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Chief Financial Officer Employment Agreement

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Sectors: Materials and Construction
Governing Law: Illinois, View Illinois State Laws
Effective Date: June 01, 1997
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EMPLOYMENT AGREEMENT


AGREEMENT (this "Agreement"), made and entered into as of the 1st day of June, 1997 by and among United Stationers Inc., a Delaware corporation (the "Parent"), United Stationers Supply Co., an Illinois corporation ("Supply," and together with the Parent and their successors and assigns permitted under this Agreement, the "Company"), and Daniel H. Bushell (the "Executive").


W I T N E S S E T H


WHEREAS, Supply and the Executive have entered into an employment agreement dated October 1, 1995 and which is still in effect as of the date written above (the "Old Agreement");


WHEREAS, the Supply and the Executive desire to hereby amend and restate the Old Agreement in its entirety; and


WHEREAS, the Parent desires to be a party to this Agreement.


NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and the Executive (individually a "Party" and together the "Parties") agree as follows:


1. DEFINITIONS.


(a) "Base Salary" shall mean the Executive's annual Base Salary as defined in Section 4 below.


(b) "Board" shall mean the Board of Directors of the Parent.


(c) "Cause" shall mean the Executive's:


(1) conviction of, or plea of NOLO CONTENDERE to, a felony;


(2) theft or embezzlement, or attempted theft or embezzlement,
of money or property or assets of the Company or any of its
affiliates;


(3) use of illegal drugs;


(4) material breach of this Agreement;


(5) commission of any act or acts of moral turpitude in
violation of Company policy;


(6) gross negligence or willful misconduct in the performance of
his duties; or


(7) breach of any fiduciary duty owed to the Company, including,
without limitation, engaging in directly competitive acts
while employed by the Company.


(d) "Change in Control of Supply" shall mean the first to occur of the following events:


(1) any "person" (as such term is used in Sections 3(a)(9) and
13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or group of persons becomes a
"beneficial owner" (as such term is used in Rule 13d-3 of
the Exchange Act) of (i) 40 percent or more of the Voting
Stock of the Parent or (ii) 60 percent or more of the Voting
Stock of Supply;


(2) the majority of the Board consists of individuals other than
Incumbent Directors;


(3) Supply adopts any plan of liquidation providing for the
distribution of all or substantially all of the assets of
Supply and its Subsidiaries taken as a whole; PROVIDED,
HOWEVER, that the adoption of such plan of liquidation is
not in conjunction with a merger of Supply with and into the
Parent;


(4) the sale or other disposition of all or substantially all of
the assets or business of Supply and its Subsidiaries taken
as a whole; PROVIDED, HOWEVER, that the shareholders of the
Parent immediately prior to such sale or disposition, do not
beneficially own, directly or indirectly, in substantially
the same proportion as they owned the Voting Stock of the
Parent prior to the sale or disposition, all of the Voting
Stock or other ownership interests of the entity or
entities, if any, that succeed to the business of Supply; or


(5) the merger or consolidation of Supply with or into another
company (the "Other Company"); PROVIDED, HOWEVER, that
immediately after the merger or consolidation, the
shareholders of the Parent immediately prior to the merger
or consolidation hold, directly or indirectly, 50 percent or
less of the Voting Stock of the surviving corporation (there
being excluded from the number of shares held by such
shareholders, but not from the Voting Stock of the surviving
corporation, any shares received by any "affiliate" (as such
term is defined under Rule 12b-2 of the Exchange Act) of the
Other Company in exchange for stock of the Other Company).


(e) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.


(f) "Common Stock" shall mean the common stock, $.10 par value per share, of United Stationers Inc.


(g) "Disability" or "Disabled" shall mean a disability as determined under the Company's long-term disability plan or program as in effect on the date the disability first occurs, or if no such plan or program


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exists on the date the disability first occurs, then a "disability" as defined under Code Section 22(e)(3).


(h) "Effective Date" shall mean June 1, 1997.


(i) "Good Reason" shall mean the occurrence of any of the following without the Executive's prior written consent:


(1) the reduction of the Executive's Base Salary as determined
in accordance with Section 4 below;


(2) the exclusion of the Executive from, or diminution in the
Executive's participation in, any pension, bonus, management
incentive, profit sharing and/or other similar incentive,
compensation or deferred compensation plans made available
generally to senior management personnel of the Company,
other than exclusions, changes or diminutions applicable to
all senior management personnel;


(3) any diminution in expense reimbursement benefits enjoyed by
the Executive, except pursuant to a general change in the
Company's reimbursement policies;


(4) any material reduction in the Executive's title or duties
which has the effect of materially reducing the Executive's
status within the Company -- PROVIDED, HOWEVER, that any
change in the office or officer to whom the Executive
reports, or in the Executive's duties or title which does
not diminish the Executive's status within the Company,
shall not be deemed "Good Reason";


(5) any relocation of the Company's headquarters or the
Executive's principal place of employment outside of the
Chicago metropolitan area; or


(6) the breach by the Company of any of its covenants or
obligations under this Agreement.


(j) "Incumbent Directors" shall mean the members of the Board as of the Effective Date; PROVIDED, HOWEVER, that any person becoming a director subsequent to such date whose election or nomination for election was supported by 2/3rds of the directors who then comprised the Incumbent Directors shall be considered to be an Incumbent Director.


(k) "Section 2 Notification" shall mean a notification as specified in Section 2.


(l) "Section 2 Notification Date" shall mean the date of a Section 2 Notification as specified in Section 2.


(m) "Subsidiary" shall mean any corporation of which the Company owns, directly or indirectly, more than 50 percent of the Voting Stock or any other business entity in which the Company directly or indirectly has an ownership interest of more than 50 percent.


(n) "Term of Employment" shall mean the period as specified under Section 2 below.


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(o) "Voting Stock" shall mean the capital stock of any class or classes having general voting power under ordinary circumstances, in the absence of contingencies, to elect the directors of a corporation.


2. TERM OF EMPLOYMENT.


(a) The Company hereby continues to employ the Executive, and the Executive hereby accepts such continued employment, for the Term of Employment, which shall begin on the Effective Date and shall end following the giving of a notice by the Executive or the Company pursuant to Section 24 below. If the Executive gives such notice, the Term of Employment shall end at the end of the 90-day period following the date on which the Executive notifies the Company in writing in accordance with Section 24 below that he wants the Term of Employment to so end. If the Company gives such notice, the Term of Employment shall end on the later of (i) the 2nd anniversary of the date on which the Company notifies the Executive in writing in accordance with Section 24 below that it wants the Term of Employment to so end or (ii) the 3rd anniversary of the Effective Date. A notification by the Executive or the Company to the other Party under this Section 2 shall be referred to herein as a "Section 2 Notification," and the date that the Section 2 Notification occurs shall be referred to herein as a "Section 2 Notification Date."


(b) Notwithstanding anything contained herein to the contrary, following the date that a Change in Control of Supply occurs:


(1) if the Executive makes a Section 2 Notification during the
period beginning on the date of such Change in Control of
Supply and ending on the 3rd anniversary of the date of such
Change in Control of Supply, the Term of Employment shall
end at the end of the 15-day period following such Section 2
Notification Date (in lieu of the 90-day period provided in
Section 2(a) above);


(2) if the Executive makes a Section 2 Notification on or after
the 3rd anniversary of the date of such Change in Control of
Supply, the Term of Employment shall end at the end of the
90-day period (in accordance with Section 2(a) above)
following such Section 2 Notification Date; and


(3) if the Company makes a Section 2 Notification at any time
following the date of such Change in Control of Supply, the
Term of Employment shall end on the later of (i) the 2nd
anniversary of such Section 2 Notification Date or (y) the
3rd anniversary of the date of the Change in Control of
Supply.


(c) Notwithstanding anything contained herein to the contrary, the Term of Employment is subject to earlier termination in accordance with Section 11 below.


3. POSITION, DUTIES AND RESPONSIBILITIES.


On the Effective Date and continuing for the remainder of the Term of Employment, the Executive shall be employed as an Executive Vice President and Chief Financial Officer of the Company and in accordance with the authority and direction of the Board shall render such administrative, financial and other related services to the Company and its Subsidiaries and affiliates as may be required, or as the Board may from time to time direct,


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commensurate with such position and title. The Executive shall serve the Company faithfully, conscientiously and to the best of the Executive's ability and shall promote the interests and reputation of the Company. Unless reasonably prevented by sickness, accident or Disability, the Executive shall devote substantially all of the Executive's time, attention, knowledge, energy and skills during normal working hours and at such other times as the Executive's duties may reasonably require to the duties of the Executive's employment. The Executive, in carrying out his duties under this Agreement, shall report to the Chief Executive Officer of the Company.


4. BASE SALARY.


The Executive shall be paid an annual base salary at no less than an annual rate of $265,000 (the "Base Salary"), payable in accordance with the regular payroll practices of the Company. The Base Salary shall be reviewed by the Board no less frequently than annually and may, in the Board's sole discretion, be increased when deemed appropriate.


5. ANNUAL INCENTIVE COMPENSATION PROGRAMS.


The Executive shall participate in the Company's annual incentive compensation plans or programs applicable to senior-level executives as established and modified from time to time by the Board in its sole discretion. The Executive shall have an annual incentive compensation award opportunity in the aggregate under all such plans or programs as determined by the Company in its sole discretion.


6. LONG-TERM INCENTIVE COMPENSATION PROGRAMS.


The Executive shall be eligible to participate in the Company's applicable long-term incentive compensation plans or programs as may be established and modified from time to time by the Board in its sole discretion.


7. EMPLOYEE BENEFIT PROGRAMS.


During the Term of Employment, the Executive shall be entitled to participate, to the extent eligible, in all plans, programs and policies providing general employee benefits for the Company's employees or its senior management employees (as approved by the Board and in effect from time to time). The benefit plans, programs and policies presently in effect are listed on Exhibit A attached to this Agreement. This Section 7 shall not be construed to require the Company to establish or maintain any plan, program or policy.


8. REIMBURSEMENT OF BUSINESS EXPENSES.


The Executive is authorized to incur reasonable business expenses in carrying out his duties and responsibilities under this Agreement, and the Company shall reimburse him for all such reasonable business expenses reasonably incurred in connection with carrying out the business of the Company, subject to documentation in accordance with the Company's policy.


9. PERQUISITES.


During the Term of Employment, the Executive shall be entitled to participate in the Company's executive fringe benefits applicable to the Company's senior-level executives in accordance with the terms and conditions of such arrangements as are in effect from time to time.


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10. VACATION.


The Executive shall be entitled to at least 20 paid vacation days (being at least 4 weeks) per calendar year which shall accrue and otherwise be subject to the Company's vacation policy.


11. TERMINATION OF EMPLOYMENT.


(a) TERMINATION OF EMPLOYMENT DUE TO DEATH. In the event of the Executive's death during the Term of Employment, the Term of Employment shall end as of the date of the Executive's death and the Company shall pay or provide, as applicable, or shall cause to be paid or to be provided, as applicable, to the Executive's estate and/or his beneficiaries, as the case may be, the following:


(1) Base Salary earned but not paid prior to the date of the
Executive's death;


(2) all annual incentive compensation awards which have been
earned but not paid in accordance with the terms of the
applicable annual incentive compensation plan, program or
arrangement;


(3) an additional amount equal to the sum of (i) the Base Salary
in effect on the date of the Executive's death and (ii) the
annual incentive compensation award paid or payable with
respect to the year immediately preceding the year in which
the Executive's death occurs, payable over the 12-month
period following the date of the Executive's death in equal
installments in accordance with the Company's regular
payroll practice;


(4) any amounts earned, accrued or owing to the Executive but
not yet paid under Section 6, 7, 8, 9 and/or 10 above in
accordance with the terms of the applicable plan, program or
arrangement; and


(5) such other or additional benefits, if any, as may be
provided under applicable plans, programs and/or
arrangements of the Company.


(b) TERMINATION OF EMPLOYMENT DUE TO DISABILITY. If the Executive's employment is terminated due to Disability during the Term of Employment, either by the Company or by the Executive, the Term of Employment shall end as of the date of the termination of the Executive's employment and the Company shall pay or provide, as applicable, or shall cause to be paid or provided, as applicable, to the Executive the following:


(1) Base Salary earned but not paid prior to the date of the
termination of the Executive's employment;


(2) all annual incentive compensation awards which have been
earned but not paid in accordance with the terms of the
applicable annual incentive compensation plan, program or
arrangement;


(3) an additional amount equal to the sum of (i) the Base Salary
in effect on the date of the termination of the Executive's
employment and (ii) the annual incentive


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compensation award paid or payable with respect to the year
immediately preceding the year in which the termination of
the Executive's employment occurs, payable over the 12-month
period following the date of the termination of the
Executive's employment in equal installments in accordance
with the Company's regular payroll practice;


(4) any amounts earned, accrued or owing to the Executive but
not yet paid under Section 6, 7, 8, 9 and/or 10 above in
accordance with the terms of the applicable plan, program or
arrangement; and


(5) such other or additional benefits, if any, as are provided
under applicable plans, programs and/or arrangements of the
Company.


In no event shall a termination of the Executive's employment for Disability occur unless the Party terminating the Executive's employment gives written notice to the other Party in accordance with Section 24 below.


(c) TERMINATION OF EMPLOYMENT BY THE COMPANY FOR CAUSE. If the Company terminates the Executive's employment for Cause during the Term of Employment, the Term of Employment shall end as of the date of the termination of the Executive's employment for Cause and the Company shall pay or provide, as applicable, or shall cause to be paid or provided, as applicable, to the Executive the following:


(1) Base Salary earned but not paid prior to the date of the
termination of his employment;


(2) all annual incentive compensation awards which have been
earned but not paid in accordance with the terms of the
applicable annual incentive compensation plan, program or
arrangement;


(3) any amounts earned, accrued or owing to the Executive but
not yet paid under Section 6, 7, 8, 9 and/or 10 above in
accordance with the terms of the applicable plan, program or
arrangement; and


(4) such other or additional benefits, if any, as are provided
under applicable plans, programs and/or arrangements of the
Company.


If the event constituting Cause is not curable by the Executive, the Company may terminate the Executive's employment for Cause effective on the date that the Company notifies the Executive in writing in accordance with Section 24 below that his employment is so terminated. If the event constituting Cause is curable, the Company shall notify the Executive in writing in accordance with Section 24 below that it intends to terminate his employment for Cause effective at the end of the 60-day period following the date that the Company so notifies the Executive (the "Cause Notification Date"), such notice to state in detail the particular event that constitutes Cause. If the event constituting Cause is curable, the Executive shall have a reasonable opportunity to cure the event constituting Cause following the Cause Notification Date; PROVIDED, HOWEVER, that if the Executive has not cured such event to the reasonable satisfaction of the Company (and the Company has not waived in writing the Executive's failure to cure) during the 30-day period following the Cause Notification Date (the "Cause Curing Period"), the Company


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may terminate the Executive's employment effective following the end of the Cause Curing Period; PROVIDED FURTHER, HOWEVER, that the Company may not terminate the Executive's employment for Cause after the end of the 90-day period following the date the Board first learns that the event constituting Cause has occurred.


(d) TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT CAUSE PRIOR TO A SECTION 2 NOTIFICATION DATE. If, prior to a Section 2 Notification Date, the Executive's employment is terminated by the Company without Cause, other than due to death or Disability, the Term of Employment shall end as of the date of the termination of the Executive's employment and the Company shall pay or provide, as applicable, or shall cause to be paid or provided, as applicable, to the Executive the following:


(1) Base Salary earned but not paid prior to the date of the
termination of his employment;


(2) all annual incentive compensation awards which have been
earned but not paid in accordance with the terms of the
applicable annual incentive compensation plan, program or
arrangement;


(3) an additional amount equal to (x) the sum of (i) the Base
Salary with respect to the year in which the termination of
the Executive's employment occurs and (ii) the annual
incentive compensation award paid or payable with respect to
the year immediately preceding the year in which the
termination of the Executive's employment occurs, multiplied
by (y) a fraction the numerator of which is the number of
full months that would have been remaining in the Term of
Employment assuming for this purpose that the Company had
made a Section 2 Notification on the date of the termination
of the Executive's employment and the denominator of which
is 12 (the "Section 11(d) Severance Benefit"). The Section
11(d) Severance Benefit shall be payable over a period of
time beginning on the date of the termination of the
Executive's employment and ending on the date that the Term
of Employment would have ended assuming for this purpose
that the Company had made a Section 2 Notification on the
date of the termination of the Executive's employment (the
"Section 11(d) Severance Period") in equal installments in
accordance with the Company's regular payroll practice;


(4) any amounts earned, accrued or owing to the Executive but
not yet paid under Section 6, 7, 8, 9 and/or 10 above in
accordance with the terms of the applicable plan, program or
arrangement;


(5) continued participation for the Executive, his spouse and
his eligible dependents, as if the Executive were still an
employee, in the Company's medical, dental, hospitalization
and life insurance plans, programs and/or arrangements in
which he was participating on the date of the termination of
his employment until the earlier of:


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(A) the end of the Section 11(d) Severance Period; or


(B) the date, or dates, the Executive receives equivalent
medical, dental, hospitalization and life insurance
coverage and benefits under the plans, programs and/or
arrangements of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage
or benefit-by-benefit basis);


PROVIDED, HOWEVER, that:


(X) if the Executive is precluded from continuing his
participation in any employee benefit plan, program or
arrangement as provided in Section 11(d)(5)(A) above,
or if the Executive's spouse and/or eligible dependents
are precluded from coverage under any employee benefit
plan, program or arrangement as provided in Section
11(d)(5)(A) above due to the fact that the Executive is
no longer an employee of the Company, he shall be
provided with the after-tax economic equivalent of the
benefits to be provided under the plan, program or
arrangement in which he, his spouse and/or his eligible
dependents are unable to participate for the period
specified in this Section 11(d)(5);


(Y) the economic equivalent of any benefit not provided
shall be deemed to be the lowest cost that would be
incurred by the Executive in obtaining a comparable
benefit himself on a non-group basis; and


(Z) payment of such after-tax economic equivalent shall be
made quarterly in advance; and


(6) such other or additional benefits, if any, as are provided
under applicable plans, programs and/or arrangements of the
Company.


(e) TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT CAUSE ON OR AFTER A SECTION 2 NOTIFICATION DATE. If,
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