall pay to him, (i) the unpaid portions
of Salary, Additional Compensation, and accrued vacation attributable to all
periods prior to and including the date of termination; and (ii) reimbursements
owing in respect or reimbursable expenses incurred by the Employee prior to the
date of termination; and (iii) the unpaid portion of Salary for the unexpired
portion of the Term of Employment and (iv) the Stay Bonus pursuant to Section
3(e).
(c) The Term of Employment may be terminated by the Company for cause
immediately upon written notice from the Company of any breach of fiduciary duty
owed by the Employee to the Company, including, without limitation, engaging in
directly competitive acts while employed by the Company.
(d) If the Term of Employment is terminated by the Company for cause
pursuant to Section 10(c) or by the Employee without good reason and not
pursuant to a Notice of Termination, the Employee shall be entitled to and the
Company shall pay to him, only (i) the unpaid portions of Salary, Additional
Compensation, and accrued vacation attributable to all periods prior to and
including the date of termination; and (ii) reimbursements owing in respect of
reimbursable expenses incurred by the Employee prior to the date of termination.
(e) The Term of Employment may be terminated by the Company for cause by
delivery to the Employee of a "Notice of Termination for Cause". A Notice of
Termination for Cause shall be a written notice from the Board of Directors of
the Company or the executive or compensation committee of the Board of Directors
of
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the Company ("Board") to the Employee, after reasonable notice (not less than 10
days) to the Employee and an opportunity for the Employee, together with the
Employee's counsel, to be heard before the Board, (i) finding that in the good
faith opinion of the Board the Employee was guilty of a breach of a fiduciary
duty owed by the Employee to the Company, including, without limitation,
engaging in directly competitive acts while employed by the Company, and (ii)
specifying the particulars thereof in detail. If within 30 days after the
giving of the Notice of Termination for Cause by the Company, the Employee
delivers to the Company a written "Notice Denying Cause" stating that a dispute
exists concerning the termination for cause, then the matter shall be submitted
to arbitration and a Final Determination shall be considered to be made on the
date of the earliest to occur of a mutual written agreement of the Employee and
the Company settling the dispute, a binding and final arbitration award or by a
final judgment, order or decree of a court of competent jurisdiction entered
upon such arbitration award (the time for appeal therefrom having expired and no
appeal having been perfected).
(f) If the Employee believes good reason exists for the termination of the
Term of Employment, the Employee may deliver to the Company a written "Notice of
Good Reason" stating specifically the particulars establishing good reason. The
Employee shall be conclusively deemed to have a good reason to terminate the
Term of Employment unless the Company shall deliver to the Employee a written
"Notice Denying Good Reason" (within 30 days after the Employee delivered the
Notice of Good Reason). A Notice Denying Good Reason shall be a written notice
from the Board after reasonable notice (not less than 10 days) to the Employee
and an opportunity for the Employee, together with the Employee's counsel, to be
heard before the Board, (i) finding that in the good faith opinion of the Board,
good reason for the termination of the Employee's Term of Employment does not
exist, and (ii) addressing the particulars on which the Employee relied to
establish good reason in detail. If the Company does not deliver a "Notice
Denying Good Reason" within 30 days after the Employee delivered the Notice of
Good Reason, the Term of Employment shall be deemed to terminate for good reason
on the earlier of (i) such 30th day or (ii) the date on which the Employee
voluntarily terminates the Term of Employment. If the Employee notifies the
Company in writing that the Employee disputes the Company's Notice Denying Good
Reason, then the matter shall be submitted to arbitration. In the event the
matter is submitted to arbitration, then a Final Determination shall be
considered to be made on the date of the earliest of a mutual written agreement
of the Employee and the Company settling the dispute, a binding and final
arbitration award or a final judgment, order or decree of a court of competent
jurisdiction entered upon such arbitration award (the time for appeal therefrom
having expired and no appeal having been perfected).
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After delivery of a Notice of Good Reason, the Employee may continue employment
until the earlier to occur of (i) the 30th day following delivery of such notice
without delivery of a Notice Denying Good Reason, (ii) a Final Determination
that the Employee has good reason to terminate the Term of Employment, or (iii)
the expiration of the Term of Employment. If the Employee terminates the Term
of Employment before such time, the Term of Employment shall be considered
terminated without good reason if a Final Determination so provides.
(g) If the Term of Employment is terminated for cause pursuant to Section
10(e) and the Employee delivers its Notice Denying Cause, or, if the Employee,
after having delivered a Notice of Good Reason pursuant to Section 10(f) to the
Company, voluntarily terminates the Term of Employment either (i) before 30 days
have elapsed following his delivery of such notice and the Company does not
acknowledge in writing that the Employee has terminated for good reason or (ii)
after a Notice Denying Good Reason has been delivered to the Employee, then the
Employee shall be entitled to receive a distribution from the Trust in an amount
equal to 3 months Salary upon meeting the requirements of the last sentence of
this Section 10(g). If a Final Determination is not made within 90 days after
such termination of the Term of Employment, then, on such 90th day, the
Employee, upon compliance with the conditions set forth below, shall be entitled
to receive a distribution from the Trust in an amount equal to (i) the portion
of the Stay Bonus which would have been paid from the termination of the Term of
Employment through such 90th day as if the provisions of Section 3(e) were in
effect, reduced by the amount, if any, by which 3 months Salary exceeds the
amount of Salary the Employee would have received after the date of the
termination of the Term of Employment, if the Term of Employment has not been
terminated prior to its expiration. In addition to receiving a distribution for
a portion of the Stay Bonus on such 90th day, the Employee shall also receive
periodic distributions for all remaining installments of the Stay Bonus when due
(as if the provisions of Section 3(e) were in effect), unless and until a Final
Determination has been made that the termination of the Term of Employment was
without good reason or for cause, as the case may be applicable, in which event,
the Company shall be entitled to recover from the Employee all or any portion of
payments to the Employee pursuant to this Section 10(g) without interest. To
qualify for the distributions described in the Section 10(g) from the Trust, the
Employee agrees to submit to the Trustee, on or before 90 days after such
termination of the Term of Employment, copies of the following, as applicable:
the Notice Denying Cause; the Notice of Good Reason and an affidavit that such
Employee voluntarily terminated the Term of Employment before the 30th day after
the giving of such Notice of Good Reason; or the Notice Denying Good Reason."
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(h) The Term of Employment may be terminated by the Company immediately
upon written notice from the Company following the Company's receipt of a Final
Certificate pursuant to Section 9.
(i) If the Term of Employment is terminated pursuant to Section 10(h), the
Employee shall be entitled to and the Company shall pay to him, (i) the unpaid
portions of Salary, Additional Compensation, and accrued vacation attributable
to all periods prior to and including the date of termination; (ii)
reimbursements owing in respect of reimbursable expenses incurred by the
Employee prior to the date of termination; and (iii) the Stay Bonus pursuant to
Section 3(e). Nothing in this Agreement shall effect the Employee's right to
receive death benefit payments under any policy of insurance carried by the
Company and payable to the Employee or his designated beneficiary.
(j) If the Employee dies during the Term of Employment, the Term of
Employment shall immediately, without notice, terminate and the Employee shall
be entitled to and the Company shall pay to his estate or any other recipient
designated by him prior to his death, only (i) the unpaid portions of Salary,
Additional Compensation, and accrued vacation attributable to all periods prior
to and including the date of his death; (ii) reimbursements owing respect of
reimbursable expenses incurred by the Employee prior to the date of his death;
and (iii) the Stay Bonus pursuant to Section 3(e). In addition, if the
Employee's spouse is then living, for the remainder of such spouse's life the
Company shall continue to provide medical and dental health coverage for the
Employee's spouse and dependent children in accordance with the Company's
Medical and Dental Plans made generally available to employees of the Company,
without cost to the Employee's spouse. Nothing in this Agreement shall affect
the Employee's right to receive death benefit payments under any policy of
insurance carried by the Company and payable to the Employee or his designated
beneficiary.
11. No Partnership Nor Joint Venture. Nothing in this Agreement shall be
construed as giving the Employee any rights as a partner in, joint venturer with
respect to, or owner of, the business of the Company; provided, however, that
this Section 11 shall not be construed as a limitation in any respect on the
Employee's rights under any other written agreement.
12. Miscellaneous.
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(a) All notices hereunder shall be given in writing and sent to the party
for whom such is intended by hand delivery or United States mail, postage
prepaid, addressed to the party for whom intended at the following respective
addresses:
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If to the Company:
United Stationers Inc.
2200 E. Golf Road
Des Plaines, IL 60016
Attn: President
with a copy to:
Altheimer & Gray
10 S. Wacker Drive
Suite 4000
Chicago, IL 60606
Attn: Phillip Gordon, Esq.
If to the Employee:
1910 S. Ridge Road
Lake Forest, IL 60045
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.
(b) This Agreement and all rights and benefits hereunder are personal to
the Employee and neither this Agreement nor any right or interest of the
Employee herein, or arising hereunder, shall be voluntarily or involuntarily
sold, transferred or assigned by the Employee. Any attempt by the Employee to
assign, execute, attach, transfer, pledge, hypothecate or otherwise dispose of
any such benefits or amounts or any rights or interests contrary to the
foregoing provisions, or the levy or attachment or similar process thereupon,
shall be null and void and of no effect and shall relieve the Company of all
liabilities hereunder. This Agreement and all of the Company's right and
obligations hereunder may be assigned and/or delegated, as the case may be,
without the Employee's consent, to any entity which merges with the Company or
which acquires substantially all of the assets of the Company and which agrees
to be bound hereby. The enforceability of the Employee's rights under the
Agreement shall not be affected by any assignment or merger.
(c) This Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, personal representatives, successors and
permitted assigns.
14
(d) This Agreement constitutes the entire agreement between the parties
hereto and contains all the agreements between such parties with respect to the
subject matter hereof. This Agreement supersedes all other agreements, oral or
in writing, between the parties hereto with respect to the subject matter
hereof.
(e) No change or modification of this Agreement shall be valid unless the
same shall be in writing and signed by the Employee and an authorized
representative of the Company other than the Employee. No waiver of any
provisions of this Agreement shall be valid unless in writing and signed by the
person or party to be charged.
(f) If any provisions of this Agreement (or portions thereof) shall, for
any reason, be invalid or unenforceable, such provisions (or portions thereof)
shall be ineffective only to the extent of such invalidity or unenforceability,
and the remaining provisions or portions shall nevertheless be valid,
enforceable and of full force and effect.
(g) The Section or paragraph headings or titles herein are for convenience
only and shall not be deemed a part of this Agreement.
(h) This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which taken together shall
constitute a single instrument.
(i) The Employee acknowledges that the Company has a significant interest
in defending against any assertion by the Internal Revenue Service ("IRS") that
any payments made by the Company to the Employee are excess parachute payments
pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended,
("Code"). The Company and the Employee both acknowledge that it is in their
mutual best interest to vigorously contest any such assertion by the IRS and
that the Company is in the best position to effectively contest the same. Thus,
in the event of an assessment or threatened assessment by the IRS of any excise
tax or interest attributable to the application of Section 4999 of the Code with
respect to any payment made by the Company to the Employee, the Employee shall
notify the Company in writing promptly after the receipt of any communication
from the IRS specifically asserting the issue of such excise tax and shall
provide a copy of such communication to the Company. Upon receiving such
written notice, the Company shall engage Arthur Andersen and such other counsel,
consultants and other experts reasonably acceptable to the Employee to represent
both the Company and the Employee in contesting the extent to which payments
made by the Company to the Employee constitute excess parachute payments, and
the Employee shall reasonably cooperate with the Company in connection
therewith. The Company may, but
15
shall not be required to, provide such representation with respect to all or a
portion of such payments that Arthur Andersen reasonably believes, by its
written opinion from time to time in form and substance reasonably satisfactory
to the Company, is more likely than not excess parachute payments or if the
Company reasonably and in good faith determines that its costs of contesting the
characterization of such payments will exceed the amount of its deduction at
stake.
(j) For purposes of this Agreement, the Employee shall be deemed to be an
employee of United Stationers Supply Co. and United Stationers Supply Co. shall
make all payments required hereunder to be made to the Employee.
(k) For purposes of this Agreement, "Change in Control" means a change in
control resulting from an acquisition of USI, whether by amalgamation,
consolidation, merger or acquisition of stock, pursuant to which any person or
firm, or its or their affiliates (as defined in Rule 12b-2 under the Securities
Exchange Act of 1934) becomes the owner of more than fifty percent (50%) of the
outstanding stock of USI either in value or voting power.
13. Arbitration. Each of the undersigned hereby agrees that any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof, will be submitted for arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment upon the
award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof.
14. The agreement is amended by adding the following new Section 15 as
follows:
"15. Medical Benefits. The Company makes the following covenants to the
Employee with respect to the Employee's medical benefits:
(a) In the event the United Stationers Medical Plan ("Plan") remains
in effect and the Employee's employment with the Company terminates, the
Employee (and the Employee's covered dependents at the time of such
termination of employment) shall be entitled to continue to participate in
the Plan until the Employee attains age sixty-five (65), and the Employee's
spouse shall be entitled to continue to participate, in her own right, in
the Plan until the Employee's spouse attains age sixty-five (65), under the
same terms and conditions applicable to persons who are provided coverage
as active employees under the Plan; provided, however, that a minimum
$1,000,000 Comprehensive Medical Lifetime Maximum Payment shall remain
applicable to the Employee (and the
16
Employee's covered dependents at the time of the termination of
employment).
(b) If the Employee dies prior to age sixty-five (65) while the Plan
remains in effect and if the Employee's spouse is then living, the
Employee's spouse (and the Employee's covered dependents at the time of the
Employee's death) shall be entitled to continue participation in the Plan
until the Employee's spouse attains age sixty-five (65) or dies, under the
same terms and conditions applicable to persons who are provided coverage
as active employees under the Plan; provided, however, that a minimum
$1,000,000 Comprehensive Medical Lifetime Maximum Payment shall remain
applicable to such spouse (and the Employee's covered dependents at the
time of the Employee's death).
(c) In the event of the termination of the Plan or discontinuance of
coverage under the Plan for any reason, the Employee shall be entitled to
and the Company shall pay to the Employee TWO THOUSAND SEVEN HUNDRED
DOLLARS ($2,700.00) per month for the period commencing on the date the
Plan terminates or Plan coverage ceases and ending on the first to occur
of:
(i) the later of the date the Employee or the Employee's
spouse attains age sixty-five (65);
(ii) in the event of the death of the Employee, the date the
spouse of the Employee attains age sixty-five (65);
(iii) the end of the eighteen (18) month period commencing on
the Plan termination date or the date on which the Plan coverage
ceases; or
(iv) December 31, 1998.
(d) In the event of the termination of the Plan or the discontinuance
of coverage under the Plan for any reason, the Company shall pay claims or
reimburse expenses for those medical expenses which are considered
deductible under section 213 of the Code or any successor provision,
(without regard to any applicable threshold for deductibility) to the
Employee, subject to the following terms and conditions:
(i) the Employee (or any of the Employee's covered dependents at
the time the Plan terminates or coverage under the Plan ceases) if
covered by a medical plan maintained by the Employee's then current
employer or a medical plan maintained by the employer of the
17
spouse of the Employee, has exceeded the lifetime maximum benefit
provided in such plan;
(ii) payment of medical expenses or reimbursement for such claims
under this subsection (d) shall not exceed the lesser of the following
amounts:
(1) a maximum of $300,000 for the Employee and all
dependents (on an aggregate basis) of the Employee as of the date
of Plan termination or the date coverage under the Plan ceases;
or
(2) an amount which exceeds $700,000 (on an aggregate basis)
for the group of Employees referred to as "Contract Officers"
under the Plan (including all dependents of such Contract
Officers as of the date of Plan termination or the date coverage
under the Plan ceases); and
(iii) reimbursement for such claims under this subsection (d)
shall be made for the period commencing on the date the Plan
terminates and ending on the first to occur of:
(1) the later of the date the Employee or the Employee's
spouse attains age sixty-five (65);
(2) in the event of the death of the Employee, the date the
spouse of the Employee attains age sixty-five (65);
(3) the end of the eighteen (18) month period commencing on
the Plan termination date or the date on which Plan coverage
ceases; or
(4) December 31, 1998.
The coverage provided under this Section 15(d) shall be separate and in addition
to the coverage provided under Section 15(c) above."
18
15. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which taken together shall
constitute a single instrument.
UNITED STATIONERS INC.,
a Delaware corporation
ATTEST:_______________________ By:___________________________
Secretary Its:__________________________
UNITED STATIONERS SUPPLY CO.,
an Illinois corporation
ATTEST:_______________________ By:___________________________
Secretary Its:__________________________
EMPLOYEE:
______________________________
Ergin Uskup
19
EXHIBIT A
TO
EMPLOYMENT AGREEMENT
(Revised February 13, 1995)
Current Employee Benefit Plans Deemed "Additional Compensation" under Paragraph
3(b)
United Stationers Supply Co. Pension Plan
United Stationers Inc. Profit Sharing PluSavings Plan
United Stationers Inc. 1981 Stock Incentive Award Plan
United Stationers Inc. 1985 Nonqualified Stock Option Plan
(cancelled as to future grants)
United Stationers Management Incentive Plan
United Stationers Executive Bonus Plan
United Stationers Supply Co. Deferred Compensation Plan
United Stationers Inc. Flexible Spending Plan
United Stationers Supplemental Benefits Plan
EXHIBIT B
The following are the fringe benefits to which the Employee is entitled as of
February 13, 1995
1. HEALTH AND DENTAL
A. United Group Medical and Dental Benefit Plans
B. Medical Reimbursement Plan - provides reimbursement to Officer (but
not dependents) for all medical and dental expenses not covered by the
above Plans
C. Retiree Health Plan
D. Surviving Spouse - Medical and Dental Benefit Plans coverage will
continue for surviving spouse and dependent children, without cost to
surviving spouse, in the event of death of the Employee during Term of
Employment
E. Medical and Dental Benefits for Early Retirees
F. Annual physical examination at Company expense.
2. COMPANY CAR
Leased Auto or equivalent cash compensation is provided in accordance with
current Policy.
3. LIFE INSURANCE
A. Group Term Life Insurance - 2 1/2 times base salary. Includes life
insurance on spouse ($4,000) and dependent children ($1,000), and
additional accidental Death and Dismemberment benefit equal to the
amount of Group Term Life.
B. Travel and Accident Insurance - $300,000 on a 24-hour business and
pleasure basis.
C. Split Dollar Life Insurance. Company pays premium; portion allocable
to the Employee benefit is added to the Employee's W-2.
4. DISABILITY BENEFITS
After payment of the disability benefits provided in this Agreement,
current disability insurance policy may provide additional benefits.
5. CLUB AND ASSOCIATION DUES
Airline club dues and professional and industry association dues are
reimbursable. Social and country club dues are reimbursable to the extent
incurred for business purposes in accordance with Company Policy.
6. FINANCIAL AND TAX CONSULTING - and tax return preparation -provided by
Arthur Andersen, LLP at Company expense in accordance with Company Policy.
7. OFFICER INDEMNIFICATION AND INSURANCE - D&O insurance is provided on
claims-made basis. Restated Certificate of Incorporation of company
provides indemnification of officers.
8. VACATION - Paid vacations in accordance with Company Policy.
9. OTHER - Any other fringe benefits that may from time to time be made
available to employees of the Company generally.
B-2
EXHIBIT C
[DATE]
Mr. Ergin Uskup
[STREET ADDRESS]
[CITY, STATE, ZIP CODE]
DEAR _____________________:
This letter sets forth the amount of and the conditions to your Stay Bonus
pursuant to your Employment Agreement with United Stationers Inc. and United
Stationers Supply Co. as a result of [your termination of employment on
____________________] [your continued employment through ____________________].
1. After you sign and return this Agreement to me, the Company will pay you [a
severance benefit] [an amount] equal to _________ payable in an initial
installment in the amount of $__________ paid within one month following
[the date the Term of Employment expires or terminates] [your severance]
with 23 equal monthly installments in the amount of $__________ each paid
to you thereafter.
2. In return for the Company's providing the severance payment, you agree as
follows:
A. RELEASE. You WAIVE and RELEASE the Company, its parent and any
related or affiliated entities and any predecessor entities to such
entities and each of their officers, directors, employees,
shareholders, agents, successors and assigns (collectively, "Released
Parties") from any claim, liability, cause of action, damage or charge
you have or may have against any of them which is related to or arises
out of anything occurring before you sign this Agreement, even those
which you do not know about, or suspect that you may have. This
includes, but is not limited to, anything related to your employment
or your separation from employment, and extends to all possible
claims, under federal, state or local law, including, without
limitation, any claims if any, under the Age Discrimination in
Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the
Civil Rights Acts of 1966 and of 1991, the Employment Retirement
Income Security Act of 1974, the Americans with Disabilities Act of
1990. (Of course, this Waiver and Release does not waive your right to
receive the [severance] payment described in Paragraph 1 above, or
your right to
Mr. Ergin Uskup
PAGE 2
receive reimbursement for ordinary business expenses previously
incurred or for pending medical or workers compensation claims or any
other right you may have against the Company pursuant to your
Employment Agreement.)
B. CONFIDENTIALITY AND NON-COMPETITION. You hereby acknowledge that
Sections 6, 7 and 8 of your Employment Agreement dated February 13,
1995 shall remain in full force and effect and survive the expiration
of the Term of Employment thereunder.
3. Should you violate any of the provisions of Paragraph 2, in addition to its
other remedies, the Company will be released from any obligation to make
the payments under Paragraph 1, and you shall repay any such [severance
payments] [installments] previously made to you.
4. This Agreement takes the place of any oral or written promises, agreements
or understandings between the Company and you about any of the subjects of
this Agreement. This Agreement cannot be altered or amended except by
written agreements signed by both you and an officer of the Company.
5. This Agreement shall be governed by Illinois law.
6. You acknowledge that you have had ample opportunity consider all of the
terms of this Agreement and to receive independent legal counsel; that you
have read and understand the Agreement and its legal effect; that no
promise or inducement was made to cause you to make this Agreement other
than considerations contained in your Employment Agreement; and that you
sign this Agreement of your own free will based on your own decision. You
also acknowledge that you have been given 45 days to consider the terms of
this Agreement before signing it, and you understand that you my revoke it
by providing me with written notice no later than 7 days after you have
signed it.
C-2
Mr. Ergin Uskup
PAGE 3
[Insert required information for valid ADEA waiver at time waiver is
delivered for Employee's signature.]
Please consider all of the above very carefully, and contact me if you have any
questions or comments. If you agree with the terms of this letter, please sign
below and return the Agreement to me.
Sincerely,
UNITED STATIONERS SUPPLY CO.
______________________________
Vice President, Human Resources
Agreed to and Signed:
This ______ Day of __________, 199_.
Signature:_________________________