10-K

QuickLinks -- Click here to rapidly navigate through this document

United States Securities and Exchange Commission
Washington, DC 20549

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                             to

Commission file number: 0-10653

UNITED STATIONERS INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware	36-3141189
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

One Parkway North Boulevard
Suite 100
Deerfield, Illinois 60015-2559
(847) 627-7000
(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant's
Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act: Common Stock, $0.10 par value per share	Name of Exchange on which registered: NASDAQ Global Select Market
(Title of Class)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ý    No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o    No ý

The aggregate market value of the common stock of United Stationers Inc. held by non-affiliates as of June 30, 2008 was approximately $864.4 million.

On February 24, 2009, United Stationers Inc. had 23,707,519 shares of common stock outstanding.

Documents Incorporated by Reference:

Certain portions of United Stationers Inc.'s definitive Proxy Statement relating to its 2009 Annual Meeting of Stockholders, to be filed within 120 days after the end of United Stationers Inc.'s fiscal year, are incorporated by reference into Part III.

UNITED STATIONERS INC.
FORM 10-K
For The Year Ended December 31, 2008

TABLE OF CONTENTS

		Page No.
	Part I
Item 1.	Business		1
Item 1A	Risk Factors		6
Item 1B	Unresolved Comment Letters		9
Item 2.	Properties		9
Item 3.	Legal Proceedings		10
Item 4.	Submission of Matters to a Vote of Security Holders		10
	Executive Officers of the Registrant		10
	Part II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		14
Item 6.	Selected Financial Data		17
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		19
Item 7A	Quantitative and Qualitative Disclosures About Market Risk		39
Item 8.	Financial Statements and Supplementary Data		41
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		88
Item 9A	Controls and Procedures		88
	Part III
Item 10.	Directors, Executive Officers and Corporate Governance		89
Item 11.	Executive Compensation		89
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		89
Item 13.	Certain Relationships and Related Transactions, and Director Independence		90
Item 14.	Principal Accounting Fees and Services		90
	Part IV
Item 15.	Exhibits and Financial Statement Schedules		91
	Signatures		96
	Schedule II—Valuation and Qualifying Accounts		97

PART I

ITEM 1.    BUSINESS.

General

United Stationers Inc. is North America's largest broad line wholesale distributor of business products, with consolidated net sales of approximately $5.0 billion. United stocks a broad and deep line of over 100,000 products and offers thousands more in the following categories: technology products, traditional business products, office furniture, janitorial and breakroom supplies, and industrial supplies. The Company's network of 67 distribution centers allows it to ship these items to approximately 30,000 reseller customers, reaching more than 90% of the U.S. and major cities in Mexico on an overnight basis.

Except where otherwise noted, the terms "United" and "the Company" refer to United Stationers Inc. and its consolidated subsidiaries. The parent holding company, United Stationers Inc. (USI), was incorporated in 1981 in Delaware. USI's only direct wholly owned subsidiary—and its principal operating company—is United Stationers Supply Co. (USSC), incorporated in 1922 in Illinois.

Products

United stocks over 100,000 stockkeeping units ("SKUs") in these categories:

Technology Products.    The Company is a leading wholesale distributor of computer supplies and peripherals in North America. It stocks more than 11,000 items, including imaging supplies, data storage, digital cameras, computer accessories and computer hardware items such as printers and other peripherals. United provides these products to value-added computer resellers, office products dealers, drug stores, grocery chains and e-commerce merchants. Technology products generated about 34% of the Company's 2008 consolidated net sales.

Traditional Office Products.    The Company is one of the largest national wholesale distributors of a broad range of office supplies. It carries over 20,000 brand-name and private label products, such as filing and record storage products, business machines, presentation products, writing instruments, paper products, shipping and mailing supplies, calendars and general office accessories. These products contributed approximately 27% of net sales during the year.

Janitorial and Breakroom Supplies.    United is a leading wholesaler of janitorial and breakroom supplies throughout the U.S. The Company holds over 8,000 items in these lines: janitorial and breakroom supplies (cleaners and cleaning accessories), foodservice consumables (such as disposable cups, plates and utensils), safety and security items, and paper and packaging supplies. This product category provided over 21% of the latest year's net sales primarily from Lagasse, Inc. (Lagasse), a wholly owned subsidiary of USSC, and is the fastest growing category of the business.

Office Furniture.    United is one of the largest office furniture wholesaler distributors in North America. It stocks nearly 4,500 products from more than 40 of the industry's leading manufacturers including, desks, filing and storage solutions, seating and systems furniture, along with a variety of products for niche markets such as education, government, healthcare and professional services. Innovative marketing programs and related services help drive this business across multiple customer channels. This product category represented approximately 10% of net sales for the year.

Industrial Supplies.    The Company acquired ORS Nasco Holding, Inc. (ORS Nasco) in December 2007, and as a result, now stocks over 60,000 items including hand and power tools, safety and security supplies, janitorial equipment and supplies, other various industrial MRO (maintenance, repair and operations) items and oil field and welding supplies. In 2008, this product category accounted for roughly 6% of the Company's net sales. The Company offers many more items in these product lines within the industrial supplies category.

1

The remaining 2% of the Company's consolidated net sales came from freight and advertising revenue.

United offers private brand products within each of its product categories to help resellers provide quality value-priced items to their customers. These include Innovera® technology products, Universal® office products, Windsoft® paper products, UniSan® janitorial and sanitation products, and Alera® office furniture. ORS Nasco offers private label brand products in the welding, industrial, safety and oil field pipeline categories under its own brand offering, Anchor Brand®.

During 2008, private brand products accounted for over 13% of United's net sales.

Customers

United serves a diverse group of approximately 30,000 customers. They include independent office products dealers; contract stationers; office products superstores; computer products resellers; office furniture dealers; mass merchandisers; mail order companies; sanitary supply, paper and foodservice distributors; drug and grocery store chains; healthcare distributors; e-commerce merchants; oil field, welding supply and industrial/MRO distributors; and other independent distributors. No single customer accounted for more than 8% of 2008 consolidated net sales.

Sales to independent resellers—which include our United Stationers Supply, Lagasse and ORS Nasco resellers, as well as new channel customers—contributed approximately 84% of consolidated net sales. The Company provides these customers with value-added services designed to help them market their products and services while improving operating efficiencies and reducing costs.

Marketing and Customer Support

United's customers can purchase most of the products the Company distributes at similar prices from many other sources. As a matter of fact, many reseller customers purchase their products from more than one source, frequently using "first call" and "second call" distributors. A "first call" distributor typically is a reseller's primary wholesaler and has the first opportunity to fill an order. If the "first call" distributor cannot meet the demand, or do so on a timely basis, the reseller will contact its "second call" distributor.

United's marketing and logistic capabilities differentiate the Company from its competitors by providing an unmatched level of value-added services to resellers:

•

A broad line of products for one-stop shopping;

•

Comprehensive printed product catalogs for easy shopping and reference guides;

•

A digital catalog and search capabilities to power e-commerce Web sites;

•

Extensive promotional materials and marketing programs to increase sales;

•

High levels of products in stock, with an average line fill rate better than 97% in 2008;

•

Efficient order processing, resulting in a 99.6% order accuracy rate for the year;

•

High-quality customer service from several state-of-the-art customer care centers;

•

National distribution capabilities that enable same-day or overnight delivery to more than 90% of the U.S. and major cities in Mexico, providing a 99% on-time delivery rate in 2008;

•

Training programs designed to help resellers improve their operations;

•

End-consumer research to help resellers better understand their markets.

United's marketing programs emphasize two other major strategies. First, the Company produces product content that is used to populate an extensive array of print and electronic catalogs for

2

commercial dealers, contract stationers and retail dealers. The printed catalogs usually are customized with each reseller's name, then sold to the resellers who, in turn, distribute them to their customers. The Company markets its broad product offering primarily through General Line catalogs. These are available in both print and electronic versions and can include various selling prices (rather than the manufacturer's suggested retail price). In addition, the Company typically produces a number of promotional catalogs each quarter. United also develops separate monthly and quarterly flyers covering most of its product categories, including its private brand lines that offer a large selection of popular commodity products. Since catalogs and electronic content provide product exposure to end consumers and generate demand, United tries to maximize their distribution on behalf of its suppliers and customers.

Second, United provides its resellers with a variety of dealer support and marketing services. These programs are designed to help resellers differentiate themselves by making it easier for customers to buy from them, and often allow resellers to reach customers they had not traditionally served.

Resellers can place orders with the Company by phone, fax and e-mail and through a variety of electronic order entry systems. Electronic order entry systems allow resellers to forward their customers' orders directly to United, resulting in the delivery of pre-sold products to the reseller. In 2008, United received approximately 90% of its orders electronically.

Distribution

The Company uses a network of 67 distribution centers to provide over 100,000 items to its approximately 30,000 reseller customers. This network, combined with the Company's depth and breadth of inventory in technology products, traditional office products, office furniture, janitorial and breakroom supplies, and industrial supplies, enables the Company to ship products on an overnight basis to more than 90% of the U.S. and major cities in Mexico. United's domestic operations generated approximately $4.9 billion of its approximately $5.0 billion in 2008 consolidated net sales, with its international operations contributing another $0.1 billion to 2008 net sales.

Regional distribution centers are supplemented with 25 local distribution points across the U.S., which serve as re-distribution points for orders filled at the regional centers. United has a dedicated fleet of approximately 550 trucks, most of which are under contract to the Company. This enables United to make direct deliveries to resellers from regional distribution centers and local distribution points.

United's inventory locator system allows it to provide resellers with timely delivery of the products they order. If a reseller asks for an item that is out of stock at the nearest distribution center, the system has the capability to automatically search for the product at other facilities within the shuttle network. When the item is found, the alternate location coordinates shipping with the primary facility. For most resellers, the result is a single on-time delivery of all items. This system gives United added inventory support while minimizing working capital requirements. As a result, the Company can provide higher service levels to its reseller customers, reduce back orders, and minimize time spent searching for substitute merchandise. These factors contribute to a high order fill rate and efficient levels of inventory. To meet its delivery commitments and to maintain high order fill rates, United carries a significant amount of inventory, which contributes to its overall working capital requirements.

The "Wrap and Label" program is another important service for resellers. It gives resellers the option to receive individually packaged orders ready to be delivered to their end consumers. For example, when a reseller places orders for several individual consumers, United can pick and pack the items separately, placing a label on each package with the consumer's name, ready for delivery to the end consumer by the reseller. Resellers appreciate the "Wrap and Label" program because it eliminates the need to break down bulk shipments and repackage orders before delivering them to consumers.

3

In addition to providing value-adding programs for resellers, United also remains committed to reducing its operating costs. Its "War on Waste" (WOW²) program, which began in 2007, is meeting the goal of removing $100 million in costs over five years through a combination of new and continuing activities. In addition, WOW² includes process improvement and work simplification activities that will help increase efficiency throughout the business and improve customer satisfaction.

Purchasing and Merchandising

As the largest broad line wholesale business products distributor in North America, United leverages its broad product selection as a key merchandising strategy. The Company orders products from over 1,000 manufacturers. This purchasing volume means United receives substantial supplier allowances and can realize significant economies of scale in its logistics and distribution activities. In 2008, United's largest supplier was Hewlett-Packard Company, which represented approximately 24% of its total purchases.

The Company's Merchandising Department is responsible for selecting merchandise and for managing the entire supplier relationship. Product selection is based on three factors: end-consumer acceptance; anticipated demand for the product; and the manufacturer's total service, price and product quality. As part of its effort to create an integrated supplier approach, United introduced the "Preferred Supplier Program." In exchange for working closely with United to reduce overall supply chain costs, participating suppliers' products are treated as preferred brands in the Company's marketing efforts.

Competition

There is only one other nationwide broad line office products wholesale distributor in North America. United and this firm compete on the basis of breadth of product lines, availability of products, speed of delivery to resellers, order fill rates, net pricing to resellers, and the quality of marketing and other value-added services.

The Company also competes with specialty distributors of office products, office furniture, technology products, janitorial and breakroom supplies and industrial supplies. These distributors typically offer more limited product lines and compete nationally, regionally or locally. In most cases, competition is based primarily upon net pricing, minimum order quantity, speed of delivery, and value-added marketing and logistics services.

The Company also competes with manufacturers who often sell their products directly to resellers and may offer lower prices. United believes that it provides an attractive alternative to manufacturer direct purchases by offering a combination of value-added services, including 1) Wrap and Label capabilities, 2) marketing and catalog programs, 3) same-day and next-day delivery, 4) a broad line of business products from multiple manufacturers on a "one-stop shop" basis, and 5) lower minimum order quantities.

Seasonality

United's sales generally are relatively steady throughout the year. However, sales also reflect seasonal buying patterns for consumers of office products. In particular, the Company's sales of office products usually are higher than average during January, when many businesses begin operating under new annual budgets and release previously deferred purchase orders. Janitorial and breakroom supplies sales are somewhat higher in the summer months. Industrial supplies sales are somewhat higher in summer months as well.

Employees

As of February 23, 2009, United employed approximately 5,800 people.

4

Management believes it has good relations with its associates. Approximately 600 of the shipping, warehouse and maintenance associates at certain of the Company's Baltimore, Los Angeles and New Jersey facilities are covered by collective bargaining agreements. In 2008, United successfully renegotiated the bargaining agreements with associates in the Los Angeles and New Jersey facilities. The bargaining agreement in the Baltimore facility is scheduled to expire in 2009. The Company has not experienced any work stoppages during the past five years.

Availability of the Company's Reports

The Company's principal Web site address is www.unitedstationers.com. This site provides United's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K—as well as amendments and exhibits to those reports filed or furnished under Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") for free as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (SEC). In addition, copies of these filings (excluding exhibits) may be requested at no cost by contacting the Investor Relations Department:

United Stationers Inc.
Attn: Investor Relations Department
One Parkway North Boulevard
Suite 100
Deerfield, IL 60015-2559
Telephone: (847) 627-7000
E-mail: IR@ussco.com

5

ITEM 1A.    RISK FACTORS.

Any of the risks described below could have a material adverse effect on the Company's business, financial condition or results of operations. These risks are not the only risks facing United; the Company's business operations could also be materially adversely affected by risks and uncertainties that are not presently known to United or that United currently deems immaterial.

United's operating results depend on the strength of the general economy.

The customers that United serves are affected by changes in economic conditions outside the Company's control, including national, regional and local slowdowns in general economic activity and job markets. Demand for the products and services the Company offers, particularly in office products, is affected by the number of white collar and other workers employed by the businesses United's customers serve. An interruption of growth in these markets or a general economic downturn, together with the negative effect this has on the number of workers employed, may adversely affect United's business, financial condition and results of operations.

United may not achieve its cost-reduction and margin enhancement goals.

United has set goals to improve its profitability over time by reducing expenses and growing sales to existing and new customers. There can be no assurance that United will achieve its enhanced profitability goals. Factors that could have a significant effect on the Company's efforts to achieve these goals include the following:

•

Inability to achieve the Company's annual "War on Waste" (WOW²) initiatives to reduce expenses and improve productivity and quality;

•

Impact on gross margin from competitive pricing pressures;

•

Failure to maintain or improve the Company's sales mix between lower margin and higher margin products;

•

Inability to pass along cost increases from United's suppliers to its customers;

•

Failure to increase sales of United's private brand products; and

•

Failure of customers to adopt the Company's product pricing and marketing programs.

The loss of a significant customer could significantly reduce United's revenues and profitability.

United's top five customers accounted for approximately 23% of the Company's 2008 net sales. The loss of one or more key customers, changes in the sales mix or sales volume to key customers, a significant downturn in the business or financial condition of any of them or the failure of any of them to timely pay all amounts due United could significantly reduce United's sales and profitability.

United's financial condition and results of operation depend on the availability of financing sources to meet its business needs.

The Company depends on various external financing sources to fund its operating, investing, and financing activities. The Company's financing agreements include covenants of the Company to maintain certain financial ratios and comply with other obligations. If the Company violates a covenant or otherwise defaults on its obligations under a financing agreement, the Company's lenders may refuse to extend additional credit, demand repayment of outstanding indebtedness and terminate the financing agreements. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—General" included below under Item 7.

6

One of the Company's external financing sources is a receivables securitization program that is dependent on back-up liquidity facilities that must be renewed annually. The Company's other primary external financing sources terminate or mature in three to five years. If the Company defaults on its obligations under a financing agreement or is unable to obtain or renew financing sources on commercially reasonable terms, its business and financial condition could be materially adversely affected.

United's reliance on supplier allowances and promotional incentives could impact profitability.

Supplier allowances and promotional incentives which are often based on volume contribute significantly to United's profitability. If United does not comply with suppliers' terms and conditions, or does not make requisite purchases to achieve certain volume hurdles, United may not earn certain allowances and promotional incentives. In addition, if United's suppliers reduce or otherwise alter their allowances or promotional incentives, United's profit margin for the sale of the products it purchases from those suppliers may be harmed. The loss or diminution of supplier allowances and promotional support could have an adverse effect on the Company's results of operation.

United relies on independent dealers for a significant percentage of its net sales.

Sales to independent office product dealers account for a significant portion of United's net sales. Independent dealers compete with national retailers that have substantially greater financial resources and technical and marketing capabilities. Over the years, several of the Company's independent dealer customers have been acquired by national retailers. If United's customer base of independent dealers declines, the Company's business and results of operations may be adversely affected.

United operates in a competitive environment.

The Company operates in a competitive environment. Competition is based largely upon service capabilities and price, as the Company's competitors are wholesalers that offer the same or similar products that the Company offers to the same customers or potential customers. United also faces competition from some of its own suppliers, which sell their products directly to United's customers. The Company's financial condition and results of operations depend on its ability to compete effectively on price, product selection and availability, marketing support, logistics and other ancillary services.

The loss of key suppliers or supply chain disruptions could decrease United's revenues and profitability.

United believes its ability to offer a combination of well-known brand name products, competitively-priced private brand products and support services is an important factor in attracting and retaining customers. The Company's ability to offer a wide range of products and services is dependent on obtaining adequate product supply and services from manufacturers or other suppliers. United's agreements with its suppliers are generally terminable by either party on limited notice. The loss of, or a substantial decrease in the availability of products or services from key suppliers at competitive prices could cause the Company's revenues and profitability to decrease. In addition, supply interruptions could arise due to transportation disruptions, labor disputes or other factors beyond United's control. Disruptions in United's supply chain could result in a decrease in revenues and profitability.

United must manage inventory effectively in order to maximize supplier allowances while minimizing excess and obsolete inventory.

To maximize supplier allowances and minimize excess and obsolete inventory, United must project end-consumer demand for over 100,000 SKUs in stock. If United underestimates demand for a particular manufacturer's products, the Company will lose sales, reduce customer satisfaction, and earn a lower

7

level of allowances from that manufacturer. If United overestimates demand, it may have to liquidate excess or obsolete inventory at a loss.

United is focusing on increasing its sales of private brand products. These products can present unique inventory challenges. United sources many of its private brand products overseas, resulting in longer order-lead times than for comparable products sourced domestically. These longer lead-times make it more difficult to forecast demand accurately and require larger inventory investments to support high service levels. In addition, United generally does not have the right to return excess inventory of private brand products to the manufacturers.

The replacement of legacy systems with new information technology systems better equipped to support the Company's business could disrupt United's business and result in increased costs and decreased revenues.

The Company relies on information technology in all aspects of its business, including managing and replenishing inventory, filling and shipping customer orders and coordinating sales and marketing activities. Many of the Company's software applications are legacy systems, including order entry, order processing, pricing, billing, returns and credits, financial, and inventory receiving and control. The Company is building and implementing new applications to replace some of the legacy systems and to provide new services to customers. Interruptions in the proper functioning of the Company's information systems or delays in implementing new systems could disrupt United's business and result in increased costs and decreased revenue. A significant disruption or failure of the Company's existing information technology systems or in the Company's development and implementation of new systems could put it at a competitive disadvantage and could adversely affect its results of operations.

United may not be successful in identifying, consummating and integrating future acquisitions.

Historically, part of United's growth and expansion into new product categories or markets has come from targeted acquisitions. Going forward, United may not be able to identify attractive acquisition candidates or complete the acquisition of any identified candidates at favorable prices and upon advantageous terms and conditions. Furthermore, competition for attractive acquisition candidates may limit the number of acquisition candidates or increase the overall costs of making acquisitions. Acquisitions involve significant risks and uncertainties, including difficulties integrating acquired business systems and personnel with United's business; the potential loss of key employees, customers or suppliers; the assumption of liabilities and exposure to unforeseen liabilities of acquired companies; the difficulties in achieving target synergies; and the diversion of management attention and resources from existing operations. Difficulties in identifying, completing or integrating acquisitions could impede United's revenues and profitability.

The Company relies heavily on its key executives and the loss of one or more of these individuals could harm the Company's ability to carry out its business strategy.

United's ability to implement its business strategy depends largely on the efforts, skills, abilities and judgment of the Company's executive management team. United's success also depends to a significant degree on its ability to recruit and retain sales and marketing, operations and other senior managers. The Company may not be successful in attracting and retaining these employees, which may in turn have an adverse effect on the Company's results of operations and financial condition.

Unexpected events could disrupt normal business operations, which might result in increased costs and decreased revenues.

Unexpected events, such as hurricanes, fire, war, terrorism, and other natural or man-made disruptions, may increase the cost of doing business or otherwise impact United's financial performance. In addition,

8

damage to or loss of use of significant aspects of the Company's infrastructure due to such events could have an adverse affect on the Company's operating results and financial condition.

ITEM 1B.    UNRESOLVED COMMENT LETTERS.

None.

ITEM 2.    PROPERTIES.

The Company considers its properties to be suitable with adequate capacity for their intended uses. The Company evaluates its properties on an ongoing basis to improve efficiency and customer service and leverage potential economies of scale. Substantially all owned facilities are subject to liens under USSC's debt agreements (see the information under the caption "Liquidity and Capital Resources" included below under Item 7). As of December 31, 2008, these properties consisted of the following:

Offices.    The Company leases approximately 205,000 square feet for its corporate headquarters in Deerfield, Illinois. Additionally the Company owns 49,000 square feet of office space in Orchard Park, New York and leases 5,300 square feet of office space in Tulsa, Oklahoma and 20,000 square feet in Muskogee, Oklahoma. The Company also leases approximately 22,000 square feet of office space in Harahan, Louisiana. In May 2008, the Company sold its former corporate headquarters in Des Plaines, Illinois.

Distribution Centers.    The Company utilizes 67 distribution centers totaling approximately 12.7 million square feet of warehouse space. Of the 12.7 million square feet of distribution center space, 2.0 million square feet is owned and 10.7 million square feet is leased. The Company opened a new facility in Orlando, Florida during the second quarter of 2008.

9

ITEM 3.    LEGAL PROCEEDINGS.

The Company is involved in legal proceedings arising in the ordinary course of or incidental to its business. The Company is not involved in any legal proceedings that it believes will result, individually or in the aggregate, in a material adverse effect upon its financial condition or results of operations.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of security holders during the fourth quarter of 2008.

EXECUTIVE OFFICERS OF THE REGISTRANT (as of February 20, 2009)

The executive officers of the Company are as follows:

Name, Age and Position with the Company	Business Experience
Richard W. Gochnauer 59, President and Chief Executive Officer	Richard W. Gochnauer became the Company's President and Chief Executive Officer in December 2002, after joining the Company as its Chief Operating Officer and as a Director in July 2002. From 1994 until he joined the Company, Mr. Gochnauer held the positions of Vice Chairman and President, International, and President and Chief Operating Officer of Golden State Foods, a privately-held food company that manufactures and distributes food and paper products.
S. David Bent 48, Senior Vice President and Chief Information Officer	S. David Bent joined the Company as its Senior Vice President and Chief Information Officer in May 2003. From August 2000 until such time, Mr. Bent served as the Corporate Vice President and Chief Information Officer of Acterna Corporation, a multi-national telecommunications test equipment and services company, and also served as General Manager of its Software Division from October 2002. Previously, he spent 18 years with the Ford Motor Company. During his Ford tenure, Mr. Bent most recently served during 1999 and 2000 as the Chief Information Officer of Visteon Automotive Systems, a tier one automotive supplier, and from 1998 through 1999 as its Director, Enterprise Processes and Systems.
Ronald C. Berg 49, Senior Vice President, Inventory Management	Ronald C. Berg has been the Company's Senior Vice President, Inventory Management, since May 2006. From May 2005 to May 2006 he served as Senior Vice President, Business Transformation. He previously served as Senior Vice President, Inventory Management and Facility Support from October, 2001 until May 2005. He also served as the Company's Vice President, Inventory Management, since 1997, and as a Director, Inventory Management, since 1994. He began his career with the Company in 1987 as an Inventory Rebuyer, and spent several years thereafter in various product and furniture or general inventory management positions. Prior to joining the Company, Mr. Berg managed Solar Cine Products, Inc., a family-owned, photographic equipment business.

10

Name, Age and Position with the Company	Business Experience
Eric A. Blanchard 52, Senior Vice President, General Counsel and Secretary	Eric A. Blanchard has served as the Company's Senior Vice President, General Counsel and Secretary since January 2006. From November 2002 until December 2006 he served as the Vice President, General Counsel and Secretary at Tennant Company. Previously Mr. Blanchard was with Dean Foods Company where he held the positions of Chief Operating Officer, Dairy Division from January 2002 to October 2002, Vice President and President, Dairy Division from 1999 to 2002 and General Counsel and Secretary from 1988 to 1999.
Patrick T. Collins 48, Senior Vice President, Sales and Marketing	Patrick T. Collins was appointed to the position of Senior Vice President, Sales and Marketing, in April 2008. Prior to this appointment, he held the position of Senior Vice President, Sales since joining the Company in October 2004. Prior to joining the Company, Mr. Collins was employed by Ingram Micro, a global technology distribution company, from January 2000 through August 2004, in various senior sales and marketing roles, serving most recently as its Senior Group Vice President of Sales and Marketing. In that capacity, Mr. Collins had operating responsibility for sales, marketing, purchasing and supplier relations for Ingram Micro's North American division. Prior to joining Ingram Micro in early 2000, Mr. Collins was with the Frito-Lay division of PepsiCo, Inc., a global food and beverage consumer products company, for nearly 15 years, where he held various accounting, planning, sales and general management positions.
Timothy P. Connolly 45, Senior Vice President, Operations	Timothy P. Connolly has served as Senior Vice President, Operations since December 2006. From February 2006 to such time, Mr. Connolly was Vice President, Field Operations Support and Facility Engineering at the Field Support Center. He joined the Company in August 2003 as Region Vice President Operations, Midwest. Before joining the Company, Mr. Connolly was the Regional Vice President, Midwest Region for Cardinal Health where he directed operations, sales, human resources, finance and customer service for one of Cardinal's largest pharmaceutical distribution centers.
James K. Fahey 58, Senior Vice President, Merchandising	James K. Fahey is the Company's Senior Vice President, Merchandising, with responsibility for category management and merchandising, global sourcing, and supplier revenue management. From September 1992 until he assumed that position in October 1998, Mr. Fahey served as Vice President, Merchandising of the Company. Prior to that time, he served as the Company's Director of Merchandising. Before he joined the Company in 1991, Mr. Fahey had an extensive career in both retail and consumer direct-response marketing.

11

Name, Age and Position with the Company	Business Experience
Jeffrey G. Howard 53, Senior Vice President, National Accounts and Channel Management	Jeffrey G. Howard has served as the Company's Senior Vice President, National Accounts and Channel Management, since October 2004. From early 2003 until such time, he was Senior Vice President, National Accounts and New Business Development. Mr. Howard previously held the positions of Senior Vice President, Sales and Customer Support Services from October 2001, Senior Vice President, National Accounts, from late 2000 and Vice President, National Accounts, from 1994. He joined the Company in 1990 as General Manager of its Los Angeles distribution center, and was promoted to Western Region Vice President in 1992. Mr. Howard began his career in the office products industry in 1973 with Boorum & Pease Company, which was acquired by Esselte Pendaflex in 1985.
Robert J. Kelderhouse 53, Vice President, Treasurer	Robert J. Kelderhouse was elected and approved as Vice President, Treasurer of the Company at the Board of Directors meeting on March 4, 2008. Mr. Kelderhouse joined the Company as a full time employee in February, 2008 and had served in a consulting capacity since November, 2007. Prior to joining the Company, Mr. Kelderhouse spent six years with R.R. Donnelley & Sons Company and one of its acquired companies, Wallace Computer Services, Inc. He served as Senior Vice President and Treasurer of R.R. Donnelley from February, 2004 through March, 2006 and as Vice President and Treasurer of Wallace Computer Services, Inc. from May, 1999 through May, 2003. Prior to joining Wallace, Mr. Kelderhouse held numerous financial and treasury management positions throughout a sixteen year career at Heller International Corporation, a global commercial finance company. His last position at Heller was as Senior Vice President, Finance and Capital Markets for the Sales Finance Group.
Barbara J. Kennedy 42, Senior Vice President, Human Resources	Barbara J. Kennedy has been United Stationers' Senior Vice President, Human Resources since August 2008. Before she joined the Company, Ms. Kennedy held various human resources management positions, serving most recently as Executive Vice President, Human Resources, Safety, Recruiting and Driver Services for Swift Transportation. Prior to joining Swift, she served as Vice President, Human Resources at Barr-Nunn Transportation.
Kenneth M. Nickel 41, Vice President, Controller and Chief Accounting Officer	Kenneth M. Nickel has been the Company's Vice President, Controller and Chief Accounting Officer since February 2007. Prior to that, Mr. Nickel served as the Company's Vice President and Controller from November 2002 to February 2007, as its Vice President and Field Support Center Controller from November 2001 to October 2002 and as its Vice President and Assistant Controller from April 2001 to October 2001. Mr. Nickel has been with the Company since November 1989 and has held progressively more responsible accounting positions within the Company's Finance department.

12

Name, Age and Position with the Company	Business Experience
P. Cody Phipps 47, President, United Stationers Supply	P. Cody Phipps has served as the Company's President, United Stationers Supply since October 2006. He joined the Company in August 2003 as its Senior Vice President, Operations. Prior to joining the Company, Mr. Phipps was a partner at McKinsey & Company, Inc., a global management consulting firm. During his tenure at McKinsey from and after 1990, he became a leader in the firm's North American Operations Effectiveness Practice and co-founded and led its Service Strategy and Operations Initiative, which focused on driving significant operational improvements in complex service and logistics environments. Prior to joining McKinsey, Mr. Phipps worked as a consultant with The Information Consulting Group, a systems consulting firm, and as an IBM account marketing representative.
Victoria J. Reich 51, Senior Vice President and Chief Financial Officer	Victoria J. Reich joined the Company in June 2007 as its Senior Vice President and Chief Financial Officer. Prior to joining the Company, Ms. Reich spent ten years with Brunswick Corporation where she most recently was President of Brunswick European Group from August 2003 until June 2006. She served as Brunswick's Senior Vice President and Chief Financial Officer from 2000 to 2003 and as Vice President and Controller from 1996 until 2000. Before joining Brunswick, Ms. Reich spent 17 years at General Electric Company where she held various financial management positions.
Stephen A. Schultz 42, Group President, Lagasse and ORS Nasco	Stephen A. Schultz was appointed to the position of Group President, Lagasse and ORS Nasco in September 2008. Prior to this appointment, he held the position of President, Lagasse, Inc., a wholly owned subsidiary of USSC, from August 2001. In October 2003, he assumed the additional position of Senior Vice President, Category Management-Janitorial/Sanitation, of the Company. Mr. Schultz joined Lagasse in early 1999 as Vice President, Marketing and Business Development, and became a Senior Vice President of Lagasse in late 2000. Before joining Lagasse, he served for nearly 10 years in various executive sales and marketing roles for Hospital Specialty Company, a manufacturer and distributor of hygiene products for the institutional janitorial and sanitation industry.

Executive officers are elected by the Board of Directors. Except as required by individual employment agreements between executive officers and the Company, there exists no arrangement or understanding between any executive officer and any other person pursuant to which such executive officer was elected. Each executive officer serves until his or her successor is appointed and qualified or until his or her earlier removal or resignation.

13

PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Common Stock Information

USI's common stock is quoted through the NASDAQ Global Select Market ("NASDAQ") under the symbol USTR. The following table shows the high and low closing sale prices per share for USI's common stock as reported by NASDAQ:

	High		Low
2008
First Quarter	$	57.14	$	43.01
Second Quarter		49.91		36.56
Third Quarter		52.01		34.20
Fourth Quarter		47.42		28.39
2007
First Quarter	$	60.21	$	46.15
Second Quarter		68.20		59.52
Third Quarter		70.82		52.36
Fourth Quarter		60.47		45.79

On February 24, 2009, the closing sale price of Company's common stock as reported by NASDAQ was $22.90 per share. On February 24, 2009, there were approximately 784 holders of record of common stock. A greater number of holders of USI common stock are "street name" or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.

14

Stock Performance Graph

The following graph compares the performance of the Company's common stock over a five-year period with the cumulative total returns of (1) The NASDAQ Stock Market Index (U.S. companies), and (2) a group of companies included within Value Line's Office Equipment Industry Index. The graph assumes $100 was invested on December 31, 2003 in the Company's common stock and in each of the indices and assumes reinvestment of all dividends (if any) at the date of payment. The following stock price performance graph is presented pursuant to SEC rules and is not meant to be an indication of future performance.

	2003		2004		2005		2006		2007		2008
United Stationers (USTR)	$	100.00	$	112.90	$	118.52	$	114.10	$	112.93	$	81.84
NASDAQ (U.S. Companies)	$	100.00	$	108.84	$	111.16	$	122.11	$	132.42	$	63.80
Value Line Office Equipment	$	100.00	$	117.40	$	116.55	$	149.64	$	117.21	$	83.26

Common Stock Repurchases

As of December 31, 2008, the Company had $100.9 million under share repurchase authorizations from its Board of Directors. During 2008, the Company repurchased 1.2 million shares of common stock at an aggregate cost of $67.5 million.

Purchases may be made from time to time in the open market or in privately negotiated transactions. Depending on market and business conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without notice.

Acquired shares are included in the issued shares of the Company and treasury stock, but are not included in average shares outstanding when calculating earnings per share data.

There were no purchases of the Company's common stock during the fourth quarter of 2008.

15

Dividends

The Company's policy has been to reinvest earnings to enhance its financial flexibility and to fund future growth. Accordingly, USI has not paid cash dividends and has no plans to declare cash dividends on its common stock at this time. Furthermore, as a holding company, USI's ability to pay cash dividends in the future depends upon the receipt of dividends or other payments from its operating subsidiary, USSC. The Company's debt agreements impose limited restrictions on the payment of dividends. For further information on the Company's debt agreements, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" in Item 7, and Note 9 to the Consolidated Financial Statements included in Item 8 of this Annual Report.

Securities Authorized for Issuance under Equity Compensation Plans

The information required by Item 201(d) of Regulation S-K (Securities Authorized for Issuance under Equity Compensation Plans) is included in Item 12 of this Annual Report.

16

ITEM 6.    SELECTED FINANCIAL DATA.

The selected consolidated financial data of the Company for the years ended December 31, 2004 through 2008 have been derived from the Consolidated Financial Statements of the Company, which have been audited by Ernst & Young LLP, an independent registered public accounting firm. The adoption of new accounting pronouncements, changes in certain accounting policies, reclassifications of discontinued operations and certain other reclassifications are reflected in the financial information presented below. The selected consolidated financial data below should be read in conjunction with, and is qualified in its entirety by, Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements of the Company included in Items 7 and 8, respectively, of this Annual Report. Except for per share data, all amounts presented are in thousands:

		Years Ended December 31,(1)
		2008			2007			2006(2)			2005			2004(3)
Income Statement Data:
Net sales		$	4,986,878		$	4,646,399		$	4,546,914		$	4,279,089		$	3,838,701
Cost of goods sold			4,246,199			3,939,684			3,792,833			3,637,065			3,254,169
	Gross profit		740,679			706,715			754,081			642,024			584,532
Operating expenses:
	Warehousing, marketing and administrative expenses		548,222			502,810			516,234			471,193			422,595
	Restructuring charge (reversal), net(4)		—			1,378			1,941			(1,331	)		—
Total operating expenses			548,222			504,188			518,175			469,862			422,595
Operating Income			192,457			202,527			235,906			172,162			161,937
Interest expense			(28,563	)		(13,109	)		(8,276	)		(3,050	)		(3,324	)
Interest income			1,048			1,197			970			342			362
Other expense, net(5)			(8,079	)		(14,595	)		(12,786	)		(7,035	)		(3,488	)
Income from continuing operations before income taxes			156,863			176,020			215,814			162,419			155,487
Income tax expense			58,449			68,825			80,510			60,949			57,523
Income from continuing operations			98,414			107,195			135,304			101,470			97,964
Loss from discontinued operations, net of tax			—			—			(3,091	)		(3,969	)		(7,993	)
Net income		$	98,414		$	107,195		$	132,213		$	97,501		$	89,971
Net income per share—basic:
	Income from continuing operations	$	4.17		$	3.92		$	4.37		$	3.08		$	2.93
	Loss from discontinued operations, net of tax		—			—			(0.10	)		(0.12	)		(0.24	)
	Net income per common share—basic	$	4.17		$	3.92		$	4.27		$	2.96		$	2.69
Net income per share—diluted:
	Income from continuing operations	$	4.13		$	3.83		$	4.31		$	3.02		$	2.88
	Loss from discontinued operations, net of tax		—			—			(0.10	)		(0.12	)		(0.23	)
	Net income per common share—diluted	$	4.13		$	3.83		$	4.21		$	2.90		$	2.65
Cash dividends declared per share		$	—		$	—		$	—		$	—		$	—
Balance Sheet Data:
Working capital(6)		$	807,631		$	543,258		$	551,556		$	421,005		$	545,552
Total assets(6)			1,881,516			1,765,555			1,560,355			1,550,545			1,419,756
Total debt(7)			663,100			451,000			117,300			21,000			18,000
Total stockholders' equity			565,638			574,254			800,940			768,512			737,071
Statement of Cash Flows Data:
Net cash (used in) provided by operating activities		$	(129,305	)	$	218,054		$	13,994		$	236,067		$	50,701
Net cash used in investing activities			(28,366	)		(197,898	)		(18,624	)		(171,748	)		(13,378	)
Net cash provided by (used in) financing activities			146,430			(13,188	)		2,198			(62,680	)		(32,032	)

(1)

Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications were limited to Balance Sheet and Cash Flow Statement presentation and did not impact the Statements of Income. Specifically, the Company reclassified capitalized software costs from "Other Assets" to "Property, Plant and Equipment" beginning in the first quarter of 2006, with prior periods updated to conform to this presentation. For the years ended December 31, 2005 and 2004, $17.0 million and $3.7 million, respectively, in operating cash outflows were reclassified as cash outflows from investing activities. The reclassification of capitalized software also resulted in a reclassification from "Other Assets" to "Property, Plant and Equipment" for 2005 of $17.0 million. Additionally, the Company reclassified certain offsets to "Accrued Liabilities" related to merchandise return reserves to "Inventory". This reclassification began in the fourth quarter of 2007, with prior periods updated to conform to this presentation. For the years ended December 31, 2006, 2005, and 2004, $7.0 million, $8.3 million, and $6.6 million , respectively, were reclassified to "Inventory" out of "Accrued Liabilities" with corresponding changes made to the Statement of Cash Flows within "Cash Flows From Operating Activities".

17

(2)

In 2006, the Company recorded $60.6 million, or $1.21 per diluted share in favorable benefits from the Company's product content syndication program and certain marketing program changes.

(3)

During 2004, the Company recorded a pre-tax write-off of approximately $13.2 million in supplier allowances, customer rebates and trade receivables, inventory and other items associated with the Company's Canadian Division.

(4)

Reflects restructuring charge in the following years: 2007—$1.4 million charge for the 2006 Workforce Reduction Program. 2006—$6.0 million charge for the 2006 Workforce Reduction Program, partially offset by a $4.1 million reversal of previously established restructuring reserves. 2005—$1.3 million reversal of previously established restructuring reserves. See Note 5 to the Consolidated Financial Statements included in Item 8 of this Annual Report.

(5)

Primarily represents the loss on the sale of certain trade accounts receivable through the Company's Receivables Securitization Program. For further information on the Company's Receivables Securitization Program, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Off-Balance Sheet Arrangements—Receivables Securitization Program" under Item 7 of this Annual Report.

(6)

In accordance with Generally Accepted Accounting Principles ("GAAP"), total assets exclude $23.0 million in 2008, $248.0 million in 2007, $225.0 million in 2006 and 2005, and $118.5 million in 2004 of certain trade accounts receivable sold through the Company's Receivables Securitization Program. For further information on the Company's Receivables Securitization Program, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Off-Balance Sheet Arrangements—Receivables Securitization Program" under Item 7 of this Annual Report.

(7)

Total debt includes current maturities.

FORWARD LOOKING INFORMATION

This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Forward-looking statements often contain words such as "expects", "anticipates", "estimates", "intends", "plans", "believes", "seeks", "will", "is likely", "scheduled", "positioned to", "continue", "forecast", "predicting", "projection", "potential" or similar expressions. Forward-looking statements include references to goals, plans, strategies, objectives, projected costs or savings, anticipated future performance, results or events and other statements that are not strictly historical in nature. These forward-looking statements are based on management's current expectations, forecasts and assumptions. This means they involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied here. These risks and uncertainties include, without limitation, those set forth above under the heading "Risk Factors."

Readers should not place undue reliance on forward-looking statements contained in this Annual Report on Form 10-K. The forward-looking information herein is given as of this date only, and the Company undertakes no obligation to revise or update it.

18

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with both the information at the end of Item 6 of this Annual Report on Form 10-K appearing under the caption, "Forward Looking Information", and the Company's Consolidated Financial Statements and related notes contained in Item 8 of this Annual Report.

Overview and Recent Results

The Company is North America's largest broad line wholesale distributor of business products, with 2008 net sales of nearly $5.0 billion. The Company sells its products through a national distribution network of 67 distribution centers to approximately 30,000 resellers, who in turn sell directly to end consumers.

Key Company and Industry Trends

The following is a summary of selected trends, events or uncertainties that the Company believes may have a significant impact on its future performance.

•

During the fourth quarter of 2008, the recession and related economic conditions contributed to a decline in sales, particularly in the office products division. While it is uncertain how long the current economic downturn will last, the Company expects the market to remain difficult in 2009. Sales year-to-date are trending down in the high single digits compared with the same period last year.

•

The Company has set an objective to reduce costs as quickly as possible to align them with lower sales. As a result of the workforce reduction announced January 27, 2009, the Company expects to incur a charge of approximately $3.0 million in the first quarter. The Company has also taken other aggressive steps to manage costs. These include the elimination of vacant positions and those filled by outside contractors, reducing the use of temporary workers and overtime and reducing staff needs due to increased productivity as a result of various strategic initiatives. The Company also expects to lower or avoid cost increases by increasing the use of voluntary time off without pay, eliminating merit increases and incentive pay for senior managers and all officers, reducing merit increases and incentive pay for all other associates and freezing pension service benefits for non-union employees effective March 1, 2009.

•

On December 21, 2007, the Company completed the acquisition of ORS Nasco, a pure wholesale distributor of industrial supplies. ORS Nasco sales for 2008 were $307 million and earnings per diluted share for the year included a $0.23 per share contribution from ORS Nasco. This exceeded the Company's targeted full year 15 - 20 cents of earnings per share accretion in 2008 for ORS Nasco.

•

On September 2, 2008, the Company completed the acquisition of certain assets and liabilities of Emco Distribution LLC's New Jersey business. The $15 million purchase price was funded under the Company's credit agreement.

•

Total Company sales for 2008 grew 7.3% to nearly $5.0 billion. Adjusted for one more sales day in 2008, sales were up 6.9% over 2007. Continued strong growth was seen in janitorial and breakroom supplies with relatively flat sales in traditional office products. These improvements were partially offset by declines in the technology and furniture categories. The 2008 results include ORS Nasco which contributed approximately 6.5% to the growth in 2008.

•

Gross margin as a percent of sales for 2008 was 14.9% versus 15.2% in 2007. The gross margin rate in 2008 was negatively impacted by declines of 45 basis points due to reduced supplier

19

allowances and purchase discounts, 40 basis points from a lower pricing margin and 5 basis points due to increased occupancy costs. These items were partially offset by a 20 basis point contribution from the addition of ORS Nasco and 40 basis points related to the effects of higher product cost inflation.

•

Operating expenses as a percent of sales for the year were 11.0% compared to 10.9% in 2007. The increase from 2007 to 2008 is due to an increase in bad debt expense for the year or 24 basis points as a percent of sales.

•

Operating cash flows for the year were a use of $129.3 million versus a source of $218.1 million in 2007. Adjusted to exclude the effects of accounts receivable sold under the Receivables Securitization Program, the Company's operating cash flows declined to a source of $95.7 million in 2008 from $195.1 million in 2007. This decline represents lower net income and an unusually unfavorable balance of inventories and payables due to the timing of investment buy purchases in the fourth quarter of 2008. Operating cash flows in 2007 were favorably impacted by the liquidation of a high year-end 2006 working capital balance.

•

During 2008, the Company acquired approximately 1.2 million shares of common stock for $67.5 million under its publicly announced share repurchase programs. As of February 23, 2009, the Company had approximately $100.9 million remaining of its existing share repurchase authorizations from the Board of Directors.

Acquisition of Emco Distribution LLC

On September 2, 2008, the Company closed the asset acquisition of Emco Distribution LLC's New Jersey business, including certain liabilities. The payment of the base purchase price of $15.1 million and transaction costs of $0.1 million were funded under the Company's credit agreement. The purchase resulted in goodwill and intangible assets of $2.4 million and $3.7 million, respectively. The purchase included $0.7 million of intangible assets with indefinite lives and $3.0 million of amortizable intangibles. Amortization expense associated with the intangible assets is expected to be approximately $0.3 million per year for 10 years. Subsequent adjustments may be made to the purchase price allocation based on, among other things, post-closing purchase price adjustments and finalizing the valuation of tangible and intangible assets.

Acquisition of ORS Nasco Holding, Inc.

On December 21, 2007, the Company's subsidiary, USSC, completed the purchase of 100% of the outstanding shares of ORS Nasco Holding, Inc. (ORS Nasco) from an affiliate of Brazos Private Equity Partners, LLC of Dallas, Texas, and other shareholders. This acquisition was completed with the payment of the base purchase price of $175.0 million plus estimated working capital adjustments, a pre-closing tax benefit payment, and other adjusting items. The purchase price was also subject to certain post-closing adjustments of which approximately $0.4 million was adjusted downward based on the subsequently negotiated working capital calculations in the second quarter of 2008. In total, the purchase price, net of cash acquired, was $180.2 million, including $0.5 million in transaction costs. The acquisition allowed the Company to diversify its product offering and provided an entry into the wholesale industrial supplies market. The purchase price was financed through the addition of a $200 million term loan under the Company's credit agreement.

The acquisition was accounted for under the purchase method of accounting in accordance with Financial Accounting Standards No. 141, Business Combinations, with the excess purchase price over the fair market value of the assets acquired and liabilities assumed allocated to goodwill. Based on the purchase price allocation, the purchase price of $180.2 million, net of cash received, has resulted in goodwill and intangible assets of $86.4 million and $44.9 million, respectively. The purchase included $12.3 million of intangible assets related to trademarks and trade names that have indefinite lives while

20

the remaining $32.6 million in intangible assets acquired is amortizable and related to customer lists and certain non-compete agreements. Neither the goodwill nor the intangible assets are expected to generate a tax deduction. For financial accounting purposes, the amortizable intangible assets are treated as a temporary difference for which a deferred tax liability of $12.2 million was recorded through purchase accounting. In addition, a deferred tax liability of $4.6 million was recorded for intangible assets with indefinite lives. The amortization expense related to the intangible assets is treated as the reversal of the temporary difference which has no impact on the effective tax rate. The weighted average useful life of amortizable intangibles is expected to be approximately 13 years. The Company recorded amortization expense of $2.1 million in 2008.

Critical Accounting Policies, Judgments and Estimates

The Company's significant accounting policies are more fully described in Note 2 of the Consolidated Financial Statements. As described in Note 2, the preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results may differ from those estimates. The Company believes that such differences would have to vary significantly from historical trends to have a material impact on the Company's financial results.

The Company's critical accounting policies are most significant to the Company's financial condition and results of operations and require especially difficult, subjective or complex judgments or estimates by management. In most cases, critical accounting policies require management to make estimates on matters that are uncertain at the time the estimate is made. The basis for the estimates is historical experience, terms of existing contracts, observance of industry trends, information provided by customers or vendors, and information available from other outside sources, as appropriate. These critical accounting policies include the following:

Supplier Allowances

Supplier allowances (fixed and variable) are common practice in the business products industry and have a significant impact on the Company's overall gross margin. Gross margin is determined by, among other items, file margin (determined by reference to invoiced price), as reduced by estimated customer discounts and rebates as discussed below, and increased by estimated supplier allowances and promotional incentives. These allowances and incentives are estimated on an ongoing basis and the potential variation between the actual amount of these margin contribution elements and the Company's estimates of them could be material to its financial results. Reported results include management's current estimate of such allowances and incentives.

In 2008, approximately 17% of the Company's estimated annual supplier allowances and incentives were fixed, based on supplier participation in various Company advertising and marketing publications. Fixed allowances and incentives are taken to income through lower cost of goods sold as inventory is sold.

The remaining 83% of the Company's estimated supplier allowances and incentives in 2008 were variable, based on the volume and mix of the Company's product purchases from suppliers. These variable allowances are recorded based on the Company's annual inventory purchase volumes and product mix and are included in the Company's Consolidated Financial Statements as a reduction to cost of goods sold, thereby reflecting the net inventory purchase cost. Supplier allowances and incentives attributable to unsold inventory are carried as a component of net inventory cost. The potential amount of variable supplier allowances often differs based on purchase volumes by supplier and product category. As a result, lower Company sales volume (which reduce inventory purchase

21

requirements) and product sales mix changes (primarily because higher-margin products often benefit from higher supplier allowance rates) can make it difficult to reach supplier allowance goals.

The Company transitioned to a calendar year program with its 2006 Supplier Allowance Program for product content syndication. This change altered the year-over-year timing on recognizing related income, which resulted in a positive impact to gross margin of $41.6 million during 2006.

Customer Rebates

Customer rebates and discounts are common in the business products industry and have a significant impact on the Company's overall sales and gross margin. Such rebates are reported in the Consolidated Financial Statements as a reduction of sales.

Customer rebates include volume rebates, sales growth incentives, advertising allowances, participation in promotions and other miscellaneous discount programs. These rebates are paid to customers monthly, quarterly and/or annually. Volume rebates and growth incentives are based on the Company's annual sales volumes to its customers. The aggregate amount of customer rebates depends on product sales mix and customer mix changes.

During 2006, the Company changed the timing of certain marketing programs impacting catalog charges and related customer rebates, which resulted in a favorable impact to gross margin of $19.0 million.

Revenue Recognition

Revenue is recognized when a service is rendered or when title to the product has transferred to the customer. Management establishes a reserve and records an estimate for future product returns related to revenue recognized in the current period. This estimate requires management to make certain estimates and judgments, including estimating the amount of future returns of products sold in the current period. This estimate is based on historical product-return trends and the loss of gross margin associated with those returns. This methodology involves some risk and uncertainty due to its dependence on historical information for product returns and gross margins to record an estimate of future product returns. If actual product returns on current period sales differ from historical trends, the amounts estimated for product returns (which reduce net sales) for the period may be overstated or understated, causing actual results of operations or financial condition to differ from those expected.

Valuation of Accounts Receivable

To determine an estimate for an allowance for doubtful accounts, the Company makes judgments as to the collectability of accounts receivable based on historical trends and future expectations. This allowance adjusts gross trade accounts receivable downward to its estimated collectible or net realizable value. To determine the appropriate allowance for doubtful accounts, management undertakes a two-step process. First, management reviews specific customer accounts receivable balances and specific customer circumstances to determine whether a further allowance is necessary. As part of this specific-customer analysis, management considers items such as account agings, bankruptcy filings, litigation, government investigations, historical charge-off patterns, accounts receivable concentrations and the current level of receivables compared with historical customer account balances. Second, a set of general allowance percentages are applied to accounts receivable generated as a result of sales. These percentages are based on historical trends for non-specific customer write-offs. Periodically, management reviews these allowance percentages, adjusting for current information and trends.

The primary risks in the methodology used to estimate the allowance for doubtful accounts are its dependence on historical information to predict the collectability of accounts receivable and timeliness

22

of current financial information from customers. To the extent actual collections of accounts receivable differ from historical trends, the allowance for doubtful accounts and related expense for the current period may be overstated or understated.

Insured Loss Liability Estimates

The Company is primarily responsible for retained liabilities related to workers' compensation, vehicle, property and general liability and certain employee health benefits. The Company records expense for paid and open claims and an expense for claims incurred but not reported based upon historical trends and certain assumptions about future events. The Company has an annual per-person maximum cap, provided by a third-party insurance company, on certain employee medical benefits. In addition, the Company has both a per-occurrence maximum loss and an annual aggregate maximum cap on workers' compensation claims.

Inventories

Inventory constituting approximately 81% of total inventory as of both December 31, 2008 and 2007, has been valued under the last-in, first-out ("LIFO") accounting method. LIFO results in a better matching of costs and revenues. The remaining inventory is valued under the first-in, first-out ("FIFO") accounting method. Inventory valued under the FIFO and LIFO accounting methods is recorded at the lower of cost or market. If the Company had valued its entire inventory under the lower of FIFO cost or market, inventory would have been $84.7 million and $60.4 million higher than reported as of December 31, 2008 and December 31, 2007, respectively. The increase in the LIFO reserve, which increased cost of sales by $24.3 million, was partially offset by reduced cost of sales resulting from decrements in certain LIFO pools. During 2008, inventory quantities for the portion of inventory accounted for under the LIFO accounting method were reduced. These reductions resulted in liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of current year purchases. The effect of these liquidations decreased cost of sales by approximately $5.4 million, which is included in the $24.3 million referenced above.

The Company records adjustments for shrinkage. Inventory that is obsolete, damaged, defective or slow moving is recorded to the lower of cost or market. These adjustments are determined using historical trends and are adjusted, if necessary, as new information becomes available.

Derivative Financial Instruments

The Company's risk management policies allow for the use of derivative financial instruments to prudently manage foreign currency exchange rate and interest rate exposure. The policies do not allow such derivative financial instruments to be used for speculative purposes. At this time, the Company primarily uses interest rate swaps which are subject to the management, direction and control of our financial officers. Risk management practices, including the use of all derivative financial instruments, are presented to the Board of Directors for approval.

All derivatives are recognized on the balance sheet date at their fair value. All derivatives in a net receivable position are included in "Other assets", and those in a net liability position are included in "Other long-term liabilities". The interest rate swaps that the Company has entered into are classified as cash flow hedges in accordance with the Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards (SFAS) No. 133 as they are hedging a forecasted transaction or the variability of cash flow to be paid by the Company. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in other comprehensive income, net of tax, until earnings are affected by the forecasted transaction or the variability of cash flow, and then are reported in current earnings.

23

The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific forecasted transactions or variability of cash flow.

The Company formally assesses, at both the hedge's inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. When it is determined that a derivative is not highly effective as a hedge then hedge accounting is discontinued prospectively in accordance with SFAS No. 133. At this time, this has not occurred as all cash flow hedges contain no ineffectiveness. See Note 20, "Derivative Financial Instruments", for further detail.

Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. The Company estimates actual current tax expense and assesses temporary differences that exist due to differing treatments of items for tax and financial statement purposes. These temporary differences result in the recognition of deferred tax assets and liabilities.

The current and deferred tax balances and income tax expense recognized by the Company are based on management's interpretation of the tax laws of multiple jurisdictions. Income tax expense also reflects the Company's best estimates and assumptions regarding, among other things, the level of future taxable income, interpretation of tax laws, and tax planning. Future changes in tax laws, changes in projected levels of taxable income, and tax planning could impact the effective tax rate and current and deferred tax balances recorded by the Company. Management's estimates as of the date of the Consolidated Financial Statements reflect its best judgment giving consideration to all currently available facts and circumstances. As such, these estimates may require adjustment in the future, as additional facts become known or as circumstances change. Further, in accordance with FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 ("FIN No. 48"), the tax effects from uncertain tax positions are recognized in the Consolidated Financial Statements, only if it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position. The Company also accounts for interest and penalties related to uncertain tax positions as a component of income tax expense.

Pension and Postretirement Health Benefits

Calculating the Company's obligations and expenses related to its pension and postretirement health benefits requires using certain actuarial assumptions. As more fully discussed in Notes 12 and 13 to the Consolidated Financial Statements included in Item 8 of this Annual Report, these actuarial assumptions include discount rates, expected long-term rates of return on plan assets, and rates of increase in compensation and healthcare costs. To select the appropriate actuarial assumptions, management relies on current market trends and historical information. The expected long-term rate of return on plan assets assumption is based on historical returns and the future expectation of returns for each asset category, as well as the target asset allocation of the asset portfolio. Pension expense for 2008 was $5.6 million, compared to $7.4 million in 2007 and $8.8 million in 2006. A one percentage point decrease in the assumed discount rate would have resulted in an increase in pension expense for 2008 of approximately $2.7 million and increased the year-end projected benefit obligation by $20.7 million.

Costs associated with the Company's postretirement health benefits plan were $0.1 million for each year ended 2008, 2007 and 2006. A one-percentage point decrease in the assumed discount rate would have resulted in incremental postretirement healthcare expenses for 2008 of approximately $0.1 million and increased the year-end accumulated postretirement benefit obligation by $0.6 million. Current rates of medical cost increases are trending above the Company's medical cost increase cap of 3% provided by

24

the plan. Accordingly, a one percentage point increase in the assumed average healthcare cost trend would not have a significant impact on the Company's postretirement health plan costs.

The following tables summarize the Company's actuarial assumptions for discount rates, expected long-term rates of return on plan assets, and rates of increase in compensation and healthcare costs for the years ended December 31, 2008, 2007 and 2006:

	2008			2007			2006
Pension plan assumptions:
Assumed discount rate		6.25	%		6.00	%		6.00	%
Rate of compensation increase		3.75	%		3.75	%		3.75	%
Expected long-term rate of return on plan assets		8.25	%		8.25	%		8.25	%
Postretirement health benefits assumptions:
Assumed average healthcare cost trend		3.00	%		3.00	%		3.00	%
Assumed discount rate		6.25	%		6.00	%		6.00	%

To select the appropriate actuarial assumptions, management relied on current market conditions, historical information and consultation with and input from the Company's outside actuaries. The expected long-term rate of return on plan assets assumption is based on historical returns and the future expectation of returns for each asset category, as well as the target asset allocation of the asset portfolio.

The Company expects to freeze pension service benefits for employees not covered by collective bargaining agreements. This action has been approved and is expected to be effective March 1, 2009.

Results for the Years Ended December 31, 2008, 2007 and 2006

The following table presents the Consolidated Statements of Income as a percentage of net sales:

		Years Ended December 31,
		2008			2007			2006
Net sales			100.00	%		100.00	%		100.00	%
Cost of goods sold			85.15			84.79			83.42
Gross margin			14.85			15.21			16.58
Operating expenses:
	Warehousing, marketing and administrative expenses		10.99			10.82			11.35
	Restructuring and other charges, net		—			0.03			0.04
Total operating expenses			10.99			10.85			11.39
Operating income			3.86			4.36			5.19
Interest expense, net			0.55			0.26			0.16
Other expense, net			0.16			0.31			0.28
Income from continuing operations before income taxes			3.15			3.79			4.75
Income tax expense			1.18			1.48			1.77
Income from continuing operations			1.97			2.31			2.98
Loss from discontinued operations, net of tax			—			—			(0.07	)
Net income			1.97	%		2.31	%		2.91	%

The above table includes all items that are separately itemized in the tables below for 2008 and 2007. Operating expenses for 2006 were also impacted by a charge related to a $6.0 million restructuring charge reflecting the 2006 Workforce Reduction Program, a $6.7 million charge related to the write-off of the Company's internal systems initiative, and a $4.1 million reversal of a prior-period restructuring charge.

25

Adjusted Operating Income and Diluted Earnings Per Share

The following table presents Adjusted Operating Income and Diluted Earnings Per Share for the years ended December 31, 2008 and 2007 (in millions, except per share data). The table shows Adjusted Operating Income and Diluted Earnings per Share excluding the effects of the gains on sale of buildings in 2008, an asset impairment charge in 2008, and a restructuring charge in 2007 (see "Comparison of Results for the Years Ended December 31, 2008 and 2007" below for more detail). Generally Accepted Accounting Principles require that the effects of these items be included in the Consolidated Statements of Income. The Company believes that excluding these items is an appropriate comparison of its ongoing operating results to last year and that it is helpful to provide readers of its financial statements with a reconciliation of these items to its Consolidated Statements of Income reported in accordance with Generally Accepted Accounting Principles.

		For the Years Ended December 31,
		2008						2007
		Amount			% to Net Sales			Amount			% to Net Sales
Sales		$	4,986.9			100.00	%	$	4,646.4			100.00	%
Gross profit		$	740.7			14.85	%	$	706.7			15.21	%
Operating expenses		$	548.2			10.99	%	$	504.2			10.85	%
	Gain on the sale of distribution centers		5.1			0.10	%		—			—
	Gain on sale of former corporate headquarter		4.7			0.09	%		—			—
	Asset impairment charge		(6.7	)		-0.13	%		—			—
	Restructuring charge		—			—			(1.4	)		-0.03	%
Adjusted operating expenses		$	551.3			11.05	%	$	502.8			10.82	%
Operating income		$	192.5			3.86	%	$	202.5			4.36	%
	Operating expense items noted above		(3.1	)		-0.06	%		1.4			0.03	%
Adjusted operating income		$	189.4			3.80	%	$	203.9			4.39	%
Net income per share—diluted		$	4.13					$	3.83
	Per share operating expense items noted above		(0.08	)					0.03
Adjusted net income per share—diluted		$	4.05					$	3.86
Adjusted net income per diluted share growth rate over the prior year period			5	%
Weighted average number of common shares—diluted			23,847						27,976

26

Comparison of Results for the Years Ended December 31, 2008 and 2007

Net Sales.    Net sales for the year ended December 31, 2008 were approximately $5.0 billion, up 7.3%, compared with $4.6 billion in 2007. The twelve-month period ended December 31, 2008 had one more selling day compared with the same period of 2007. Adjusted for this change in workdays, sales grew 6.9%. The following table shows net sales by product category for 2008 and 2007 (in millions):

	Years Ended December 31,
	2008		2007(1)
Technology products	$	1,679	$	1,729
Traditional office products (including cut-sheet paper)		1,349		1,340
Janitorial and breakroom supplies		1,053		925
Office furniture		505		569
Industrial supplies		307		3
Freight revenue		86		77
Other		8		3
Total net sales	$	4,987	$	4,646

(1)

Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications were limited to changes between the "Traditional office products" and "Office furniture" product categories presentation and did not impact the Consolidated Statements of Income.

Sales in the technology products category declined 3.3%, after adjusting for selling days, in 2008 compared to 2007. This category continues to represent the largest percentage of the Company's consolidated net sales and accounted for approximately 34% for 2008. Competitive pressures, reduced discretionary spending and the weak economy all negatively impacted sales in this category. The Company's continued focus on margin management also has led to declines in this area of the business.

Sales of traditional office products in 2008 grew less than 1% per selling day versus 2007. Traditional office supplies represented approximately 27% of the Company's consolidated net sales for 2008. The growth in this category was primarily driven by higher cut-sheet paper sales which typically earns a lower margin than other traditional office products sales which declined for the year.

Sales growth in the janitorial and breakroom supplies category remained strong, rising approximately 13% in 2008, adjusted for the additional sales day, as compared to 2007. This category accounted for nearly 21% of the Company's 2008 consolidated net sales. Growth in this category was primarily due to continued success in the Company's "office-jan" program to grow sales of janitorial and breakroom supplies to traditional office products resellers, ongoing efforts to convert direct sales to wholesale, and national account business which began late in 2007.

Office furniture sales in 2008 were down 11.6%, after adjusting for selling days, compared to 2007. Office furniture accounted for approximately 10% of the Company's 2008 consolidated net sales. This category, which typically has higher margins, has seen the harshest impact from the recession as consumers put off high dollar discretionary purchases of furniture.

Sales of industrial supplies accounted for 6% of the Company's net sales in 2008. ORS Nasco sales of such products contributed approximately 6.5% to the Company's overall annual sales growth.

The remaining 2% of the Company's consolidated net sales came from freight and advertising revenue.

Gross Profit and Gross Margin Rate.    Gross profit (gross margin dollars) for 2008 was $740.7 million, compared to $706.7 million in 2007. The gross margin rate (gross profit as a percentage of net sales) for 2008 was 14.9%, as compared to 15.2% for 2007. Lower supplier allowances and purchase discounts,

27

which resulted from the impact of lower sales volume, mix and inventory reductions, negatively impacted the gross margin rate by approximately 45 basis points. The effects of this lower margin sales mix across and within product categories also negatively impacted pricing margin by 40 basis points. The Company also experienced some increased of occupancy costs throughout the year which negatively impacted the gross margin rate by 5 basis points. These items were partially offset by the 20 basis point contribution of ORS Nasco to the gross margin rate and the 40 basis point favorable impact of product cost inflation and selective investment buys in advance of these price increases.

Operating Expenses.    Operating expenses for 2008 totaled $548.2 million, or 11.0% of net sales, compared with $504.2 million, or 10.9% of net sales in 2007. Operating expenses in 2008 included $5.1 million related to the gains on the sale of two distribution centers, $4.7 million related to the gain on the sale of the Company's former corporate headquarters, and an asset impairment charge of $6.7 million related to capitalized software development costs. Operating expenses in 2007 include a $1.4 million restructuring charge related to finalizing the 2006 Workforce Reduction Program. ORS Nasco operating expenses for 2008 were $37.5 million and $0.8 million in 2007. Excluding ORS Nasco and the items mentioned above, operating expenses in 2008 and 2007 were 11.0% and 10.8%, respectively, of net sales. The primary cause for the increase was higher bad debt expense of 24 basis points, as the Company increased its reserves for doubtful accounts due to the weak economic environment. Also the Company's incremental strategic investments added 7 basis points to the operating expenses ratio. These increases were partially offset by lower management bonuses of 9 basis points and lower depreciation expense of 7 basis points. Cost containment actions in 2008 also helped offset general inflationary cost increases.

Interest Expense, net.    Net interest expense for 2008 was $27.5 million, compared with $11.9 million in 2007. The increase in interest expense in 2008 was attributable to higher average outstanding debt in 2008 resulting primarily from the $200 million Term Loan entered into in December 2007, the $135 million Note Purchase Agreement entered into in October 2007 and an increase in the average outstanding balance of the revolving credit facility resulting from the reduction in the average outstanding amount borrowed under the Receivable Securitization Program. The impact of these increased borrowings on interest expense was partially offset by lower average rates.

Other Expense, net.    Other Expense for 2008 was $8.1 million, compared with $14.6 million in 2007. Net Other Expense for 2008 and 2007 primarily reflected costs associated with the sale of certain trade accounts receivable through the Receivables Securitization Program. The 2008 decline was due primarily to reduced average borrowings under the Receivables Securitization Program.

Income Taxes.    Income tax expense was $58.4 million in 2008, compared with $68.8 million in 2007. The Company's effective tax rate was 37.3% in 2008, compared to 39.1% in 2007. This effective tax rate decrease primarily related to lower income tax contingencies and the mix of income between jurisdictions and legal entities.

Net Income.    Net income for 2008 totaled $98.4 million, or $4.13 per diluted share, compared with net income of $107.2 million, or $3.83 per diluted share for 2007. Adjusting for the impact of the $9.8 million pre-tax gains on the sale of two distribution centers and the Company's former corporate headquarters, and a pre-tax asset impairment charge of $6.7 million related to capitalized software development costs, 2008 diluted earning per share were $4.05 per share versus $3.86 per share after adjusting 2007 by $1.4 million (pre-tax) related to finalizing the 2006 Workforce Reduction Program.

Comparison of Results for the Years Ended December 31, 2007 and 2006

Net Sales.    Net sales for the year ended December 31, 2007 were $4.6 billion, up 2.2%, compared with $4.5 billion in 2006. The twelve-month period ended December 31, 2007 had one more selling day

28

compared with the same period of 2006. Adjusted for this change in workdays, sales grew 1.8%. The following table shows net sales by product category for 2007 and 2006 (in millions):

	Years Ended December 31,
	2007		2006
Technology products	$	1,729	$	1,767
Traditional office products (including cut-sheet paper)		1,340		1,300
Janitorial and breakroom supplies		925		849
Office furniture		569		551
Industrial supplies		3		—
Freight revenue		77		70
Other		3		10
Total net sales	$	4,646	$	4,547

(1)

Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications were limited to changes between the "Traditional office products" and "Office furniture" product categories presentation and did not impact the Consolidated Statements of Income.

Sales in the technology products category declined 2.2% in 2007 compared to 2006. This category continues to represent the largest percentage of the Company's consolidated net sales and accounted for approximately 37% for 2007. Competitive pressures and continued focus on margin management have led to declines in this area of the business.

Sales of traditional office products in 2007 grew approximately 3% versus 2006. Traditional office supplies represented approximately 29% of the Company's consolidated net sales for 2007. The growth in this category was primarily driven by higher cut-sheet paper sales as well as growth in new emerging channels.

Sales growth in the janitorial and breakroom supplies category remained strong, rising approximately 9% in 2007 compared to 2006. This category accounted for nearly 20% of the Company's 2007 consolidated net sales. Growth in this category was primarily due to volume increases in foodservice and paper products aided by improved service levels, breadth of line, new catalogs and marketing efforts. A new multi-year agreement signed in the fourth quarter 2007 with a major account also contributed to this increase.

Office furniture sales in 2007 were up approximately 3% compared to 2006. Office furniture accounted for approximately 12% of the Company's 2007 consolidated net sales.

Sales of industrial supplies accounted for less than 1% of the Company's net sales in 2007 as the acquisition of ORS Nasco was not completed until late December.

The remaining 1% of the Company's consolidated net sales came from freight and advertising revenue.

Gross Profit and Gross Margin Rate.    Gross profit (gross margin dollars) for 2007 was $706.7 million, compared to $754.1 million in 2006. The gross margin rate (gross profit as a percentage of net sales) for 2007 was 15.2%, as compared to 16.6% for 2006. The decline in gross profit dollars and rate is partially attributable to incremental income in 2006 related to the Company's product content syndication program and marketing program changes. These non-recurring benefits accounted for $60.6 million or 133 basis points. Adjusting for this item, the gross margin rate in 2006 was 15.3% or 4 bps higher than 2007. Successful management efforts in key margin components including supplier allowances (17 bps) were partially offset by lower levels of buy-side inflation (21 bps).

Operating Expenses.    Operating expenses for 2007 totaled $504.2 million, or 10.9% of net sales, compared with $518.2 million, or 11.4% of net sales in 2006. Operating expenses in 2007 include a

29

$1.4 million restructuring charge related to finalizing the 2006 Workforce Reduction Program. During 2006, operating expenses were unfavorably affected by a $6.0 million restructuring charge reflecting the workforce reduction and a $6.7 million charge related to the write-off of the Company's internal systems initiative. These effects were partially offset by a $4.1 million reversal of a prior-period restructuring charge. Adjusting for these non-recurring items, operating expenses in 2007 and 2006 were 10.8% and 11.2% as a percentage of net sales. The 38 bp improvement in operating expenses is mainly due to reduced payroll and employee related expenses as a result of the previously mentioned workforce reduction.

Interest Expense, net.    Net interest expense for 2007 was $11.9 million, compared with $7.3 million in 2006. The increase in interest expense in 2007 was attributable to higher borrowings for the increased stock repurchases and acquisition of ORS Nasco, offset by lower average rates.

Other Expense, net.    Other Expense for 2007 was $14.6 million, compared with $12.8 million in 2006. Net Other Expense for 2007 and 2006 primarily reflected costs associated with the sale of certain trade accounts receivable through the Receivables Securitization Program. The 2007 increase is due primarily to incremental sales of accounts receivable.

Income from Continuing Operations before Income Taxes.    Income from continuing operations before income taxes for 2007 totaled $176.0 million compared to $215.8 million in 2006.

Income Taxes.    Income tax expense was $68.8 million in 2007, compared with $80.5 million in 2006. The Company's effective tax rate was 39.1% in 2007, compared to 37.3% in 2006. This effective tax rate increase primarily relates to higher income tax contingencies and the mix of income between jurisdictions and legal entities.

Income From Continuing Operations.    Income from continuing operations for 2007 totaled $107.2 million, or $3.83 per diluted share, compared with $135.3 million, or $4.31 per diluted share, in 2006. Adjusting for the impact of the non-recurring items noted above, diluted earnings per share from continuing operations were $3.86 per share in 2007 versus $3.17 per share in 2006.

Loss From Discontinued Operations.    On June 9, 2006, the Company sold its Canadian Division. The after-tax loss from discontinued operations totaled $3.1 million, or $0.10 per diluted share for the year ended December 31, 2006.

Net Income.    Net income for 2007 totaled $107.2 million, or $3.83 per diluted share, compared with net income of $132.2 million, or $4.21 per diluted share for 2006. Adjusting for the impact of the non-recurring items noted above, diluted earnings per share were $3.86 per share in 2007 versus $3.27 per share in 2006.

Liquidity and Capital Resources

General

USI is a holding company and, as a result, its primary sources of funds are cash generated from the operating activities of its operating subsidiary, USSC, including the sale of certain accounts receivable, and cash from borrowings by USSC. Restrictive covenants in USSC's debt agreements restrict USSC's ability to pay cash dividends and make other distributions to USI. In addition, the right of USI to participate in any distribution of earnings or assets of USSC is subject to the prior claims of the creditors, including trade creditors, of USSC.

30

The Company's outstanding debt under GAAP, together with funds generated from the sale of accounts receivable under the Company's off-balance sheet Receivables Securitization Program (as defined below), consisted of the following amounts (in thousands):

	As of December 31, 2008			As of December 31, 2007
2007 Credit Agreement—Revolving Credit Facility	$	321,300		$	109,200
2007 Credit Agreement—Term Loan		200,000			200,000
2007 Master Note Purchase Agreement		135,000			135,000
Industrial development bond, at market-based interest rates, maturing in 2011		6,800			6,800
Debt under GAAP		663,100			451,000
Accounts receivable sold(1)		23,000			248,000
Total outstanding debt under GAAP and accounts receivable sold (adjusted debt)		686,100			699,000
Stockholders' equity		565,638			574,254
Total capitalization	$	1,251,738		$	1,273,254
Adjusted debt-to-total capitalization ratio		54.8	%		54.9	%

(1)

See discussion below under "Off-Balance Sheet Arrangements—Receivables Securitization Program"

The most directly comparable financial measure to adjusted debt that is calculated and presented in accordance with GAAP is total debt (as provided in the above table as "Debt under GAAP"). Under GAAP, accounts receivable sold under the Company's Receivables Securitization Program are required to be reflected as a reduction in accounts receivable and not reported as debt. Internally, the Company considers accounts receivable sold to be a financing mechanism. The Company therefore believes it is helpful to provide readers of its financial statements with a measure ("adjusted debt") that adds accounts receivable sold to debt and calculates debt-to-total capitalization on the same basis. A reconciliation of these non-GAAP measures is provided in the table above. Adjusted debt and the adjusted-debt-to-total-capitalization ratio are provided as additional liquidity measures.

In accordance with GAAP, total debt outstanding at December 31, 2008 increased by $212.1 million to $663.1 million from the balance at December 31, 2007. This resulted from an increase in borrowings under the 2007 Credit Agreement with the $200 million Term Loan and the $135 million private placement. Adjusted debt as of December 31, 2008 declined by $12.9 million from the balance at December 31, 2007 as a result of a $225.0 million decline in the amount sold under the Company's Receivables Securitization Program and the increase of $212.1 million in debt previously described.

At December 31, 2008, the Company's adjusted debt-to-total capitalization ratio was 54.8%, compared to 54.9% at December 31, 2007.

31

Operating cash requirements and capital expenditures are funded from operating cash flow and available financing. Financing available from debt and the sale of accounts receivable as of December 31, 2008, is summarized below (in millions):

Availability
Maximum financing available under:
2007 Credit Agreement—Revolving Credit Facility		$	425.0
2007 Credit Agreement—Term Loan			200.0
2007 Master Note Purchase Agreement			135.0
Receivables Securitization Program(1)			230.0
Industrial Development Bond			6.8
	Maximum financing available			$	996.8
Amounts utilized:
2007 Credit Agreement—Revolving Credit Facility			321.3
2007 Credit Agreement—Term Loan			200.0
2007 Master Note Purchase Agreement			135.0
Receivables Securitization Program			23.0
Outstanding letters of credit			19.5
Industrial Development Bond			6.8
	Total financing utilized				705.6
	Available financing, before restrictions				291.2
Restrictive covenant limitation					103.1
	Available financing as of December 31, 2008			$	188.1

(1)

The Receivables Securitization Program provides for maximum funding available of the lesser of $250 million or an amount based on eligible receivables, excess concentrations, and requried reserves.

Restrictive covenants, most notably the leverage ratio covenant under the 2007 Credit Agreement and the 2007 Master Note Purchase Agreement (both as defined in Note 9 of the Consolidated Financial Statements) may separately limit total available financing at points in time, as further discussed below. As of December 31, 2008, the leverage ratio covenant in the 2007 Credit Agreement restricted the Company's ability to borrow the full available funding from debt and the sale of accounts receivable (as shown above).

The Company believes that its operating cash flow and financing capacity, as described, provide adequate liquidity for operating the business for the foreseeable future.

32

Disclosures About Contractual Obligations

The following table aggregates all contractual obligations that affect financial condition and liquidity as of December 31, 2008 (in thousands):

		Payment due by period
Contractual obligations		2009		2010 & 2011		2012 & 2013		Thereafter		Total
Long-term debt		$	—	$	6,800	$	521,300	$	135,000	$	663,100
Fixed interest payments on long-term debt(1)			19,427		38,854		13,821		—		72,102
Operating leases			51,816		86,742		58,298		70,476		267,332
Purchase obligations			790		1,049		25		—		1,864
	Total contractual cash obligations	$	72,033	$	133,445	$	593,444	$	205,476	$	1,004,398

(1)

The Company has entered into several interest rate swap transactions on a portion of its long-term debt. The fixed interest payments noted in the table are based on the notional amounts and fixed rates inherent in the swap transactions and related debt instruments. For more detail see Note 20, "Derivative Financial Instruments", in the Notes to the Consolidated Financial Statements. In addition, as of December 31, 2008 the Company has $251.1 million of long-term debt and financing from the sale of accounts receivable that is based on variable market rates not subject to the Company's interest rate swap transactions. The projected interest payments on this portion of the Company's long-term debt is not included in this table. See Note 9, "Long-Term Debt" for further detail.

At December 31, 2008, the Company had a liability for unrecognized tax benefits of $8.0 million as discussed in Note 15, "Income Taxes", and an accrual for the related interest, that are excluded from the Contractual Obligations table. Due to the uncertainties related to these tax matters, the Company is unable to make a reasonably reliable estimate when cash settlement with a taxing authority may occur.

Credit Agreement and Other Debt

On July 5, 2007, USI and USSC entered into a Second Amended and Restated Five-Year Revolving Credit Agreement with PNC Bank, National Association and U.S. Bank National Association, as Syndication Agents, KeyBank National Association and LaSalle Bank, National Association, as Documentation Agents, and JPMorgan Chase Bank, National Association, as Agent (as amended on December 21, 2007, the "2007 Credit Agreement"). The 2007 Credit Agreement provides a Revolving Credit Facility with a committed principal amount of $425 million and a Term Loan in the principal amount of $200 million. Interest on both the Revolving Credit Facility and the Term Loan is based on the three-month LIBOR plus an interest margin based upon the Company's debt to EBITDA ratio (or "Leverage Ratio", as defined in the 2007 Credit Agreement). The 2007 Credit Agreement prohibits the Company from exceeding a Leverage Ratio of 3.25 to 1.00 and imposes other restrictions on the Company's ability to incur additional debt. The Revolving Credit Facility expires on July 5, 2012, which is also the maturity date of the Term Loan.

On October 15, 2007, USI and USSC entered into a Master Note Purchase Agreement (the "2007 Note Purchase Agreement") with several purchasers. The 2007 Note Purchase Agreement allows USSC to issue up to $1 billion of senior secured notes, subject to the debt restrictions contained in the 2007 Credit Agreement. Pursuant to the 2007 Note Purchase Agreement, USSC issued and sold $135 million of floating rate senior secured notes due October 15, 2014 at par in a private placement (the "Series 2007-A Notes"). Interest on the Series 2007-A Notes is payable quarterly in arrears at a rate per annum equal to three-month LIBOR plus 1.30%, beginning January 15, 2008. USSC may issue additional series of senior secured notes from time to time under the 2007 Note Purchase Agreement but

33

has no specific plans to do so at this time. USSC used the proceeds from the sale of these notes to repay borrowings under the 2007 Credit Agreement.

On November 6, 2007, USSC entered into an interest rate swap transaction (the "November 2007 Swap Transaction") with U.S. Bank National Association as the counterparty. USSC entered into the November 2007 Swap Transaction to mitigate USSC's floating rate risk on an aggregate of $135 million of LIBOR based interest rate risk. Under the terms of the November 2007 Swap Transaction, USSC is required to make quarterly fixed rate payments to the counterparty calculated based on a notional amount of $135 million at a fixed rate of 4.674%, while the counterparty is obligated to make quarterly floating rate payments to USSC based on the three-month LIBOR on the same referenced notional amount. The November 2007 Swap Transaction has an effective date of January 15, 2008 and a termination date of January 15, 2013.

On December 20, 2007, USSC entered into an interest rate swap transaction (the "December 2007 Swap Transaction") with Key Bank National Association as the counterparty. USSC entered into the December 2007 Swap Transaction to mitigate USSC's floating rate risk on an aggregate of $200 million of LIBOR based interest rate risk. Under the terms of the December 2007 Swap Transaction, USSC is required to make quarterly fixed rate payments to the counterparty calculated based on a notional amount of $200 million at a fixed rate of 4.075%, while the counterparty is obligated to make quarterly floating rate payments to USSC based on the three-month LIBOR on the same referenced notional amount. The December 2007 Swap Transaction has an effective date of December 21, 2007 and a termination date of June 21, 2012.

On March 13, 2008, USSC entered into an interest rate swap transaction (the "March 2008 Swap Transaction") with U.S. Bank National Association as the counterparty. USSC entered into the March 2008 Swap Transaction to mitigate USSC's floating rate risk on an aggregate of $100 million of LIBOR based interest rate risk. Under the terms of the March 2008 Swap Transaction, USSC is required to make quarterly fixed rate payments to the counterparty calculated based on a notional amount of $100 million at a fixed rate of 3.212%, while the counterparty is obligated to make quarterly floating rate payments to USSC based on the three-month LIBOR on the same referenced notional amount. The March 2008 Swap Transaction had an effective date of March 31, 2008 and a termination date of June 29, 2012.

As of both December 31, 2008 and December 31, 2007, the Company had outstanding letters of credit under the 2007 Credit Agreement of $19.5 million.

At December 31, 2008 funding levels (including amounts sold under the Receivables Securitization Program), a 50 basis point movement in interest rates would result in an annualized increase or decrease of approximately $1.3 million in interest expense, on a pre-tax basis, and loss on the sale of certain accounts receivable, and ultimately upon cash flows from operations.

As of December 31, 2008, the Company had an industrial development bond outstanding with a balance of $6.8 million. This bond is scheduled to mature in 2011 and carries market-based interest rates.

Refer to Note 9, "Long-Term Debt", for further descriptions of the provisions of 2007 Credit Agreement and the 2007 Note Purchase Agreement.

Off-Balance Sheet Arrangements—Receivables Securitization Program

USSC maintains a third-party receivables securitization program (the "Receivables Securitization Program" or the "Program") that provides funding of up to $250 million. On November 10, 2006, the Company entered into an amendment to its revolving credit agreement, which, among other things, increased the permitted size of the Receivables Securitization Program to $350 million, a $75 million increase from the $275 million limit under the prior credit agreement. During the first quarter of 2007, the Company increased its commitments to the maximum available of $250 million. Under the Receivables Securitization Program, USSC sells, on a revolving basis, its eligible trade accounts receivable (except

34

for certain excluded accounts receivable, which initially includes all accounts receivable of Lagasse, Inc., ORS Nasco and foreign operations) to USS Receivables Company, Ltd. (the "Receivables Company"). The Receivables Company, in turn, ultimately transfers the eligible trade accounts receivable to a trust. The trust then sells investment certificates, which represent an undivided interest in the pool of accounts receivable owned by the trust, to third-party investors. Certain bank funding agents, or their affiliates, provide standby liquidity funding to support the sale of the accounts receivable by the Receivables Company under 364-day liquidity facilities. Standby liquidity funding is committed for 364 days and must be renewed before maturity in order for the Program to continue. The Program liquidity was renewed on March 21, 2008. The Program contains certain covenants and requirements, including criteria relating to the quality of receivables within the pool of receivables. If the covenants or requirements were compromised, funding from the Program could be restricted or suspended, or its costs could increase. In such a circumstance, or if the standby liquidity funding were not renewed, the Company could require replacement liquidity. As of December 31, 2008, the Company had sold $23 million of interests in trade accounts receivable.

Cash Flows

Cash flows for the Company for the years ended December 31, 2008, 2007 and 2006 are summarized below (in thousands):

	Years Ended December 31,
	2008			2007			2006
Net cash (used in) provided by operating activities	$	(129,305	)	$	218,054		$	13,994
Net cash used in investing activities		(28,366	)		(197,898	)		(18,624	)
Net cash provided by (used in) financing activities		146,430			(13,188	)		2,198

Cash Flows From Operations

Net cash used by operating activities for the year ended December 31, 2008 totaled $129.3 million, compared with net cash provided by operating activities of $218.1 million in 2007. After excluding the impacts of accounts receivable sold under the Receivables Securitization Program (see table below), cash flows provided by operating activities were $95.7 million for 2008 and helped fund capital expenditures of $31.7 million and acquisitions of $14.9 million in 2008. This is compared to adjusted cash flows provided by operating activities of $195.1 million for 2007, which helped fund $18.7 million in capital expenditures.

Adjusted operating cash flows for 2008 were unfavorably impacted by unusually low accounts payable balances at December 31, 2008. Payables were at $341.1 million at December 31, 2008 down from $448.6 million at December 31, 2007 due to the timing of inventory purchases and investment buys. Partially offsetting this unfavorable change, inventories were down $34.7 million to $680.5 million at December 31, 2008 from $715.2 million at December 31, 2007. These two items combined accounted for approximately $125.6 million of the decline in adjusted operating cash flows compared to 2007. Operating cash flows were also negatively impacted by $35.3 million due to the timing of accrued liabilities and payments. These three unfavorable items totaling $160.9 million were partially offset by a reduction in accounts receivable of $65.8 million, after excluding the impact of accounts receivable sold.

Operating cash flows for the year ended December 31, 2007 totaled $218.1 million, compared with $14.0 million in 2006. Adjusted to exclude the impact of accounts receivable sold, cash flows provided by operating activities were $195.1 million in 2007 versus $14.0 million in 2006. The increase in operating cash flows can be attributed to working capital improvements in 2007 versus 2006, particularly in inventory and payables. Inventories were a $14.4 million source of cash for the year ended December 31, 2007 compared to a $7.4 million use of cash for 2006. Payables were a $42.7 million source of cash in 2007 compared to a $63.3 million use of cash in 2006. The remainder of the

35

improvement in 2007 operating cash flows versus 2006 is due to a $50.9 million change in deferred credits (liability) resulting from the timing of the recognition and collection of fixed supplier funding.

The Company views accounts receivable sold through its Receivables Securitization Program (the "Program") to be a financing mechanism based on the following considerations and reasons:

•

The Program historically was the Company's preferred source of floating rate financing, primarily because it had generally carried a lower cost than other traditional borrowings;

•

The Program characteristics are similar to those of traditional debt, including being secured, having an interest component and being viewed as traditional debt by the Program's financial providers in determining capacity to support and service debt;

•

The terms of the Program are structured to be similar to those in many revolving credit facilities, including provisions addressing maximum commitments, costs of borrowing, financial covenants and events of default;

•

As with debt, the Company elects, in accordance with the terms of the Program, how much is funded through the Program at any given time;

•

Provisions of the 2007 Credit Agreement and the 2007 Note Purchase Agreement aggregate true debt (including borrowings under the Credit Facility) together with the balance of accounts receivable sold under the Program into the concept of "Consolidated Funded Indebtedness." This effectively treats the Program as debt for purposes of requirements and covenants under those agreements; and

•

For purposes of managing working capital requirements, the Company evaluates working capital before any sale of accounts receivables sold through the Program to assess accounts receivable requirements and performance of such measures as days outstanding and working capital efficiency.

Net cash provided by operating activities excluding the effects of receivables sold and net cash used in financing activities including the effects of receivables sold for the years ended December 31, 2008, 2007 and 2006 is provided below as an additional liquidity measure (in thousands):

		Years Ended December 31,
		2008			2007			2006
Cash Flows From Operating Activities:
	Net cash (used in) provided by operating activities	$	(129,305	)	$	218,054		$	13,994
	Excluding the change in accounts receivable sold		225,000			(23,000	)		—
	Net cash provided by operating activities excluding the effects of receivables sold	$	95,695		$	195,054		$	13,994
Cash Flows From Financing Activities:
	Net cash provided by (used in) financing activities	$	146,430		$	(13,188	)	$	2,198
	Including the change in accounts receivable sold		(225,000	)		23,000			—
	Net cash (used in) provided by financing activities including the effects of receivables sold	$	(78,570	)	$	9,812		$	2,198

Cash Flows From Investing Activities

Net cash used in investing activities for the years ended December 31, 2008, 2007 and 2006 was $28.4 million, $197.9 million and $18.6 million, respectively. During 2008, the Company used cash for investing activities to acquire Emco Distribution LLC for $15.2 million. Capital spending for 2008 was $31.7 million which was used for various investments in information technology systems, technology hardware, and distribution center equipment including several facility projects. Proceeds from the sales

36

of two distribution centers and the Company's former corporate headquarters were $18.2 million. During 2007, the Company used cash for investing activities to acquire ORS Nasco, for approximately $180.6 million, net of cash acquired (see "Acquisition of ORS Nasco Holding, Inc." above). Capital spending in 2007 was $18.7 million. During 2006, cash used in investing activities included $46.7 million in capital expenditures for IT systems, infrastructure and ongoing operations, partially offset by $14.8 million in proceeds primarily from the sale of the Company's Edison and Pennsauken facilities both located in New Jersey and $13.3 million in cash proceeds from the sale of the Company's Canadian Division. A final payment related to the sale of the Canadian Division was then received in 2007 for $1.3 million. The Company expects gross capital spending (before the impact of any sales proceeds) for 2009 to be in the range of $15 million to $20 million.

Cash Flows From Financing Activities

The Company's cash flow from financing activities is largely dependent on levels of borrowing under the Company's credit agreements and the acquisition or issuance of treasury stock.

Net cash provided by financing activities for 2008 totaled $146.4 million, compared to a use of cash of $13.2 million in 2007. This favorable change is due to a decline in share repurchase activity of $315.8 million partially offset by a reduction in net borrowings from the revolving credit facility and other financing agreements of $121.6 million, a $26.9 million decline in net proceeds from the exercise of stock options, and a $9.4 million decline in proceeds from the excess tax benefits related to share-based compensation. Net cash used by financing activities for 2007 totaled $13.2 million, compared to a source of cash of $2.2 million in 2006. In 2007, the Company repurchased 6.5 million shares of its common stock at an aggregate cost of $383.3 million. In addition, for 2007 the Company's financing activities included the addition of a $135 million private placement note and a $200 million Term Loan, both previously described above. Net proceeds from stock option exercises were also $29.0 million in 2007. During 2006, the Company repurchased 2.6 million shares of its common stock at an aggregate cost of $124.7 million, offset by borrowings of $96.3 million under the Credit Agreement's Revolving Credit Facility and $26.2 million from the net proceeds of stock options exercised.

Seasonality

The Company experiences seasonality in its working capital needs, with highest requirements in December through February, reflecting a build-up in inventory prior to and during the peak January sales period. See the information under the heading "Seasonality" in Part I, Item 1 of this Annual Report on Form 10-K. The Company believes that its current availability is sufficient to satisfy the seasonal working capital needs for the foreseeable future.

Inflation/Deflation and Changing Prices

The Company maintains substantial inventories to accommodate the prompt service and delivery requirements of its customers. Accordingly, the Company purchases its products on a regular basis in an effort to maintain its inventory at levels that it believes are sufficient to satisfy the anticipated needs of its customers, based upon historical buying practices and market conditions. Although the Company historically has been able to pass through manufacturers' price increases to its customers on a timely basis, competitive conditions will influence how much of future price increases can be passed on to the Company's customers. Conversely, when manufacturers' prices decline, lower sales prices could result in lower margins as the Company sells existing inventory. As a result, changes in the prices paid by the Company for its products could have a material effect on the Company's net sales, gross margins and net income. See the information under the heading "Comparison of Results for the Years Ended December 31, 2008 and 2007" in Part I, Item 7 of this Annual Report or Form 10-K for further analysis on these changes in prices in 2008.

37

New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS No. 157), which clarifies the definition of fair value, establishes a framework for measuring fair value, and expands the disclosures regarding fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. Effective January 1, 2008, the Company adopted SFAS No. 157 for financial assets and liabilities recognized at fair value on a recurring basis. This adoption did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. In February 2008, the FASB issued FASB Staff Position ("FSP") 157-2, Effective Date of FASB Statement No. 157 ("FSP 157-2"), which delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting FSP 157-2 on its financial position and its results of operations. See Note 21, "Fair Value Measurements", for information and related disclosures regarding the Company's fair value measurements.

In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R) ("SFAS No. 158"). SFAS No. 158 requires employers to recognize the funded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in comprehensive income in the year in which the changes occur. The funded status of a defined benefit pension plan is measured as the difference between plan assets at fair value and the plan's projected benefit obligation. Under SFAS No. 158, employers are also required to measure plan assets and benefit obligations at the date of their fiscal year-end statement of financial position. The Company adopted the required recognition provisions of SFAS No. 158 as of December 31, 2006, and the requirement to measure a plan's assets and obligations as of the balance sheet date as of January 1, 2008. See Note 12, "Pension Plans and Defined Contribution Plan", for more information regarding the adoption of the measurement date provisions of SFAS No. 158.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS No. 159"), which permits all entities to choose to measure eligible financial instruments at fair value at specific election dates. SFAS No. 159 requires companies to report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date and recognize upfront costs and fees related to those items in earnings as incurred and not deferred. SFAS No. 159 applies to fiscal years beginning after November 15, 2007. SFAS No. 159 was effective for the Company as of January 1, 2008. However, the Company does not currently have any instruments that it has elected to measure at fair value. As a result, the adoption of SFAS No. 159 did not impact the Company's consolidated financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations ("SFAS No. 141(R)"), which is a revision to SFAS No. 141, Business Combinations, originally issued in June 2001. The revised statement retains the fundamental requirements of SFAS No. 141 but also defines the acquirer and establishes the acquisition date as the date that the acquirer achieves control. The main features of SFAS No. 141(R) are that it requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions noted in the Statement. SFAS No. 141(R) requires the acquirer to recognize goodwill as of the acquisition date. Finally, the new Statement makes a number of other significant amendments to other Statements and other authoritative guidance including requiring research and development costs acquired to be capitalized separately from goodwill and requiring the

38

expensing of transaction costs directly related to an acquisition. This new Statement is effective for acquisitions on or after the beginning of the first fiscal year beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 141(R) to have a material impact on its financial position and/or its results of operations.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 ("SFAS No. 160"), which requires, among other items, that ownership interest in subsidiaries held by parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent's equity. The Statement also requires that the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income. Finally, SFAS No. 160 requires that entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This Statement is effective for fiscal years beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 160 to have a material impact on its financial position and/or its results of operations.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS No. 161"), which amends and expands the disclosure requirements of SFAS No. 133 with the intent to provide users of financial statements with an enhanced understanding of an entity's derivative and hedging activities. Specifically, SFAS No. 161 requires further disclosure on the following: 1) how and why an entity uses derivative instruments; 2) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations; and 3) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. In order to meet these requirements, SFAS No. 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit risk-related contingent features in derivative agreements. This Statement is effective for fiscal years beginning after November 15, 2008. The Company does not expect the adoption of SFAS No. 161 to have a material impact on its financial position and/or its results of operations.

In April 2008, the FASB issued FASB Staff Position ("FSP") FAS 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors to be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. Disclosures will be required to provide information that will enable users of financial statements to assess the extent to which the expected future cash flows associated with the asset are affected by the entity's intent and/or ability to renew or extend the arrangement. The FSP is effective for fiscal years beginning after December 15, 2008. The Company has not yet completed its evaluation of the impact of this FSP on its Consolidated Financial Statements.

In June 2008, the FASB issued Emerging Issue Task Force ("EITF") Issue No. 03-6-1, Determining Whether Instruments Granted in Share-Based Transactions Are Participating Securities. This EITF addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, thus impacting the calculation of earnings per share. If a share-based payment is determined to be a participating security, then the two-class method of calculating earnings per share may be required. This EITF is effective for fiscal years beginning after December 15, 2008. The Company has not yet completed its evaluation of the impact of this EITF on its Consolidated Financial Statements.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is subject to market risk associated principally with changes in interest rates and foreign currency exchange rates.

39

Interest Rate Risk

The Company's exposure to interest rate risks is principally limited to the Company's outstanding long-term debt at December 31, 2008 of $663.1 million, $23.0 million of receivables sold under the Receivables Securitization Program and the Company's $327.9 million retained interest in the trust.

As of December 31, 2008, 100% of the Company's outstanding debt is priced at variable interest rates based primarily on the applicable bank prime rate, the LIBOR or the applicable commercial paper rates related to the Receivables Securitization Program. While the Company does have $663.1 million of outstanding debt with interest based on variable market rates at December 31, 2008, the Company has hedged $435.0 million of this debt with three separate fixed interest rate swaps see Note 2, "Summary of Significant Accounting Policies", and Note 20, "Derivative Financial Instruments", to the Consolidated Financial Statements. As of December 31, 2008, the overall weighted average effective borrowing rate of the Company's debt was 4.1%. At year-end $251.1 million of long-term debt and financing from the sale of accounts receivable was based on variable market rates not subject to the Company's interest rate swap transactions. A 50 basis point movement in interest rates would result in an annualized increase or decrease of approximately $1.3 million in interest expense and loss on the sale of certain accounts receivable, on a pre-tax basis, and ultimately upon cash flows from operations.

The Company's retained interest in the trust is also subject to interest rate risk. The Company measures the fair value of its retained interest throughout the term of the securitization program using a present value model that includes an assumed discount rate of 3.0% per annum, which approximates the Company's interest cost on the receivable securitization programs, and an average collection cycle of approximately 45 days. Accordingly, a 50 basis point movement in interest rates would not result in a material impact on the Company's results of operations.

Foreign Currency Exchange Rate Risk

The Company's foreign currency exchange rate risk is limited principally to the Mexican Peso, as well as product purchases from Asian countries valued and paid in U.S. dollars. Many of the products the Company sells in Mexico are purchased in U.S. dollars, while the sale is invoiced in the local currency. The Company's foreign currency exchange rate risk is not material to its financial position, results of operations and cash flows. The Company has not previously hedged these transactions, but it may enter into such transactions in the future.

40

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act to mean a process designed by, or under the supervision of, the Company's principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the Consolidated Financial Statements.

Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.

Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2008, in relation to the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included an evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies and the Company's overall control environment. That assessment was supported by testing and monitoring performed both by the Company's Internal Audit organization and its Finance organization.

Based on that assessment, management concluded that as of December 31, 2008, the Company's internal control over financial reporting was effective. Management reviewed the results of its assessment with the Audit Committee of our Board of Directors.

Ernst & Young LLP, an independent registered public accounting firm, who audited and reported on the Consolidated Financial Statements included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting as stated in their report which appears on page 42 of this Annual Report on Form 10-K.

41

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and
Stockholders of United Stationers Inc.

We have audited United Stationers Inc. and subsidiaries' internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). United Stationers Inc. and subsidiaries' management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying report on Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the effectiveness of the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, United Stationers Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of United Stationers Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2008, and our report dated February 27, 2009, expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Chicago, Illinois
February 27, 2009

42

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of
United Stationers Inc.

We have audited the accompanying consolidated balance sheets of United Stationers Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2008. Our audits also included the financial statement schedule listed in the index at Item 15(a). These Consolidated Financial Statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of United Stationers Inc. and subsidiaries at December 31, 2008 and 2007, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, effective January 1, 2008, the Company adopted the provisions of Statement of Financial Accounting Standards No. 158, "Employers Accounting for Defined Benefit Pension and Other Postretirement Plans", to measure a plan's assets and obligations as of the balance sheet date; and effective January 1, 2007 the Company adopted the provisions of the Financial Accounting Standards Board's Interpretation No. 48, "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109".

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), United Stationers Inc. and subsidiaries' internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2009 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Chicago, Illinois
February 27, 2009

43

UNITED STATIONERS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

		Years Ended December 31,
		2008			2007			2006
Net sales		$	4,986,878		$	4,646,399		$	4,546,914
Cost of goods sold			4,246,199			3,939,684			3,792,833
Gross profit			740,679			706,715			754,081
Operating expenses:
	Warehousing, marketing and administrative expenses		548,222			502,810			516,234
	Restructuring charge, net		—			1,378			1,941
	Total operating expenses		548,222			504,188			518,175
Operating income			192,457			202,527			235,906
Interest expense			28,563			13,109			8,276
Interest income			(1,048	)		(1,197	)		(970	)
Other expense, net			8,079			14,595			12,786
Income from continuing operations before income taxes			156,863			176,020			215,814
Income tax expense			58,449			68,825			80,510
Income from continuing operations			98,414			107,195			135,304
Loss from discontinued operations, net of tax			—			—			(3,091	)
Net income		$	98,414		$	107,195		$	132,213
Net income per share—basic:
	Net income per share—continuing operations	$	4.17		$	3.92		$	4.37
	Net loss per share—discontinued operations		—			—			(0.10	)
	Net income per share—basic	$	4.17		$	3.92		$	4.27
	Average number of common shares outstanding—basic		23,578			27,323			30,956
Net income per share—diluted:
	Net income per share—continuing operations	$	4.13		$	3.83		$	4.31
	Net loss per share—discontinued operations		—			—			(0.10	)
	Net income per share—diluted	$	4.13		$	3.83		$	4.21
	Average number of common shares outstanding—diluted		23,847			27,976			31,371

See notes to Consolidated Financial Statements.

44

UNITED STATIONERS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)

			As of December 31,
			2008			2007
ASSETS
Current assets:
	Cash and cash equivalents		$	10,662		$	21,957
	Accounts receivable, less allowance for doubtful accounts of $21,653 in 2008 and $13,351 in 2007			282,350			321,305
	Retained interest in receivables sold, less allowance for doubtful accounts of $10,891 in 2008 and $5,894 in 2007			327,860			94,809
	Inventories			680,516			715,161
	Other current assets			33,857			38,595
		Total current assets		1,335,245			1,191,827
Property, plant and equipment, at cost:
	Land			12,259			12,968
	Buildings			58,768			63,996
	Fixtures and equipment			268,368			259,294
	Leasehold improvements			20,786			19,374
	Capitalized software costs			50,971			56,480
Total property, plant and equipment				411,152			412,112
	Less—accumulated depreciation and amortization			258,138			238,989
Net property, plant and equipment				153,014			173,123
Intangible assets, net				67,982			68,756
Goodwill				314,441			315,526
Other				10,834			16,323
		Total assets	$	1,881,516		$	1,765,555
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	341,084		$	448,608
	Accrued liabilities			186,530			199,961
		Total current liabilities		527,614			648,569
Deferred income taxes				—			30,172
Long-term debt				663,100			451,000
Other long-term liabilities				125,164			61,560
		Total liabilities		1,315,878			1,191,301
Stockholders' equity:
	Common stock, $0.10 par value; authorized—100,000,000 shares, issued—37,217,814 in 2008 and 2007			3,722			3,722
	Additional paid-in capital			382,721			376,379
	Treasury stock, at cost—13,687,843 shares in 2008 and 12,645,513 shares in 2007			(712,944	)		(650,187	)
	Retained earnings			957,089			859,292
	Accumulated other comprehensive loss, net of tax			(64,950	)		(14,952	)
		Total stockholders' equity		565,638			574,254
		Total liabilities and stockholders' equity	$	1,881,516		$	1,765,555

See notes to Consolidated Financial Statements.

45

UNITED STATIONERS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(dollars in thousands, except share data)

		Common Stock				Treasury Stock								Accumulated Other Comprehensive Income (Loss)
												Additional Paid-in Capital					Retained Earnings			Total Stockholders' Equity
		Shares		Amount		Shares			Amount
As of December 31, 2005			37,217,814	$	3,722		(5,340,443	)	$	(194,334	)	$	344,628	$	(3,613	)	$	618,109		$	768,512
Net income			—		—		—			—			—		—			132,213			132,213
Unrealized translation adjustments			—		—		—			—			—		917			—			917
Realized translation adjustments			—		—		—			—			—		(12,325	)		—			(12,325	)
Minimum pension liability adjustments, net of tax of $2,551			—		—		—			—			—		4,215			—			4,215
	Comprehensive (loss) income		—		—		—			—			—		(7,193	)		132,213			125,020
Adjustments to apply SFAS No. 158, net of tax benefit of $2,741			—		—		—			—			—		(4,530	)		—			(4,530	)
Acquisition of treasury stock			—		—		(2,574,575	)		(122,212	)		—		—			—			(122,212	)
Stock compensation			—		—		742,086			18,731			15,419		—			—			34,150
As of December 31, 2006			37,217,814	$	3,722		(7,172,932	)	$	(297,815	)	$	360,047	$	(15,336	)	$	750,322		$	800,940
Net income			—		—		—			—			—		—			107,195			107,195
Unrealized translation adjustments			—		—		—			—			—		(300	)		—			(300	)
Minimum pension liability adjustments, net of tax of $1,789			—		—		—			—			—		2,983			—			2,983
Unrealized loss on interest rate swaps, net of tax benefit of $1,380			—		—		—			—			—		(2,299	)		—			(2,299	)
	Comprehensive income		—		—		—			—			—		384			107,195			107,579
Adoption of FIN 48			—		—		—			—			—		—			1,775			1,775
Acquisition of treasury stock			—		—		(6,562,049	)		(383,360	)		—		—			—			(383,360	)
Stock compensation			—		—		1,089,468			30,988			16,332		—			—			47,320
As of December 31, 2007			37,217,814	$	3,722		(12,645,513	)	$	(650,187	)	$	376,379	$	(14,952	)	$	859,292		$	574,254
Net income			—		—		—			—			—		—			98,414			98,414
Unrealized translation adjustments			—		—		—			—			—		(3,585	)		—			(3,585	)
Minimum pension liability adjustments, net of tax benefits of $17,059			—		—		—			—			—		(27,715	)		—			(27,715	)
Unrealized loss on interest rate swaps, net of tax benefit of $11,800			—		—		—			—			—		(19,172	)		—			(19,172	)
	Comprehensive (loss) income		—		—		—			—			—		(50,472	)		98,414			47,942
Adjustments to apply SFAS No. 158, net of tax benefit of $88			—		—		—			—			—		474			(617	)		(143	)
Acquisition of treasury stock			—		—		(1,233,199	)		(67,477	)		—		—			—			(67,477	)
Stock compensation			—		—		190,869			4,720			6,342		—			—			11,062
As of December 31, 2008			37,217,814	$	3,722		(13,687,843	)	$	(712,944	)	$	382,721	$	(64,950	)	$	957,089		$	565,638

See notes to Consolidated Financial Statements.

46

UNITED STATIONERS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)

				Years Ended December 31,
				2008			2007			2006
Cash Flows From Operating Activities:
	Net income			$	98,414		$	107,195		$	132,213
	Adjustments to reconcile net income to net cash (used in) provided by operating activities:
	Depreciation and amortization				43,457			42,700			38,232
	Amortization of capitalized financing costs				924			705			801
	Write-off of capitalized software development costs				6,735			—			6,501
	Share-based compensation				8,971			8,888			7,953
	Loss on sale of Canadian Division				—			—			5,885
	Excess tax benefits related to share-based compensation				(72	)		(9,467	)		(4,572	)
	Write down of assets held for sale				—			546			—
	(Gain) loss on the disposition of property, plant and equipment				(9,851	)		529			(5,482	)
	Deferred income taxes				447			(4,119	)		(16,143	)
	Changes in operating assets and liabilities, excluding the effects of acquisitions:
		Decrease (increase) in accounts receivable, net			47,323			(15,907	)		(46,875	)
		(Increase) decrease in retained interest in receivables sold, net			(233,051	)		12,340			9,389
		Decrease (increase) in inventory			39,530			14,404			(7,371	)
		Increase in other assets			(14,752	)		(6,161	)		(5,504	)
		(Decrease) increase in accounts payable			(76,449	)		70,012			(20,165	)
		Decrease in checks in-transit			(31,566	)		(27,349	)		(43,099	)
		(Decrease) increase in accrued liabilities			(14,137	)		21,211			(45,339	)
		Increase in other liabilities			4,772			2,527			7,570
			Net cash (used in) provided by operating activities		(129,305	)		218,054			13,994
Cash Flows From Investing Activities:
	Acquisitions, net of cash acquired				(14,891	)		(180,603	)		—
	Sale of Canadian Division				—			1,295			13,332
	Capital expenditures				(31,713	)		(18,685	)		(46,725	)
	Proceeds from the disposition of property, plant and equipment				18,238			95			14,769
			Net cash used in investing activities		(28,366	)		(197,898	)		(18,624	)
Cash Flows From Financing Activities:
	Net borrowings (repayments) under Revolving Credit Facility				212,100			(1,300	)		96,300
	Borrowings from financing agreements				—			335,000			—
	Payment of debt issuance costs				(256	)		(1,990	)		(163	)
	Net proceeds from the exercise of stock options				2,019			28,965			26,217
	Acquisition of treasury stock, at cost				(67,505	)		(383,330	)		(124,728	)
	Excess tax benefits related to share-based compensation				72			9,467			4,572
			Net cash provided by (used in) financing activities		146,430			(13,188	)		2,198
Effect of exchange rate changes on cash and cash equivalents					(54	)		—			6
Net change in cash and cash equivalents					(11,295	)		6,968			(2,426	)
Cash and cash equivalents, beginning of period					21,957			14,989			17,415
Cash and cash equivalents, end of period				$	10,662		$	21,957		$	14,989

See notes to Consolidated Financial Statements.

47

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying Consolidated Financial Statements represent United Stationers Inc. ("USI") with its wholly owned subsidiary United Stationers Supply Co. ("USSC"), and USSC's subsidiaries (collectively, "United" or the "Company"). The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts of USI and its subsidiaries. All intercompany transactions and balances have been eliminated. The Company is the largest broad line wholesale distributor of business products in North America, with net sales of nearly $5.0 billion for the year ended December 31, 2008. The Company operates in a single reportable segment as a national wholesale distributor of business products. The Company stocks more than 100,000 items and offers thousands more from over 1,000 manufacturers. These items include a broad spectrum of technology products, traditional business products, office furniture, janitorial and breakroom supplies, and industrial supplies. In addition, the Company also offers private brand products. The Company primarily serves commercial and contract office products dealers, janitorial/breakroom product distributors, computer product resellers, furniture dealers and industrial product distributors. The Company sells its products through a national distribution network of 67 distribution centers to approximately 30,000 resellers, who in turn sell directly to end-consumers.

Acquisition of Emco Distribution LLC

On September 2, 2008, the Company completed the acquisition of certain assets and liabilities of Emco Distribution LLC's New Jersey business. The payment of the base purchase price of $15.1 million and transaction costs of approximately $0.1 million were funded under the Company's credit agreement. The purchase resulted in goodwill and intangible assets of $2.4 million and $3.7 million, respectively. The purchase included $0.7 million of intangible assets with indefinite lives and $3.0 million of amortizable intangibles. Amortization expense associated with the intangible assets is expected to be approximately $0.3 million per year and the weighted average useful life of amortizable intangibles is expected to be approximately 10 years. Subsequent adjustments may be made to the purchase price allocation based on, among other things, post-closing purchase price adjustments and finalizing the valuation of tangible and intangible assets.

Acquisition of ORS Nasco Holding, Inc.

On December 21, 2007, the Company's subsidiary, USSC, completed the purchase of 100% of the outstanding shares of ORS Nasco Holding, Inc. (ORS Nasco) from an affiliate of Brazos Private Equity Partners, LLC of Dallas, Texas, and other shareholders. This acquisition was completed with the payment of the base purchase price of $175.0 million plus estimated working capital adjustments, a pre-closing tax benefit payment, and other adjusting items. The purchase price was also subject to certain post-closing adjustments of which approximately $0.4 million was adjusted downward based on the subsequently negotiated working capital calculations in the second quarter of 2008. In total, the purchase price, net of cash acquired, was $180.2 million, including $0.5 million in transaction costs. The acquisition allowed the Company to diversify its product offering and provided an entry into the wholesale industrial supplies market. The purchase price was financed through the addition of a $200 million term loan under the Company's credit agreement.

The acquisition was accounted for under the purchase method of accounting in accordance with SFAS No. 141, Business Combinations, with the excess purchase price over the fair market value of the assets acquired and liabilities assumed allocated to goodwill. Based on the purchase price allocation, the purchase price of $180.2 million, net of cash received, has resulted in goodwill and intangible assets of

48

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Basis of Presentation (Continued)

$86.4 million and $44.9 million, respectively. The purchase included $12.3 million of intangible assets with indefinite lives related to trademarks and trade names while the remaining $32.6 million in intangible assets acquired is amortizable and related to customer lists and certain non-compete agreements. Neither the goodwill nor the intangible assets are expected to generate a tax deduction. For financial accounting purposes, the amortizable intangible assets are treated as a temporary difference for which a deferred tax liability of $12.2 million was recorded through purchase accounting. In addition, a deferred tax liability of $4.6 million was recorded for intangible assets with indefinite lives. The amortization expense related to the intangible assets is treated as the reversal of the temporary difference which has no impact on the effective tax rate. The weighted average useful life of amortizable intangibles is expected to be approximately 13 years. The Company recorded amortization expense of $2.1 million in 2008.

Purchase Price Allocation
(dollars in thousands)

Purchase Price, net of cash acquired					$	180,243
Allocation of Purchase Price:
Accounts receivable, net		$	(31,615	)
Inventories			(49,806	)
Other current assets			(5,433	)
Property, plant and equipment			(8,989	)
Intangible assets			(44,910	)
	Total assets acquired					(140,754	)
Trade accounts payable			23,272
Accrued liabilities			2,870
Deferred taxes			20,795
	Total liabilities assumed					46,937
Amount to goodwill					$	86,426

Reclassifications

Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications were limited to Balance Sheet and Cash Flow Statement presentation and did not impact the Statements of Income. Specifically, the Company reclassified capitalized software costs from "Other Assets" to "Property, Plant and Equipment" beginning in the first quarter of 2006, with prior periods updated to conform to this presentation.

The Company also reclassified certain offsets to "Accrued Liabilities" related to merchandise return reserves to "Inventory". This reclassification began in the fourth quarter of 2007, with prior periods updated to conform to this presentation. For the year ended December 31, 2007, $7.0 million was reclassified to "Inventory" out of "Accrued Liabilities" with corresponding changes made to the Statement of Cash Flows within "Cash Flows From Operating Activities".

Additionally, as of December 31, 2007, the Company reclassified "Accumulated Depreciation and Amortization" related to ORS Nasco to various property, plant and equipment accounts, at cost. Such

49

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Basis of Presentation (Continued)

reclassifications were limited to the Balance Sheet presentation and did not impact the Statements of Income.

Common Stock Repurchases

As of December 31, 2008, the Company had Board authorization to repurchase $100.9 million of USI common stock. During 2008, the Company repurchased 1,233,832 shares of USI's common stock at an aggregate cost of $67.5 million. In 2007, the Company repurchased 6,561,416 shares of USI's common stock at an aggregate cost of $383.3 million. In 2006, the Company repurchased 2,626,275 shares of USI common stock at an aggregate cost of $124.7 million. A summary of total shares repurchased under the Company's share repurchase authorizations is as follows (dollars in millions, except share data):

			Share Repurchases History
			Cost						Shares
Authorizations:
	2008 Authorization ($100.0 million remaining)					$	100.0
	2007 Authorizations ($0.9 million remaining)						400.0
	2002 to 2006 Authorizations (completed)						325.0
Repurchases:
	2008 repurchases		$	(67.5	)					1,233,832
	2007 repurchases			(383.3	)					6,561,416
	2002 to 2006 repurchases			(273.3	)					6,352,578
		Total repurchases					(724.1	)		14,147,826
Remaining repurchase authorized at December 31, 2008						$	100.9

Depending on market and business conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without notice.

Acquired shares are included in the issued shares of the Company and treasury stock, but are not included in average shares outstanding when calculating earnings per share data. During 2008, 2007 and 2006, the Company reissued 190,869; 1,089,468; and 742,086 shares, respectively, of treasury stock to fulfill its obligations under its equity incentive plans.

Canadian Division—Discontinued Operations

During the first quarter of 2006, the Company announced its intention to sell its Azerty United Canada operations (the "Canadian Division") and therefore began reporting it as discontinued operations at that time. All prior-periods have been reclassified to conform to this presentation.

On June 9, 2006, the Company completed the sale of certain net assets of its Canadian Division to SYNNEX Canada Limited (the "Buyer"), a subsidiary of SYNNEX Corporation, for approximately $14.3 million. The purchase price was subject to certain post-closing adjustments, including an adjustment for the value of any inventory and accounts receivable included in the sale that was not subsequently sold or collected within 180 days from the date of sale. During 2006, the Company received cash payments from the Buyer of $13.3 million. An additional $1.3 million was received during the first quarter of 2007 to finalize this transaction. As part of the sale, the Buyer agreed to assume certain

50

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Basis of Presentation (Continued)

liabilities of the Canadian Division and offered employment to some of the employees. Under the terms of the sale, the Company is responsible for severance costs associated with employees not retained by the Buyer. As of December 31, 2006, this amount totaled $0.6 million and has been included in the loss from the sale of the Canadian Division for 2006. In addition, the Company had three leased facilities associated with the Canadian Division that have been vacated. As of December 31, 2006, obligations for two of the facilities had been settled. The remaining facility is leased through March 31, 2011 and is sublet through the same period.

Losses associated with the discontinued operations of the Canadian Division for the year ended December 31, 2006 were as follows (in thousands):

	For the Year Ended December 31, 2006
Pre-tax loss from ongoing operations	$	(794	)
Pre-tax loss from the sale of the Canadian Division		(5,885	)
Total pre-tax loss from discontinued operations		(6,679	)
Total income tax benefit		3,588
Total after-tax loss from discontinued operations	$	(3,091	)

2. Summary of Significant Accounting Policies

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. For all acquisitions, account balances and results of operations are included in the Consolidated Financial Statements as of the date acquired.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could differ from these estimates.

Various assumptions and other factors underlie the determination of significant accounting estimates. The process of determining significant estimates is fact specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some cases, actuarial techniques. The Company periodically reevaluates these significant factors and makes adjustments where facts and circumstances dictate.

Supplier Allowances

Supplier allowances (fixed or variable) are common practice in the business products industry and have a significant impact on the Company's overall gross margin. Gross margin is determined by, among other items, file margin (determined by reference to invoiced price), as reduced by customer discounts and rebates as discussed below, and increased by supplier allowances and promotional incentives.

51

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

Receivables related to supplier allowances totaled $91.8 million and $134.8 million as of December 31, 2008 and 2007. These receivables are included in "Accounts receivable" in the Consolidated Balance Sheets.

In 2008, approximately 17% of the Company's annual supplier allowances and incentives were fixed, based on supplier participation in various Company advertising and marketing publications. Fixed allowances and incentives are taken to income through lower cost of goods sold as inventory is sold.

The remaining 83% of the Company's annual supplier allowances and incentives in 2008 were variable, based on the volume and mix of the Company's product purchases from suppliers. These variable allowances are recorded based on the Company's annual inventory purchase volumes and product mix and are included in the Company's Consolidated Financial Statements as a reduction to cost of goods sold, thereby reflecting the net inventory purchase cost. Supplier allowances and incentives attributable to unsold inventory are carried as a component of net inventory cost. The potential amount of variable supplier allowances often differs based on purchase volumes by supplier and product category. As a result, lower Company sales volume (which reduce inventory purchase requirements) and product sales mix changes (especially because higher-margin products often benefit from higher supplier allowance rates) can make it difficult to reach some supplier allowance goals.

The Company transitioned to a calendar year program with its 2006 Supplier Allowance Program for product content syndication. This change altered the year-over-year timing on recognizing related income, and has resulted in a positive impact on gross margin during 2006 of $41.6 million related to this program.

Customer Rebates

Customer rebates and discounts are common practice in the business products industry and have a significant impact on the Company's overall sales and gross margin. Such rebates are reported in the Consolidated Financial Statements as a reduction of sales. Customer rebates of $62.1 million and $59.5 million as of December 31, 2008 and 2007 are included as a component of "Accrued liabilities" in the Consolidated Balance Sheets.

Customer rebates include volume rebates, sales growth incentives, advertising allowances, participation in promotions and other miscellaneous discount programs. These rebates are paid to customers monthly, quarterly and/or annually. Estimates for volume rebates and growth incentives are based on estimated annual sales volume to the Company's customers. The aggregate amount of customer rebates depends on product sales mix and customer mix changes. Reported results reflect management's current estimate of such rebates. Changes in estimates of sales volumes, product mix, customer mix or sales patterns, or actual results that vary from such estimates may impact future results.

During 2006, the Company changed the timing of certain marketing programs impacting catalog charges and related customer rebates, which resulted in a favorable impact to gross margin of $19.0 million.

Revenue Recognition

Revenue is recognized when a service is rendered or when title to the product has transferred to the customer. Management records an estimate for future product returns related to revenue recognized in the current period. This estimate is based on historical product return trends and the gross margin

52

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

associated with those returns. Management also records customer rebates that are based on annual sales volume to the Company's customers. Annual rebates earned by customers include growth components, volume hurdle components, and advertising allowances.

Shipping and handling costs billed to customers are treated as revenues and recognized at the time title to the product has transferred to the customer. Freight costs are included in the Company's Consolidated Financial Statements as a component of cost of goods sold and not netted against shipping and handling revenues. Net sales do not include sales tax charged to customers.

Share-Based Compensation

At December 31, 2008, the Company had two active share-based employee compensation plans covering key associates and/or non-employee directors of the Company. Historically, the majority of awards issued under these plans have been stock options with service-type conditions. Effective January 1, 2006, the Company accounts for stock-based compensation utilizing the fair value recognition provisions of Statement of Financial Accounting Standards ("SFAS") No. 123(R), Share-Based Payment. See Note 3 to the Consolidated Financial Statements.

Valuation of Accounts Receivable

The Company makes judgments as to the collectability of accounts receivable based on historical trends and future expectations. Management estimates an allowance for doubtful accounts, which addresses the collectability of trade accounts receivable. This allowance adjusts gross trade accounts receivable downward to its estimated collectible, or net realizable value. To determine the allowance for doubtful accounts, management reviews specific customer risks and the Company's accounts receivable aging. Uncollectible receivable balances are written off against the allowance for doubtful accounts when it is determined that the receivable balance is uncollectible.

Goodwill and Intangible Assets

Goodwill is initially recorded based on the premium paid for acquisitions and is subsequently tested for impairment. The Company tests goodwill for impairment annually and whenever events or circumstances indicate that an impairment may have occurred, such as a significant adverse change in the business climate, loss of key personnel or a decision to sell or dispose of a reporting unit. Determining whether an impairment has occurred requires valuation of the respective reporting unit, which the Company estimates using a discounted cash flow method. When available and as appropriate, comparative market multiples are used to corroborate discounted cash flow results. If this analysis indicates goodwill is impaired, an impairment charge would be taken based on the amount of goodwill recorded versus the implied fair value of goodwill computed by independent appraisals.

Intangible assets are initially recorded at their fair market values determined on quoted market prices in active markets, if available, or recognized valuation models. Intangible assets that have finite useful lives are amortized on a straight-line basis over their useful lives. Intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment or whenever events or circumstances indicate an impairment may have occurred. See Note 4 to the Consolidated Financial Statements.

53

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

Insured Loss Liability Estimates

The Company is primarily responsible for retained liabilities related to workers' compensation, vehicle, property and general liability and certain employee health benefits. The Company records an expense for paid and open claims and an expense for claims incurred but not reported based on historical trends and on certain assumptions about future events. The Company has an annual per-person maximum cap, provided by a third-party insurance company, on certain employee medical benefits. In addition, the Company has both a per-occurrence maximum loss and an annual aggregate maximum cap on workers' compensation claims.

Leases

The Company leases real estate and personal property under operating leases. Certain operating leases include incentives from landlords including, landlord "build-out" allowances, rent escalation clauses and rent holidays or periods in which rent is not payable for a certain amount of time. The Company accounts for landlord "build-out" allowances as deferred rent at the time of possession and amortizes this deferred rent on a straight-line basis over the term of the lease. The Company also recognizes leasehold improvements associated with the "build-out" allowances and amortizes these improvements over the shorter of (1) the term of the lease or (2) the expected life of the respective improvements.

The Company accounts for rent escalation and rent holidays as deferred rent at the time of possession and amortizes this deferred rent on a straight-line basis over the term of the lease. As of December 31, 2008, the Company is not a party to any capital leases.

Inventories

Inventory constituting approximately 81% of total inventory as of both December 31, 2008 and 2007 have been valued under the last-in, first-out ("LIFO") accounting method. LIFO results in a better matching of costs and revenues. The remaining inventory is valued under the first-in, first-out ("FIFO") accounting method. Inventory valued under the FIFO and LIFO accounting methods is recorded at the lower of cost or market. If the Company had valued its entire inventory under the lower of FIFO cost or market, inventory would have been $84.7 million and $60.4 million higher than reported as of December 31, 2008 and December 31, 2007, respectively. The increase in the LIFO reserve, which increased cost of sales by $24.3 million, was partially offset by reduced cost of sales resulting from decrements in certain LIFO pools. During 2008, inventory quantities for the portion of inventory accounted for under the LIFO accounting method were reduced. These reductions resulted in liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of current year purchases. The effect of these liquidations decreased cost of sales by approximately $5.4 million, included in the $24.3 million above.

The Company records adjustments for shrinkage. Inventory that is obsolete, damaged, defective or slow moving is recorded to the lower of cost or market. These adjustments are determined using historical trends and are adjusted, if necessary, as new information becomes available.

Pension and Postretirement Health Benefits

The Company adopted the recognition and related disclosure provisions of Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 158, Employers'

54

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R) ("SFAS No. 158") on December 31, 2006 for its pension and postretirement health benefits. The Company has adopted the measurement date provisions of SFAS No. 158 for the fiscal year ending December 31, 2008, in accordance with the statement. This adoption measures the plan assets and benefit obligations as of the Company's fiscal year end.

Calculating the Company's obligations and expenses related to its pension and postretirement health benefits requires selection and use of certain actuarial assumptions. As more fully discussed in Notes 12 and 13 to the Consolidated Financial Statements, these actuarial assumptions include discount rates, expected long-term rates of return on plan assets, and rates of increase in compensation and healthcare costs. To select the appropriate actuarial assumptions, management relies on current market conditions and historical information. Pension expense for 2008 was $5.6 million, compared to $7.4 million and $8.8 million in 2007 and 2006, respectively. A one percentage point decrease in the expected assumed discount rate would have resulted in an increase in pension expense for 2008 of approximately $2.7 million and increased the year-end projected benefit obligation by $20.7 million.

Costs associated with the Company's postretirement health benefits plan totaled $0.1 million each for the years ended 2008, 2007 and 2006. A one-percentage point decrease in the assumed discount rate would have resulted in incremental postretirement healthcare expenses for 2008 of approximately $0.1 million and increased the year-end accumulated postretirement benefit obligation by $0.6 million. Current rates of medical cost increases are trending above the Company's medical cost increase cap of 3% provided by the plan. Accordingly, a one percentage point increase in the assumed average healthcare cost trend would not have a significant impact on the Company's postretirement health plan costs.

The Company expects to freeze pension service benefits for employees not covered by collective bargaining agreements. This action has been approved and is expected to be effective March 1, 2009.

Cash Equivalents

An unfunded check balance (payments in-transit) exists for the Company's primary disbursement accounts. Under the Company's cash management system, the Company utilizes available borrowings, on an as-needed basis, to fund the clearing of checks as they are presented for payment. As of December 31, 2008 and 2007, outstanding checks totaling $39.2 million and $70.8 million, respectively, were included in "Accounts payable" in the Consolidated Balance Sheets. All highly liquid debt instruments with an original maturity of three months or less are considered cash equivalents. Cash equivalents are stated at cost, which approximates market value.

Property, Plant and Equipment

Property, plant and equipment is recorded at cost. Depreciation and amortization are determined by using the straight-line method over the estimated useful lives of the assets. The estimated useful life assigned to fixtures and equipment is from two to 10 years; the estimated useful life assigned to buildings does not exceed 40 years; leasehold improvements are amortized over the lesser of their useful lives or the term of the applicable lease. Repair and maintenance costs are charged to expense as incurred.

55

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

On July 11, 2008, the Company completed the sale of its distribution center located in Jacksonville, FL for approximately $3.5 million. The net book value of this building and related assets was $1.8 million as of the closing date. In addition, the Company closed on the sale of its distribution center in Tampa, FL on August 8, 2008, with a sales price of approximately $4.8 million compared with a net book value of $1.5 million. As of December 31, 2007, the Company had one building and associated assets, related to its former corporate headquarters, with total net book value of $5.4 million classified as "assets held for sale" within "Other assets" on the Condensed Consolidated Balance Sheets. On May 7, 2008, the Company completed the sale of this building for approximately $9.8 million.

During 2007, the Company recognized an impairment loss of $0.6 million on certain Information Technology (IT) hardware "held for sale". During 2006, the Company sold its Edison, New Jersey and Pennsauken, New Jersey facilities for a total gain of $6.7 million.

Software Capitalization

The Company capitalizes internal use software development costs in accordance with the American Institute of Certified Public Accountants' Statement of Position No. 98-1, Accounting for Costs of Computer Software Developed or Obtained for Internal Use. Amortization is recorded on a straight-line basis over the estimated useful life of the software, generally not to exceed seven years. Capitalized software is included in "Property, plant and equipment, at cost" on the Consolidated Balance Sheet. The total costs are as follows (in thousands):

		As of December 31,
		2008			2007
Capitalized software development costs		$	57,706		$	56,480
Write-off of capitalized software development costs			(6,735	)		—
Accumulated amortization			(36,498	)		(36,359	)
	Net capitalized software development costs	$	14,473		$	20,121

As of December 31, 2007, net capitalized software development costs included $8.3 million related to the Company's Reseller Technology Solution (RTS) investment. These capitalized software development costs were being amortized over five years with $1.6 million, $2.9 million and $1.7 million of amortization expense recorded for the years ending December 31, 2008, 2007, and 2006, respectively. During 2008, the Company wrote off the remaining $6.7 million of capitalized software development costs related to the RTS investment. The charge reflected delays in bringing this solution to market and the acceleration of development of other such software solutions. As a result of these changing developments, the Company's undiscounted forecasted cash flows and fair value analysis associated with this investment declined such that a write-off of the remaining asset-value was required. During 2006, the Company wrote off $6.7 million related to an internal systems initiative. These two pre-tax write-offs are reflected in "Warehousing, marketing and administrative expenses" on the Consolidated Statement of Income for 2008 and 2006, respectively.

Derivative Financial Instruments

The Company's risk management policies allow for the use of derivative financial instruments to prudently manage foreign currency exchange rate and interest rate exposure. The policies do not allow

56

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

such derivative financial instruments to be used for speculative purposes. At this time, the Company primarily uses interest rate swaps which are subject to the management, direction and control of our financial officers. Risk management practices, including the use of all derivative financial instruments, are presented to the Board of Directors for approval.

All derivatives are recognized on the balance sheet date at their fair value. All derivatives in a net receivable position are included in "Other assets", and those in a net liability position are included in "Other long-term liabilities". The interest rate swaps that the Company has entered into are classified as cash flow hedges in accordance with SFAS No. 133 as they are hedging a forecasted transaction or the variability of cash flow to be paid by the Company. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in other comprehensive income, net of tax, until earnings are affected by the forecasted transaction or the variability of cash flow, and then are reported in current earnings.

The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific forecasted transactions or variability of cash flow.

The Company formally assesses, at both the hedge's inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. When it is determined that a derivative is not highly effective as a hedge then hedge accounting is discontinued prospectively in accordance with SFAS No. 133. At this time, there is no ineffectiveness to record on the Company's Consolidated Statement of Income resulting from the Company's cash flow hedges. See Note 20, "Derivative Financial Instruments", for further detail.

Income Taxes

The Company accounts for income taxes using the liability method in accordance with SFAS No. 109, Accounting for Income Taxes. The Company estimates actual current tax expense and assesses temporary differences that exist due to differing treatments of items for tax and financial statement purposes. These temporary differences result in the recognition of deferred tax assets and liabilities.

A provision has not been made for deferred U.S. income taxes on the undistributed earnings of the Company's foreign subsidiaries as these earnings have historically been permanently invested.

The current and deferred tax balances and income tax expense recognized by the Company are based on management's interpretation of the tax laws of multiple jurisdictions. Income tax expense also reflects the Company's best estimates and assumptions regarding, among other things, the level of future taxable income, interpretation of tax laws, and tax planning. Future changes in tax laws, changes in projected levels of taxable income, and tax planning could impact the effective tax rate and current and deferred tax balances recorded by the Company. Management's estimates as of the date of the Consolidated Financial Statements reflect its best judgment giving consideration to all currently available facts and circumstances. As such, these estimates may require adjustment in the future, as additional facts become known or as circumstances change. Further, in accordance with FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 ("FIN No. 48"), the tax effects from uncertain tax positions are recognized in the Consolidated Financial Statements, only if it is more likely than not that the position will be sustained upon

57

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

examination, based on the technical merits of the position. The Company accounts for interest and penalties related to uncertain tax positions as a component of income tax expense.

Foreign Currency Translation

The functional currency for the Company's foreign operations is the local currency. Assets and liabilities of these operations are translated into U.S. currency at the rates of exchange at the balance sheet date. The resulting translation adjustments are included in accumulated other comprehensive loss, a separate component of stockholders' equity. Income and expense items are translated at average monthly rates of exchange. Realized gains and losses from foreign currency transactions were not material.

New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS No. 157"), which clarifies the definition of fair value, establishes a framework for measuring fair value, and expands the disclosures regarding fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. Effective January 1, 2008, the Company adopted SFAS No. 157 for financial assets and liabilities recognized at fair value on a recurring basis. This adoption did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. In February 2008, the FASB issued FASB Staff Position ("FSP") 157-2, Effective Date of FASB Statement No. 157 ("FSP 157-2") which delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting FSP 157-2 on its financial position and its results results of operations. See Note 21, "Fair Value Measurements", for information and related disclosures regarding the Company's fair value measurements.

In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R) ("SFAS No. 158"). SFAS No. 158 requires employers to recognize the funded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in comprehensive income in the year in which the changes occur. The funded status of a defined benefit pension plan is measured as the difference between plan assets at fair value and the plan's projected benefit obligation. Under SFAS No. 158, employers are also required to measure plan assets and benefit obligations at the date of their fiscal year-end statement of financial position. The Company adopted the required recognition provisions of SFAS No. 158 as of December 31, 2006, and the requirement to measure a plan's assets and obligations as of the balance sheet date as of January 1, 2008. See Note 12, "Pension Plans and Defined Contribution Plan", for more information regarding the adoption of the measurement date provisions of SFAS No. 158.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS No. 159"), which permits all entities to choose to measure eligible financial instruments at fair value at specific election dates. SFAS No. 159 requires companies to report unrealized gains and losses on items for which the fair value option has been elected in earnings at each

58

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

subsequent reporting date and recognize upfront costs and fees related to those items in earnings as incurred and not deferred. SFAS No. 159 applies to fiscal years beginning after November 15, 2007. SFAS No. 159 was effective for the Company as of January 1, 2008. However, the Company does not currently have any instruments that it has elected to measure at fair value. As a result, the adoption of SFAS No. 159 did not impact the Company's consolidated financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations ("SFAS No. 141(R)"), which is a revision to SFAS No. 141, Business Combinations, originally issued in June 2001. The revised statement retains the fundamental requirements of SFAS No. 141 but also defines the acquirer and establishes the acquisition date as the date that the acquirer achieves control. The main features of SFAS No. 141(R) are that it requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions noted in the Statement. SFAS No. 141(R) requires the acquirer to recognize goodwill as of the acquisition date. Finally, the new Statement makes a number of other significant amendments to other Statements and other authoritative guidance including requiring research and development costs acquired to be capitalized separately from goodwill and requiring the expensing of transaction costs directly related to an acquisition. This new Statement is effective for acquisitions on or after the beginning of the first fiscal year beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 141(R) to have a material impact on its financial position and/or its results of operations.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 ("SFAS No. 160"), which requires, among other items, that ownership interest in subsidiaries held by parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent's equity. The Statement also requires that the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income. Finally, SFAS No. 160 requires that entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This Statement is effective for fiscal years beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 160 to have a material impact on its financial position and/or its results of operations.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS No. 161"), which amends and expands the disclosure requirements of SFAS No. 133 with the intent to provide users of financial statements with an enhanced understanding of an entity's derivative and hedging activities. Specifically, SFAS No. 161 requires further disclosure on the following: 1) how and why an entity uses derivative instruments; 2) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations; and 3) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. In order to meet these requirements, SFAS No. 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit risk-related contingent features in derivative agreements. This Statement is effective for fiscal years beginning after November 15, 2008. The Company does not expect the adoption of SFAS No. 161 to have a material impact on its financial position and/or its results of operations.

59

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

In April 2008, the FASB issued FASB Staff Position ("FSP") FAS 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors to be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. Disclosures will be required to provide information that will enable users of financial statements to assess the extent to which the expected future cash flows associated with the asset are affected by the entity's intent and/or ability to renew or extend the arrangement. The FSP is effective for fiscal years beginning after December 15, 2008. The Company has not yet completed its evaluation of the impact of this FSP on its Consolidated Financial Statements.

In June 2008, the FASB issued Emerging Issue Task Force ("EITF") Issue No. 03-6-1, Determining Whether Instruments Granted in Share-Based Transactions Are Participating Securities. This EITF addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, thus impacting the calculation of earnings per share. If a share-based payment is determined to be a participating security, then the two-class method of calculating earnings per share may be required. This EITF is effective for fiscal years beginning after December 15, 2008. The Company has not yet completed its evaluation of the impact of this EITF on its Consolidated Financial Statements.

3. Share-Based Compensation

Overview

As of December 31, 2008, the Company has two active equity compensation plans. A description of these plans is as follows:

Amended 2004 Long-Term Incentive Plan ("LTIP")

In March 2004, the Company's Board of Directors adopted the LTIP to, among other things, attract and retain managerial talent, further align the interest of key associates to those of the Company's shareholders and provide competitive compensation to key associates. Award vehicles include stock options, stock appreciation rights, full value awards, cash incentive awards and performance-based awards. Key associates and non-employee directors of the Company are eligible to become participants in the LTIP, except that non-employee directors may not be granted incentive stock options. During 2008, the Company granted 191,621 shares of restricted stock under the LTIP. The Company granted no stock options under the LTIP during 2008.

Nonemployee Directors' Deferred Stock Compensation Plan

Pursuant to the United Stationers Inc. Nonemployee Directors' Deferred Stock Compensation Plan, non-employee directors may defer receipt of all or a portion of their retainer and meeting fees. Fees deferred are credited quarterly to each participating director in the form of stock units, based on the fair market value of the Company's common stock on the quarterly deferral date. Each stock unit account generally is distributed and settled in whole shares of the Company's common stock on a one-for-one basis, with a cash-out of any fractional stock unit interests, after the participant ceases to serve as a Company director. For the years ended December 31, 2008, 2007 and 2006, the Company recorded compensation expense of $0.3 million, $0.2 million, and $0.2 million, respectively. As of December 31, 2008, 2007 and 2006, the accumulated number of stock units outstanding under this plan was 46,203; 39,156; and 34,749; respectively.

60

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Share-Based Compensation (Continued)

Accounting For Stock-Based Compensation

Prior to January 1, 2006, the Company accounted for those plans under the recognition and measurement provisions of Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations, as permitted by Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123").

Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment ("SFAS No. 123(R)"), using the modified-prospective transition method. The Company's adoption of SFAS No. 123(R) did not result in any cumulative effect of an accounting change. Under this modified-prospective transition method, compensation cost recognized in 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123(R). Results for prior periods have not been restated. The Company recorded pre-tax expense of $9.0 million ($5.6 million after-tax), or $0.24 per basic and diluted share, for share-based compensation for the year ended December 31, 2008. The Company recorded pre-tax expense of $8.9 million ($5.4 million after-tax), or $0.20 per basic and $0.19 per diluted share, for share-based compensation for the year ended December 31, 2007. The Company recorded pre-tax expense of $8.0 million ($5.0 million after-tax), or $0.16 per basic and diluted share, for share-based compensation for the year ended December 31, 2006.

The following tables summarize the intrinsic value of options outstanding, exercisable, and exercised for the applicable periods listed below:

Intrinsic Value of Options
(in thousands of dollars)

	Outstanding		Exercisable
As of December 31, 2008	$	1,926	$	1,926
As of December 31, 2007		11,364		11,254
As of December 31, 2006		27,259		21,916

Intrinsic Value of Options Exercised
(in thousands of dollars)

For the year ended
December 31, 2008	$	1,301
December 31, 2007		28,179
December 31, 2006		12,730

61

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Share-Based Compensation (Continued)

The following tables summarize the intrinsic value of restricted shares outstanding and vested for the applicable periods listed below:

Intrinsic Value of Restricted Shares
(in thousands of dollars)

Outstanding
As of December 31, 2008	$	8,609
As of December 31, 2007		5,816
As of December 31, 2006		670

Intrinsic Value of Restricted Shares Vested
(in thousands of dollars)

For the year ended
December 31, 2008	$	1,617
December 31, 2007		476
December 31, 2006		978

As of December 31, 2008, there was $16.1 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted. This cost is expected to be recognized over a weighted-average period of 2.0 years.

SFAS No. 123(R), Share-Based Payment ("SFAS No. 123(R)"), requires that cash flows resulting from the tax benefits from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) be classified as financing cash flows. For the years ended December 31, 2008, 2007 and 2006, respectively, the $0.1 million, $9.5 million and $4.6 million excess tax benefits classified as financing cash inflows on the Consolidated Statement of Cash Flows would have been classified as operating cash inflows if the Company had not adopted SFAS No. 123(R).

Historically, the majority of awards issued under these plans have been stock options with service-type conditions. The Company began utilizing restricted stock awards in its annual award grant in September 2007.

Stock Options

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model that uses various assumptions including the expected stock price volatility, risk-free interest rate, and expected life of the option. Stock options, generally vest in annual increments over three years and have a term of 10 years. Compensation costs for all stock options are recognized, net of estimated forfeitures, on a straight-line basis as a single award typically over the vesting period. The Company estimates expected volatility based on historical volatility of the price of its common stock. The Company estimates the expected term of share-based awards by using historical data relating to option exercises and employee terminations to estimate the period of time that options granted are expected to be outstanding. The interest rate for periods during the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. As of December 31, 2008, there was $4.9 million of

62

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Share-Based Compensation (Continued)

total unrecognized compensation cost related to stock option awards granted. The Company granted 459,268 stock options during the year ended December 31, 2007. There were no stock options granted during 2008. The weighted average fair value for stock options granted during the year ended December 31, 2007 of $14.23 was estimated using the following weighted-average assumptions:

	2007
Exercise price		59.62
Expected stock price volatility		23.3	%
Risk-free interest rate		4.3	%
Expected life of options (years)		3.5
Expected dividend yield		0.0	%

The following table summarizes the transactions, excluding restricted stock, under the Company's equity compensation plans for the last three years:

	2008			Weighted Average Exercise Price		2007			Weighted Average Exercise Price		2006			Weighted Average Exercise Price
Options outstanding—January 1		2,827,582		$	44.45		3,631,049		$	39.19		3,707,782		$	36.37
Granted		—			—		459,268			59.62		768,993			46.07
Exercised		(94,135	)		34.17		(1,120,098	)		33.42		(751,214	)		31.72
Cancelled		(119,442	)		48.51		(142,637	)		46.35		(94,512	)		43.97
Options outstanding—December 31		2,614,005		$	44.63		2,827,582		$	44.45		3,631,049		$	39.19
Number of options exercisable		2,116,871		$	42.47		1,714,434		$	39.75		2,025,395		$	35.87

The following table summarizes outstanding and exercisable options granted under the Company's equity compensation plans as of December 31, 2008:

Exercise Prices		Outstanding		Remaining Contractual Life (Years)		Exercisable
	20.01—25.00		135,304		3.4		135,304
	25.01—30.00		91,695		3.0		91,695
	30.01—35.00		49,784		2.6		49,784
	35.01—40.00		342,370		4.6		342,370
	40.01—45.00		398,050		5.7		398,050
	45.01—50.00		1,180,009		7.2		960,178
	50.01—55.00		—		—		—
	55.01—60.00		365,670		8.7		122,450
	60.01—65.00		—		—		—
	65.01—70.00		51,123		8.6		17,040
	Total		2,614,005		6.4		2,116,871

63

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Share-Based Compensation (Continued)

Restricted Stock

The Company granted 191,621 and 120,795 shares of restricted stock during the years ended December 31, 2008 and 2007, respectively. Included in 2008 grants were 88,316 shares granted to employees who were not executive officers and 20,173 shares granted to non-employee directors. These awards generally vest in annual increments over three years. There were also 83,132 shares granted to executive officers that vest with respect to each officer in annual increments over three years provided that the following conditions are satisfied: (1) the officer is still employed as of the anniversary date of the grant; and (2) the Company's cumulative diluted earnings per share for the four calendar quarters immediately preceding the vesting date exceed $1.00 per diluted share as defined in the officers' restricted stock award agreement. As of December 31, 2008, there was $11.2 million of total unrecognized compensation cost related to non-vested restricted stock awards granted. A summary of the status of the Company's restricted stock grants and changes during the last three years is as follows:

Restricted Stock		2008			Weighted Average Grant Date Fair Value		2007			Weighted Average Grant Date Fair Value		2006			Weighted Average Grant Date Fair Value
Nonvested—January 1			125,865		$	58.79		14,350		$	47.48		20,400		$	31.01
	Granted		191,621			49.88		120,795			59.36		11,850			47.63
	Vested		(32,612	)		59.02		(7,500	)		46.23		(17,900	)		28.81
	Cancelled		(27,820	)		53.08		(1,780	)		59.02		—			—
Nonvested—December 31			257,054		$	52.74		125,865		$	58.79		14,350		$	47.48

4. Goodwill and Intangible Assets

As of December 31, 2008 and 2007, the Company's Consolidated Balance Sheet reflected $314.4 million and $315.5 million, respectively, of goodwill. The change in goodwill from 2007 to 2008 was the result of purchase price adjustments associated with the acquisition of ORS Nasco (see Note 1 for more detail on "Acquisition of ORS Nasco Holding, Inc.") and goodwill associated with the acquisition of Emco Distribution (see Note 1 for more detail on "Acquisition of Emco Distribution LLC"). As of December 31, 2008 and 2007, the Company had $68.0 million and $68.8 million in net intangible assets. Net intangible assets as of December 31, 2008 consist primarily of customer listings and non-compete agreements purchased as part of the Sweet Paper acquisition, ORS Nasco acquisition (see "Acquisition of ORS Nasco Holding, Inc." in Note 1) and the Emco Distribution acquisition (see Note 1 for more detail on "Acquisition of Emco Distribution LLC"). Amortization of intangible assets purchased as part of the these acquisitions totaled $4.8 million, $2.6 million and $2.6 million for the years ended December 31, 2008, 2007, and 2006, respectively. Accumulated amortization of intangible assets as of December 31, 2008 and 2007 totaled $11.4 million and $6.6 million, respectively.

64

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Goodwill and Intangible Assets (Continued)

The following table summarizes the intangible assets of the Company by major class of intangible assets and the cost, accumulated amortization, net carrying amount, and weighted average life, if applicable (in thousands):

	December 31, 2008									December 31, 2007
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Useful Life (years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Useful Life (years)
Intangible assets subject to amortization
Customer Relationships and other intangibles	$	62,460	$	(10,353	)	$	52,107		14	$	59,360	$	(5,879	)	$	53,481		14
Non-compete agreements		3,950		(1,075	)		2,875		3		3,750		(775	)		2,975		3
Total	$	66,410	$	(11,428	)	$	54,982			$	63,110	$	(6,654	)	$	56,456
Intangible assets not subject to amortization
Trademarks	$	13,000		—		$	13,000		n/a	$	12,300		—		$	12,300		n/a
Total	$	79,410	$	(11,428	)	$	67,982			$	75,410	$	(6,654	)	$	68,756

The following table summarizes the amortization expense expected to be incurred over the next five years on intangible assets from acquisitions completed as of December 31, 2008 (in thousands):

Year	Amounts
2009	$	4,961
2010		4,786
2011		4,657
2012		4,521
2013		4,521

Sale of Canadian Division

As part of the sale of the Company's Canadian Division (see "Canadian Division—Discontinued Operations" in Note 1), $15.1 million of goodwill was written-off and included in the $6.7 million pre-tax loss from discontinued operations for the year ended December 31, 2006.

5. Restructuring and Other Charges

2006 Workforce Reduction Program

On October 17, 2006, the Company announced a restructuring plan to eliminate staff positions through both voluntary and involuntary separation plans (the "Workforce Reduction Program"). The Workforce Reduction Program included workforce reductions of 110 associates and as of December 31, 2007, the measures were substantially complete. The Company recorded a pre-tax charge of $6.0 million in 2006 for severance pay and benefits, prorated bonuses, and outplacement costs that will be paid primarily during 2007. Cash outlays associated with the 2006 Workforce Reduction Program in 2008, 2007 and 2006 totaled $0.6 million, $6.6 million, and $0.4 million, respectively. As of December 31, 2008 and 2007, the Company had accrued reserves for the 2006 Workforce Reduction Program of $0.1 million and

65

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Restructuring and Other Charges (Continued)

$0.7 million, respectively. The Company recorded an additional charge of $1.7 million related to this action in 2007.

2002 Restructuring Plan

The Company's Board of Directors approved a restructuring plan in the fourth quarter of 2002 (the "2002 Restructuring Plan") that included additional charges related to revised real estate sub-lease assumptions used in the 2001 Restructuring Plan, further downsizing of TOP operations (including severance and anticipated exit costs related to a portion of the Company's Memphis distribution center), closure of the Milwaukee, Wisconsin distribution center and the write-down of certain e-commerce-related investments. All initiatives under the 2002 Restructuring Plan are complete. However, certain cash payments will continue for accrued exit costs that relate to long-term lease obligations that expire at various times over the next two years. The Company continues to actively pursue opportunities to sublet unused facilities.

During 2006, the Company reversed $4.1 million in restructuring and other charges as a result of events impacting estimates for future obligations associated with the 2002 Restructuring Plan. The Company is now using previously unused space in its Memphis distribution center for operations related to the Company's global sourcing initiative and to expand Lagasse's distribution capability for janitorial and breakroom supplies including foodservice consumables products.

2001 Restructuring Plan

The Company's Board of Directors approved a restructuring plan in the third quarter of 2001 (the "2001 Restructuring Plan") that included an organizational restructuring, a consolidation of certain distribution facilities and USSC's call center operations, an information technology platform consolidation, divestiture of the call center operations of The Order People ("TOP") and certain other assets, and a significant reduction of TOP's cost structure. The restructuring plan included workforce reductions of approximately 1,375 associates. All initiatives under the 2001 Restructuring Plan are complete. However, certain cash payments will continue for accrued exit costs that relate to long-term lease obligations that expire at various times over the next two years. The Company continues to actively pursue opportunities to sublet unused facilities.

As of December 31, 2008 and 2007, the Company had accrued restructuring costs on its balance sheet of approximately $1.0 million and $1.6 million, respectively, for the remaining exit costs related to the 2002 and 2001 Restructuring Plans. Net cash payments related to the 2002 and 2001 Restructuring Plans for 2008, 2007 and 2006 totaled $0.5 million, $0.3 million and $1.0 million, respectively.

66

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss as of December 31, 2008, 2007 and 2006 included the following (in thousands):

	As of December 31,
	2008			2007			2006
Unrealized currency translation adjustments	$	(6,752	)	$	(3,167	)	$	(2,867	)
Unrealized loss on interest rate swaps, net of tax		(21,471	)		(2,299	)		—
Minimum pension liability adjustments, net of tax		(37,201	)		(9,486	)		(7,939	)
Adjustments to apply SFAS No. 158, net of tax		474			—			(4,530	)
Total accumulated other comprehensive loss	$	(64,950	)	$	(14,952	)	$	(15,336	)

7. Earnings Per Share

Basic earnings per share ("EPS") is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if dilutive securities were exercised into common stock. Stock options, restricted stock and deferred stock units are considered dilutive securities. Stock options to purchase 1.6 million shares of common stock were outstanding at December 31, 2008, but were not included in the computation of diluted earnings per share because the options' exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. The amount of antidilutive options in prior years is not material.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

			Years Ended December 31,
			2008		2007		2006
Numerator:
	Net income		$	98,414	$	107,195	$	132,213
Denominator:
	Denominator for basic earnings per share—Weighted average shares			23,578		27,323		30,956
	Effect of dilutive securities:
		Employee stock options		269		653		415
	Denominator for diluted earnings per share—Adjusted weighted average shares and the effect of dilutive securities			23,847		27,976		31,371
	Net income per common share:
		Net income per share—basic	$	4.17	$	3.92	$	4.27
		Net income per share—assuming dilution	$	4.13	$	3.83	$	4.21

8. Segment Information

SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, requires companies to report financial and descriptive information about their reportable operating segments, including segment profit or loss, certain specific revenue and expense items, and segment assets, as well as information about the revenues derived from the Company's products and services, the countries in which the Company earns revenues and holds assets, and major customers. This statement also

67

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Segment Information (Continued)

requires companies that have a single reportable segment to disclose information about products and services, information about geographic areas, and information about major customers. This statement requires the use of the management approach to determine the information to be reported. The management approach is based on the way management organizes the enterprise to assess performance and make operating decisions regarding the allocation of resources. SFAS No. 131 permits the aggregation, based on specific criteria, of several operating segments into one reportable operating segment. Management has chosen to aggregate its operating segments and report segment information as one reportable segment. A discussion of the factors relied upon and processes undertaken by management in determining that the Company meets the aggregation criteria is provided below, followed by the required disclosure regarding the Company's single reportable segment.

Management defines operating segments as individual operations that the Chief Operating Decision Maker ("CODM") (in the Company's case, the President and Chief Executive Officer) reviews for the purpose of assessing performance and making operating decisions. When evaluating operating segments, management considers whether:

•

The component engages in business activities from which it may earn revenues and incur expenses;

•

The operating results of the component are regularly reviewed by the enterprise's CODM;

•

Discrete financial information is available about the component; and

•

Other factors are present, such as management structure, presentation of information to the Board of Directors and the nature of the business activity of each component.

Based on the factors referenced above, management has determined that the Company has three operating segments, USSC (referred to by the Company as "Supply"), the first-tier operating subsidiary of USI; Lagasse and ORS Nasco. Supply also includes operations in Mexico conducted through a USSC subsidiary, as well as Azerty, which has been consolidated into Supply.

Management has also concluded that the Company's three operating segments meet all of the aggregation criteria required by SFAS 131. Such determination is based on company-wide similarities in (1) the nature of products and/or services provided, (2) customers served, (3) production processes and/or distribution methods used, (4) economic characteristics including gross margins and operating expenses and (5) regulatory environment. Management further believes aggregate presentation provides more useful information to the financial statement user and is, therefore, consistent with the principles and objectives of SFAS No. 131.

The following discussion sets forth the required disclosure regarding single reportable segment information:

The Company operates as a single reportable segment as North America's largest broad line wholesale distributor of business products, with 2008 net sales of approximately $5.0 billion—including foreign operations in Mexico. For the years ended December 31, 2008, 2007 and 2006, the Company's net sales from foreign operations in Mexico totaled $96.0 million, $88.9 million and $96.2 million, respectively. In June 2006, the Company sold its Canadian Division which had net sales for the year ended December 31, 2006 of $47.9 million. The Company stocks more than 100,000 items from over 1,000 manufacturers. This includes a broad spectrum of manufacturers' brand and private brand office products, computer supplies, office furniture, business machines, presentation products, janitorial and

68

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Segment Information (Continued)

breakroom supplies and industrial supplies. The Company primarily serves commercial and contract office products dealers and other independent distributors. The Company sells its products through a national distribution network to approximately 30,000 resellers, who in turn sell directly to end-consumers. These products are distributed through the Company's network of 67 distribution centers. As of December 31, 2008, 2007, and 2006, long-lived assets of the Company's foreign operations in Mexico totaled $4.7 million, $4.8 million, and $4.8 million, respectively.

The Company's product offerings, comprised of more than 100,000 stockkeeping units (SKUs), may be divided into the following primary categories: (i) traditional office products, which include writing instruments, paper products, organizers and calendars and various office accessories; (ii) technology products such as computer supplies and peripherals; (iii) office furniture, such as desks, filing and storage solutions, seating and systems furniture, along with a variety of products for niche markets such as education government, healthcare and professional services; (iv) janitorial and breakroom supplies, which includes janitorial and breakroom supplies, foodservice consumables, safety and security items, and paper and packaging supplies; and (v) industrial supplies which includes hand and power tools, safety and security supplies, janitorial equipment and supplies and welding products. In 2008, the Company's largest supplier was Hewlett-Packard Company, which represented approximately 24% of its total purchases. No other supplier accounted for more than 10% of the Company's total purchases.

The Company's customers include independent office products dealers and contract stationers, office products mega-dealers, office products superstores, computer products resellers, office furniture dealers, mass merchandisers, mail order companies, sanitary supply distributors, drug and grocery store chains, e-commerce dealers and other independent distributors. No single customer accounted for more than 8% of the Company's 2008 consolidated net sales.

The following table shows net sales by product category for 2008, 2007 and 2006 (in millions):

	Years Ended December 31,
	2008		2007		2006
Technology products	$	1,679	$	1,729	$	1,767
Traditional office products		1,349		1,340		1,300
Janitorial and breakroom supplies		1,053		925		849
Office furniture		505		569		551
Industrial supplies		307		3		—
Freight revenue		86		77		70
Other		8		3		10
Total net sales	$	4,987	$	4,646	$	4,547

(1)

Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications were limited to changes between the "Traditional office products" and "Office furniture" product categories presentation and did not impact the Consolidated Statements of Income.

9. Long-Term Debt

USI is a holding company and, as a result, its primary sources of funds are cash generated from operating activities of its direct operating subsidiary, USSC, and from borrowings by USSC. The 2007

69

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Long-Term Debt (Continued)

Credit Agreement (as defined below) and the 2007 Master Note Purchase Agreement (as defined below) contain restrictions on the ability of USSC to transfer cash to USI.

Long-term debt consisted of the following amounts (in thousands):

		As of December 31,
		2008		2007
2007 Credit Agreement—Revolving Credit Facility		$	321,300	$	109,200
2007 Credit Agreement—Term Loan			200,000		200,000
2007 Master Note Purchase Agreement (Private Placement)			135,000		135,000
Industrial development bond, maturing in 2011			6,800		6,800
	Total	$	663,100	$	451,000

As of December 31, 2008, 100% of the Company's outstanding debt is priced at variable interest rates based primarily on the applicable bank prime rate, the London InterBank Offered Rate ("LIBOR") or the applicable commercial paper rates related to the Receivables Securitization Program. While the Company does have $663.1 million of outstanding LIBOR based debt at December 31, 2008, the Company has hedged $435.0 million of this debt with three separate interest rate swaps see Note 2, "Summary of Significant Accounting Policies", and Note 20, "Derivative Financial Instruments", to the Consolidated Financial Statements. As of December 31, 2008, the overall weighted average effective borrowing rate of the Company's debt was 4.1%. At year-end funding levels based on $251.1 million, a 50 basis point movement in interest rates would result in an annualized increase or decrease of approximately $1.3 million in interest expense and loss on the sale of certain accounts receivable, on a pre-tax basis, and ultimately upon cash flows from operations.

Credit Agreement and Other Debt

On July 5, 2007, USI and USSC entered into a Second Amended and Restated Five-Year Revolving Credit Agreement with PNC Bank, National Association and U.S. Bank National Association, as Syndication Agents, KeyBank National Association and LaSalle Bank, National Association, as Documentation Agents, and JPMorgan Chase Bank, National Association, as Agent (as amended on December 21, 2007, the "2007 Credit Agreement"). The 2007 Credit Agreement provides a Revolving Credit Facility with a committed principal amount of $425 million and a Term Loan in the principal amount of $200 million. Interest on both the Revolving Credit Facility and the Term Loan is based on the three-month LIBOR plus an interest margin based upon the Company's debt to EBITDA ratio (or "Leverage Ratio", as defined in the 2007 Credit Agreement). The 2007 Credit Agreement prohibits the Company from exceeding a Leverage Ratio of 3.25 to 1.00 and imposes other restrictions on the Company's ability to incur additional debt. The Revolving Credit Facility expires on July 5, 2012, which is also the maturity date of the Term Loan.

On October 15, 2007, USI and USSC entered into a Master Note Purchase Agreement (the "2007 Note Purchase Agreement") with several purchasers. The 2007 Note Purchase Agreement allows USSC to issue up to $1 billion of senior secured notes, subject to the debt restrictions contained in the 2007 Credit Agreement. Pursuant to the 2007 Note Purchase Agreement, USSC issued and sold $135 million of floating rate senior secured notes due October 15, 2014 at par in a private placement (the "Series 2007-A Notes"). Interest on the Series 2007-A Notes is payable quarterly in arrears at a rate per annum equal to three-month LIBOR plus 1.30%, beginning January 15, 2008. USSC may issue

70

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Long-Term Debt (Continued)

additional series of senior secured notes from time to time under the 2007 Note Purchase Agreement but has no specific plans to do so at this time. USSC used the proceeds from the sale of these notes to repay borrowings under the 2007 Credit Agreement.

USSC has entered into several interest rate swap transactions to mitigate its floating rate risk on a portion of its total long-term debt. See Note 20, "Derivative Financial Instruments", for further detail on these swap transactions and their accounting treatment.

The 2007 Credit Agreement also provides for the issuance of letters of credit in an aggregate amount of up to a sublimit of $90 million and provides a sublimit for swingline loans in an aggregate outstanding principal amount not to exceed $30 million at any one time. These amounts, as sublimits, do not increase the maximum aggregate principal amount, and any undrawn issued letters of credit and all outstanding swingline loans under the facility reduce the remaining availability under the 2007 Credit Agreement.

As of both December 31, 2008 and December 31, 2007, the Company had outstanding letters of credit under the 2007 Credit Agreement of $19.5 million. Approximately $7.0 million of these letters of credit were used to guarantee the industrial development bond. The industrial development bond had $6.8 million outstanding as of December 31, 2008 and carried market-based interest rates.

Obligations of USSC under the 2007 Credit Agreement and the 2007 Note Purchase Agreement are guaranteed by USI and certain of USSC's domestic subsidiaries. USSC's obligations under these agreements and the guarantors' obligations under the guaranties are secured by liens on substantially all Company assets, including accounts receivable, chattel paper, commercial tort claims, documents, equipment, fixtures, instruments, inventory, investment property, pledged deposits and all other tangible and intangible personal property (including proceeds) and certain real property, but excluding accounts receivable (and related credit support) subject to any accounts receivable securitization program permitted under the 2007 Credit Agreement. Also securing these obligations are first priority pledges of all of the capital stock of USSC and the domestic subsidiaries of USSC.

Debt maturities as of December 31, 2008, were as follows (in thousands):

Year	Amount
2009	$	—
2010		—
2011		6,800
2012		521,300
2013		—
Later years		135,000
Total	$	663,100

71

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Receivables Securitization Program

General

On March 28, 2003, USSC entered into a third-party receivables securitization program with JP Morgan Chase Bank, as trustee (the "Receivables Securitization Program" or the "Program") that provides funding of up to $250 million. The Company utilizes the Program as an alternate source of liquidity.

Under the Program, USSC sells, on a revolving basis, its eligible trade accounts receivable (except for certain excluded accounts receivable, which initially includes all accounts receivable of Lagasse, Inc., ORS Nasco and foreign operations) to USS Receivables Company, Ltd. (the "Receivables Company"). The Receivables Company, in turn, ultimately transfers the eligible trade accounts receivable to a trust. The trust then sells investment certificates, which represent an undivided interest in the pool of accounts receivable owned by the trust, to third-party investors. Affiliates of JP Morgan Chase Bank, PNC Bank and (as of March 26, 2004) Fifth Third Bank act as funding agents. The funding agents, or their affiliates, provide standby liquidity funding to support the sale of the accounts receivable by the Receivables Company under 364-day liquidity facilities. Standby liquidity funding is committed for 364 days and must be renewed before maturity in order for the Program to continue. The Receivables Securitization Program provides for the possibility of other liquidity facilities that may be provided by other commercial banks rated at least A-1/P-1.

The Program liquidity was renewed on March 21, 2008. The Program contains certain covenants and requirements, including criteria relating to the quality of receivables within the pool of receivables. If the covenants or requirements were compromised, funding from the Program could be restricted or suspended, or its costs could increase. In such a circumstance, or if the standby liquidity funding were not renewed, the Company could require replacement liquidity.

As discussed above, the 2007 Credit Agreement is an existing alternate liquidity source. The Company believes that, if so required, it also could access other liquidity sources to replace funding from the Program.

Financial Statement Presentation

The Receivables Securitization Program is accounted for as a sale in accordance with FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Trade accounts receivable sold under this program are excluded from accounts receivable in the Consolidated Financial Statements. As of both December 31, 2008 and 2007, the Company had sold $23.0 million and $248.0 million of interests in trade accounts receivable. Accordingly, trade accounts receivable of $23.0 million and $248.0 million as of both December 31, 2008 and 2007 are excluded from the Consolidated Financial Statements. As discussed below, the Company retains an interest in the trust based on funding levels determined by the Receivables Company. The Company's retained interest in the trust is included in the Consolidated Financial Statements under the caption, "Retained interest in receivables sold, net." For further information on the Company's retained interest in the trust, see the caption "Retained Interest" below.

The Company recognizes certain costs and/or losses related to the Receivables Securitization Program. Costs related to this program vary on a daily basis and generally are related to certain short-term interest rates. The annual interest rate on the certificates issued under the Receivables Securitization Program during 2008 ranged between 3.1% and 5.9%. In addition to the interest on the certificates, the Company pays certain bank fees related to the program. Losses recognized on the sale of accounts receivable,

72

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Receivables Securitization Program (Continued)

which represent the interest and bank fees that are the financial cost of funding under the program including amortization of previously capitalized bank fees and excluding servicing revenues, totaled $8.1 million for 2008, compared with $14.6 million for 2007. Proceeds from the collections under this revolving agreement for 2008, 2007 and 2006 were $3.9 billion, $3.9 billion and $3.6 billion, respectively. All costs and/or losses related to the Receivables Securitization Program are included in the Consolidated Financial Statements of Income under the caption "Other Expense, net."

The Company has maintained responsibility for servicing the sold trade accounts receivable and those transferred to the trust. No servicing asset or liability has been recorded because the fees received for servicing the receivables approximate the related costs.

Retained Interest

The Receivables Company determines the level of funding achieved by the sale of trade accounts receivable, subject to a maximum amount. It retains a residual interest in the eligible receivables transferred to the trust, such that amounts payable in respect of such residual interest will be distributed to the Receivables Company upon payment in full of all amounts owed by the Receivables Company to the trust (and by the trust to its investors). The Company's net retained interest on $350.9 million and $342.8 million of trade receivables in the trust as of December 31, 2008 and December 31, 2007 was $327.9 million and $94.8 million, respectively. The Company's retained interest in the trust is included in the Consolidated Financial Statements under the caption, "Retained interest in receivables sold, net."

The Company measures the fair value of its retained interest throughout the term of the Receivables Securitization Program using a present value model incorporating the following two key economic assumptions: (1) an average collection cycle of approximately 45 days; and (2) an assumed discount rate of 3.0% per annum, which approximates the Company's interest cost on the receivable securitization programs. In addition, the Company estimates and records an allowance for doubtful accounts related to the Company's retained interest. Considering the above noted economic factors and estimates of doubtful accounts, the book value of the Company's retained interest approximates fair value. A 10% and 20% adverse change in the assumed discount rate or average collection cycle would not have a material impact on the Company's financial position or results of operations. Accounts receivable sold to the trust and written off during 2008 and 2007 were not material.

73

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Leases, Contractual Obligations and Contingencies

The Company has entered into non-cancelable long-term leases for certain property and equipment. Future minimum lease payments under operating leases in effect as of December 31, 2008 having initial or remaining non-cancelable lease terms in excess of one year are as follows (in thousands):

Year	Operating Leases(1)
2009	$	51,816
2010		47,421
2011		39,321
2012		32,804
2013		25,494
Later years		70,476
Total required lease payments	$	267,332

(1)

Operating leases are net of immaterial sublease income.

Operating lease expense was approximately $53.5 million, $51.4 million, and $55.2 million in 2008, 2007, and 2006, respectively.

12. Pension Plans and Defined Contribution Plan

Pension Plans

As of December 31, 2008, the Company has pension plans covering approximately 3,900 of its associates. Non-contributory plans covering non-union associates provide pension benefits that are based on years of credited service and a percentage of annual compensation. Non-contributory plans covering union members generally provide benefits of stated amounts based on years of service. The Company funds the plans in accordance with all applicable laws and regulations. The Company uses December 31 as its measurement date to determine its pension obligations. The non-union plans have been closed to new associates beginning January 1, 2008. In addition, effective January 1, 2008, in accordance with the new measurement provisions of SFAS No. 158 (see Note 2 for "New Accounting Pronouncements"), the Company changed its measurement date to determine its pension obligations to its fiscal year end.

The Company expects to freeze pension service benefits for employees not covered by collective bargaining agreements. This action has been approved and is expected to be effective March 1, 2009.

74

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Pension Plans and Defined Contribution Plan (Continued)

Change in Projected Benefit Obligation

The following table sets forth the plans' changes in Projected Benefit Obligation for the years ended December 31, 2008 and 2007 (in thousands):

	2008			2007
Benefit obligation at beginning of year	$	127,306		$	118,864
Service cost—benefit earned during the period		6,953			6,182
Interest cost on projected benefit obligation		8,979			7,016
Actuarial loss		2,198			372
Benefits paid		(2,581	)		(5,128	)
Benefit obligation at end of year	$	142,855		$	127,306

The accumulated benefit obligation for the plan as of December 31, 2008 and 2007 totaled $128.8 million and $115.6 million, respectively.

Plan Assets and Investment Policies and Strategies

The following table sets forth the change in the plans' assets for the years ended December 31, 2008 and 2007 (in thousands):

	2008			2007
Fair value of plan assets at beginning of year	$	102,609		$	82,389
Actual return on plan assets		(32,521	)		11,239
Company contributions		16,165			14,109
Benefits paid		(2,581	)		(5,128	)
Fair value of plan assets at end of year	$	83,672		$	102,609

The Company's pension plan investment allocations, as a percentage of the fair value of total plan assets, as of December 31, 2008 and 2007, by asset category are as follows:

Asset Category	2008			2007
Cash		1.1	%		1.9	%
Equity securities		62.4	%		66.2	%
Fixed income		36.5	%		31.9	%
Total		100.0	%		100.0	%

The investment policies and strategies for the Company's pension plan assets are established with the goals of generating above-average investment returns over time, while containing risks within acceptable levels and providing adequate liquidity for the payment of plan obligations. The Company recognizes that there typically are tradeoffs among these objectives, and strives to minimize risk associated with a given expected return.

The plan assets are invested primarily in a diversified mix of fixed income investments and equity securities. The Company establishes target ranges for investment allocation and sets specific

75

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Pension Plans and Defined Contribution Plan (Continued)

allocations. On an ongoing basis, the Company reviews plan assets for possible rebalancing among investments to remain consistent with target allocations. Actual plan asset allocations as of December 31, 2008 and 2007 are consistent with the Company's target allocation ranges.

Plan Funded Status

The following table sets forth the plans' funded status as of December 31, 2008 and 2007 (in thousands):

	2008			2007
Funded status of the plan	$	(59,183	)	$	(24,697	)
Unrecognized prior service cost		1,059			1,299
Unrecognized net actuarial loss		62,946			18,646
Net amount recognized	$	4,822		$	(4,752	)

Amounts Recognized in Consolidated Balance Sheet

	2008			2007
Accrued benefit liability	$	(59,183	)	$	(24,697	)
Accumulated other comprehensive income		64,005			19,945
Net amount recognized	$	4,822		$	(4,752	)

Components of Net Periodic Benefit Cost

Net periodic pension cost for the years ended December 31, 2008, 2007 and 2006 for pension and supplemental benefit plans includes the following components (in thousands):

	2008			2007			2006
Service cost — benefit earned during the period	$	5,892		$	6,182		$	5,968
Interest cost on projected benefit obligation		7,729			7,016			6,398
Expected return on plan assets		(8,790	)		(7,179	)		(5,745	)
Amortization of prior service cost		205			205			401
Amortization of actuarial loss		594			1,195			1,738
Net periodic pension cost	$	5,630		$	7,419		$	8,760

The estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into the net periodic benefit cost during 2009 are approximately $3.7 million and $0.3 million, respectively. The service cost and interest cost for 2008 shown in this table do not equal the service cost and interest cost shown in the Change in Projected Benefit Obligation table above due to the measurement date change required by SFAS No. 158.

76

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Pension Plans and Defined Contribution Plan (Continued)

Assumptions Used

The following tables summarize the Company's actuarial assumptions for discount rates, expected long-term rates of return on plan assets, and rates of increase in compensation and healthcare costs for the years ended December 31, 2008, 2007 and 2006:

	2008			2007			2006
Pension plan assumptions:
Assumed discount rate		6.25	%		6.00	%		6.00	%
Rate of compensation increase		3.75	%		3.75	%		3.75	%
Expected long-term rate of return on plan assets		8.25	%		8.25	%		8.25	%

To select the appropriate actuarial assumptions, management relied on current market conditions, historical information and consultation with and input from the Company's outside actuaries. The expected long-term rate of return on plan assets assumption is based on historical returns and the future expectation of returns for each asset category, as well as the target asset allocation of the asset portfolio. The change in the assumed discount rate in 2008 did not have a material impact on the Company's net periodic pension cost.

Contributions

The May 15, 2009 contribution amount has not yet been determined.

Estimated Future Benefit Payments

The estimated future benefit payments under the Company's pension plans are as follows (in thousands):

	Amounts
2009	$	4,112
2010		4,243
2011		5,094
2012		6,351
2013		5,856
2014-2018		42,582

Defined Contribution Plan

The Company has a defined contribution plan. Salaried associates and non-union hourly paid associates are eligible to participate after completing six consecutive months of employment. The plan permits associates to have contributions made as 401(k) salary deferrals on their behalf, or as voluntary after-tax contributions, and provides for Company contributions, or contributions matching associates' salary deferral contributions, at the discretion of the Board of Directors. Company contributions to match associates' contributions were approximately $5.1 million, $4.3 million and $4.2 million in 2008, 2007 and 2006, respectively.

77

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Pension Plans and Defined Contribution Plan (Continued)

Measurement Date Provisions of SFAS No. 158

SFAS No. 158 provides two transition alternatives related to the change in measurement date provisions. The Company elected the standard method. The transition from a previous measurement date of October 31, 2007 to December 31, 2007, beginning in fiscal 2008, required the Company to reduce its Retained Earnings as of January 1, 2008 by $0.6 million to recognize the one-time after-tax effect of an additional two months of net periodic benefit expense for the Company's pension and postretirement healthcare benefit plans. There was no impact on the Company's results of operations. The balance sheet adjustments as of January 1, 2008 were as follows (in thousands):

	Increase (decrease)
Deferred income tax liability	$	(88	)
Accrued pension benefits liability		488
Accrued postretirement benefits liability		(257	)
Retained earnings		(617	)
Accumulated other comprehensive income		474

13. Postretirement Health Benefits

The Company maintains a postretirement plan. The plan is unfunded and provides healthcare benefits to substantially all retired non-union associates and their dependents. Eligibility requirements are based on the individual's age (minimum age of 55), years of service and hire date. The benefits are subject to retiree contributions, deductible, co-payment provision and other limitations. Effective January 1, 2008, in accordance with the new measurement date provisions of SFAS No. 158 (see Note 2 for "New Accounting Pronouncements"), the Company changed its measurement date to determine its postretirement health obligations to December 31.

Accrued Postretirement Benefit Obligation

The following table provides the plan's change in Accrued Postretirement Benefit Obligation ("APBO") for the years ended December 31, 2008 and 2007 (in thousands):

	2008			2007
Benefit obligation at beginning of year	$	3,965		$	3,580
Service cost — benefit earned during the period		254			264
Interest cost on projected benefit obligation		249			201
Plan participants' contributions		316			375
Actuarial gain		(465	)		—
Benefits paid		(409	)		(455	)
Benefit obligation at end of year	$	3,910		$	3,965

Plan Assets and Investment Policies and Strategies

The Company does not fund its postretirement healthcare plan (see "Plan Funded Status" below). Accordingly, as of December 31, 2008 and 2007, the postretirement healthcare plan held no assets. The

78

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Postretirement Health Benefits (Continued)

following table provides the change in plan assets for the years ended December 31, 2008 and 2007 (in thousands):

	2008			2007
Fair value of plan assets at beginning of year	$	—		$	—
Company contributions		93			80
Plan participants' contributions		316			375
Benefits paid		(409	)		(455	)
Fair value of plan assets at end of year	$	—		$	—

Plan Funded Status

The Company's postretirement healthcare plan is unfunded. The following table sets forth the plans' funded status as of December 31, 2008 and 2007 (in thousands):

	2008			2007
Funded status of the plan	$	(3,910	)	$	(3,965	)
Amount recognized in accumulated other comprehensive income	$	(4,874	)	$	(5,116	)

Components of Net Periodic Postretirement Benefit Cost

The costs of postretirement healthcare benefits for the years ended December 31, 2008, 2007 and 2006 were as follows (in thousands):

	2008			2007			2006
Service cost — benefit earned during the period	$	207		$	264		$	249
Interest cost on projected benefit obligation		211			201			192
Recognized actuarial gain		(366	)		(317	)		(346	)
Net periodic postretirement benefit cost	$	52		$	148		$	95

The estimated net actuarial gain that will be amortized from accumulated other comprehensive income into the net periodic benefit cost during 2009 is approximately $0.3 million. The service cost and interest cost for 2008 shown in this table do not equal the service cost and interest cost shown in the Accrued Postretirement Benefit Obligation table above due to the measurement date change required by SFAS No. 158.

Assumptions Used

The weighted-average assumptions used in accounting for the Company's postretirement plan for the three years presented are set forth below:

	2008			2007			2006
Assumed average healthcare cost trend		3.00	%		3.00	%		3.00	%
Assumed discount rate		6.25	%		6.00	%		6.00	%

79

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Postretirement Health Benefits (Continued)

The Company's medical cost increase rate is capped at 3.00% by the plan.

Contributions

The May 15, 2009 contribution amount has not yet been determined.

Estimated Future Benefit Payments

The estimated future benefits payments under the Company's postretirement healthcare plan are as follows (in thousands):

	Amounts
2009	$	114
2010		127
2011		140
2012		154
2013		171
2014-2018		1,241

14. Preferred Stock

USI's authorized capital shares include 15 million shares of preferred stock. The rights and preferences of preferred stock are established by USI's Board of Directors upon issuance. As of December 31, 2008, USI had no preferred stock outstanding and all 15 million shares are classified as undesignated preferred stock.

15. Income Taxes

The provision for income taxes consisted of the following (in thousands):

			2008			2007			2006
Currently payable
	Federal		$	51,725		$	66,906		$	84,889
	State			6,277			6,038			11,764
		Total currently payable		58,002			72,944			96,653
Deferred, net—
	Federal(1)			(215	)		(3,629	)		(14,610	)
	State(1)			662			(490	)		(1,533	)
		Total deferred, net		447			(4,119	)		(16,143	)
Provision for income taxes			$	58,449		$	68,825		$	80,510

(1)

Prior year numbers for income tax provisions for deferred, net federal and deferred, net state were reclassified by increasing federal and reducing state by $77 in 2007 and reducing federal and increasing state by $287 in 2006.

80

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Income Taxes (Continued)

The Company's effective income tax rates for the years ended December 31, 2008, 2007 and 2006 varied from the statutory federal income tax rate as set forth in the following table (in thousands):

	Years Ended December 31,
	2008						2007					2006
	Amount			% of Pre-tax Income			Amount		% of Pre-tax Income			Amount			% of Pre-tax Income
Tax provision based on the federal statutory rate	$	54,902			35.0	%	$	61,607		35.0	%	$	75,535			35.0	%
State and local income taxes— net of federal income tax benefit		4,510			2.9	%		3,606		2.0	%		6,650			3.1	%
Change in tax reserves and accrual adjustments		6			0.0	%		3,132		1.8	%		(1,728	)		-0.8	%
Non-deductible and other		(969	)		-0.6	%		480		0.3	%		53			0.0	%
Provision for income taxes	$	58,449			37.3	%	$	68,825		39.1	%	$	80,510			37.3	%

The deferred tax assets and liabilities resulted from temporary differences in the recognition of certain items for financial and tax accounting purposes. The sources of these differences and the related tax effects were as follows (in thousands):

	2008				2007
	Assets		Liabilities		Assets		Liabilities
Accrued expenses	$	12,373	$	—	$	17,521	$	—
Allowance for doubtful accounts		12,112		—		6,853		—
Depreciation and amortization		—		24,424		—		26,446
Intangibles arising from acquisitions		—		19,738		—		20,090
Inventory reserves and adjustments		—		25,479		—		16,650
Pension and postretirement		22,909				5,670
Long-Term swap liability		13,202				1,380
Reserve for stock based compensation		7,777		—		4,787		—
Restructuring costs		446		—		932		—
Other		—		180		1,371		—
Total	$	68,819	$	69,821	$	38,514	$	63,186

In the Consolidated Balance Sheets, these deferred assets and liabilities were classified on a net basis as current and non-current, based on the classification of the related asset or liability or the expected reversal date of the temporary difference.

FASB Interpretation No. 48—Accounting for Uncertainty in Income Taxes

The Company adopted the provisions of FIN No. 48 on January 1, 2007. As a result of the implementation of FIN No. 48, the Company recognized a net decrease of $1.8 million in the liability for unrecognized tax benefits, which was accounted for as an increase to the January 1, 2007 balance of retained earnings.

81

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Income Taxes (Continued)

At December 31, 2007, the Company had $9.2 million in gross unrecognized tax benefits. At December 31, 2008, the gross unrecognized tax benefits decreased to $8.0 million.

	2008			2007
Beginning Balance	$	9,191		$	5,825
Additions based on tax positions taken during a prior period		30			4,315
Reductions based on tax positions taken during a prior period		(418	)		—
Additions based on tax positions taken during the current period		503			555
Reductions related to a settlement of tax matters		—			(87	)
Reductions related to a lapse of applicable statute of limitations		(1,306	)		(1,417	)
Total	$	8,000		$	9,191

At December 31, 2008 and 2007, $6.8 million and $7.3 million, respectively, of these gross unrecognized tax benefits would, if recognized, decrease the Company's effective tax rate, with the remainder, if recognized, impacting "Goodwill" and "Other Current Assets".

The Company recognizes net interest and penalties related to unrecognized tax benefits in income tax expense. The gross amounts of interest and penalties reflected in the Consolidated Statement of Income for the years ended December 31, 2008 and 2007 were $0.2 million and $0.4 million, respectively, and the amounts related to 2006 were not material. The Consolidated Balance Sheets at December 31, 2008 and December 31, 2007 include $1.7 million, accrued for the potential payment of interest and penalties.

As of December 31, 2008, the Company's U.S. Federal income tax returns for 2005 and subsequent years remain subject to examination by tax authorities. In addition, the Company's state income tax returns for the tax years 2001 through 2007 remain subject to examinations by state and local income tax authorities. Although the Company is not currently under examination by the IRS, a number of state and local examinations are currently ongoing. Due to the potential for resolution of ongoing examinations and the expiration of various statutes of limitation, it is reasonably possible that the Company's gross unrecognized tax benefits balance may change within the next twelve months by a range of zero to $4.0 million.

16. Supplemental Cash Flow Information

In addition to the information provided in the Consolidated Statements of Cash Flows, the following are supplemental disclosures of cash flow information for the years ended December 31, 2008, 2007 and 2006 (in thousands):

		Years Ended December 31,
		2008		2007		2006
Cash Paid During the Year For:
	Interest	$	26,122	$	8,434	$	6,186
	Discount on the sale of trade accounts receivable		8,409		15,574		12,695
	Income taxes, net		55,364		57,024		79,458

82

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. Other Expense

The following table sets forth the components of other expense (dollars in thousands):

		Years Ended December 31,
		2008		2007		2006
Loss on sale of accounts receivable, net of
	servicing revenue	$	8,079	$	14,566	$	12,765
Other			—		29		21
Total		$	8,079	$	14,595	$	12,786

18. Fair Value of Financial Instruments

The estimated fair value of the Company's financial instruments approximates their net carrying values. The estimated fair values of the Company's financial instruments are as follows (in thousands):

	As of December 31,
	2008				2007
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	10,662	$	10,662	$	21,957	$	21,957
Accounts receivable, net		282,350		282,350		321,305		321,305
Retained interest in receivables sold,net		327,860		327,860		94,809		94,809
Accounts payable		341,084		341,084		448,608		448,608
Long-term debt		663,100		663,100		451,000		451,000
Long-term interest rate swap liability		34,652		34,652		3,679		3,679

The fair value of the interest rate swaps is estimated based upon the amount that the Company would receive or pay to terminate the agreements as of December 31 of each year. See Note 20, "Derivative Financial Instruments", for further information.

83

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. Other Assets and Liabilities

Other assets and liabilities as of December 31, 2008 and 2007 were as follows (in thousands):

	As of December 31,
	2008		2007
Other Long-Term Assets, net:
Assets held for sale	$	—	$	5,388
Investment in deferred compensation		3,118		4,144
Long-Term notes receivable		5,261		3,562
Capitalized financing costs		2,116		2,718
Other		339		511
Total other long-term assets, net	$	10,834	$	16,323
Other Long-Term Liabilities:
Accrued pension obligation	$	59,183	$	24,697
Deferred rent		14,740		14,494
Deferred directors compensation		3,118		4,144
Postretirement benefits		3,810		3,832
Restructuring and exit costs reserves		651		1,604
Long-Term swap liability		34,652		3,679
Long-Term income tax liability		6,856		7,542
Other		2,154		1,568
Total other long-term liabilities	$	125,164	$	61,560

20. Derivative Financial Instruments

Interest rate movements create a degree of risk to the Company's operations by affecting the amount of interest payments. Interest rate swap agreements are used to manage the Company's exposure to interest rate changes. The Company designates its floating-to-fixed interest rate swaps as cash flow hedges of the variability of future cash flows at the inception of the swap contract to support hedge accounting.

On November 6, 2007, USSC entered into an interest rate swap transaction (the "November 2007 Swap Transaction") with U.S. Bank National Association as the counterparty. USSC entered into the November 2007 Swap Transaction to mitigate USSC's floating rate risk on an aggregate of $135 million of LIBOR based interest rate risk. Under the terms of the November 2007 Swap Transaction, USSC is required to make quarterly fixed rate payments to the counterparty calculated based on a notional amount of $135 million at a fixed rate of 4.674%, while the counterparty is obligated to make quarterly floating rate payments to USSC based on the three-month LIBOR on the same referenced notional amount. The November 2007 Swap Transaction has an effective date of January 15, 2008 and a termination date of January 15, 2013. Notwithstanding the terms of the November 2007 Swap Transaction, USSC is ultimately obligated for all amounts due and payable under its credit agreements.

Subsequently, on December 20, 2007, USSC entered into another interest rate swap transaction (the "December 2007 Swap Transaction") with Key Bank National Association as the counterparty. USSC entered into the December 2007 Swap Transaction to mitigate USSC's floating rate risk on an aggregate of $200 million of LIBOR based interest rate risk. Under the terms of the December 2007 Swap

84

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20. Derivative Financial Instruments (Continued)

Transaction, USSC is required to make quarterly fixed rate payments to the counterparty calculated based on a notional amount of $200 million at a fixed rate of 4.075%, while the counterparty is obligated to make quarterly floating rate payments to USSC based on the three-month LIBOR on the same referenced notional amount. The December 2007 Swap Transaction has an effective date of December 21, 2007 and a termination date of June 21, 2012. Notwithstanding the terms of the December 2007 Swap Transaction, USSC is ultimately obligated for all amounts due and payable under its credit agreements.

On March 13, 2008, USSC entered into an interest rate swap transaction (the "March 2008 Swap Transaction") with U.S. Bank National Association as the counterparty. USSC entered into the March 2008 Swap Transaction to mitigate USSC's floating rate risk on an aggregate of $100 million of LIBOR based interest rate risk. Under the terms of the March 2008 Swap Transaction, USSC is required to make quarterly fixed rate payments to the counterparty calculated based on a notional amount of $100 million at a fixed rate of 3.212%, while the counterparty is obligated to make quarterly floating rate payments to USSC based on the three-month LIBOR on the same referenced notional amount. The March 2008 Swap Transaction had an effective date of March 31, 2008 and a termination date of June 29, 2012. Notwithstanding the terms of the March 2008 Swap Transaction, USSC is ultimately obligated for all amounts due and payable under its credit agreements.

The interest rate swap agreements outstanding as of December 31, 2008 are as follows (in thousands):

As of December 31, 2008	Notional Amount		Receive	Pay			Maturity Date		Fair Value Asset (Liability)(1)
November 2007 Swap Transaction	$	135,000	Floating 3-month LIBOR		4.674	%		January 15, 2013	$	(14,565	)
December 2007 Swap Transaction		200,000	Floating 3-month LIBOR		4.075	%		June 21, 2012		(15,320	)
March 2008 Swap Transaction		100,000	Floating 3-month LIBOR		3.212	%		June 29, 2012		(4,767	)

(1)

These interest rate derivatives qualify for hedge accounting. Therefore, the fair value of each interest rate derivative is included in the Company's Consolidated Balance Sheets as either a component of "Other assets" or "Other long-term liabilities" with an offsetting component in "Stockholders' Equity" as part of "Accumulated Other Comprehensive Loss". Fair value adjustments of the interest rate swaps will be deferred and recognized as an adjustment to interest expense over the remaining term of the hedged instrument.

The hedged transactions described above qualify as cash flow hedges under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS No. 133"). This Statement requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value. The Company does not offset fair value amounts recognized for interest rate swaps executed with the same counterparty. For derivative instruments that are designated and qualify as a cash flow hedge (for example, hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings (for example, in "interest expense" when the hedged transactions are interest cash flows associated with floating-rate debt).

The Company has entered into these interest rate swap agreements, described above, that effectively convert a portion of its floating-rate debt to a fixed-rate basis. This reduces the impact of interest rate changes on future interest expense. By using such derivative financial instruments, the Company exposes itself to credit risk and market risk. Credit risk is the risk that the counterparty to the interest rate swap agreements (as noted above) will fail to perform under the terms of the agreements. The Company

85

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20. Derivative Financial Instruments (Continued)

attempts to minimize the credit risk in these agreements by only entering into transactions with credit worthy counterparties. The market risk is the adverse effect on the value of a derivative financial instrument that results from a change in interest rates.

21. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including:

•

the retained interest in accounts receivables sold under the Receivables Securitization Program based on observable inputs including an average collection cycle and assumed discount rate (see Note 10, "Receivables Securitization Program" for further information and a detailed description of this asset); and

•

interest rate swap liabilities related to interest rate swap derivatives based on the mark-to-market position of the Company's interest rate swap positions and other observable interest rates (see Note 20, "Derivative Financial Instruments", for more information on these interest rate swaps).

SFAS No. 157 establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company's own assumptions (unobservable inputs). The hierarchy consists of three levels:

•

Level 1—Quoted market prices in active markets for identical assets or liabilities;

•

Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable; and

•

Level 3—Unobservable inputs developed using estimates and assumptions developed by the Company which reflect those that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The following table summarizes the financial instruments measured at fair value in the accompanying Consolidated Balance Sheet as of December 31, 2008 (in thousands):

		Fair Value Measurements as of December 31, 2008
				Quoted Market Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
		Total		Level 1		Level 2		Level 3
Assets
	Retained interest in receivables sold, less allowance for doubtful accounts	$	327,860	$	—	$	—	$	327,860
Liabilities
	Interest rate swap liability	$	34,652	$	—	$	34,652	$	—

86

UNITED STATIONERS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

21. Fair Value Measurements (Continued)

The following tables present the changes in Level 3 assets measured at fair value on a recurring basis for the year ended December 31, 2008:

	Retained Interest in receivables sold, net
Balance as of December 31, 2007	$	94,809
Net payments/sales		238,051
Realized losses		(5,000	)
Balance as of December 31, 2008	$	327,860

The realized losses associated with Level 3 assets relate to that portion of the Company's bad debt expense related to the retained interest in receivables sold. This expense is reflected in the Company's Consolidated Statements of Income under the caption "Warehousing, marketing and administrative expenses."

SFAS No. 157 requires separate disclosure of assets and liabilities measured at fair value on a recurring basis, as noted above, from those measured at fair value on a nonrecurring basis. As of December 31, 2008, no assets or liabilities are measured at fair value on a nonrecurring basis.

22. Quarterly Financial Data—Unaudited

	First Quarter(3)		Second Quarter		Third Quarter		Fourth Quarter		Total(1)
	(dollars in thousands, except per share data)
Year Ended December 31, 2008:
Net sales	$	1,252,474	$	1,251,335	$	1,337,855	$	1,145,214	$	4,986,878
Gross profit	$	184,301	$	182,023	$	197,860	$	176,495	$	740,679
Net income(2)	$	21,316	$	21,474	$	33,069	$	22,555	$	98,414
Net income per share—basic	$	0.89	$	0.92		1.41	$	0.96	$	4.17
Net income per share—diluted	$	0.88	$	0.91	$	1.39	$	0.95	$	4.13
Year Ended December 31, 2007:
Net sales	$	1,193,316	$	1,141,205	$	1,191,956	$	1,119,922	$	4,646,399
Gross profit	$	180,061	$	169,678	$	176,286	$	180,690	$	706,715
Net income	$	27,239	$	24,109	$	27,507	$	28,340	$	107,195
Net income per share—basic	$	0.92	$	0.86		1.02	$	1.14	$	3.92
Net income per share—diluted	$	0.90	$	0.84	$	1.00	$	1.12	$	3.83

(1)

As a result of changes in the number of common and common equivalent shares during the year, the sum of quarterly earnings per share will not necessarily equal earnings per share for the total year.

(2)

2008 results were impacted by the following items: (1) a $5.1 million, or $0.14 per diluted share gain on the sale of two distribution centers during the third quarter of 2008, (2) a $4.7 million, or $0.12 per diluted share gain on the sale of the Company's former corporate headquarters from the second quarter of 2008, and (3) a second-quarter $6.7 million, or $0.18 per diluted share charge to write-off internal system capitalized software costs.

(3)

2007 results were impacted by the following item: (1) $1.4 million or $0.03 per diluted share charge related to the Company's 2006 Workforce Reduction Program.

87

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

The Registrant had no disagreements on accounting and financial disclosure of the type referred to in Item 304 of Regulation S-K.

ITEM 9A.    CONTROLS AND PROCEDURES.

Attached as exhibits to this Annual Report are certifications of the Company's President and Chief Executive Officer ("CEO") and Senior Vice President and Chief Financial Officer ("CFO"), which are required in accordance with Rule 13a-14 under the Exchange Act. This "Controls and Procedures" section includes information concerning the controls and controls evaluation referred to in such certifications. It should be read in conjunction with the reports of the Company's management on the Company's internal control over financial reporting and the report thereon of Ernst & Young LLP referred to below.

Inherent Limitations on Effectiveness of Controls

The Company's management, including the CEO and CFO, does not expect that the Company's Disclosure Controls or its internal control over financial reporting will prevent or detect all error or all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the existence of resource constraints. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the fact that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by managerial override. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and no design is likely to succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks, including that controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Disclosure Controls and Procedures

At the end of the period covered by this Annual Report on Form 10-K the Company's management performed an evaluation, under the supervision and with the participation of the Company's CEO and CFO, of the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Such disclosure controls and procedures ("Disclosure Controls") are controls and other procedures designed to provide reasonable assurance that information required to be disclosed in USI's reports filed under the Exchange Act, such as this Annual Report, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure Controls are also designed to reasonably assure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Management's quarterly evaluation of Disclosure Controls includes an evaluation of some components of the Company's internal control over financial reporting, and internal control over financial reporting is also separately evaluated on an annual basis.

Based on this evaluation, the Company's management (including its CEO and CFO) concluded that, as of December 31, 2008, the Company's Disclosure Controls were effective, subject to the inherent limitations noted above in this Item 9A.

88

Management's Report on Internal Control over Financial Reporting and Related Report of Independent Registered Public Accounting Firm

Management's report on internal control over financial reporting and the report of Ernst & Young LLP, the Company's independent registered public accounting firm, regarding its audit of the Company's internal control over financial reporting are included in Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes to the Company's internal control over financial reporting that occurred during the last quarter of 2008 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

For information about the Company's executive officers, see "Executive Officers of the Registrant" included as Item 4A of this Annual Report on Form 10-K. In addition, the information contained under the captions "Proposal 1: Election of Directors" and "Voting Securities and Principal Holders—Section 16(a) Beneficial Ownership Reporting Compliance" in USI's Proxy Statement for its 2009 Annual Meeting of Stockholders ("2009 Proxy Statement") is incorporated herein by reference.

The information required by Item 10 regarding the Audit Committee's composition and the presence of an "audit committee financial expert" is incorporated herein by reference to the information under the captions "Governance and Board Matters—Board Committees—General" and "—Audit Committee" in USI's 2009 Proxy Statement. In addition, information regarding delinquent filers pursuant to Item 405 of Regulation S-K is incorporated by reference to the information under the captions "Section 16(a) Beneficial Ownership Reporting Compliance" in USI's 2009 Proxy Statement.

The Company has adopted a code of ethics (its "Code of Business Conduct") that applies to all directors, officers and associates, including the Company's CEO, CFO and Controller, and other executive officers identified pursuant to this Item 10. A copy of this Code of Business Conduct is available on the Company's Web site at www.unitedstationers.com. The Company intends to disclose any significant amendments to and waivers of its Code of Conduct by posting the required information at this Web site within the required time periods.

ITEM 11.    EXECUTIVE COMPENSATION.

The information required to be furnished pursuant to this Item is incorporated herein by reference to the information under the captions "Director Compensation", "Executive Compensation" and "Compensation Committee Interlocks and Insider Participation" in USI's 2009 Proxy Statement.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The beneficial ownership information required to be furnished pursuant to this Item is incorporated herein by reference to the information under the captions "Voting Securities and Principal Holders—Security Ownership of Certain Beneficial Owners" and "Voting Securities and Principal Holders—Security Ownership of Management" in USI's 2009 Proxy Statement. Information relating to securities authorized for issuance under United's equity plans is incorporated herein by reference to the information under the caption "Equity Compensation Plan Information" in USI's 2009 Proxy Statement.

89

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information required to be furnished pursuant to this Item is incorporated herein by reference to the information under the caption "Certain Relationships and Related Transactions" in USI's 2009 Proxy Statement.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES.

The information required to be furnished pursuant to this Item is incorporated herein by reference to the information under the captions "Proposal 2: Ratification of Selection of Independent Registered Public Accountants—Fee Information" and "—Audit Committee Pre-Approval Policy" in USI's 2009 Proxy Statement.

90

PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a)

The following financial statements, schedules and exhibits are filed as part of this report:

			Page No.
(1)		Financial Statements of the Company:
	Management Report on Internal Control Over Financial Reporting			41
	Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting			42
	Report of Independent Registered Public Accounting Firm			43
	Consolidated Statements of Income for the years ended December 31, 2008, 2007 and 2006			44
	Consolidated Balance Sheets as of December 31, 2008 and 2007			45
	Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2008, 2007 and 2006			46
	Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006			47
	Notes to Consolidated Financial Statements			48
(2)		Financial Statement Schedule:
	Schedule II—Valuation and Qualifying Accounts			97
		All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

(3)

Exhibits (numbered in accordance with Item 601 of Regulation S-K):

The Company is including as exhibits to this Annual Report certain documents that it has previously filed with the SEC as exhibits, and it is incorporating such documents as exhibits herein by reference from the respective filings identified in parentheses at the end of the exhibit descriptions. Except where otherwise indicated, the identified SEC filings from which such exhibits are incorporated by reference were made by the Company (under USI's file number of 0-10653). The management contracts and compensatory plans or arrangements required to be included as exhibits to this Annual Report pursuant to Item 15(b) are listed below as Exhibits 10.23 through 10.57, inclusive, and each of them is marked with a double asterisk at the end of the related exhibit description.

91

Exhibit Number		Description
	2.1	Stock Purchase Agreement, dated as of November 14, 2007, among ORS Nasco Holdings, Inc., United Stationers Supply Co. ("USSC"), the shareholders of ORS Nasco Holding, Inc. parties thereto and Brazos Equity GP II, LLC, as representative. (Exhibit 2.1 to the Company's Current Report on Form 8-K filed on December 28, 2007)
	2.4	Purchase and Sale Agreement, dated May 19, 2005, among Lagasse, Inc. and the shareholders of Sweet Paper Sales Corp. and the asset sellers of Sweet Paper Sales Group (Exhibit 10.3 to the Company's Form 10-Q for the quarter ended June 30, 2005, filed on August 9, 2005)
	2.5	Amendment Number One to Purchase and Sale Agreement, dated May 19, 2005, among Lagasse, Inc. and the shareholders of Sweet Paper Sales Corp. and the asset sellers of Sweet Paper Sales Group (Exhibit 10.4 to the Company's Form 10-Q for the quarter ended June 30, 2005, filed on August 9, 2005)
	3.1	Second Restated Certificate of Incorporation of United Stationers, Inc. ("USI" or the "Company"), dated as of March 19, 2002 (Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 2001, filed on April 1, 2002 (the "2001 Form 10-K"))
	3.2	Amended and Restated Bylaws of United Stationers Inc., dated as of October 10, 2007 (Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on October 12, 2007)
	4.1	Rights Agreement, dated as of July 27, 1999, by and between USI and BankBoston, N.A., as Rights Agent (Exhibit 4.1 to the Company's 2001 Form 10-K)
	4.2	Amendment to Rights Agreement, effective as of April 2, 2002, by and among USI, Fleet National Bank (f/k/a BankBoston, N.A.) and EquiServe Trust Company, N.A. (Exhibit 4.1 to the Company's Form 10-Q for the quarter ended March 31, 2002, filed on May 15, 2002)
	4.3	Master Note Purchase Agreement, dated as of October 15, 2007, among USI, USSC, and the note purchasers identified therein (the "2007 Note Purchase Agreement") (Exhibit 4.3 to the Company's Form 10-Q for the quarter ended September 30, 2007, filed November 7, 2007 (the "Form 10-Q filed on November 7, 2007"))
	4.4	Parent Guaranty, dated as of October 15, 2007, by USI in favor of holders of the promissory notes identified therein (Exhibit 4.4 to the Form 10-Q filed on November 7, 2007)
	4.5	Subsidiary Guaranty, dated as of October 15, 2007, by Lagasse, Inc., United Stationers Technology Services LLC ("USTS") and United Stationers Financial Services LLC ("USFS") in favor of the holders of the promissory notes identified therein (Exhibit 4.5 to the Form 10-Q filed on November 7, 2007)
	10.1	Guaranty, dated as of March 21, 2003, by USSC, as borrower, USI, Azerty Incorporated, Lagasse, Inc., USFS, and USTS in favor of Bank One, NA as administrative agent (Exhibit 4.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2002, filed on March 31, 2003 (the "2002 Form 10-K")
	10.2	Second Amended and Restated Receivables Sale Agreement, dated as of March 28, 2003, among USSC, as seller, USFS, as purchaser, and United Stationers Financial Services LLC ("USFS") USFS, as servicer (Exhibit 10.2 to the 2002 Form 10-K)
	10.3	Amended and Restated USFS Receivables Sale Agreement, dated as of March 28, 2003, among USFS, as seller, USS Receivables Company, Ltd. ("USSR"), as purchaser, and USFS as servicer (Exhibit 10.4 to the 2002 Form 10-K)
	10.4	Second Amended and Restated Servicing Agreement, dated as of March 28, 2003, among USSR, USFS, as servicer, USSC, as support provider, and Bank One, NA, as trustee (Exhibit 10.6 to the 2002 Form 10-K)
	10.5	Second Amended and Restated Pooling Agreement, dated as of March 28, 2003, among USSR, USFS, as servicer, and Bank One, NA, as trustee (Exhibit 10.8 to the 2002 Form 10-K)

92

Exhibit Number		Description
	10.6	Series 2003-1 Supplement, dated as of March 28, 2003, to the Second Amended and Restated Pooling Agreement, dated as of March 28, 2003, by and among USSR, USFS, as servicer, Bank One, NA, as funding agent, Falcon Asset Securitization Corporation, as initial purchaser, the other parties from time to time thereto, and Bank One, NA, as trustee (Exhibit 10.9 to the 2002 Form 10-K)
	10.7	Second Amended and Restated Series 2000-2 Supplement, dated as of March 28, 2003, to the Second Amended and Restated Pooling Agreement, dated as of March 28, 2003, by and among USSR, USFS, as servicer, Market Street Funding Corporation, as committed purchaser, PNC Bank, National Association, as administrator, and Bank One, NA, as trustee (Exhibit 10.11 to the 2002 Form 10-K)
	10.8	Series 2004-1 Supplement, dated as of March 26, 2004 to the Second Amended and Restated Pooling Agreement, dated as of March 28, 2003 by and among Fifth Third Bank (Chicago) and JPMorgan Chase Bank (Exhibit 10.1 to the Company's Form 10-Q for the quarter ended March 31, 2004, filed on May 10, 2004).
	10.9	Lease Agreement, dated as of January 12, 1993, as amended, among Stationers Antelope Joint Venture, AVP Trust, Adon V. Panattoni, Yolanda M. Panattoni and USSC (Exhibit 10.32 to the Company's Form S-1 (SEC File No. 033-59811-01) filed on July 28, 1995 (the "1995 S-1")
	10.10	Second Amendment to Lease, dated as of November 22, 2002, between Stationers Joint Venture and USSC (Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003, filed on March 15, 2004 (the "2003 Form 10-K")
	10.11	Lease Agreement, dated as of December 1, 2001, between Panattoni Investments, LLC and USSC (Exhibit 10.8 to the Company's 2001 Form 10-K)
	10.12	Lease Agreement, dated as of October 12, 1998, between Corum Carol Stream Associates, LLC and USSC (Exhibit 10.94 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998, filed on March 29, 1999)
	10.13	Industrial Lease Agreement, executed as of October 21, 2001, by and between Duke Construction Limited Partnership and USSC (Exhibit 10.16 to the Company's 2001 Form 10-K)
	10.14	First Amendment to Industrial Lease Agreement, dated October 1, 2002, between Allianz Life Insurance Co. of North America and USSC (Exhibit 10.20 to the 2003 Form 10-K)
	10.15	Industrial/Commercial Single Tenant Lease—Net, dated November 4, 2004, between Cransud One, L.L.C. and USSC (Exhibit 10.27 to the Company's 2004 Form 10-K, filed March 16, 2005)
	10.16	Lease, dated July 25, 2005, among United, USSC and Carr Parkway North I, LLC (Exhibit 10.1 to the Company's Form 10-Q filed on August 9, 2005)
	10.17	United Stationers Inc. 1992 Management Equity Plan (as amended and restated as of July 31, 2002) (Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, filed on November 14, 2002 ("Form 10-Q filed on November 14, 2002"))**
	10.18	United Stationers Inc. 2000 Management Equity Plan (as amended and restated as of July 31, 2002) (Exhibit 10.1 to the Company's Form 10-Q filed on November 14, 2002)**
	10.19	Form of grant letter used for grants of non-qualified options to non-employee directors under the 2004 Long-Term Incentive Plan (Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on September 3, 2004 (the "September 3, 2004 Form 8-K"))**
	10.20	Form of grant letter used for grants of non-qualified stock options to employees under the United Stationers Inc. 2004 Long-Term Incentive Plan (Exhibit 10.2 to the September 3, 2004 Form 8-K) **
	10.21	Form of Indemnification Agreement entered into between USI directors and various executive officers of USI (Exhibit 10.36 to the Company's 2001 Form 10-K)**

93

Exhibit Number		Description
	10.22	Form of Indemnification Agreement entered into by USI and (for purposes of one provision) USSC with each of Richard W. Gochnauer, and other directors and executive officers of USI (Exhibit 10.7 to the Company's Form 10-Q filed on November 14, 2002)**
	10.23	Form of Indemnification Agreement entered into by USI and (for purposes of one provision) USSC with P. Cody Phipps, and other executive officers of USI (Exhibit 10.3 to the Company's Form 10-Q filed on August 6, 2004)**
	10.24	Summary of compensation of certain executive officers of United (paragraph 1 of Item 5.02 to the Company's Current Report on Form 8-K, filed February 27, 2007)**
	10.25*	Omnibus Amendment dated as of March 23, 2008, by and among USSR, USFS, Falcon Asset Securitization Corporation, PNC Bank, National Association, Market Street Funding LLC, JPMorgan Chase Bank, NA,, and Fifth Third Bank,
	10.26	Non-Qualified Stock Option Grant Letter, dated as of July 24, 2007 among United Stationers Inc. and Victoria J. Reich (Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, filed on November 7, 2007)**
	10.27	Form of Restricted Stock Award Agreement for Section 16 Officers under the United Stationers Inc. 2004 Long-Term Incentive Plan (Exhibit 10.3 to the Company's Form 10 filed on November 7, 2007)**
	10.28	Pledge and Security Agreement dated as of October 15, 2007, among United Stationers Inc., USSC, Lagasse, Inc., USTS and USFS and JPMorgan Chase Bank, N.A. as collateral agent (Exhibit 10.5 to the Company's Form 10-Q filed on November 7, 2007)
	10.29	Intercreditor Agreement, dated as of October 15, 2007, by and among JPMorgan Chase Bank, NA, in its capacity as agent and contractual representative, and the holders of the notes issued pursuant to the 2007 Note Purchase Agreement (Exhibit 10.6 to the Form 10-Q filed on November 7, 2007)
	10.30	Second Amended and Restated Five-Year Revolving Credit Agreement, dated July 5, 2007, among USSC, as borrower, USI, as a credit party, JPMorgan Chase Bank, National Association in its capacity as agent, and the financial institutions listed on the signature pages thereof (Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 5, 2007)
	10.31	Reaffirmation, dated July 5, 2007 among USI, USSC, Lagasse, Inc., USTS and USFS (Exhibit 10.2 to the Company's Current Report on Form 8-K filed on July 5, 2007)
	10.32	Amendment No. 1, dated December 21, 2007, to Second Amended and Restated Five-Year Revolving Credit Agreement, dated July 5, 2007, among USSC, as borrower, USI, as a credit party, JPMorgan Chase Bank, National Association, in its capacity as agent, and the financial institutions listed on the signature pages thereof (Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 28, 2007)
	10.33*	United Stationers Inc. Nonemployee Directors' Deferred Stock Compensation Plan effective January 1, 2009**
	10.34*	United Stationers Supply Co. Amended and Restated Deferred Compensation Plan, effective as of January 1, 2009**
	10.35*	Medical Executive Reimbursement Program, as in effect as of January 1, 2009**
	10.36*	Executive Employment Agreement, effective as of December 31, 2008, by and among USI, USSC, and Richard W. Gochnauer **
	10.37*	Executive Employment Agreement, effective December 31, 2008, by and among USI, USSC and Stephen A. Schultz **
	10.38*	Executive Employment Agreement , effective as of December 31, 2008, by and among USI, USSC and P. Cody Phipps**
	10.39*	Executive Employment Agreement, effective as of December 31, 2008, by and among USI, USSC and Patrick T. Collins**

94

Exhibit Number		Description
	10.40*	Executive Employment Agreement, effective as of December 31, 2008, by and among USI, USSC and Victoria J. Reich**
	10.41	Summary of compensation of non-employee directors of United Stationers Inc. as amended July 31, 2008 with an effective date of September 1, 2008 (Exhibit 10.2 to the Company's Form 10-Q filed on November 7, 2008)**
	10.42*	United Stationers Inc. and Subsidiaries Amended and Restated Management Incentive Plan, effective January 1, 2009.**
	10.43*	United Stationers Inc. Amended and Restated 2004 Long-Term Incentive Plan effective as of January 1, 2009.**
	10.44	Form of Restricted Stock Award Agreement for Non-Employee Directors (Exhibit 10.4 to the Company's Form 10-Q filed on November 7, 2008)**
	10.45	Form of Restricted Stock Award Unit Agreement for Non-Employee Directors (Exhibit 10.5 to the Company's Form 10-Q filed on November 7, 2008)**
	21*	Subsidiaries of USI
	23*	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
	31.1*	Certification of Chief Executive Officer, dated as of February 27, 2009, as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 by Richard W. Gochnauer
	31.2*	Certification of Chief Financial Officer, dated as of February 27, 2009, as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 by Victoria J. Reich
	32.1*	Certification Pursuant to 18 U.S.C. Section 1350, dated February 27, 2009, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Richard W. Gochnauer and Victoria J. Reich

*

Filed herewith.

**

Represents a management contract or compensatory plan or arrangement.

95

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNITED STATIONERS INC.
	BY:	/s/ RICHARD W. GOCHNAUER Richard W. Gochnauer President and Chief Executive Officer (Principal Executive Officer)
Dated: February 27, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Capacity	Date
/s/ RICHARD W. GOCHNAUER Richard W. Gochnauer	President and Chief Executive Officer (Principal Executive Officer) and a Director	February 27, 2009
/s/ VICTORIA J. REICH Victoria J. Reich	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	February 27, 2009
/s/ KENNETH M. NICKEL Kenneth M. Nickel	Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)	February 27, 2009
/s/ FREDERICK B. HEGI, JR. Frederick B. Hegi, Jr.	Chairman of the Board of Directors	February 27, 2009
/s/ JEAN S. BLACKWELL Jean S. Blackwell	Director	February 27, 2009
/s/ DANIEL J. CONNORS Daniel J. Connors	Director	February 27, 2009
/s/ CHARLES K. CROVITZ Charles K. Crovitz	Director	February 27, 2009
/s/ DANIEL J. GOOD Daniel J. Good	Director	February 27, 2009
/s/ ILENE S. GORDON Ilene S. Gordon	Director	February 27, 2009
/s/ ROY W. HALEY Roy W. Haley	Director	February 27, 2009
/s/ BENSON P. SHAPIRO Benson P. Shapiro	Director	February 27, 2009
/s/ ALEX D. ZOGHLIN Alex D. Zoghlin	Director	February 27, 2009

96

SCHEDULE II

UNITED STATIONERS INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 2008, 2007 and 2006

Description (in thousands)		Balance at Beginning of Period		Additions Charged to Costs and Expenses		Deductions(1)			Balance at End of Period
Allowance for doubtful accounts(2):
	2006		18,304		5,627		(4,714	)		19,217
	2007		19,217		4,147		(4,119	)		19,245
	2008		19,245		16,469		(3,170	)		32,544

(1)

—net of any recoveries

(2)

—represents allowance for doubtful accounts related to the retained interest in receivables sold and accounts receivable, net.

97

QuickLinks

PART I

ITEM 1. BUSINESS.
ITEM 1A. RISK FACTORS.
ITEM 1B. UNRESOLVED COMMENT LETTERS.
ITEM 2. PROPERTIES.

ITEM 3. LEGAL PROCEEDINGS.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
ITEM 6. SELECTED FINANCIAL DATA.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Purchase Price Allocation (dollars in thousands)

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
ITEM 9A. CONTROLS AND PROCEDURES.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
ITEM 11. EXECUTIVE COMPENSATION.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

SIGNATURES

SCHEDULE II

EX-10.25

Exhibit 10.25

OMNIBUS AMENDMENT

OMNIBUS AMENDMENT

DATED AS OF MARCH 21, 2008

BY AND AMONG

USS RECEIVABLES COMPANY, LTD.,

UNITED STATIONERS FINANCIAL SERVICES LLC,

UNITED STATIONERS SUPPLY CO.,

FALCON ASSET SECURITIZATION COMPANY LLC,

PNC BANK, NATIONAL ASSOCIATION,

MARKET STREET FUNDING LLC,

JPMORGAN CHASE BANK, N.A.
(successor by merger to BANK ONE, NA (Main Office Chicago)),

FIFTH THIRD BANK

and

THE BANK OF NEW YORK TRUST COMPANY, N.A.
(successor in interest to JPMORGAN CHASE BANK, N.A.), as Trustee

AMENDMENT NO. 5 TO SERIES 2004-1 SUPPLEMENT

AMENDMENT NO. 6 TO SERIES 2003-1 SUPPLEMENT

AMENDMENT NO. 6 TO SECOND AMENDED AND RESTATED SERIES
2000-2 SUPPLEMENT

AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED POOLING
AGREEMENT

OMNIBUS AMENDMENT

This OMNIBUS AMENDMENT (this “Omnibus Amendment”) is entered into as of March 21, 2008 by and among USS Receivables Company, Ltd., a Cayman Islands limited liability company (“USSR”), United Stationers Financial Services LLC, an Illinois limited liability company (“USFS”), United Stationers Supply Co., an Illinois corporation (“USSC”, and together with USSR and USFS, the “USS Companies”), Falcon Asset Securitization Company LLC, a Delaware limited liability company (“Falcon”), PNC Bank, National Association, as Administrator under and as defined in the Series 2000-2 Supplement referred to below (“PNC”), Market Street Funding LLC (“Market Street”), JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office Chicago)), as the Funding Agent and the sole APA Bank under and as defined in the Series 2003-1 Supplement referred to below (“JPMorgan Chase Bank” or the “Funding Agent”), Fifth Third Bank, as Administrator under and as defined in the Series 2004-1 Supplement referred to below (“Fifth Third”) and The Bank of New York Trust Company, N.A. (successor in interest to JPMorgan Chase Bank, N.A.), as Trustee (the “Trustee”).

RECITALS

WHEREAS, USSR, USFS, as Servicer (the “Servicer”), and the Trustee are parties to that certain Second Amended and Restated Pooling Agreement, dated as of March 28, 2003 (as amended, supplemented, restated or otherwise modified and in effect from time to time, the “Pooling Agreement”);

WHEREAS, USSR, the Servicer, Fifth Third and the Trustee are parties to that certain Series 2004-1 Supplement, dated as of March 26, 2004, to the Pooling Agreement, as amended by the Omnibus Amendment with respect thereto, dated as of March 25, 2005, as further amended by the Omnibus Amendment with respect thereto, dated as of March 24, 2006, as further amended by the Omnibus Amendment with respect thereto, dated as of March 23, 2007 and as further amended by the Omnibus Amendment with respect thereto, dated as of July 26, 2007 (as so amended and as further amended, supplemented, restated or otherwise modified and in effect from time to time, the “Series 2004-1 Supplement”);

WHEREAS, USSR, the Servicer, Falcon, JPMorgan Chase Bank and the Trustee are parties to that certain Series 2003-1 Supplement, dated as of March 28, 2003, to the Pooling Agreement, as amended by the Omnibus Amendment with respect thereto, dated as of March 26, 2004, as further amended by the Omnibus Amendment with respect thereto, dated as of March 25, 2005, as further amended by the Omnibus Amendment with respect thereto, dated as of March 24, 2006, as further amended by the Omnibus Amendment with respect thereto, dated as of March 23, 2007 and as further amended by the Omnibus Amendment with respect thereto, dated

as of July 26, 2007 (as so amended and as further amended, supplemented, restated or otherwise modified and in effect from time to time, the “Series 2003-1 Supplement”);

WHEREAS, USSR, the Servicer, PNC, Market Street and the Trustee are parties to that certain Second Amended and Restated Series 2000-2 Supplement, dated as of March 28, 2003, to the Pooling Agreement, as amended by the Omnibus Amendment with respect thereto, dated as of March 26, 2004, as further amended by the Omnibus Amendment with respect thereto, dated as of March 25, 2005, as further amended by the Omnibus Amendment with respect thereto, dated as of March 24, 2006, as further amended by the Omnibus Amendment with respect thereto, dated as of March 23, 2007 and as further amended by the Omnibus Amendment with respect thereto, dated as of July 26, 2007 (as so amended and as further amended, supplemented, restated or otherwise modified and in effect from time to time, the “Series 2000-2 Supplement”);

WHEREAS, each of the parties hereto now desires to amend each of the Pooling Agreement, the Series 2004-1 Supplement, the Series 2003-1 Supplement and the Series 2000-2 Supplement (collectively, the “Amended Documents”), in each case, subject to the terms and conditions hereof.

AGREEMENT

NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.Definitions Used Herein. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth for such terms in the Pooling Agreement or, if not defined therein, the Series 2004-1 Supplement, Series 2003-1 Supplement or Series 2000-2 Supplement, as applicable.

Section 2.Amendments to the Series 2004-1 Supplement. Immediately upon the satisfaction of each of the conditions precedent set forth in Section 6 of this Omnibus Amendment, the Series 2004-1 Supplement is hereby amended, effective as of the date first written above, as follows:

(a)by amending and restating the definition of “Accrual Period” appearing in Section 1.1 thereof as follows:

“Accrual Period” shall mean the period from and including the first day of each calendar month to and including the last day of such calendar month, provided that the final Accrual Period hereunder shall terminate on the date of the final payment made hereunder on the VFC Certificate.

3

(b)by amending and restating the definition of “Commitment Expiry Date” appearing in Section 1.1 thereof as follows:

“Commitment Expiry Date” shall mean March 20, 2009 (as may be extended for up to an additional 364 days from time to time in writing by the Committed Purchaser and the Administrator in their sole discretion).

(c)by amending and restating the definition of “Commitment Termination Date” appearing in Section 1.1 thereof as follows:

“Commitment Termination Date” shall mean the earlier to occur of (i) the date on which the Purchase Limit has been reduced to zero pursuant to Section 2.8 of this Supplement, and (ii) March 18, 2011.

(d)by amending and restating the definition of “Rate Period” appearing in Section 1.1 thereof as follows (solely for convenience, changed language is italicized):

“Rate Period” shall mean, unless otherwise agreed by the Administrator and the Company, with respect to any Funding Tranche, (i) initially the period commencing on (and including) the date of the initial purchase or funding of such Funding Tranche and ending on (but excluding) the first day of the next following calendar month, and (ii) thereafter each period commencing on (and including) the first day of each calendar month and ending on the first day of the next following calendar month; provided, that:

(A)any Rate Period with respect to any Funding Tranche not funded at the CP Rate which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day; provided, however, if Yield in respect of such Rate Period is computed by reference to the Euro-Rate, and such Rate Period would otherwise end on a day which is not a Business Day, and there is no subsequent Business Day in the same calendar month as such day, such Rate Period shall end on the next preceding Business Day;

(B)in the case of any Rate Period for any Funding Tranche which commences before the occurrence of an Early Amortization Event and would otherwise end on a date occurring after the occurrence of an Early Amortization Event, such Rate Period shall end on the date of the occurrence of an Early Amortization Event and the duration of each Rate Period which commences on or after the occurrence of an Early Amortization Event shall be of such duration as shall be selected by the Administrator; and

4

(C)any Rate Period in respect of which Yield is computed by reference to the CP Rate may be terminated at the election of, and upon notice thereof to the Company and the Servicer by, the Administrator any time, in which case the Funding Tranche allocated to such terminated Rate Period shall be allocated to a new Rate Period commencing on (and including) the date of such termination and ending on (but excluding) the first day of the next following calendar month and shall accrue Yield at the Alternate Rate.

(e)by amending and restating paragraphs (b) and (c) of Section 2.9 as follows (solely for convenience, changed language is italicized):

(b)The Servicer shall distribute pursuant to subsection 3A.6(b), from amounts on deposit in the Series 2004-1 Collection Sub-account, to the Administrator, for the account of the Committed Purchaser, on each Distribution Date, a commitment fee with respect to the Accrual Period most recently ended on or prior to such date (the “Commitment Fee”) at the Commitment Fee Rate of the average daily excess of 102% of the Purchase Limit over the average Series 2004-1 Purchaser Invested Amount during such Accrual Period for the actual number of days in such Accrual Period. The Commitment Fee shall be payable (i) monthly in arrears on each Distribution Date for such Accrual Period and (ii) on the Facility Termination Date. To the extent that funds on deposit in the Series 2004-1 Collection Sub-account at any such date are insufficient to pay the Commitment Fee due on such date, the Servicer shall so notify the Company and the Company shall immediately pay the Administrator the amount of any such deficiency.

(c)The Servicer shall distribute pursuant to subsection 3A.6(b), from amounts on deposit in the Series 2004-1 Collection Sub-account, to the Administrator, for the account of the Committed Purchaser, on each Distribution Date, a utilization fee (the “Utilization Fee”) with respect to the Accrual Period most recently ended on or prior to such date at the Utilization Fee Rate of the average daily Series 2004-1 Purchaser Invested Amount during such period for the actual number of days in such Accrual Period. The Utilization Fee shall be payable (i) monthly in arrears on each Distribution Date for such Accrual Period and (ii) on the Facility Termination Date. To the extent that funds on deposit in the Series 2004-1 Collection Sub-account at any such date are insufficient to pay the Utilization Fee due on such date, the Servicer shall so notify the Company and the Company shall immediately pay the Administrator the amount of any such deficiency.

5

(f)by amending and restating the first sentence of paragraph (a) of Section 3A.4 as follows (solely for convenience, added language is italicized):

On or before the Business Day preceding the each Distribution Date, the Administrator shall notify the Servicer and the Trustee of the Series 2004-1 Monthly Interest Amount for the most recent Accrual Period ending on or before the related Distribution Date.

(g)by amending and restating the first sentence of paragraph (c) of Section 3A.4 as follows (solely for convenience, added language is italicized):

On each Distribution Date, the Servicer shall determine the excess, if any (the “Interest Shortfall”), of (i) the Series 2004-1 Monthly Interest for the most recent Accrual Period ending on or before such Distribution Date over (ii) the amount which will be available to be distributed to the Purchasers on such Distribution Date in respect thereof pursuant to this Supplement.

Section 3.Amendments to the Series 2003-1 Supplement. Immediately upon the satisfaction of each of the conditions precedent set forth in Section 6 of this Omnibus Amendment, Section 1.1 of the Series 2003-1 Supplement is hereby amended, effective as of the date first written above, as follows:

(a)by amending and restating the definition of “Commitment Expiry Date” as follows:

“Commitment Expiry Date” shall mean March 20, 2009 (as may be extended for up to an additional 364 days from time to time in writing by Initial Purchaser, the Funding Agent and the APA Banks).

(b)by amending and restating the definition of “Commitment Termination Date” as follows:

“Commitment Termination Date” shall mean the earliest to occur of (i) the date on which the Aggregate Commitment Amount has been reduced to zero pursuant to Section 2.7 of this Supplement, (ii) the Commitment Expiry Date, (iii) the Optional Termination Date, (iv) the date on which the Early Amortization Period is declared to commence or automatically commences and (v) March 18, 2011.

Section 4.Amendments to the Series 2000-2 Supplement. Immediately upon the satisfaction of each of the conditions precedent set forth in Section 6 of this

6

Omnibus Amendment, Section 1.1 of the Series 2000-2 Supplement is hereby amended, effective as of the date first written above, as follows:

(a)by amending and restating the definition of “Accrual Period” appearing in Section 1.1 thereof as follows:

“Accrual Period” shall mean the period from and including the first day of each calendar month to and including the last day of such calendar month, provided that the final Accrual Period hereunder shall terminate on the date of the final payment made hereunder on the VFC Certificate.

(b)by amending and restating the definition of “Commitment Expiry Date” as follows:

“Commitment Expiry Date” shall mean March 20, 2009 (as may be extended for up to an additional 364 days from time to time in writing by the Committed Purchaser and the Administrator in their sole discretion).

(c)by amending and restating the definition of “Commitment Termination Date” as follows:

“Commitment Termination Date” shall mean the earlier to occur of (i) the date on which the Purchase Limit has been reduced to zero pursuant to Section 2.8 of this Supplement, and (ii) March 18, 2011.

(d)by amending and restating the definition of “Rate Period” appearing in Section 1.1 thereof as follows (solely for convenience, changed language is italicized):

“Rate Period” shall mean, unless otherwise agreed by the Administrator and the Company, with respect to any Funding Tranche, (i) initially the period commencing on (and including) the date of the initial purchase or funding of such Funding Tranche and ending on (but excluding) the first day of the next following calendar month, and (ii) thereafter each period commencing on (and including) the first day of each calendar month and ending on the first day of the next following calendar month; provided, that:

(A)any Rate Period with respect to any Funding Tranche not funded at the CP Rate which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day; provided, however, if Yield in respect of such Rate Period is computed by reference to the Euro-Rate, and such Rate Period would otherwise end on

7

a day which is not a Business Day, and there is no subsequent Business Day in the same calendar month as such day, such Rate Period shall end on the next preceding Business Day;

(B)in the case of any Rate Period for any Funding Tranche which commences before the occurrence of an Early Amortization Event and would otherwise end on a date occurring after the occurrence of an Early Amortization Event, such Rate Period shall end on the date of the occurrence of an Early Amortization Event and the duration of each Rate Period which commences on or after the occurrence of an Early Amortization Event shall be of such duration as shall be selected by the Administrator; and

(C)any Rate Period in respect of which Yield is computed by reference to the CP Rate may be terminated at the election of, and upon notice thereof to the Company and the Servicer by, the Administrator any time, in which case the Funding Tranche allocated to such terminated Rate Period shall be allocated to a new Rate Period commencing on (and including) the date of such termination and ending on (but excluding) the first day of the next following calendar month and shall accrue Yield at the Alternate Rate.

(e)by amending and restating paragraphs (b) and (c) of Section 2.9 as follows (solely for convenience, changed language is italicized):

(b)The Servicer shall distribute pursuant to subsection 3A.6(b), from amounts on deposit in the Series 2000-2 Collection Sub-account, to the Administrator, for the account of the Committed Purchaser, on each Distribution Date, a commitment fee with respect to the most recent Accrual Period ending on or prior to such date (the “Commitment Fee”) at the Commitment Fee Rate of the average daily excess of 102% of the Purchase Limit over the average Series 2000-2 Purchaser Invested Amount during such Accrual Period for the actual number of days in such Accrual Period. The Commitment Fee shall be payable (i) monthly in arrears on each Distribution Date and (ii) on the Facility Termination Date. To the extent that funds on deposit in the Series 2000-2 Collection Sub-account at any such date are insufficient to pay the Commitment Fee due on such date, the Servicer shall so notify the Company and the Company shall immediately pay the Administrator the amount of any such deficiency.

(c)The Servicer shall distribute pursuant to subsection 3A.6(b), from amounts on deposit in the Series 2000-2 Collection Sub-account, to the Administrator, for the account of the Committed Purchaser, on each Distribution Date, a utilization fee (the “Utilization Fee”) with respect to the

8

Accrual Period most recently ended on or prior to such date at the Utilization Fee Rate of the average daily Series 2000-2 Purchaser Invested Amount during such period for the actual number of days in such Accrual Period. The Utilization Fee shall be payable (i) monthly in arrears on each Distribution Date for such Accrual Period and (ii) on the Facility Termination Date. To the extent that funds on deposit in the Series 2000-2 Collection Sub-account at any such date are insufficient to pay the Utilization Fee due on such date, the Servicer shall so notify the Company and the Company shall immediately pay the Administrator the amount of any such deficiency.

(f)by amending and restating the first sentence of paragraph (a) of Section 3A.4 as follows (solely for convenience, added language is italicized):

On or before the Business Day preceding the each Distribution Date, the Administrator shall notify the Servicer and the Trustee of the Series 2000-2 Monthly Interest Amount for the most recent Accrual Period ending on or before the related Distribution Date.

(g)by amending and restating paragraph (c) of Section 3A.4 as follows (solely for convenience, added language is italicized):

On each Distribution Date, the Servicer shall determine the excess, if any (the “Interest Shortfall”), of (i) the Series 2000-2 Monthly Interest for the most recent Accrual Period ending on or before such Distribution Date over (ii) the amount which will be available to be distributed to the Purchasers on such Distribution Date in respect thereof pursuant to this Supplement. If the Interest Shortfall with respect to the Accrual Period ended most recently on or prior to any Distribution Date is greater than zero, an additional amount (“Additional Interest”) equal to the product of (A) the number of days until such Interest Shortfall shall be repaid divided by 365 (or 366, as the case may be), (B) the Base Rate plus 2.0% and (C) such Interest Shortfall (or the portion thereof which has not been paid to the Committed Purchaser) shall be payable as provided herein with respect to the VFC Certificates on each Distribution Date following such Distribution Date to but excluding the Distribution Date on which such Interest Shortfall is paid to the VFC Certificateholders.

(h)by amending and restating clause (iii) of paragraph (a) of Section 3A.6 as follows (solely for convenience, added language is italicized):

(iii) ratably, to the payment of all accrued and unpaid Series 2000-2 Monthly Interest payable with respect to the Accrual Period ended most

9

recently on or prior to such Distribution Date (the “Monthly Interest Payment”), plus the amount of any Monthly Interest Payment previously due but not distributed to the Administrator, for further distribution to the Committed Purchaser on a prior Distribution Date, plus the amount of any Additional Interest with respect to the Accrual Period ended most recently on or prior to such Distribution Date and any Additional Interest previously due but not distributed to the Administrator, for further distribution to the Committed Purchaser on a prior Distribution Date, plus all accrued and unpaid fees under the Fee Letter (including the Commitment Fee and the Utilization Fee);

Section 5.Amendments to the Pooling Agreement. Immediately upon the satisfaction of each of the conditions precedent set forth in Section 6 of this Omnibus Amendment, Section 1.1 of the Pooling Agreement is hereby amended by amending and restating clause (i) of the definition of “Eligible Receivable” as follows:

(i) (A) it is not a Receivable for which the applicable Seller (or any of its transferees) has established an offsetting specific reserve (other than a specific default or loss reserve), provided that a Receivable subject only in part to the foregoing shall be an Eligible Receivable to the extent not so subject, and (B) it is not a Receivable for which the applicable Seller (or any of its transferees) has established a specific default or loss reserve in the amount of 100% of such Receivable;

Section 6.Conditions to Effectiveness of this Omnibus Amendment. The effectiveness of this Omnibus Amendment is subject to the satisfaction of the following conditions precedent:

(a)Omnibus Amendment. The Trustee shall have received, on or before the date hereof, executed counterparts of this Omnibus Amendment, duly executed by each of the parties hereto.

(b)Representations and Warranties. As of the date hereof, both before and after giving effect to this Omnibus Amendment, all of the representations and warranties of the USS Companies contained in each Amended Document, as amended hereby and in each other Transaction Document (other than those that speak expressly only as of a different date) shall be true and correct in all material respects as though made on the date hereof (and by its execution hereof, each of the USS Companies shall be deemed to have represented and warranted such).

(c)No Early Amortization Event. As of the date hereof both before and after giving effect to this Omnibus Amendment, no Early

10

Amortization Event shall have occurred and be continuing (and by its execution hereof, each of the USS Companies shall be deemed to have represented and warranted such).

(d)           Payment of Fees. The USS Companies shall have paid all costs, fees and expenses due and owing, by any of them, pursuant to the Fee Letter.

Section 7                Miscellaneous.

(a)           Effect; Ratification. The amendments set forth herein are effective solely for the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to (i) be a consent to any amendment, waiver or modification of any other term or condition of any Amended Document or of any other instrument or agreement referred to therein; or (ii) prejudice any right or remedy which any of the Trustee, the Funding Agent, Falcon, PNC, Fifth Third or Market Street may now have or may have in the future under or in connection with any Amended Document, as amended hereby or any other instrument or agreement referred to therein. Each reference in the Series 2004-1 Supplement to “this Supplement,” “herein,” “hereof” and words of like import and each reference in the other Transaction Documents to the “Series 2004-1 Supplement” shall mean the Series 2004-1 Supplement as amended hereby. Each reference in the Series 2003-1 Supplement to “this Supplement,” “herein,” “hereof” and words of like import and each reference in the other Transaction Documents to the “Series 2003-1 Supplement” shall mean the Series 2003-1 Supplement as amended hereby. Each reference in the Series 2000-2 Supplement to “this Supplement,” “herein,” “hereof” and words of like import and each reference in the other Transaction Documents to the “Series 2000-2 Supplement” shall mean the Series 2000-2 Supplement as amended hereby. This Omnibus Amendment shall be construed in connection with and as part of each Amended Document, as amended hereby, respectively, and all terms, conditions, representations, warranties, covenants and agreements set forth in each such agreement and each other instrument or agreement referred to therein, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

(b)           Transaction Documents. This Omnibus Amendment is a Transaction Document executed pursuant to the Amended Documents and shall be construed, administered and applied in accordance with the terms and provisions thereof.

(c)           Costs, Fees and Expenses. The USS Companies agree to reimburse each of the Trustee, the Funding Agent, Falcon, PNC, Fifth Third and Market Street on demand for all costs, fees and expenses (including the reasonable

11

fees and expenses of counsels to each of the Trustee, the Funding Agent, Falcon, PNC, Fifth Third and Market Street) incurred in connection with the preparation, execution and delivery of this Omnibus Amendment.

(d)           Counterparts. This Omnibus Amendment may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.

(e)           Severability. If any one or more of the covenants, agreements, provisions or terms of this Omnibus Amendment shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Omnibus Amendment and shall in no way affect the validity or enforceability of the other provisions of this Omnibus Amendment.

(f)            GOVERNING LAW. THIS OMNIBUS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

(g)           On the date hereof, (i) Fifth Third is the holder of one hundred percent of the interest in the Series 2004-1 Supplement VFC Certificate, (ii) Falcon is the holder of one hundred percent of the interest in the Series 2003-1 Supplement VFC Certificate and (iii) Market Street is the holder of one hundred percent of the interest in the Series 2000-2 Supplement VFC Certificate. Each of Fifth Third, Falcon and Market Street hereby authorizes and directs the Trustee (as defined in each Supplement) to execute and deliver this Omnibus Amendment.

12

IN WITNESS WHEREOF, the parties hereto have caused this Omnibus Amendment to be executed and delivered by their respective duly authorized officers as of the date first written above.

USS RECEIVABLES COMPANY, LTD.
By:	/s/ Victoria J. Reich
Name:		Victoria J. Reich
Title:		President

UNITED STATIONERS FINANCIAL SERVICES LLC, as Servicer under and as defined in the Pooling Agreement and the Supplements
By:	/s/ Victoria J. Reich
Name:		Victoria J. Reich
Title:		President

FIFTH THIRD BANK, as Administrator and Committed Purchaser under and as defined in the Series 2004-1 Supplement
By:	/s/ Brian Gardner
Name:		Brian Gardner
Title:		Vice President

JPMORGAN CHASE BANK, N.A. (successor by merger to BANK ONE, NA (Main Office Chicago)), individually as the sole APA Bank and as Funding Agent under and as defined in the Series 2003-1 Supplement
By:	/s/ DavidWhiting
Name:		DavidWhiting
Title:		Vice President

FALCON ASSET SECURITIZATION COMPANY LLC, as Initial Purchaser under and as defined in the Series 2003-1 Supplement
By:		JPMorgan Chase Bank, N.A. (successor by Merger to Bank One, NA (Main Office Chicago)),
Its:		Attorney-In-Fact
By:	/s/ David Whiting
Name:		David Whiting
Title:		Vice President

PNC BANK, NATIONAL ASSOCIATION, as Administrator under and as defined in the Series 2000-2 Supplement
By:	/s/ William P. Falcon
Name:		William P. Falcon
Title:		Vice President

MARKET STREET FUNDING LLC, as Committed Purchaser under and as defined in the Series 2000-2 Supplement

By:

Name:

Title:

PNC BANK, NATIONAL ASSOCIATION, as Administrator under and as defined in the Series 2000-2 Supplement

By:

Name:

Title:

MARKET STREET FUNDING LLC, as Committed Purchaser under and as defined in the Series 2000-2 Supplement
By:	/s/ Doris J. Hearn
Name:		Doris J. Hearn
Title:		Vice President

THE BANK OF NEW YORK TRUST COMPANY, N.A. (successor in interest to JPMORGAN CHASE BANK, N.A.), as Trustee
By:	/s/ Bill Marshall
Name:		Bill Marshall
Title:		Vice President

EX-10.33

Exhibit 10.33

The United Stationers Inc.
Nonemployee Directors’ Deferred
Stock Compensation Plan

ARTICLE I

INTRODUCTION

I.1            Establishment. United Stationers, Inc. (the “Company”) hereby establishes the United Stationers Inc. Nonemployee Directors’ Deferred Stock Compensation Plan (the “Plan”) for those directors of the Company who are not employees of the Company or any of its subsidiaries or affiliates. The Plan allows Nonemployee Directors to defer the receipt of cash compensation and to receive such deferred compensation in the form of Shares of Common Stock of the Company.  It is intended that the provisions of the Plan conform to the requirements of section 409A of the Code (as defined below) and the Plan will be interpreted in all respects in accordance with such requirements.  Any references in the Plan to section 409A of the Code include references to applicable guidance issued thereunder.

I.2            Purpose. The Plan is intended to advance the interests of the Company and its Stockholders by providing a means to attract and retain qualified persons to serve as Nonemployee Directors and to promote ownership by Nonemployee Directors of a greater proprietary interest in the Company, thereby aligning such Directors’ interests more closely with the interests of Stockholders of the Company.

I.3            Effective Date. The Plan first became effective as of the date on which the Plan was adopted by the Board of Directors and was subsequently approved by a vote of the stockholders of the Company at the next following Annual Meeting.  This Plan is an amendment and restatement as of January 1, 2009 (“Effective Date”).

ARTICLE II

DEFINITIONS

II.1          “Annual Meeting” means the Annual Meeting of Stockholders of the Company.

II.2          “Board” means the Board of Directors of the Company.

II.3          “Code” means the Internal Revenue Code of 1986, as amended.

II.4          “Committee” means the Board or a committee appointed to administer the Plan under Article IV.

II.5          “Company” means United Stationers, Inc., a Delaware corporation, or any successor thereto.

Effective 12/16/2008

II.6          “Deferral Date” means the date Fees would otherwise have been paid to the Participant.

II.7          “Deferral Election” means a written election to defer Fees under the Plan.

II.8          “Director” means any individual who is a member of the Board.

II.9          “Fair Market Value” means the closing price for the Shares reported on a consolidated basis on the NASDAQ National Market on the relevant date or, if there were no sales on such date, the closing price on the nearest preceding date on which sales occurred.

II.10        “Fees” means all or part of any retainer or meeting fees payable in cash to a Nonemployee Director in his or her capacity as a Director. Fees shall not include any expenses paid directly or through reimbursement.

II.11        “Nonemployee Director” means a Director who is not, as of the date of an Annual Meeting, an employee of the Company or any of its subsidiaries or affiliates. For purposes of the Plan, an employee is an individual whose wages are subject to the withholding of federal income tax under section 3401 of the Code.

II.12        “Participant” means a Nonemployee Director who defers Fees under Article VI of the Plan.

II.13        “Secretary” means the Secretary or any Assistant Secretary of the Company.

II.14        “Shares” means shares of the Common Stock of the Company, par value $.10 per share.

II.15        “Stock Units” means the credits to a Participant’s Stock Unit Account under Article VI of the Plan, each of which represents the right to receive one Share upon settlement of the Stock Unit Account.

II.16        “Stock Unit Account” means the bookkeeping account established by the Company pursuant to Section VI.5.

II.17“Termination of Service,” and references to a Nonemployee Director’s termination as a Director (including separation from service and other similar references), means termination of service as a Director for any reason, subject to the following:

(i)The Director relationship or employment relationship will be deemed to have ended at the time the Nonemployee Director and the Company reasonably anticipate that a level of bona fide services the Nonemployee Director would perform for the Company and, if applicable, the Affiliates after such date would permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36 month period (or the full period of service to the Company and the Affiliates if the Nonemployee Director has performed services for the Company and the Affiliates for less than 36 months).  In the absence of an expectation that the Nonemployee Director will perform at the above-described level, the date of termination

as a Director or termination of employment will not be delayed solely by reason of the Nonemployee Director continuing to be on the Company’s and the Affiliates’ payroll after such date.

(ii)           The Director relationship or employment relationship will be treated as continuing intact while the Nonemployee Director is on a bona fide leave of absence (determined in accordance with Treas. Reg. §409A-1(h)).

(iii)          The determination of a Nonemployee Director’s termination as a Director or termination of employment by reason of a sale of assets, sale of stock, spin-off, or other similar transaction of the Company or an Affiliate will be made in accordance with Treas. Reg. §1.409A-1(h).

(iv)          If a Nonemployee Director performs services both as an employee of the Company or an Affiliate, and a member of the Board of the Company or an Affiliate, the determination of whether termination of employment or termination of service as a Director shall be made in accordance with Treas. Reg. §1.409A-1(h)(5) (relating to dual status service providers).

(v)           For purposes of this Section II.17, the term “Affiliates” means all persons with whom the Company is considered to be a single employer under Code section 414(b) and all persons with whom the Company would be considered a single employer under Code section 414(c) thereof.

ARTICLE III

SHARES AVAILABLE UNDER THE PLAN

Subject to adjustment as provided in Article X, and except as otherwise provided in this Article III, the maximum number of Shares that may be distributed in settlement of Stock Unit Accounts under the Plan shall be 50,000. Such Shares may include authorized but unissued Shares, Treasury Shares or Shares that have been reacquired by the Company.  Shares to be distributed in settlement of Stock Unit Accounts under the Plan may be Shares issued pursuant to Section 5.5 of the United Stationers Inc. 2004 Long-Term Incentive Plan, and any such Shares so distributed shall not count against the 50,000 share limit provided above.

ARTICLE IV

ADMINISTRATION

The Plan shall be administered by the Board or such other committee as may be designated by the Board. The Committee shall have the authority to make all determinations it deems necessary or advisable for administering the Plan, subject to the express provisions of the Plan. Notwithstanding the foregoing, no Director who is a Participant under the Plan shall participate in any determination relating solely or primarily to his or her own Shares, Stock Units or Stock Unit Account.

ARTICLE V

ELIGIBILITY

Each person who is a Nonemployee Director on a Deferral Date shall be eligible to defer Fees payable on such date in accordance with Article VI of the Plan. If any Nonemployee Director subsequently becomes an employee of the Company or any of its subsidiaries, but does not incur a Termination of Service, such Director shall continue as a Participant with respect to Fees previously deferred, but shall cease eligibility with respect to all future Fees, if any, earned while an employee.

ARTICLE VI

DEFERRAL ELECTIONS IN LIEU OF CASH PAYMENTS

VI.1         General Rule.  Each Nonemployee Director may, in lieu of receipt of Fees, defer any or all of such Fees in accordance with this Article VI, provided that such Nonemployee Director is eligible under Article V of the Plan to defer such Fees at the date any such Fees are otherwise payable. A Director may elect to defer a percentage (of not less than 50% and in 5% increments up to 100%) of his or her Fees.

VI.2         Timing of Election.  A Nonemployee Director may make a Deferral Election within 30 days after the date he first becomes eligible to participate in the Plan. A Nonemployee Director who does not make a Deferral Election when first eligible to do so may make a Deferral Election at any time before the first day of any subsequent calendar year.  For the period commencing on the Effective Date, the Nonemployee Director must make the election or reelect to defer amounts under the Plan before the Effective Date.

VI.3         Effect and Duration of Election.  A Deferral Election shall apply to services performed and Fees payable after the date such election is made and shall be deemed to be continuing and applicable to all services performed and Fees payable in subsequent calendar years, unless the Participant revokes or modifies such election by filing a new election form before the first day of any subsequent calendar year, effective for all services performed and Fees payable on and after the first day of such calendar year.

VI.4         Form of Election.  A Deferral Election shall be made in a manner satisfactory to the Committee. Generally, a Deferral Election shall be made by completing and filing the specified election form with the Secretary or his or her designee within the period described in Section VI.2 or Section VI.3.

VI.5         Establishment of Stock Unit Account.  The Company shall establish a Stock Unit Account for each Participant. All Fees deferred pursuant to this Article VI shall be credited to the Participant’s Stock Unit Account as of the Deferral Date and converted to Stock Units. The number of Stock Units credited to a Participant’s Stock Unit Account as of a Deferral Date shall equal the amount of the deferred Fees divided by the Fair Market Value of a Share on such Deferral Date, with fractional units calculated to three decimal places. Fractional Stock Units shall be credited cumulatively, but any fractional Stock Unit in a Participant’s Stock Unit

Account at the time of a distribution under Article VII shall be converted into cash equal to the Fair Market Value of a corresponding fractional Share on the date of distribution.

VI.6         Crediting of Dividend Equivalents.  As of each dividend payment date with respect to Shares, each Participant shall have credited to his or her Stock Unit Account a dollar amount equal to the amount of cash dividends that would have been paid on the number of Shares equal to the number of Stock Units credited to the Participant’s Stock Unit Account as of the close of business on the record date for such dividend. Such dollar amount shall then be converted into a number of Stock Units equal to the number of whole and fractional Shares that could have been purchased with such dollar amount at Fair Market Value on the dividend payment date.

ARTICLE VII

SETTLEMENT OF STOCK UNITS

VII.1        Timing and Form of Payment.  Subject to the provisions of Sections VII.2 and VII.4 the following provisions of this Section VII.1, and the other terms and conditions of the Plan, payment of a Participant’s Stock Unit Account balance, shall be made (or shall begin to be distributed) to the Participant as of the permitted payment dates described in (i) below and in a permitted payment form as set forth in (ii) below, each as elected by the Participant in his first Deferral Election under the Plan (or, with respect to any Nonemployee Director who was a Participant in the Plan immediately prior to the Effective Date, as elected in the Deferral Election on file with respect to the Participant on December 31, 2008).  A Participant’s election of a payment time and form shall apply with respect to his or her entire Stock Unit Account.

(i)            A Participant shall receive or begin receiving a distribution of his or her Stock Unit Account in the manner described in (ii) on the first day of the first calendar quarter immediately following the date on which the Participant incurs a Termination of Service, and if the Participant has made an election to receive payment in annual installments, each subsequent installment shall be paid on January 1 of each calendar year thereafter commencing with the calendar year immediately following the calendar year in which the first installment was paid.

(ii)           A Participant’s first Deferral Election filed under Article VI (or, with respect to any Nonemployee Director who was a Participant in the Plan immediately prior to the Effective Date, the Deferral Election on file with respect to the Participant on December 31, 2008) shall specify whether the Participant’s Stock Unit Account is to be settled by delivering to the Participant the number of Shares equal to the number of whole Stock Units then credited to the Participant’s Stock Unit Account, in either (A) a lump sum, or (B) a series of annual installments over a period not to exceed 5 years.  With respect to annual installment payments, the amount of each installment paid under this Section VII.1 will equal the result of dividing the Participant’s Stock Unit Account by the number of installments remaining immediately before the payment. Any fractional Stock Unit credited to a Participant’s Stock Unit Account at the time of a distribution shall be paid in cash at the time of such distribution. If a Participant fails to elect a payment form, payment shall be made in a lump sum.

VII.2        Payment Upon Death of a Participant. If a Participant dies before the entire balance of his or her Stock Unit Account has been distributed, the balance of the Participant’s Stock Unit Account shall be paid in cash, in a lump sum, as soon as administratively feasible (but not more than 30 days) after the Participant’s death, to the beneficiary designated by the Participant under Article IX.

VII.3        Continuation of Dividend Equivalents.  If payment of Stock Units is made in annual installments pursuant to Section VII.1, the Participant’s Stock Unit Account shall continue to be credited with dividend equivalents as provided in Section VI.6 until the entire balance of the Participant’s Stock Unit Account has been distributed.

VII.4        Special 409A Rules.  Notwithstanding any other provision of the Plan to the contrary, if any payment hereunder is subject to section 409A of the Code, if such payment is to be paid on account of the Participant’s Termination of Service and if the Participant is then a specified employee (within the meaning of section 409A(a)(2)(B) of the Code), such payment shall be delayed until the first day of the seventh month following the Participant’s separation from service (or, if later, the date on which such payment is otherwise to be paid under the Plan).  Any payment which is to be made as of the first day of the seventh month following separation from service shall be made no later than 30 days after such date.  In all cases, whether a Participant has incurred a Termination of Service or other separation from service for purposes of the Plan shall be determined in accordance with the requirements of section 409A of the Code relating to separations from service by applying the applicable default provisions.

ARTICLE VIII

UNFUNDED STATUS

VIII.1      General.  The interest of each Participant in any Fees deferred under the Plan (and any Stock Units or Stock Unit Account relating thereto) shall be that of a general creditor of the Company. Stock Unit Accounts, and Stock Units credited thereto, shall at all times be maintained by the Company as bookkeeping entries evidencing unfunded and unsecured general obligations of the Company. Except as provided in Section VIII.2, no money or other assets shall be set aside for any Participant.

VIII.2      Trust.  To the extent determined by the Board, the Company may transfer funds necessary to fund all or part of the payments under the Plan to a trust; provided, the assets held in such trust shall remain at all times subject to the claims of the general creditors of the Company. No participant or beneficiary shall have any interest in the assets held in such trust or in the general assets of the Company other than as a general, unsecured creditor. Accordingly, the Company shall not grant a security interest in the assets held by the trust in favor of any Participant, beneficiary or creditor.

ARTICLE IX

DESIGNATION OF BENEFICIARY

Each Participant may designate, on a form provided by the Committee, one or more beneficiaries to receive payment of the Participant’s Stock Unit Account in the event of such Participants death. The Company may rely upon the beneficiary designation list filed with the Committee, provided that such form was executed by the Participant or his or her legal representative and filed with the Committee prior to the Participant’s death. If a Participant has not designated a beneficiary, or if the designated beneficiary is not surviving when a payment is to be made to such person under the Plan, the beneficiary with respect to such payment shall be the Participant’s surviving spouse, or if there is no surviving spouse, the Participant’s estate.

ARTICLE X

ADJUSTMENT PROVISIONS

In the event any recapitalization, reorganization, merger, consolidation, spin-off combination, repurchase, exchange of Shares or other securities of the Company, stock split or reverse split, or similar corporate transaction or event affects Shares such that an adjustment is determined by the Board or Committee to be appropriate to prevent dilution or enlargement of Participants’ rights under the Plan, then the Board or Committee shall, in a manner that is proportionate to the change to the Shares and is otherwise equitable, adjust the number or kind of Shares to be delivered upon settlement of Stock Unit Accounts under Article VII.

ARTICLE XI

GENERAL PROVISIONS

XI.1         No Stockholder Rights Conferred.  Nothing contained in the Plan will confer upon any Participant or beneficiary any rights of a Stockholder of the Company, unless and until Shares are in fact issued or transferred to such Participant or beneficiary in accordance with Article VII.

XI.2         Changes to The Plan.  The Board may amend, alter, suspend, discontinue, extend, or terminate the Plan, subject to the requirements of section 409A of the Code, without the consent of Stockholders or Participants; provided, no action taken without the consent of an affected Participant may materially impair the rights of such Participant with respect to any Stock Units credited to his or her Stock Unit Account at the time of such change or termination.

XI.3         Compliance With Laws and Obligations.  The Company will not be obligated to issue or deliver Shares in connection with the Plan in a transaction subject to the registration requirements of the Securities Act of 1933, as amended, or any other federal or state securities law, any requirement under any listing agreement between the Company and any national securities exchange or automated quotation system or any other laws, regulations, or contractual obligations of the Company, until the Company is satisfied that such laws, regulations and other obligations of the Company have been complied with in full. Certificates representing Shares

delivered under the Plan will be subject to such restrictions as may be applicable under such laws, regulations and other obligations of the Company.

XI.4         Limitations on Transferability.  Stock Units and any other right under the Plan will not be transferable by descent and distribution (or to a designated beneficiary in the event of a Participant’s death), Stock Units and other rights under the Plan may not be pledged, mortgaged, hypothecated or otherwise encumbered, and shall not be subject to the claims of creditors of any Participant.

XI.5         Governing Law.  The validity, construction and effect of the Plan and any agreement hereunder will be determined in accordance with (i) the Delaware General Corporation Law, and (ii) to the extent applicable, other laws (including those governing contracts) of the State of Illinois.

XI.6         Plan Termination.  Unless earlier terminated by action of the Board, which termination shall be subject to the requirements of section 409A of the Code, the Plan will remain in effect until such time as no Shares remain available for delivery under the Plan and the Company has no further rights or obligations under the Plan.

EX-10.34

Exhibit 10.34

UNITED STATIONERS SUPPLY CO.

AMENDED AND RESTATED DEFERRED COMPENSATION PLAN

(Effective as of January 1, 2009)

ARTICLE I.  Purpose

The purpose of the Plan is to assist a select group of key management in their financial and retirement planning by providing a means for the deferral of a portion of their current compensation.  It is anticipated that this will aid in attracting and retaining the key management required for the continued growth and profitability of United Stationers Inc. and its subsidiaries.  This Plan is an amendment and restatement as of January 1, 2009 (“Effective Date”) of the United Stationers Supply Co. Deferred Compensation Plan in effect prior to the Effective Date.  The Plan is not intended to qualify under section 401(a) of the Internal Revenue Code of 1986, as amended (“Code”), or to be subject to Part 2, 3 or 4 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  It is intended that the provisions of the Plan conform to the requirements of section 409A of the Code and the Plan will be interpreted in all respects in accordance with such requirements.  Any references in the Plan to section 409A of the Code include references to applicable guidance issued thereunder.

ARTICLE II.  Participation

1.Eligibility.  All exempt employees classified as Grade 1, 2, 3, 4 or 5 of United Stationers Supply Co. or any other direct or indirect subsidiary of United Stationers Inc. permitted to participate in the Plan by the Committee (as hereafter defined) (“Company”) are eligible to participate in the Plan.

2.Election to Defer.

(a)Each Participant may elect to defer any portion of future compensation, either base salary or cash bonus, or both (and in no event will any deferral election be given effect with respect to a stock option or stock appreciation right), (“Deferred Amount”) by filing with the Committee (or its delegate) a properly completed Deferred Amount Form(s) (“Deferral Election Form”) stating the percentage of base salary and/or percentage of cash bonus to be deferred.  Subject to the following two sentences, the election to defer base salary and/or cash bonus must be submitted no later than the last day of the designated election period that ends on or prior to December 31 of the calendar year immediately preceding the calendar year to which the election applies. [However, for the period commencing on the Effective Date, the Participant must make the election or reelect with respect to amounts deferred under the Plan prior to the Effective Date.]  For the first year in which the employee becomes eligible, the Participant must make the election within 30 days after the date the employee becomes eligible.  A new Deferral Election Form must be submitted each year.  For any year the Company may establish minimum or maximum deferral amounts.

(b)If a Participant receives a hardship withdrawal from a qualified retirement plan of the Company or any other Related Company and, as a result of such withdrawal, is precluded by the terms of the qualified retirement plan from making deferrals under the Plan, then the Participant’s deferral election shall be cancelled and any future deferral elections by such Participant shall be subject to the provisions of subparagraph (a) immediately above.  The term “Related Company” means any corporation or trade or business during any period which it is, along with United Stationers, Inc., a member of a controlled group of trades or businesses, as described in section 414(b) and 414(c),

1

respectively, of the Code; provided, however that whether a corporation, trade or business is a Related Company shall be determined by substituting “more than 50 percent” for “at least 80 percent” where applicable with respect to sections 414(b) and 414(c).

3.Deferred Accounts.

(a)The Company shall establish an unfunded notional deferred account (“Account”) for each Participant.  Such Account shall be credited with the amount of compensation deferred and reduced by each payment.

(b)Prior to the Effective Date for Accounts as of the Effective Date and with each Deferral Election Form executed by a Participant on or after the Effective Date, each Participant shall elect an investment preference for purposes of calculating a rate of return on the Participant’s Account, in accordance with procedures established by the committee administering the Plan as set forth in Article IV (“Committee”).  Within the month of December to be effective as of January 1st of the following calendar year or at such other time or times determined by the Committee, each Participant may change the Participant’s election of an investment preference for purposes of calculating a rate of return on the Participant’s Account, in accordance with procedures established by the Committee.  Unless determined otherwise by the Committee, the investment preferences among which the Participant may elect shall be the investment funds under the United Stationers 401(k) Savings Plan (“401(k) Savings Plan”).  The investment preference selected by the Participant shall remain in effect until a new investment election is filed in accordance with procedures established by the Committee, provided such procedures comply with section 409A of the Code.  Unless otherwise determined appropriate by the Committee, the investment preference selected by the Participant shall be the investment fund (“Investment Fund”) used as a measure for determining a rate of return for the Participant’s Account.

As of the last day of each calendar quarter or such shorter applicable period or such date as determined by the Committee, each Account shall be credited or debited with a rate of return which reflects the earnings, gains and losses equal to the amount the Account would have earned, gained or lost if actually invested in the applicable Investment Funds.  For purposes of determining such rate of return, the Committee shall establish such procedures as it deems appropriate.  The Committee may at any time or from time to time change or otherwise modify the basis or the method of calculating and crediting such rate of return.

Separate accounting shall apply with respect to each Deferred Amount.

4.Company Liability.  The rights granted to the Participant or any beneficiary shall be solely those of a general unsecured creditor.  The Plan constitutes a mere promise by the Company to make benefit payments in the future.  The Company shall not be required to fund or otherwise segregate assets to be used for payment of benefits under the Plan.  The Company may maintain a trust (“Trust”) to hold assets to be used for payment of benefits under the Plan and may make investments in amounts equal or unequal to amounts payable hereunder but the Company shall not be under any obligation to establish a Trust or make such investments and the assets of any such Trust and such investments shall remain an asset of the Company subject to the claims of the Company’s general creditors.  Any payments by the Trust to a Participant of benefits under the Plan shall be considered payments by the Company and shall discharge the Company of any liability under the Plan for such payments.  The Plan, and any action taken pursuant to it, are not to be construed as creating a fiduciary relationship of any kind.

2

ARTICLE III.  Payment of Deferred Amounts

1.Time and Method of Payment.

(a)Subject to the provisions of paragraphs 2 and 3 of this Article III, the following provisions of this paragraph 1, and the other terms and conditions of the Plan, payment of a Participant’s Account balance, determined as of [the last day of the calendar month] immediately preceding the Payment Date (as defined below) shall be made (or shall begin to be distributed) to the Participant with respect to the applicable permitted Payment Events (as defined below) and in the permitted Payment Methods, each as elected by the Participant in his or her first deferral election under the Plan (or, with respect to any person who was a Participant in the Plan immediately prior to the Effective Date, as elected in the Deferral Election Form on file with respect to the Participant on December 31, 2008) and simultaneously with the filing of subsequent Deferral Election Forms.  For purposes of the Plan, with respect to each Deferred Amount:

(i)permissible “Payment Methods” are (A) a lump sum payment or (B) a series of periodic installments (if monthly installments, to be not less than 12 nor more than 120 or, if annual installments, to be not more than 10); and

(ii)permissible “Payment Events” are (A) occurrence of the date specified by the Participant, (B) the Participant’s death, (C) termination of the Participant’s employment with the Company and all Related Companies by reason of the Participant’s incurrence of a Disability, (D) a Change of Control of United Stationers, Inc., or (E) termination of the Participant’s employment with the Company and all Related Companies for any reason [other than the Participant’s death or Disability].

The Participant may elect to receive payment upon the earliest to occur of one or more of the permissible Payment Events as selected by the Participant in his or her Deferral Election Form and the Participant’s payment election shall designate the calendar year in which payments shall commence or such other manner and pursuant to such other procedures as the Committee may prescribe, provided such other manner and procedures comply with section 409A of the Code.  The “Payment Date” with respect to a Deferred Amount (as adjusted for deemed earnings and losses in accordance with paragraph 3 of Article II) shall be the date on which payment is made in full (in the case of an election to receive a single lump sum payment) or the date on which payment commences (in the case of an election to receive periodic installment payments).  If a Participant elects a lump sum payment, the Payment Date for such lump sum payment will be January [15] of the calendar year selected by the Participant.  If a Participant elects periodic installment payments, the Payment Date for the initial installment payment will be January [15] of the calendar year selected by the Participant.  If a Participant fails to submit a payment election setting forth a Payment Event, Payment Date and/or a Payment Method with a Deferral Election Form and the Participant previously completed a payment election specifying a Payment Event, Payment Date and a Payment Method, the Committee shall deem the most recently completed payment election of the Participant to apply to such subsequent deferral election or use such other procedures for determining payment as it may prescribe, provided such other procedures and payment method and timing comply with section 409A of the Code.  If no Payment Event is specified in any deferral election of a Participant, the Participant shall be deemed to have elected the Payment Event set forth in subparagraph (a)(ii)(E) above.  If no Payment Method is specified in any deferral election of a Participant, the Participant shall be deemed to have elected a lump sum as the Payment Method and the Payment Date shall be January [15] of the calendar year next following the calendar year in which the Participant’s termination occurs.  For purposes of section 409A of the Code, a series of installment payments shall be treated as one payment.

3

(b)With respect to periodic installment payments, the amount of each installment paid under this paragraph 1 of Article III will equal the result of dividing the applicable portion of the Participant’s Account (e.g., the applicable Deferred Amount as adjusted for deemed earnings and losses, determined as of the last day of the calendar month before the date on which such payment is made) by the number of installments remaining immediately before the payment.

(c)For purposes of the Plan, a Participant shall not be considered to have incurred a Disability unless the disability satisfies the provisions of Treas. Reg. §1.409A-3(i)(4).(1)

(d)“Change of Control” shall have the same meaning as under the United Stationers, Inc. 2004 Long-Term Incentive Plan (“LTIP”); provided, however, that a change of control event that otherwise is a Change of Control under the LTIP shall be a Change of Control for purposes of the Plan only if such event also satisfies the requirements of Treas. Reg. §1.409A-3(i)(5).

2.Changes to Time and Method of Payment.  From and after the Effective Date, a Participant may change the Payment Event, Payment Date and/or Payment Method of any Deferred Amount (including any Payment Event, Payment Date or Payment Method established pursuant to a deemed election pursuant to paragraph 1 above of this Article III) once during his or her period of participation in the Plan after the Effective Date by filing an election with the Committee.  Notwithstanding any other provision of the Plan to the contrary, any such election to change the Payment Event, Payment Date and/or Payment Method (a) shall not be effective until the date that is 12 months following the date on which it is filed with the Committee and (b) shall be effective only if it is filed with the Committee at least 12 months prior to the date on which payments are otherwise to be made (or begin) under the Plan (i.e., the date on which the first payment of the Participant’s Account is otherwise scheduled to begin pursuant to paragraph 1 above of this Article III).  If a Participant files an effective change to the Payment Event, Payment Date and/or Payment Method pursuant to this paragraph 2 of Article III, payment of the applicable portions of the Participant’s Account balance shall be made in accordance with the new payment election and such payments shall be made (or shall commence) as soon as practicable (but in no event more than 30 days) after the date which is the fifth anniversary of the date on which payment was to commence under the Participant’s prior deferral election (the “Deferred Commencement Date”).  The amount of each distribution that is payable on or after the Deferred Commencement Date shall be determined in accordance with paragraph 1 above of this Article III by substituting the Deferred Commencement Date for the Payment Date in such paragraph 1.

3.Accelerated and Alternative Payments.  Notwithstanding any election of a Payment Event, Payment Date or Payment Method by a Participant, an accelerated payment (or alternative payment, as the case may be) shall be made to the Participant or his or her beneficiary (as designated under paragraph 4) in the case of the earliest to occur of the Participant’s death, termination of employment with the Company and all Related Companies by reason of the Participant’s Disability, other voluntary or involuntary termination of employment with the Company and all Related Companies, a Change of Control of United Stationers, Inc., or in the event of an unforeseeable emergency.

(a)In the case of the Participant’s voluntary or involuntary termination of employment with the Company and all Related Companies other than by reason of death or Disability prior to receiving the full balance of his or her Account, the remaining balance shall be paid to

(1)Because the Permitted Event is termination from employment and not the disability itself, the Plan need not define “Disability” as such term is defined in section 409A.  The Plan did not include a definition, however. Is “Disability” intended to have the same meaning as under the Company’s long-term disability plan that covers the Participant?

4

the Participant in accordance with the Payment Method the Participant had elected with respect to termination of employment, provided that the addition of such different Payment Method is subject to Treas. Reg. §1.409A-2(b) (subsequent deferral elections) and Treas. Reg. §1.409A-3(j) (accelerated payments), or, if the Participant did not elect a Payment Method with respect to termination of employment, in one lump sum.

(b)Unless the date of the Participant’s death or termination by reason of Disability is the earliest Payment Event selected by the Participant in accordance with subparagraph 1(a)(ii) of this Article III and the Participant elected periodic installments as his or her Payment Method upon death or termination by reason of Disability, in the case of the Participant’s death or termination by reason of Disability prior to receiving the full balance of his or her Account, the remaining balance shall be paid to the Participant, if living, or to the Participant’s beneficiary if not, in one lump sum as soon as reasonably practicable (but in no event more than 30 days) after determination by the Committee that death has occurred or after the Participant’s termination of employment with the Company and all Related Companies by reason of Disability.  If no beneficiary has been designated, or none survives, the payment will be to the Participant’s estate.  If a beneficiary survives, but is legally disabled, the payment may be to any person deemed by the Committee to have incurred expenses for such beneficiary unless a prior claim has been made by a duly appointed guardian or legal representative.

(d)If the Participant elected Change of Control as a Payment Event pursuant to subparagraph 1(a)(ii) of this Article III and a Change of Control occurs prior to receiving the full balance of his or her Account, the remaining balance shall be paid to the Participant in accordance with the Payment Method the Participant had elected with respect to Change of Control, provided that the addition of such different Payment Method is subject to Treas. Reg. §1.409A-2(b) (subsequent deferral elections) and Treas. Reg. §1.409A-3(j) (accelerated payments).  If the Participant did not elect Change of Control as a Payment Event and a Change of Control occurs prior to receiving the full balance of his or her Account, the remaining balance shall be paid to the Participant in one lump sum as soon as reasonably practicable (but in no event more than 30 days) after the Change of Control occurs.  If the Participant’s death, Disability, or other termination of employment occurs on the date of a Change of Control, the provisions of this subparagraph (d) shall be controlling such that Change of Control shall be deemed to be the applicable Payment Event.

(e)An unforeseeable emergency for purpose of the Plan is an unanticipated emergency caused by an event beyond the control of the Participant or the Participant’s beneficiary that would result in severe financial hardship if withdrawal is not permitted.  In the case of a financial emergency the Participant may apply to the Committee in writing for an accelerated payment.  Only that portion of the Account necessary to meet the emergency, as determined by the Committee, shall be paid.  The applicant must supply all information necessary to make such a determination.  Notwithstanding anything in this paragraph (e) to the contrary, an unforeseeable emergency shall not be considered to exist for purposes of the Plan unless the financial emergency of the Participant satisfies the requirements of Treas. Reg. §1.409A-3(i)(3).

4.Designation of Beneficiary.  Each Participant shall have the continuing right to designate a beneficiary.  A Beneficiary Designation Form may be submitted to the Committee (or its delegate) at any time.  A change in beneficiary may be made by submitting a revised Beneficiary Designation Form to the Committee.  Consent of any person previously named is not required.

ARTICLE IV.  Administration

The Plan shall be administered by the members of the United Stationers Supply Co. Administrative Committee or such other committee appointed to administer the Plan by the Human Resources

5

Committee of the Board of Directors of United Stationers Inc.  The Committee may adopt such rules for carrying out the provisions and purposes of the Plan, as it deems advisable.  The Committee’s interpretations and determinations of any question arising under the Plan or any such rule shall be conclusive if not inconsistent with the provision and purposes of the Plan.  No member of the Committee shall be liable for any action taken or omitted in connection with the Plan unless attributable to his or her own willful misconduct or lack of good faith.  The Committee may permit elections under the Plan to be made electronically and references to Election Forms may mean records of electronic election forms.

ARTICLE V.  Miscellaneous

1.Transferability.  The rights and interests of the Participants under the Plan may not be transferred, assigned, pledged or encumbered except by will or by the laws of descent and distribution.

2.Binding Effect.  The plan shall bind and inure to the benefit of the Company, its affiliates and its successors by merger, consolidation, purchase or otherwise and the Participant and his or her heirs and legal representatives.

3.Status.  The Plan does not confer upon the Participant any legal right to any specific amount of compensation, or to continue in the employ of the Company, nor does it restrict the right of the Participant to terminate his or her service.  Nothing in this Plan shall interfere with or limit in any way the right of the Company to terminate or change a Participant’s employment at any time nor confer upon any Participant any right to any benefits not specifically provided by the Plan.

4.Withholding.  The Company shall deduct from any amounts being deferred or any payment any amount required by law to be withheld.

5.Other Compensation.  The adoption of this Plan shall in no way be construed as limiting the power of the Board to adopt any other compensation arrangements it deems desirable.

6.Special 409A Rules.

(a)Notwithstanding any other provision of the Plan to the contrary, if any payment hereunder is subject to section 409A of the Code, if such payment is to be paid on account of the Participant’s separation from service and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code), such payment shall be delayed until the first day of the seventh month following the Participant’s separation from service (or, if later, the date on which such payment is otherwise to be paid under the Plan).  Any payment which is to be made as of the first day of the seventh month following separation from service shall be made no later than 30 days after such date.

(b)References in the Plan to the Participant’s termination of employment (including references to the Participant’s employment termination, and to the Participant terminating employment, a Participant’s separation from service, and other similar reference) shall mean, respectively, the Participant ceasing to be employed by the Company and all Related Companies, subject to the following:

(i)The employment relationship will be deemed to have ended at the time the Participant and the applicable company reasonably anticipate that a level of bona fide services the Participant would perform for the Company and Related Companies after such date would permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36 month period (or the full period of service to the Company and Related Companies if the Participant has performed services for the Company

6

and Related Companies for less than 36 months).  In the absence of an expectation that the Participant will perform at the above-described level, the date of termination of employment will not be delayed solely by reason of the Participant continuing to be on the Company’s and Related Companies’ payroll after such date.

(ii)The employment relationship will be treated as continuing intact while the Participant is on a bona fide leave of absence (determined in accordance with Treas. Reg. §409A-1(h)).

(iii)The determination of a Participant’s termination of employment by reason of a sale of assets, sale of stock, spin-off, or other similar transaction of the Company or a Related Company will be made in accordance with Treas. Reg. §1.409A-1(h).

7.Entire Plan.  The Plan and the forms mentioned herein constitute the entire agreement between the Company and the Participant with respect hereto.

8.Modification and Termination.  The Board of Directors of United Stationers Supply Co. (“Board”) at any time, subject to the requirements of section 409A of the Code,  may amend, modify, suspend, reinstate or terminate this Plan in whole or in part or with respect to any Participants, provided that such action shall not adversely affect the rights of any Participants with respect to the amounts already deferred hereunder.

9.Governing Law.  This Plan shall be governed by the laws of the State of Illinois.  It is intended that the Plan complies with the provisions of the Code and Treasury Regulations in effect at the time of its adoption.  If such laws are later construed in such way as to make this Plan void, or its deferral benefits no longer available, then the Plan will be given effect in such manner as will best carry out the purposes and intentions of the parties.

10.Notices.  Any notice in connection with the Plan shall be in written and delivered in person or by registered or certified mail, return receipt requested. Date of delivery will be the date personally delivered or the date on the return receipt, if correctly addressed.

11.Effective Date and Term.  The Plan as amended and restated as of the Effective Date shall continue until terminated by the Board.

7

EX-10.35

Exhibit 10.35

Medical Executive Reimbursement Program (MERP)

Eligibility

Participation in the Medical Executive Reimbursement Program (“MERP”) will be limited to those active key associates in exempt grades 1 — 4 of United Stationers Supply Co. or its subsidiaries (“Company”) as determined solely by CEO discretion. Under no circumstances will the program apply to spouses or dependents.

Program

The Company will reimburse MERP participants for their medical care expenses in recognition of their key role and services provided to the Company.

General

Allowable Medical Care Expenses

Medical care expenses include the diagnosis, care, medication, treatment or prevention of disease. Expenses paid for medical care shall include those paid for the purpose of affecting any structure or function of the body and for the transportation and lodging primarily for and essential to medical care. Allowable operations or treatments affecting any portion of the body include:

·Therapy or X-ray treatments.

·Hospital services.

·Nursing services (including nurse’s board when paid by the participant).

·Medical laboratory.

·Surgery.

·Dental services.

·X-rays.

·Medicines and drugs (only items which are legally procured and generally accepted as falling within the category of medicines and drugs, whether or not requiring a prescription).

·Eye exams.

·Eyeglasses and contact lenses.

·Artificial teeth or limbs.

·Ambulance hire.

·Other diagnostic and healing services.

Expenses paid for transportation primarily for, and essential to, the rendering of medical care are allowable expenses. This includes expenses for the cost of any meals and lodging while away from home receiving medical treatment. The person’s condition must be such that the particular medical care at the institution is vital to recovery.

An expenditure, which is merely beneficial to general health, such as a vacation, is not an allowable expense.

Reimbursement of Medical Care Expenses

The Company will reimburse participants for allowable medical care expenses after all other Company or non-company insurance policies and medical plans (including Medicare and/or any other government sponsored plan) covering the participant, have paid benefits.

Active key associates participating in the MERP will be reimbursed per the following schedule:

By Salary Grades

Grade 1   $40,000 maximum per calendar year

Grade 2   $30,000 maximum per calendar year

Grade 3   $25,000 maximum per calendar year

Grade 4   $15,000 maximum per calendar year

Reimbursement of an allowable medical care expense under the MERP shall be made no later than the last day of the calendar year following the calendar year in which the expense is incurred.  All reimbursements under the MERP are subject to the participant’s timely submission of such supporting documentation and other information as the Company may request.

Amendment and Termination

The Company reserves the right in its sole discretion to amend or terminate the MERP, at any time and from time to time, in a writing that is adopted and signed by the Company’s Senior Vice President, Human Resources and, unless the amendment is ministerial or administrative in terms and effect, approved in advance by the Human Resources Committee of the Company’s Board of Directors.

Miscellaneous

The MERP is a welfare benefit program established and maintained primarily for the purpose of providing medical care benefits for a select group of management or highly compensated employees.  The MERP is subject to the attached continuation coverage rules and benefit claims and appeals procedures.

Attachments:	COBRA
	ERISA Claims and Appeals

EX-10.36

Exhibit 10.36

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made, entered into and effective as of December 31, 2008 (the “Effective Date”) by and among UNITED STATIONERS INC., a Delaware corporation (hereinafter, together with its successors, referred to as “Holding”), UNITED STATIONERS SUPPLY CO., an Illinois corporation (hereinafter, together with its successors, referred to as the “Company”, and, together with Holding, the “Companies”), and RICHARD W. GOCHNAUER, currently a resident of Winnetka, IL (hereinafter referred to as the “Executive”).

WHEREAS, the Companies and Executive are parties to an Executive Employment Agreement dated July 22, 2002 and amended as of January 1, 2003 and December 31, 2003 (the “Prior Agreement”), which the parties desire to amend and restate in its entirety as set forth in this Agreement; and

WHEREAS, in October 2004, the American Jobs Creation Act of 2004 (the “Act”) was enacted, Section 885 of which Act added new provisions to the Internal Revenue Code pertaining to deferred compensation and for which the Treasury Department has issued final regulations and guidance regarding the deferred compensation provisions of the Act permitting service providers and service recipients a transition period to modify existing deferred compensation arrangements to bring them into compliance with the Act; and

WHEREAS, the parties agree that it is in their mutual best interests to modify, amend and clarify the terms and conditions of the Prior Agreement, as set forth in this Agreement, with the full intention of complying with the Act so as to avoid the additional taxes and penalties imposed under the Act; and

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

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

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

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

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

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

Section I.Definitions.

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

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

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

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

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

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

2

that in determining whether a Change of Control has occurred, Voting Securities which are held or acquired by (i) Holding of any of its subsidiaries or (ii) an employee benefit plan (or a trust forming a part thereof) maintained by Holding or any of its subsidiaries shall not constitute a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the issuance of Voting Securities by Holding, and after such issuance of Voting Securities by Holding, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person to more than 50% of the Voting Securities of Holding, then a Change of Control shall occur; (b) At any time during a period of two consecutive years, the individuals who at the beginning of such period constituted the Board (the “incumbent Board”) cease for any reason to constitute more than 50% of the Board; provided, however, that if the election, or nomination for election by Holding’s stockholders, of any new director was approved by a vote of more than 50% of the directors then comprising the Incumbent Board, such new director shall, for purposes of this subsection (b), be considered as though such person were a member of the Incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of (i) either an actual “Election Consent” (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by reason of an agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest; (c) Consummation of a merger, consolidation or reorganization or approval by Holding’s stockholders of a liquidation or dissolution of Holding or the occurrence of a liquidation or dissolution of Holding (“Business Combination”), unless, following such Business Combination: (1) the Persons with Beneficial Ownership of Holding, immediately before such Business Combination, have Beneficial Ownership of more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity) resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns Holding or all or substantially all of Holding’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) in substantially the same proportions as their Beneficial Ownership of the Voting Securities immediately before such Business Combination, (2) the individuals who were members of the Incumbent Baud immediately prior to the execution of the initial agreement providing for such Business Combination constitute more than 50% of the members of the board of directors (or comparable governing body of a noncorporate entity) of the Surviving Company; and (3) no Person (other than Holding, any of its subsidiaries or any employee benefit plan (or any trust forming a part thereof) maintained by Holding, the Surviving Company or any Person who immediately prior to such Business Combination had Beneficial Ownership of 30% or more of the then Voting Securities) has Beneficial Ownership of 30% or more of the then combined voting power of the Surviving Company’s then outstanding voting securities; provided, that notwithstanding this clause (3), a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; or (d) Approval by Holding’s stockholders of an agreement for the assignment, sale, conveyance, transfer, lease or other disposition of all or substantially all of the assets of Holding to any Person (other than a subsidiary of Holding or other entity, the Persons with Beneficial Ownership of which are the same Persons with Beneficial Ownership of Holding and such Beneficial Ownership is in substantially the same proportions), or the occurrence of the same. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional

3

number of shares Beneficially Owned by such Person; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such acquisition of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person, then a Change of Control shall occur.

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

“Good Reason” shall mean (i) any material breach by the Companies of this Agreement without Executive’s written consent, (ii) any material reduction, without the Executive’s written consent, in the Executive’s duties, responsibilities or authority; provided, however, that for purposes of this clause (ii), a change in the number or identity of the Executive’s direct reports shall not be deemed by itself to materially reduce Executive’s duties, responsibilities or authority as long as Executive continues to report to either the Chief Executive Officer or Board of the Companies prior to the end of the first quarter of the calendar year 2003 and thereafter or such earlier date as the Executive begins serving as President and Chief Executive Officer of the Companies solely to the Board of the Companies, or (iii) without Executive’s written consent: (A) a material reduction in the Executive’s Base Salary,(B) the relocation of the Executive’s principal place of employment more than fifty (50) miles from its location on the Effective Date of this Agreement, or (C) the relocation of the Company’s corporate headquarters office outside of the Chicago, IL metropolitan area. For purposes of this Agreement, a Change of Control, alone, does not constitute Good Reason. Furthermore, notwithstanding the above, the occurrence of any of the events described above will not constitute Good Reason unless the Executive gives the Companies written notice within thirty (30) days after the initial occurrence of any of such events that the Executive believes that such event constitutes Good Reason, and the Companies thereafter fail to cure any such event within sixty (60) days after receipt of such notice.

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

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

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

“Annual Bonus”	Section 4(b)
“Base Salary”	Section 4(a)
“Bonus Plan”	Section 4(b)
“Confidential information or proprietary data”	Section 6(a)(2)
“Customer”	Section 6(d)(2)
“Disability”	Section 5(c)
“Employment Period”	Section 2
“Retirement”	Section 5(f)
“Term” and “Termination Date”	Section 2

4

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

Section 3.Duties.

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

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

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

(a)the Executive shall receive, at such intervals and in accordance with such Company payroll policies as may be in effect from time to time, an annual salary (pro rata for any partial year) equal to $900,000.00 (“Base Salary”). The Base Salary shall be reviewed by the Board from time to time and may, in the Board’s sole discretion, be increased when deemed appropriate by the Board; if so increased, it shall not thereafter be reduced (other than an across-the-board reduction applied in the same percentage at the same time to all of the Companies’ senior executives at the same grade level).

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

5

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

(d)the Executive shall be entitled to participate in all incentive, savings and retirement plans, stock option plans, practices, policies and programs applicable generally to other senior executives of the Companies at the senior grade level and as determined by the Board from time to time;

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

(f)the Executive shall be entitled to twenty (20) paid vacation days per calendar year (pro rata for any partial year); and

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

Section 5.Termination of Employment.

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

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

(c)If the Employment Period is terminated prior to the expiration of the Term by the Executive for Good Reason or by the Companies for any reason other than Cause or the Executive’s permanent disability, as defined in the Companies’ Board approved disability plan or policy as in effect from time to time (“Disability”) and other than within two (2) years following a Change of Control, then, as the Executive’s exclusive right and remedy in respect of such termination:

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

(ii)the Executive shall be entitled to an amount equal to two (2) times the Executive’s then existing Base Salary, to be paid in such intervals and at such times in accordance with the

6

Company’s payroll practices in effect from time to time over the twenty-four (24) month period following the Termination Date; but in no event shall such amount paid under this Section 5(c)(ii) exceed the lesser of (A) $460,000.00 or (B) two (2) times Executive’s annualized compensation based upon the annual rate of pay for services to the Companies for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service), consistent with the parties’ intention that the payments under this Section 5(c)(ii) constitute a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

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

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

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

(vi)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Termination Date, beginning on the Termination Date and continuing until the earlier of (A) the twenty-four (24) month anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer, provided that Executive timely pays the Executive’s portion of such coverage and provided further that if the Company determines that the coverage to be provided under this Section 5(c)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(c)(v)

7

that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(vii)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 24 month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date;

(viii)if the Executive’s outstanding stock options have not by then fully vested pursuant to the terms of the Companies’ applicable stock option plan(s) and applicable stock option agreement(s), then to the extent permitted in the Companies’ applicable stock option plan(s) and as provided in the applicable option agreement(s), the Executive shall continue to vest in Executive’s unvested stock options following the Termination Date;

(ix)the Executive shall receive a lump sum cash payment, payable to Executive within thirty (30) days following the Termination Date, in an amount equal to the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had five (5) additional years of credit for purposes of age, benefit service and vesting;

(x)for purposes of any outstanding equity-based compensation award agreement with the Companies to which the Executive is a party as of the Termination Date, Executive shall be credited with five (5) additional years of service for purposes of determining whether the definition of “Retirement” contained in any such award agreement has been satisfied; and

(xi)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition assistance services provided by a career transition assistance firm selected by the Executive and paid for by the Companies in an amount not to exceed twenty percent (20%) of the sum of (i) the Executive’s then existing Base Salary and (ii) the target incentive compensation award for the calendar year during which the Termination Date occurs. The Executive shall not be eligible to receive cash in lieu of executive level career transition assistance services.

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

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

(ii)the Executive shall be entitled to a lump-sum payment in an amount equal to three (3) times the Executive’s then existing Base Salary, to be paid within thirty (30) days following the Termination Date;

(iii)the Executive shall be entitled to a lump-sum payment in an amount equal to three (3) times the greater of (A) the target incentive compensation award for the calendar year during

8

which the Termination Date occurs or (B) the average of the Executive’s Annual Bonuses for the three (3) prior calendar years, to be paid within thirty (30) days following the Termination Date;

(iv)the Executive shall be entitled to a lump-sum payment to be paid within thirty (30) days following the Termination Date in an amount equal to the pro-rata target incentive compensation award for the calendar year during which the Termination Date occurs. Such pro-rata target incentive compensation award shall be determined by multiplying the target incentive compensation award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365);

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Change of Control, beginning on the Termination Date and continuing until the earlier of (A) the third anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer; provided that the Executive timely pays the Executive’s portion of such coverage, and provided further that if the Company determines that the coverage to be provided under this Section 5(d)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(d)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 36-month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date;

(vii)the Executive shall receive a lump sum cash payment, payable to Executive within thirty (30) days following the Termination Date, in an amount equal to the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had eight (8) additional years of credit for purposes of age, benefit service and vesting;

(viii)if the Executive’s outstanding stock options have not by then fully vested pursuant to the terms of the Companies’ applicable stock option plan(s) and applicable option agreement(s), then to the extent permitted in the Companies’ applicable stock option plan(s) and as provided in the applicable stock option agreement(s), the Executive shall continue to vest in Executive’s unvested stock options following the Termination Date;

(ix)for purposes of any outstanding equity-based compensation award agreement with the Companies to which the Executive is a party as of the Termination Date, Executive shall be

9

credited with five (5) additional years of service for purposes of determining whether the definition of “Retirement” contained in any such award agreement has been satisfied;

(x)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition assistance services provided by a career transition assistance firm selected by the Executive and paid for by the Companies in an amount not to exceed twenty percent (20%) of the sum of (i) the Executive’s then existing Base Salary and (ii) the target incentive compensation award for the calendar year during which the Termination Date occurs. The Executive shall not be eligible to receive cash in lieu of executive level career transition assistance services; and

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

(e)Except for Executive’s vested benefits under the Companies’ employee benefit plans, any amounts payable pursuant to Sections 5(c) and 5(d) above shall be considered severance payments and be in full and complete satisfaction of the obligations of the Companies to the Executive in connection with the termination of the Executive’s employment.

(f)If the Employment Period is terminated as a result of the Executive’s death, Disability or retirement, as defined in the Companies’ Board-approved retirement plan or policy, as in effect from time to time (“Retirement”), then the Executive shall be entitled to (1) the Executive’s Accrued Benefits in accordance with Section 5(a), (2) any benefits that may be payable to the Executive under any applicable Board-approved disability, life insurance or retirement plan or policy in accordance with the terms of such plan or policy, (3) a credit of five (5) additional years of service for purposes of determining whether the definition of “Retirement” contained in any outstanding equity-based compensation award agreement with the Companies to which the Executive is a party as of the Termination Date has been satisfied, and (4) a lump sum payment in an amount equal to:

(i)in the event the Employment Period is terminated as a result of Executive’s death or Disability, an amount equal to (A) the pro-rata target Annual Bonus award for the calendar year during which the Termination Date occurs by reason of the Executive’s death or Disability, such pro-rata award to be determined by multiplying the target Annual Bonus award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365), plus (B) the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had five (5) additional years of credit for purposes of age, benefit service and vesting; or

10

(ii)in the event the Employment Period is terminated as a result of Executive’s Retirement, an amount equal to: (A) the pro-rata actual Annual Bonus award for the calendar year during which the Termination Date occurs by reason of the Executive’s Retirement, such pro-rata award to be determined by multiplying the actual Annual Bonus award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365); plus (B) the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had five (5) additional years of credit for purposes of age, benefit service and vesting.

(iii)In the event the Employment Period is terminated as a result of Executive’s death, such lump sum payment shall be made within 30 days following the Termination Date; in the event the Employment Period is terminated as a result of Executive’s Disability, such lump sum payment shall be made on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date; and in the event the Employment Period is terminated as a result of Executive’s Retirement, such lump sum payment shall be made on the later of the date that Annual Bonus payments are made to other participants in the plan or the first regular payroll date of the Company to occur following the date that is six months after the Termination Date.

(g)Notwithstanding anything else contained herein, if the Executive voluntarily terminates employment without Good Reason, or the Companies terminate the Executive’s employment for Cause, all of the Executive’s rights to payment from the Companies (including pursuant to any plan or policy of the Companies) shall terminate immediately, except the right to payment for Accrued Benefits in respect of periods prior to such termination and the Executive’s vested benefits under the Companies’ employee benefit plans.

(h)Notwithstanding anything to the contrary contained in this Section 5, the Executive shall be required to execute the Companies’ then current standard release agreement as a condition to receiving any of the payments and benefits provided for in Sections 5(c) and (d), excluding the Accrued Benefits in accordance with Section 5(a), and no payments and benefits provided for in Sections 5(c) and (d) other than the Accrued Benefits in accordance with Section 5(a) shall be payable to Executive unless and until all applicable consideration and rescission periods for the release agreement have expired, Executive has not rescinded the release agreement and Executive is in compliance with each of the terms and conditions of such release agreement and this Agreement as of the date of such payments and benefits. It is acknowledged and agreed that the then current standard release agreement shall be a mutual release and shall not diminish or terminate the Executive’s rights under this Agreement or the Indemnification Agreement.

(i)Upon termination of the Executive’s employment with the Companies, subject to the Executive’s affirmative obligations pursuant to Section 6, the Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Companies under this Agreement.

(j)Notwithstanding any provision to the contrary contained in this Agreement, if the cash payments due and the other benefits to which Executive shall become entitled under Section 5(d), either alone or together with other payments in the nature of compensation to Executive which are contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company or otherwise, would constitute a “parachute payment” (as defined in Section 280G of the Code or any successor provision thereto), such payments or benefits shall be reduced (but not below zero) to the largest aggregate amount as will result in no portion thereof being subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or being non-deductible to

11

the Company for Federal Income Tax purposes pursuant to Section 280G of the Code (or any successor provision thereto), provided, however, that no such reduction shall occur, and this Section 5(j) shall not apply, in the event that the amount of such reduction would be more than 10% of the aggregate value of such payments and benefits.  The Companies shall in good faith determine the amount of any reduction to be made pursuant to this Section 5(j), and shall make such reduction by first reducing amounts payable under Section 5(d)(i) and thereafter by reducing amounts payable under the following Sections of this Agreement in the following order, as necessary to achieve the reduction:  5(d)(iii), 5(d)(iv), 5(d)(vi), 5(d)(vii).  Amounts payable as reimbursements under Sections 5(d)(v) and 5(d)(x), if any, shall not be subject to reduction.  No modification of, or successor provision to, Section 280G or Section 4999 subsequent to the date of this Agreement shall, however, reduce the benefits to which the Executive would be entitled under this Agreement in the absence of this Section 5(j) to a greater extent than they would have been reduced if Section 280G and Section 4999 had not been modified or superseded subsequent to the date of this Agreement, notwithstanding anything to the contrary provided in the first sentence of this Section 5(j).

(k)Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that Section 5(j) above does not apply and any payment or distribution of any type to or in respect of the Executive made directly or indirectly, by the Companies, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), is or will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

(i)All computations and determinations relevant to Section 5(k) and this subsection 5(k)(i) shall be made by a national accounting firm selected and reimbursed by the Companies from among the ten (10) largest accounting firms in the United States as determined by gross revenues (the “Accounting Firm”), subject to the Executive’s consent (not to be unreasonably withheld), which firm may be the Companies’ accountants. Such determinations shall include whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code). In making the initial determination hereunder as to whether a Gross-Up Payment is required, the Accounting Firm shall determine that no Gross-Up Payment is required if the Accounting Firm is able to conclude that no “Change of Control” has occurred (within the meaning of Section 280G of the Code). If the Accounting Firm determines that a Gross-Up Payment is required, the Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter both to the Companies and the Executive by no later than thirty (30) days following the Termination Date, if applicable, or such earlier time as is requested by the Companies or the Executive (if the Executive reasonably believes that any of the Total Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Companies with a written statement that such Accounting Firm has concluded that it is more likely than not that no Excise Tax is payable (including the reasons therefor) and the Executive is not required to report any Excise Tax on Executive’s federal income tax return.

(ii)If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within twenty (20) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Companies by the Accounting Firm. Any

12

determination by the Accounting Firm shall be binding upon the Companies and the Executive, absent manifest error.

(iii)As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Companies should have been made (“Underpayment’), or that Gross-Up Payments will have been made by the Companies which should not have been made (“Overpayment?). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Companies to or for the benefit of the Executive.

(iv)In the case of an Overpayment, the Executive shall, at the direction and expense of the Companies, take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by the Companies, and otherwise reasonably cooperate with the Companies to correct such Overpayment, provided, however, that the Executive shall not in any event be obligated to return to the Companies an amount greater than the portion of the Overpayment that Executive has retained or has recovered as a refund from the applicable taxing authorities.

(v)The Executive shall notify the Companies in writing of any claim by the Internal Revenue Service relating to the possible application of the Excise Tax under Section 4999 of the Code to any of the payments and amounts referred to herein and shall afford the Companies, at their expense, the opportunity to control the defense of such claim (for the sake of clarity, if the Internal Revenue Service is successful in any such claim or the Executive reaches a final settlement with the Internal Revenue Service with respect to such claim (after having afforded the Companies, at their expense, the opportunity to control the defense of such claim), the amount of the Excise Tax resulting from such successful claim or settlement shall be determinative as to whether or not there has been an Underpayment or an Overpayment for purposes of subsection 5(k)(iii).

(vi)Without limiting the intent of this Section 5(k) to make the Executive whole, on an after-tax basis, from the application of the Excise Taxes, all determinations by the Accounting Firm shall be made with a view to minimizing the application of Sections 280G and 4999 of the Code of any of the Total Payments, subject, however, to the following: the Accounting Firm shall make its determination on the basis of “substantial authority” (within the meaning of Section 6230 of the Code) and shall provide opinions to that effect to both the Companies and the Executive upon the request of either of them.

(vii)Notwithstanding any provision above to the contrary, any Gross-Up Payment payable under this Section 5(k) shall be made by the end of the calendar year following the calendar year in which the Executive remits the taxes.  Further, notwithstanding any provision above to the contrary, any right to reimbursement under this Section 5(k) of expenses incurred by Executive due to a tax audit or litigation addressing the existence or amount of a tax liability shall be made by the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or litigation are remitted, or where as a result of the audit or litigation no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.  Any Gross-Up Payment and any reimbursement of expenses payable under this Section 5(k) shall not be made before the date that is six months after the Termination Date.

13

Section 6.Further Obligations of the Executive.

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

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

(i)Business, financial and strategic information, such as sales and earnings information and trends, material, overhead and other costs, profit margins, accounting information, banking and financing information, pricing policies, capital expenditure/investment plans and budgets, forecasts, strategies, plans and prospects.

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

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

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

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

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

14

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

(c)During the twenty-four (24) month period following the end of the Executive’s employment with the Companies, the Executive shall not within the United States and Canada in any capacity (whether as an owner, employee, consultant or otherwise) perform, manage, supervise, or be responsible or accountable for anyone else who is performing services which are the same as, substantially similar or related to the services the Executive provided for the Companies or their Subsidiaries during the last two years of the Executive’s employment by the Companies — for, or on behalf of, any other Person who or which is (1) a wholesaler of office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (2) a provider of services the same as or substantially similar to those provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, or (3) engaged in a line of business other than described in (1) or (2) hereinabove which is the same or substantially similar to the lines of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.

(d)(1) During (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the twenty-four (24) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer with respect to the purchase of (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines, or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (B) services the same as or substantially similar to those provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, for or on behalf of any Person other than the Companies or any of their Subsidiaries. Also, (i) during the Executive’s employment by the Companies, whether during or after the Employment Period and (ii) for the twenty-four (24) month period following the end of the Executive’s employment with the Companies, if the Executive is employed by a Supplier, the Executive shall not at any time, directly or indirectly, solicit any Customer to switch the purchase of the products or services described hereinabove from the Companies or their Subsidiaries to Supplier.

(2) For purposes of this Agreement, a “Customer” is any Person who or which has ordered or purchased by or from the Companies or any of their Subsidiaries (A) office products, including traditional

15

office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing, (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period. For purposes of this Agreement, a “Supplier” is any Person who or which has furnished to the Companies or their Subsidiaries for resale (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or nor related to the foregoing (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period.

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

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

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

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

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

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

16

the posting of any bond or other security, in addition to all other legal remedies to which the Companies may be entitled.

Section 7.Successors. The Companies may assign their rights under this Agreement to any successor to all or substantially all the assets of the Companies, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Companies. Any such assignment by the Companies shall remain subject to the Executive’s rights under Section 5 hereof. The rights of the Executive under this Agreement may not be assigned or encumbered by the Executive, voluntarily or involuntarily, during the Executive’s lifetime, and any such purported assignment shall be void ab initio. Notwithstanding the foregoing, all rights of the Executive under this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, estates, executors, administrators, heirs and beneficiaries. All amounts payable to the Executive hereunder shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs or representatives.

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

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

Section 10.Amendment. This Agreement may not be amended or modified at any time except by a written instrument approved by the Board, and executed by the Companies and the Executive; provided, however, that any attempted amendment or modification without such approval and execution shall be null and void ab initio and of no effect.

Section 11.Payment; Taxes and Withholding. The Company shall be responsible as employer for payment of all cash compensation and severance payments provided herein and Holding shall cause the Company to make such payments. The Executive shall not be entitled to receive any additional compensation from either of the Companies for any services the Executive provides to Holding or the Companies’ Subsidiaries. The Company shall be entitled to withhold from any amounts to be paid to the Executive hereunder any federal, state, local, or foreign withholding or other taxes or charges which it is from time to time required to withhold. The Company shall be entitled to rely on an opinion of counsel if any question as to the amount or requirement of any such withholding shall arise.  Executive shall be solely responsible for the payment of all taxes due and owing with respect to wages, benefits and other compensation provided to him hereunder. This Agreement is intended to satisfy, or be exempt from, the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.

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

17

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

If to the Companies:

United Stationers Inc.

United Stationers Supply Co.

One Parkway North Blvd.

Suite 100

Deerfield, IL 60015-2559

Attention: General Counsel

If to the Executive:

Richard W. Gochnauer

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

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

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

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

made a part hereof. The parties shall execute the Indemnification Agreement contemporaneously with the execution of this Agreement.

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

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

18

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

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

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

Section 22.Entire Agreement. This Agreement, including the Indemnification Agreement and any other written undertakings by the Executive referred to herein, supersedes all other agreements, arrangements or understandings (whether written or oral) between the Companies and the Executive with respect to the subject matter of this Agreement, including without limitation the Prior Agreement and the Executive’s employment relationship with the Companies and any of their Subsidiaries, and this Agreement contains the sole and entire agreement among the parties hereto with respect to the subject matter hereof.

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

UNITED STATIONERS INC.
By:
	Frederick B. Hegi
	Chairman
UNITED STATIONERS SUPPLY CO.
EXECUTIVE:
By:
	Richard W. Gochnauer

19

EX-10.37

Exhibit 10.37

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), is made, entered into and effective as of December 31, 2008 (the “Effective Date”) by and among UNITED STATIONERS INC., a Delaware corporation (hereinafter, together with its successors, referred to as “Holding”), UNITED STATIONERS SUPPLY CO., an Illinois corporation (hereinafter, together with its successors, referred to as the “Company”, and, together with Holding, the “Companies”), and Stephen A. Schultz (hereinafter referred to as the “Executive”) and specifically, supersedes the Executive Employment Agreement Executive entered into with the Companies on July 1, 2002.

WHEREAS, the Companies and Executive are parties to an Executive Employment Agreement dated May 18, 2005 (the “Prior Agreement”), which the parties desire to amend and restate in its entirety as set forth in this Agreement; and

WHEREAS, in October 2004, the American Jobs Creation Act of 2004 (the “Act”) was enacted, Section 885 of which Act added new provisions to the Internal Revenue Code pertaining to deferred compensation and for which the Treasury Department has issued final regulations and guidance regarding the deferred compensation provisions of the Act permitting service providers and service recipients a transition period to modify existing deferred compensation arrangements to bring them into compliance with the Act; and

WHEREAS, the parties agree that it is in their mutual best interests to modify, amend and clarify the terms and conditions of the Prior Agreement, as set forth in this Agreement, with the full intention of complying with the Act so as to avoid the additional taxes and penalties imposed under the Act; and

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

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

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

1

Executive’s employment may be terminated without compensation in the event of a Change of Control; and

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

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

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

Section 1.Definitions.

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

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

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

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

2

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

“Change of Control” shall meant (a) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of the combined voting power of Holding’s then outstanding voting securities entitled to vote generally in the election of directors (“Voting Securities”); provided, however, that the acquisition or holding of Voting Securities by (i) Holding of any of its subsidiaries, (ii) an employee benefit plan (or a trust forming a part thereof) maintained by Holding or any of its subsidiaries, or (iii) any Person in which the Executive has a substantial equity interest shall not constitute a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued.; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the issuance of Voting Securities by Holding, and after such issuance of Voting Securities by Holding, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person to more than 50% of the Voting Securities of Holding; then a Chang: of Control shall occur; (b) At any time during a period of two consecutive years, the individuals who at the beginning of such period reinstituted the Board (the “Incumbent Board”) cease for any reason to constitute more than 50% of the Board;

3

provided, however, that if the election. or nomination for election by Holding’s stockholders, of any new director was approved by a vote of more than 50% of the directors then comprising the Incumbent Board, such new director shall, for purposes of this subsection (b), be considered as though such person were a member of the, incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of (i) either an actual “Election Consent” (as described in Rule 14a-11  promulgated unde(r) the Exchange Act) or other actual solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by reason of an agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest: (c) Consummation of a merger, consolidation or reorganizations or approval by Holding’s stockholders of a liquidation or dissolution of Holding or the occurrence of a liquidation or dissolution of Holding (“Business Combination”), unless, following such Business Combination: (I) the Persons with Beneficial Ownership of Holding, immediately before such Business Combination, have Beneficial Ownership of more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity) resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns Holding or all or substantially all of Holding’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) in substantially the same proportions as their Beneficial Ownership of the Voting Securities immediately before such Business Combination, (2) the individuals who were members of the Incumbent Board immediately prior to the execution of the initial agreement providing for such Business Combination constitute more than 50% of the members of the board of directors (or comparable governing by of a noncorporate entity) of the Surviving Company; and (3) no Person (other than Holding, any of its subsidiaries or any employee benefit plan (Or any trust forming a part thereof) maintained by Holding, the Surviving Company or any Person who immediately prior to such Business Combination had Beneficial Ownership of 30% or more of the then Voting Securities) has Beneficial Ownership of 30% or more of the then combined voting power of the Surviving Company’s then outstanding voting securities; provided, that notwithstanding this clause (3), a Change of Control shall not be deemed to occur solely because any Person acquirer. Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Security so issued; provided, however that a Business Combination with a Person in which the Executive has a substantial equity interest shall not constitute a Change of Control, or (d) Approval by Holding’s stockholders of an agreement for the assignment, sale, conveyance, transfer, !case or other disposition of all or substantially all of the assets of Holding to any Person (other than a Person in which the Executive has a substantial equity interest and other than a subsidiary of Holding or other entity, the Persons with Beneficial Ownership of which are the same Persons with Beneficial Ownership of Holding and such Beneficial. Ownership is in substantially the same proportions), or the occurrence of the same. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely

4

because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by such Person; provided that if a Change of Control would occur but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such acquisition of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person, then a Change of Control shall occur.

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

“Good Reason” shall mean (i) any material breach by the Companies of this Agreement without Executive’s written consent, (ii) any material reduction, without the Executive’s written consent, in the Executive’s duties, responsibilities or authority; provided, however, that for purposes of this clause (ii), neither (A) a change in the Executive’s Supervising Officer or the number or identity of the Executive’s direct reports, nor (B) a change in the Executive’s title, duties. responsibilities or authority was result of a realignment or restructuring of the Companies’ executive organizational chart nor (C) a change in the Executive’s title, duties, responsibilities or authority as a result of a realignment or restructuring of the Companies shall necessarily be deemed by itself to materially reduce Executive’s duties, responsibilities or authority, as long as, in the case of either (A), (B) or (C), Executive continues to report to either the Chief Executive Officer or Chief Operating Officer of the Companies or to the Supervising Officer to whom he reported immediately prior to the Change of Control or a Supervising Officer of equivalent responsibility and authority, or (iii) without Executive’s written consent: (A) a material reduction in the Executive’s Base Salary, (B) the relocation of the Executive’s principal place of employment more than fife (50) miles from its location on the date of a Change in Control, or (C) the relocation of the Company’s corporate headquarters office outside of the metropolitan area in which it is located on the date of a Change in Control. For purposes of this Agreement, a Change of Control, atone, does not constitute Good Reason. Furthermore, notwithstanding the above, the occurrence of any of the events described above will not constitute Good Reason unless the Executive gives the Companies written notice within thirty (30) days after the initial occurrence of any of such events that the Executive believes that such event constitutes Good Reason, and the Companies thereafter fail to cure any such event within sixty (60) days after receipt of such notice.

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

“Subsidiary” shall mean, with respect to any Person, any other Person of which such

5

first Person owns 20% or more of the economic interest in such Person or owns or has the power to vote, directly or indirectly, securities representing 20% or more of the votes ordinarily entitled to be cast for the election of directors car other governing Persons.

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

Annual Bonus”	Section 4(b)
“Base Salary”	Section 4(a)
“Bonus Plan”	Section 4(b)
“Confidential information or proprietary data”	Section 6(a)(2)
“Customer”	Section 6(d)(2)
“Disability”	Section 5(c)
“Employment Period”	Section 2
“Retirement”	Section 5(f)
“Supervising Officer”	Section 3(a)
“Term” and “Termination Date”	Section 2

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

Section 3,Duties.

(a)During the Employment Period, the Executive (1) shall serve as Group President, Lagasse, Inc. and ORS Nasco, Inc., a subsidiary of the Companies, (ii) shall report directly to an officer of the Companies (the “Supervising Officer”) who shall be selected by the Board or the Chief Executive Officer in its or his or her sole discretion, (iii) shall. subject to and in accordance with the authority and direction of the Board and/or the Supervising Officer have such authority and perform in a diligent and competent manner- such duties as may be assigned to the Executive from time to time by the Board and/or the Supervising Officer and (iv) shall devote the Executive’s best efforts and such time, attention, knowledge and skill to the operation of the business and affairs of the Companies as shall be necessary to perform the Executive’s duties. During the Employment Period, the Executive’s place of performance for the Executive’s duties and responsibilities shall be at

6

the Companies’ corporate headquarters office, unless another principal place of performance is a(g)reed in writing among the parties and except for required travel by the Executive on the Companies’ business or as may be reasonably required by the Companies.

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

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

(a)the Executive shall receive, at such intervals and in accordance with such Company payroll policies as may be in effect from time to time, an annual salary (pro rata for any partial year) equal to $380,000.16 (.”Base Salary”). The Base Salary shall be reviewed by the Board from time to time and may, in the Board’s sole discretion, be increased when deemed appropriate by the Board; if so increased, it shall not thereafter be reduced (other than an across-the-board reduction applied in the same percentage at the same time to all of the Companies’ senior executives at the same grade level);

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

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

(d)the Executive shall be entitled to participate in all (i)ncentive, savings and retirement plans, stock option plans, practices, policies and programs applicable generally to other senior executives of the Companies at the same grade level and as determined by the Board from time to time;

(e)the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans.

7

practices, policies and programs provided by the Company to senior executives of the Companies; at the same grade level (including, without limitation. medical, prescription. dental, disability, salary continuance, employee life, group life, and accidental death and travel accident insurance plans and programs) to the extent applicable generally to other executives of the Companies at the same grade level;

(f)the Executive shall be entitled to not less than twenty (20) paid vacation days per calendar year (pro rata for any partial year); and

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

Section 5.Termination of Employment.

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

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

(c)If the Employment Period, is terminated prior to the expiration of the Term by the Companies for any reason other than Cause or the Executive’s permanent disability, as defined in the Companies’ Board-approved disability plan or policy as in effect from time to time (“Disability”) and other than within two (2) years following a Change of Control, then, as the Executive’s exclusive right and remedy in respect of such termination:

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

(ii)the Executive shall be entitled to an amount equal to one and one-half (1 1/2 )

8

times the Executive’s then existing Base Salary, to be paid in such intervals and at such times in accordance with the Company’s payroll practices in effect from time to time over the eighteen (18) month period following the Termination Date; but in no event shall such amount paid under this Section 5(c)(ii) exceed the lesser of (A) $460,000.00 or (B) two (2) times Executive’s annualized compensation based upon the annual rate of pay for services to the Companies for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service), consistent with the parties’ intention that the payments under this Section 5(c)(ii) constitute a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(iii)in the event that an amount equal to one and one-half times (1½) the Executive’s then-existing Base Salary exceeds the limitations of Subsections 5(c)(ii)(A) or (B) above, then the Executive shall be entitled to an additional lump sum payment equal to the difference between (x) one and one-half (1½) times the Executive’s then-existing Base Salary and (y) the amount payable to Executive under Subsection 5(c)(ii), such lump sum payable to Executive on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date;

(iv)the Executive shall be entitled to a payment in an amount equal to one and one-half (1½) times the actual Annual Bonus award which would otherwise be payable for the calendar year during which the Termination Date occurs, as if the Executive had been employed for all of such calendar year based on actual performance, to be paid at such time as the Annual Bonus award would otherwise be paid in accordance with the Company’s policies;

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Termination Date, beginning on the Termination Date and continuing until the earlier of (A) the eighteen (18) month anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer; provided that Executive timely pays the Executive’s portion of such coverage, and provided further that if the Company determines that the coverage to be provided under this Section 5(c)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(c)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from

9

deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 18 month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date; and

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

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

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

(ii)the Executive shall be entitled to a lump-sum payment in an amount equal to two (2) times the Executive’s then existing Base Salary, to be paid within thirty (30) days following the Termination Date;

(iii)the Executive shall be entitled to a lump-sum payment in an amount equal to two (2) times the Executive’s target incentive compensation award for the calendar year during which the Termination Date occurs, to be paid within thirty (30) days following the Termination Date;

(iv)the Executive shall be entitled to a lump-sum payment to be paid within thirty (30) days following the Termination Date in an amount equal to the pro-rata target incentive compensation award for the calendar year during which the Termination Date occurs. Such pro-rata target incentive compensation award shall be determined by multiplying the target incentive compensation award amount by a fraction. the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365).

(v)the Executive shall continue to be covered, upon the same terms and

10

conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Change of Control beginning on the Termination Date and continuing until the earlier of: (A) the second anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer; provided that the Executive timely pays the Executive’s portion of such coverage, and provided further that if the Company determines that the coverage to be provided under this Section 5(d)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(d)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 24-month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date;

(vii)the Executive shall receive a lump sum cash payment, payable to Executive within thirty (30) days following the Termination Date, in an amount equal to the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had two (2) additional years of credit for purposes of age, benefit service and vesting under the Company’s defined benefit retirement plan;

(viii)if the Executive’s outstanding stock options have not by then, fully vested pursuant to the terms of the Companies’ applicable stock option plans) and applicable option agreement(s), then to the extent permitted in the Companies’ applicable stock option plan(s) and as provided in the applicable stock option agreement(s), the Executive shall continue to vest in the Executive’s unvested stock options following the Termination Date;

(ix)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition

11

assistance services provided by a career transition assistance firm selected by the Executive and paid for by the Companies in an amount not to exceed tees percent (10%) of the sum of the Executive’s then existing Base Salary. The Executive shall not be eligible to receive cash in lieu of executive level career transition assistance services; and

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

(e)Any amounts payable pursuant to Sections 5(c) and 5(d) above shall be considered severance payments anti, except for the Executive’s vested benefits under the Companies’ employee benefit plans (other than severance plans), shall be in full and complete satisfaction of the obligations of the Companies to the Executive in connection with the termination of the Executive’s employment. The Company shall deliver a Form 1099 to the Executive reflecting such payments.

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

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

12

sixty-five (365); or

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

In the event the Employment Period is terminated as a result of Executive’s death, such lump sum payment shall be made within 30 days following the Termination Date; in the event the Employment Period is terminated as a result of Executive’s Disability, such lump sum payment shall be made on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date; and in the event the Employment Period is terminated as a result of Executive’s Retirement, such lump sum payment shall be made on the later of the date that Annual Bonus payments are made to other participants in the plan or the first regular payroll date of the Company to occur following the date that is six months after the Termination Date.

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

(h.)Notwithstanding anything to the contrary contained in this Section 5, the Executive shall be required to execute the Companies’ then current standard release agreement as a condition to receiving any of the payments and benefits provided for in Sections 5(c) and (d), excluding the Accrued Benefits in accordance with Section 5(a), and no payments and benefits provided for in Sections 5(c) and (d) other than the Accrued Benefits in accordance with Section 5(a) shall be payable to Executive unless and until all applicable consideration and rescission periods for the release agreement have expired, Executive has not rescinded the release agreement and Executive is in compliance with each of the terms and conditions of such release agreement and this Agreement as of the date of such payments and benefits. It is acknowledged and agreed that the then current standard release agreement shall not diminish or terminate the Executive’s rights under this Agreement.

(i)In the event of a termination of the Executive’s employment entitling the Executive to benefits under Section 5(c) above, the Executive shall use reasonable efforts to obtain employment suitable to his education, training and experience, and, upon obtaining any such other employment shall promptly notify the Companies thereof. The

13

remaining obligation of the Companies under Section 5(c) shall be offset by any compensation earned by the Executive from such other employment during the eighteenth month period commencing on his Termination Date. Except as set forth in the first sentence of this Section 5(i) and subject to the Executive’s affirmative obligations pursuant to Section 6, the Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Companies under this Agreement.

(j)Notwithstanding any provision to the contrary contained in this Agreement, if the cash payments due and the other benefits to which Executive shall become entitled under Section 5(d), either alone or together with other payments in the nature of compensation to Executive which are contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company or otherwise, would constitute a “parachute payment” (as defined in Section 280G of the Code or any successor provision thereto), such payments or benefits shall be reduced (but not below zero) to the largest aggregate amount as will result in no portion thereof being subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or being non-deductible to the Company for Federal Income Tax purposes pursuant to Section 280G of the Code (or any successor provision thereto), provided, however, that no such reduction shall occur, and this Section 5(j) shall not apply, in the event that the amount of such reduction would be more than 10% of the aggregate value of such payments and benefits.  The Companies shall in good faith determine the amount of any reduction to be made pursuant to this Section 5(j), and shall make such reduction by first reducing amounts payable under Section 5(d)(i) and thereafter by reducing amounts payable under the following Sections of this Agreement in the following order, as necessary to achieve the reduction:  5(d)(iii), 5(d)(iv), 5(d)(vi), 5(d)(vii).  Amounts payable as reimbursements under Sections 5(d)(v) and 5(d)(x), if any, shall not be subject to reduction.  No modification of, or successor provision to, Section 280G or Section 4999 subsequent to the date of this Agreement shall, however, reduce the benefits to which the Executive would be entitled under this Agreement in the absence of this Section 5(j) to a greater extent than they would have been reduced if Section 280G and Section 4999 had not been modified or superseded subsequent to the date of this Agreement, notwithstanding anything to the contrary provided in the first sentence of this Section 5(j).

(k)Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that Section 5(j) above does not apply and any payment or distribution of any type to or in respect of the Executive made directly or indirectly, by the Companies or by any other- party in connection with a Change of Control, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), is or will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with

14

respect to such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

(i)All computations and determinations relevant to Section 5(k) and this subsection 5(k)(i) shall be made by a national accounting firm selected and reimbursed by the Companies from among the ten (10) largest accounting firms in the United States as determined by gross revenues (the “Accounting Firm”), subject to the Executive’s consent (not to be unreasonably withheld), which .firm may be the Companies’ accountants. Such determinations shall include whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code) In making the initial determination hereunder as to whether a Gross-Up Payment is required, the Accounting Firm shall determine that no Gross-Up Payment is required if the Accounting Firm is able to conclude that no “Change of Control” has occurred (within the meaning of Section 28OG of the Code). If the Accounting Firm determines that a Gross-Up Payment is required, the Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter both to the Companies and the Executive by no later than thirty (30) days following the Termination Date, if applicable, or such earlier time as is requested by the Companies or the Executive (if the Executive reasonably believes that any of the Total Patents may he subject to the Excise Tax). if the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Companies with a written statement that such Accounting Firm has concluded that it is more likely than not that no Excise Tax is payable (including the reasons therefor) and the Executive is not required to report any Excise Tax on Executive’s federal income tax return.

(ii)If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within twenty (20) clays after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Companies by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Companies and the Executive, absent manifest error.

(iii)As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Companies should have been made (“Underpayment”), or that Gross-Up Payments will have been made by the Companies which should not have been made (“Overpayments”). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with an amount which after payment of all taxes thereon is equal to any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Companies to or for the benefit of the Executive.

15

(iv)In the case of an Overpayment, the Executive shall, at the direction and expense of the Companies, take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Companies, and otherwise reasonably cooperate with the Companies to Correct such. Overpayment, provided, however, that the Executive shall not in any event be obligated to return to the Companies an amount greater than the portion of the Overpayment that Executive has retained after payment of all taxes thereon or has recovered as a refund from the applicable taxing authorities.

(v)The Executive shall notify the Companies in writing of any claim by the Internal Revenue Service relating to the possible application of the Excise

Tax under Section 4999 of the Code to any of the payments and amounts referred to herein and shall afford the Companies, at their expense, the opportunity to control the defense of such claim (for the sake of clarity, if the Internal Revenue Service is successful in any such claim or the Executive reaches a final settlement with the Internal Revenue Service with respect to such claim (after having afforded the Companies, at their expense, the opportunity to control the defense of such claim), the amount of the Excise Tax resulting from such successful claim or settlement shall be determinative as to whether or not there has been an Underpayment or an Overpayment for purposes of subsection 5(k)(iii).

(vi)Without limiting the intent of this Section 5(k) to make the Executive whole, on an after-tax basis, from the application of the Excise Taxes, all determinations by the Accounting Finn shall he made with a view to minimizing the application of :Sections 28OG and 4999 of the Code of any of the Total Payments, subject, however, to the following: the Accounting Firm shall make its determination on the basis of “substantial authority” (within the meaning of Section 6230 of the Code) and shall provide opinions to that effect to both the Companies and the Executive upon the request of either of them.

(vii)Notwithstanding any provision above to the contrary, any Gross-Up Payment payable under this Section 5(k) shall be made by the end of the calendar year following the calendar year in which the Executive remits the taxes.  Further, notwithstanding any provision above to the contrary, any right to reimbursement under this Section 5(k) of expenses incurred by Executive due to a tax audit or litigation addressing the existence or amount of a tax liability shall be made by the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or litigation are remitted, or where as a result of the audit or litigation no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.  Any Gross-Up Payment and any reimbursement of expenses payable under this Section 5(k) shall not be made before the date that is six months after the Termination Date.

16

Section 6.Further Obligations of the Executive

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

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

(i)Business, financial and strategic information, such as sales and earnings information and trends, material, overhead and other costs profit margins, accounting information, banking and financing information, pricing policies, capital expenditure/investment plans and budgets, forecasts, strategies, plans and prospects.

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

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

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

17

schedules.

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

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

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

(c)The Companies maintain, and Executive acknowledges and agrees, the Companies have and will entrust Executive with proprietary information, strategies, knowledge, customer relationships and know-how which would be detrimental to the Companies’ interest in protecting relationships with Customers and/or Suppliers if Executive were to provide services or otherwise participate in the operation of a competitor of the Company. Therefore, during (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the eighteen (18) month period following the end of Executive’s employment with the Companies,, the Executive shall not in any capacity (whether as an owner, employee, consultant or otherwise), at any time perform, manage, supervise. or be responsible or accountable for anyone else who is performing services — which are the same as, substantially similar or related to the services the Executive is providing, or during the last two years of the Executive’s employment by the Companies has provided, for the Companies or their Subsidiaries — for, or on behalf of, any other Person who or which is (1) a wholesaler of office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (2) a provider of services the same as or substantially similar to those provided by the Companies or their

18

Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, or (3) engaged. in a line of business other than described in (l) or (2) hereinabove which is the same or substantially similar to the lines of business engaged in by the Companies or their Subsidiaries, or to any line of business which to the Executive’s knowledge is under active consideration or planning by the Companies and their Subsidiaries, during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.

(d)(1)During (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer for or on behalf of any Person other than the Companies or any of their Subsidiaries with respect to the purchase of (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines, or such other .products whether or not related to the foregoing provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (B) services the same as or substantially similar to those provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services provided to such Customer from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period. Without limiting the foregoing, (i) during the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) insofar as the Executive may be employee/ by, or acting on or on behalf of, a Supplier at any time within the eighteen (18) month period following the end of the Executive’s Employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer to switch the purchase of the products or services described hereinabove from the Companies or their Subsidiaries to Supplier.

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

19

months of the Executive’s employment with the Companies, whether during or after the Employment Period. For purposes of this Agreement, a “Supplier” is any Person who or which has furnished to the Companies or their Subsidiaries for resale (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or nor related to the foregoing (B) services provided by or from the Companies or any of their Subsidiaries or (C) produces or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.

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

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

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

(h)During the Executive’s employment with the Companies, whether during or after the Employment Period and during the eighteen (18) month period following the end of Executive’s employment with the Companies, the Executive agrees that, prior to accepting employment with a Customer or Supplier of the Companies, the Executive will give notice to the Chief Executive Officer of the Companies. The Companies reserve the right to make such Customer or Supplier aware of the Executive’s obligations under Section 6 of this Agreement.

(i)During and following Executive’s Employment Period, the Executive shall

20

furnish a copy of this Section 6 in its entirety to any prospective employer prior to accepting employment with such prospective employer.

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

Section 7.Successors. The Companies may assign their rights under this Agreement to any successor to all or substantially all the assets of the Companies, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Companies. Any such assignment by the Companies shall remain subject to the Executive’s rights under Section 5 hereof. The rights of the Executive under this Agreement may not be assigned or encumbered by the Executive, voluntarily or involuntarily, during the Executive’s lifetime, and any such purported assignment shall be void ab initio. Notwithstanding the foregoing, all rights of the Executive under this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, estates, executors, administrators, heirs and beneficiaries. All amounts payable to the Executive hereunder shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs or representatives.

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

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

Section 10.Amendment. This Agreement may not be amended or modified at any time except by a written instrument approved by the Board, and executed by the Companies and the Executive; provided, however, that any attempted amendment or modification without such approval and execution shall be null and void ab initio and of no effect.

Section 11.Payment; Taxes and Withholding.  The Company shall he responsible as employer for payment of all cash compensation and severance payments

21

provided herein and Holding shall use [he Company to make such payments. The Executive shall not he entitled to receive any additional compensation from either of the Companies for any services the Executive provides to Holding or the Companies’ Subsidiaries. The Company than be entitled to withhold from any amounts to be paid to the Executive hereunder any federal, state, local, or foreign withholding or other taxes or charges which it is from time to time required to withhold. The Company shall he entitled to rely on an opinion of counsel if any question as to the amount or requirement of any such withholding shall arise. Executive shall be solely responsible for the payment of all taxes due and owing with respect to wages, benefits, and other compensation provided to him hereunder.  This Agreement is intended to satisfy, or be exempt from, the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.

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

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

If to the Companies:

United Stationers Inc,

United Stationers Supply Co.

One Parkway North Blvd.

Suite 100

Attention: General Counsel

If to the Executive:

Stephen A. Schultz

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

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

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

22

Section 16.Indemnification. The provisions set forth in the Indemnification Agreement appended hereto as Attachment A are hereby incorporated into this Agreement and made a part hereof. The parties shall execute the Indemnification Agreement contemporaneously with the execution of this Agreement.

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

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

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

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

Section 21.Free to Contract. The Executive represents and warrants to the Companies that the Executive is able freely to accept employment by the Companies as described in this Agreement and that there are no existing agreements, arrangements or understandings, written or oral, that would prevent the Executive from entering into this Agreement, would prevent or restrict the Executive in any way from rendering services to

23

the Companies as provided herein during the Employment Period or would be breached by the future performance by the Executive of the Executive’s duties and responsibilities hereunder.

Section 22.Entire Agreement. This Agreement, including the Indemnification Agreement and any other written undertakings by the Executive referred to herein, supersedes all other agreements, arrangements or understandings (whether written or oral) between the Companies and the Executive with respect to the subject matter of this Agreement, including without limitation the Prior Agreement and the Executive’s employment relationship with the Companies and any of their Subsidiaries, and this Agreement contains the sole and entire agreement among the pates hereto with respect to the subject matter hereof.

***

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

EXECUTED ON :		UNITED STATIONERS INC.
	, 2008	By:
			Name:  Richard W. Gochnauer
			Title:    President and Chief Executive
Officer
EXECUTED ON:		UNITED STATIONERS SUPPLY CO.
	, 2008	By:
			Name:  Richard W. Gochnauer
			Title:    President and Chief Executive
Officer
EXECUTED ON:		EXECUTIVE:
	, 2008
		Stephen A. Schultz

24

EX-10.38

Exhibit 10.38

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made, entered into and effective as of December 31, 2008 (the “Effective Date”) by and among UNITED STATIONERS INC., a Delaware corporation (hereinafter, together with its successors, referred to as “Holding”), UNITED STATIONERS SUPPLY CO., an Illinois corporation (hereinafter, together with its successors, referred to as the “Company”, and, together with Holding, the “Companies”), and P. Cody Phipps (hereinafter referred to as the “Executive”).

WHEREAS, the Companies and Executive are parties to an Executive Employment Agreement dated August 18, 2003 (the “Prior Agreement”), which the parties desire to amend and restate in its entirety as set forth in this Agreement; and

WHEREAS, in October 2004, the American Jobs Creation Act of 2004 (the “Act”) was enacted, Section 885 of which Act added new provisions to the Internal Revenue Code pertaining to deferred compensation and for which the Treasury Department has issued final regulations and guidance regarding the deferred compensation provisions of the Act permitting service providers and service recipients a transition period to modify existing deferred compensation arrangements to bring them into compliance with the Act; and

WHEREAS, the parties agree that it is in their mutual best interests to modify, amend and clarify the terms and conditions of the Prior Agreement, as set forth in this Agreement, with the full intention of complying with the Act so as to avoid the additional taxes and penalties imposed under the Act; and

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

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

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

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

1

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

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

Section 1.Definitions.

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

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

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

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

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

2

“Change of Control” shall mean (a) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of the combined voting power of Holding’s then outstanding voting securities entitled to vote generally in the election of directors (“Voting Securities”); provided, however, that the acquisition or holding of Voting Securities by (i) Holding of any of its subsidiaries, (ii) an employee benefit plan (or a trust forming a part thereof) maintained by Holding or any of its subsidiaries, or (iii) any Person in which the Executive has a substantial equity interest shall not constitute a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the issuance of Voting Securities by Holding, and after such issuance of Voting Securities by Holding, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person to more than 50% of the Voting Securities of Holding, then a Change of Control shall occur; (b) At any time during a period of two consecutive years, the individuals who at the beginning of such period constituted the Board (the “Incumbent Board”) cease for any reason to constitute more than 50% of the Board; provided, however, that if the election, or nomination for election by Holding’s stockholders, of any new director was approved by a vote of more than 50% of the directors then comprising the Incumbent Board, such new director shall, for purposes of this subsection (b), be considered as though such person were a member of the Incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of (i) either an actual “Election Consent” (as described in Rule 14a-l I promulgated under the Exchange Act) or other actual solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by reason of an agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest; (c) Consummation of a merger, consolidation or reorganization or approval by Holding’s stockholders of a liquidation or dissolution of Holding or the occurrence of a liquidation or dissolution of Holding (“Business Combination”), unless, following such Business Combination: (1) the Persons with Beneficial Ownership of Holding, immediately before such Business Combination, have Beneficial Ownership of more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity) resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns Holding or all or substantially all of Holding’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) in substantially the same proportions as their Beneficial Ownership of the Voting Securities immediately before such Business Combination, (2) the individuals who were members of the Incumbent Board immediately prior to the execution of the initial agreement providing for such Business Combination constitute more than 50% of the members of the board of directors (or comparable governing body of a noncorporate entity) of the Surviving Company; and (3) no Person (other than Holding, any of its subsidiaries or any employee benefit plan (or any trust forming a part thereof) maintained by Holding, the Surviving Company or any Person who immediately prior to such Business Combination had Beneficial Ownership of 30% or more of the then Voting Securities) has Beneficial Ownership of 30% or more of the then combined voting power of the Surviving Company’s then outstanding voting securities; provided, that notwithstanding this clause (3), a Change of Control shall not be

3

deemed to occur solely because any Person acquired Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided, however that a Business Combination with a Person in which the Executive has a substantial equity interest shall not constitute a Change of Control, or (d) Approval by Holding’s stockholders of an agreement for the assignment, sale, conveyance, transfer, lease or other disposition of all or substantially all of the assets of Folding to any Person (other than a Person in which the Executive has a substantial equity interest and other than a subsidiary of Holding or other entity, the Persons with Beneficial Ownership of which are the same Persons with Beneficial Ownership of Holding and such Beneficial Ownership is in substantially the same proportions), or the occurrence of the same. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by such Person; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such acquisition of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person, then a Change of Control shall occur.

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

“Good Reason” shall mean (i) any material breach by the Companies of this Agreement without Executive’s written consent, (ii) any material reduction, without the Executive’s written consent, in the Executive’s duties, responsibilities or authority; provided, however, that for purposes of this clause (ii), neither (A) a change in the Executive’s Supervising Officer or the number or identity of the Executive’s direct reports, nor (B) a change in the Executive’s title, duties, responsibilities or authority as a result of a realignment or restructuring of the Companies’ executive organizational chart nor (C) a change in the Executive’s title, duties, responsibilities or authority as a result of a realignment or restructuring of the Companies shall necessarily be deemed by itself to materially reduce Executive’s duties, responsibilities or authority, as long as, in the case of either (A), (B) or (C), Executive continues to report to either the Chief Executive Officer or Chief Operating Officer of the Companies or to the Supervising Officer to whom he reported immediately prior to the Change of Control or a Supervising Officer of equivalent responsibility and authority, or (iii) without Executive’s written consent: (A) a material reduction in the Executive’s Base Salary, (B) the relocation of the Executive’s principal place of employment more than fifty (50) miles from its location on the date of a Change in Control, or (C) the relocation of the Company’s corporate headquarters office outside of the metropolitan area in which it is located on the date of a Change in Control. For purposes of this Agreement, a Change of Control, alone, does not constitute Good Reason. Furthermore, notwithstanding the above, the occurrence of any of the events described above will not constitute Good Reason unless the Executive gives the Companies written notice within thirty (30) days after the initial occurrence of any of such events that the Executive believes that such event constitutes Good Reason, and the Companies thereafter fail to cure any such event within sixty (60) days after receipt of such notice.

“Person” shall mean any natural person, firm, corporation, limited liability company,

4

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

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

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

“Annual Bonus”	Section 4(b)
“Base Salary”	Section 4(a)
“Bonus Plan”	Section 4(b)
“Confidential information or proprietary data”	Section 6(a)(2)
“Customer”	Section 6(d)(2)
“Disability”	Section 5(c)
“Employment Period”	Section 2
“Retirement”	Section 5(0
“Supervising Officer”	Section 3(a)
“Term” and “Termination Date”	Section 2

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

Section 3.Duties.

(a)During the Employment Period, the Executive (i) shall serve as President, United Stationers Supply Company, of the Companies, (ii) shall report directly to an officer of the Companies (the “Supervising Officer”) who shall be selected by the Board or the Chief Executive Officer in its or his or her sole discretion, (iii) shall, subject to and in accordance with the authority and direction of the Board and/or the Supervising Officer have such authority and perform in a diligent and competent manner such duties as may be assigned to the Executive from time to time by the Board and/or the Supervising Officer and (iv) shall devote the Executive’s best efforts and such time, attention, knowledge and skill to the operation of the business and affairs of the Companies as shall be necessary to perform the Executive’s duties. During the Employment Period, the

5

Executive’s place of performance for the Executive’s duties and responsibilities shall be at the Companies’ corporate headquarters office, unless another principal place of performance is agreed in writing among the parties and except for required travel by the Executive on the Companies’ business or as may be reasonably required by the Companies.

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

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

(a)the Executive shall receive, at such intervals and in accordance with such Company payroll policies as may be in effect from time to time, an annual salary (pro rata for any partial year) equal to $478,590 (“Base Salary”). The Base Salary shall be reviewed by the Board from time to time and may, in the Board’s sole discretion, be increased when deemed appropriate by the Board; if so increased, it shall not thereafter be reduced (other than an across-the-board reduction applied in the same percentage at the same time to all of the Companies’ senior executives at the same grade level);

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

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

(d)the Executive shall be entitled to participate in all incentive, savings and retirement plans, stock option plans, practices, policies and programs applicable generally to other senior executives of the Companies at the same grade level and as determined by the Board from time to time;

(e)the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company to senior executives of the Companies at the same grade level (including, without limitation, medical, prescription,

6

dental, disability, salary continuance, employee life, group life, and accidental death and travel accident insurance plans and programs) to the extent applicable generally to other executives of the Companies at the same grade level;

(f)the Executive shall be entitled to not less than twenty (20) paid vacation days per calendar year (pro rata for any partial year); and

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

Section 5.Termination of Employment.

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

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

(c)If the Employment Period is terminated prior to the expiration of the Term by the Companies for any reason other than Cause or the Executive’s permanent disability, as defined in the Companies’ Board-approved disability plan or policy as in effect from time to time (“Disability”) and other than within two (2) years following a Change of Control, then, as the Executive’s exclusive right and remedy in respect of such termination:

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

(ii)the Executive shall be entitled to an amount equal to one and one-half (1-1/2) times the Executive’s then existing Base Salary, to be paid in such intervals and at such times in accordance with the Company’s payroll practices in effect from time to time over the eighteen (18) month period following the Termination Date but in no event shall such amount paid under this Section 5(c)(ii) exceed the lesser of (A) $460,000.00 or (B) two (2) times Executive’s annualized compensation based upon the annual rate of pay for services to the Companies for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service), consistent with the

7

parties’ intention that the payments under this Section 5(c)(ii) constitute a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(iii)in the event that an amount equal to one and one-half times (1½) the Executive’s then-existing Base Salary exceeds the limitations of Subsections 5(c)(ii)(A) or (B) above, then the Executive shall be entitled to an additional lump sum payment equal to the difference between (x) one and one-half (1½) times the Executive’s then-existing Base Salary and (y) the amount payable to Executive under Subsection 5(c)(ii), such lump sum payable to Executive on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date;

(iv)the Executive shall be entitled to a payment in an amount equal to one and one-half (1½) times the actual Annual Bonus award which would otherwise be payable for the calendar year during which the Termination Date occurs, as if the Executive had been employed for all of such calendar year based on actual performance, to be paid at such time as the Annual Bonus award would otherwise be paid in accordance with the Company’s policies;

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental, insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Termination Date, beginning on the Termination Date and continuing until the earlier of: (A) the eighteen (18) month anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer, provided that Executive timely pays the Executive’s portion of such coverage; and provided further that if the Company determines that the coverage to be provided under this Section 5(c)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(c)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 18 month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date;

(vii)the Executive shall receive a lump sum cash payment, payable to Executive within thirty (30) days following the Termination Date, in an amount equal to

8

the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had five (5) additional years of credit for purposes of age, benefit service and vesting;

(viii)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition assistance services provided by a career transition assistance firm selected by the Executive and paid for by the Companies in an amount not to exceed twenty percent (20%) of the sum of (i) the Executive’s then existing Base Salary and (ii) the target incentive compensation award for the calendar year during which the Termination Date occurs. The Executive shall not be eligible to receive cash in lieu of executive level career transition assistance services.

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

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

(ii)the Executive shall be entitled to a lump-sum payment in an amount equal to two (2) times the Executive’s then existing Base Salary, to be paid within thirty (30) days following the Termination Date;

(iii)the Executive shall be entitled to a lump-sum payment in an amount equal to two (2) times the Executive’s target incentive compensation award for the calendar year during which the Termination Date occurs, to be paid within thirty (30) days following the Termination Date;

(iv)the Executive shall be entitled to a lump-sum payment to be paid within thirty (30) days following the Termination Date in an amount equal to the pro-rata target incentive compensation award for the calendar year during which the Termination Date occurs. Such pro-rata target incentive compensation award shall be determined by multiplying the target incentive compensation award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365);

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Change of Control, beginning on the Termination Date and continuing until the earlier of: (A) the second anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent

9

employer, provided that the Executive timely pays the Executive’s portion of such coverage and provided further that if the Company determines that the coverage to be provided under this Section 5(d)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(d)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 24-month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date;

(vii)the Executive shall receive a lump sum cash payment, payable to Executive within thirty (30) days following the Termination Date, in an amount equal to the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had seven (7) additional years of credit for purposes of age, benefit service and vesting under the Company’s defined benefit retirement plan;

(viii)if the Executive’s outstanding stock options have not by then fully vested pursuant to the terms of the Companies’ applicable stock option plan(s) and applicable option agreement(s), then to the extent permitted in the Companies’ applicable stock option plan(s) and as provided in the applicable stock option agreement(s), the Executive shall continue to vest in the Executive’s unvested stock options following the Termination Date;

(ix)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition assistance services provided by a career transition assistance Finn selected by the Executive and paid for by the Companies in an amount not to exceed twenty percent (20%) of the sum of (i) the Executive’s then existing Base Salary and (ii) the target incentive compensation award for the calendar year during which the Termination Date occurs. The Executive shall not be eligible to receive cash in lieu of executive level career transition assistance services; and

(x)the Executive shall be entitled to be reimbursed by the Company for the Executive’s reasonable attorneys’ fees, costs and expenses incurred in conjunction with any dispute regarding Section 5(d)  if Executive prevails in any material respect in such dispute, provided that (A) the applicable statutes of limitations shall not have expired for any claim

10

arising from the dispute that could be raised in a court of law; (B) Executive shall submit to the Company verification of legal expenses for reimbursement within 60 days from the date the expense was incurred; (C) the Company shall reimburse Executive for eligible expenses promptly thereafter, but in any event not earlier than the first day of the seventh month following the Termination Date and not later than December 31 of the calendar year following the calendar year in which the expense was incurred; (D) the expenses eligible for reimbursement during any given calendar year shall not affect the expenses eligible for reimbursement in any other calendar year; and (E) the right to reimbursement hereunder may not be liquidated or exchanged for cash or any other benefit.

(e)Any amounts payable pursuant to Sections 5(c) and 5(d) above shall be considered severance payments and, except for the Executive’s vested benefits under the Companies’ employee benefit plans (other than severance plans), shall be in full and complete satisfaction of the obligations of the Companies to the Executive in connection with the termination of the Executive’s employment.

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

(i)in the event the Employment Period is terminated as a result of Executive’s death or Disability, an amount equal to the pro-rata target Annual Bonus award for the calendar year during which the Termination Date occurs by reason of the Executive’s death or Disability, such pro-rata award to be determined by multiplying the target Annual Bonus award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365), plus (B) the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had five (5) additional years of credit for purposes of age, benefit service and vesting; or

(ii)in the event the Employment Period is terminated as a result of Executive’s Retirement, an amount equal to: (A) the pro-rata actual Annual Bonus award for the calendar year during which the Termination Date occurs by reason of the Executive’s Retirement, such pro-rata award to be determined by multiplying the actual Annual Bonus award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365); plus (B) the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had five (5) additional years of credit for purposes of age, benefit service and vesting.

(iii)In the event the Employment Period is terminated as a result of Executive’s death, such lump sum payment shall be made within 30 days following the

11

Termination Date; in the event the Employment Period is terminated as a result of Executive’s Disability, such lump sum payment shall be made on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date; and in the event the Employment Period is terminated as a result of Executive’s Retirement, such lump sum payment shall be made on the later of the date that Annual Bonus payments are made to other participants in the plan or the first regular payroll date of the Company to occur following the date that is six months after the Termination Date.

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

(h)Notwithstanding anything to the contrary contained in this Section 5, the Executive shall be required to execute the Companies’ then current standard release agreement as a condition to receiving any of the payments and benefits provided for in Sections 5(c) and (d), excluding the Accrued Benefits in accordance with Section 5(a), and no payments and benefits provided for in Sections 5(c) and (d) other than the Accrued Benefits in accordance with Section 5(a) shall be payable to Executive unless and until all applicable consideration and rescission periods for the release agreement have expired, Executive has not rescinded the release agreement and Executive is in compliance with each of the terms and conditions of such release agreement and this Agreement as of the date of such payments and benefits. It is acknowledged and agreed that the then current standard release agreement shall not diminish or terminate the Executive’s rights under this Agreement.

(i)In the event of a termination of the Executive’s employment entitling the Executive to benefits under Section 5(c) above, the Executive shall use reasonable efforts to obtain employment suitable to his education, training and experience, and, upon obtaining any such other employment shall promptly notify the Companies thereof. The remaining obligation of the Companies under Section 5(c) shall be offset by any compensation earned by the Executive from such other employment during the eighteenth month period commencing on his Termination Date. Subject to the preceding sentence and to the Executive’s affirmative obligations pursuant to Section 6, the Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Companies under this Agreement.

(j)Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution of any type to or in respect of the Executive made directly or indirectly, by the Companies or by any other party in connection with a Change of Control, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”). is or will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the

12

Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

(i)All computations and determinations relevant to Section 5(j) and this subsection 5(j)(i) shall be made by a national accounting firm selected and reimbursed by the Companies from among the ten (10) largest accounting rims in the United States as determined by gross revenues (the “Accounting Firm”), subject to the Executive’s consent (not to be unreasonably withheld), which firm may be the Companies’ accountants. Such determinations shall include whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code). In making the initial determination hereunder as to whether a Gross-Up Payment is required, the Accounting Firm shall determine that no Gross-Up Payment is required if the Accounting Firm is able to conclude that no “Change of Control” has occurred (within the meaning of Section 280G of the Code). If the Accounting Firm determines that a Gross-Up Payment is required, the Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter both to the Companies and the Executive by no later than thirty (30) days following the Termination Date, if applicable, or such earlier time as is requested by the Companies or the Executive (if the Executive reasonably believes that any of the Total Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Companies with a written statement that such Accounting Firm has concluded that it is more likely than not that no Excise Tax is payable (including the reasons therefor) and the Executive is not required to report any Excise Tax on Executive’s federal income tax return.

(ii)If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within twenty (20) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Companies by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Companies and the Executive, absent manifest error.

(iii)As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Companies should have been made (“Underpayment”), or that Gross-Up Payments will have been made by the Companies which should not have been made (“Overpayments”). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with an amount which after payment of all taxes thereon is equal to any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Companies to or for the benefit of the Executive.

(iv)In the case of an Overpayment, the Executive shall, at the direction and expense of the Companies, take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Companies, and otherwise reasonably cooperate with the Companies to correct such Overpayment, provided, however, that the Executive shall not in any event be obligated to return to the Companies an amount greater than the portion of

13

the Overpayment that Executive has retained after payment of all taxes thereon or has recovered as a refund from the applicable taxing authorities.

(v)The Executive shall notify the Companies in writing of any claim by the Internal Revenue Service relating to the possible application of the Excise Tax under Section 4999 of the Code to any of the payments and amounts referred to herein and shall afford the Companies, at their expense, the opportunity to control the defense of such claim (for the sake of clarity, if the Internal Revenue Service is successful in any such claim or the Executive reaches a final settlement with the Internal Revenue Service with respect to such claim (after having afforded the Companies, at their expense, the opportunity to control the defense of such claim), the amount of the Excise Tax resulting from such successful claim or settlement shall be determinative as to whether or not there has been an Underpayment or an Overpayment for purposes of subsection 5(j)(iii).

(vi)Without limiting the intent of this Section 5(j) to make the Executive whole, on an after-tax basis, from the application of the Excise Taxes, all determinations by the Accounting Firm shall be made with a view to minimizing the application of Sections 280G and 4999 of the Code of any of the Total Payments, subject, however, to the following: the Accounting Firm shall make its determination on the basis of “substantial authority” (within the meaning of Section 6230 of the Code) and shall provide opinions to that effect to both the Companies and the Executive upon the request of either of them.

(vii)Notwithstanding any provision above to the contrary, any Gross-Up Payment payable under this Section 5(j) shall be made by the end of the calendar year following the calendar year in which the Executive remits the taxes. Further, notwithstanding any provision above to the contrary, any right to reimbursement under this Section 5(j) of expense incurred by Executive due to a tax audit or litigation addressing the existence or amount of a tax liability shall be made by the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or litigation are remitted, or where as a result of the audit or litigation no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation. Any Gross-Up Payment and any reimbursement of expense payable under this Section 5(j) shall not be made before the date that is six months after the Termination Date.

Section 6.Further Obligations of the Executive.

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

(2)For purposes of this Agreement, “confidential information or proprietary data” means information and data prepared, compiled, or acquired by or for the

14

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

(i)Business, financial and strategic information, such as sales and earnings information and trends, material, overhead and other costs, profit margins, accounting information, banking and financing information, pricing policies, capital expenditure/investment plans and budgets, forecasts, strategies, plans and prospects.

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

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

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

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

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

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

15

documents, materials and other property of the Companies and their Subsidiaries in the Executive’s possession, custody or control, in good condition, to the Companies.

(c)During (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the eighteen (18) month period following the end of Executive’s employment with the Companies, the Executive shall not within the United States and Canada in any capacity (whether as an owner, employee, consultant or otherwise) at any time perform, manage, supervise, or be responsible or accountable for anyone else who is performing services — which are the same as, substantially similar or related to the services the Executive is providing, or during the last two years of the Executive’s employment by the Companies has provided, for the Companies or their Subsidiaries — for, or on behalf of, any other Person who or which is (1) a wholesaler of office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (2) a provider of services the same as or substantially similar to those provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period, or (3) engaged in a line of business other than described in (1) or (2) hereinabove which is the same or substantially similar to the lines of business engaged in by the Companies or their Subsidiaries, or to any line of business which to the Executive’s knowledge is under active consideration or planning by the Companies and their Subsidiaries, during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period.

(d)(1)During (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer for or on behalf of any Person other than the Companies or any of their Subsidiaries with respect to the purchase of (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines, or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period, (B) services the same as or substantially similar to those provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services provided to such Customer from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period. Without limiting the foregoing, (i) during the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) insofar as the Executive may be employed by, or acting for or on behalf of, a Supplier at any time within the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer to switch the purchase of the products or services described hereinabove from the Companies or their Subsidiaries to Supplier.

16

(2)For purposes of this Agreement, a “Customer” is any Person who or which has ordered or purchased by or from the Companies or any of their Subsidiaries (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing, (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period. For purposes of this Agreement, a “Supplier” is any Person who or which has furnished to the Companies or their Subsidiaries for resale (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or nor related to the foregoing (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period.

(e)During the Executive’s employment by the Companies, whether during or after the Employment Period, and during the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, induce or solicit any employee of the Companies or any of their Subsidiaries for the purpose of causing such employee to terminate his or her employment with the Companies or such Subsidiary.

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

(g)If any court determines that any portion of this Section 6 is invalid or unenforceable, the remainder of this Section 6 shall not thereby be affected and shall be given full effect without regard to the invalid provision. If any court construes any of the provisions of Section 6(c), 6(d), 6(e) or 6(0 above, or any part thereof, to be unreasonable because of the duration or scope of such provision, such court shall have the power to reduce the duration or scope of such provision and to enforce such provision as so reduced.

(h)During the Executive’s employment with the Companies, whether during or after the Employment Period and during the eighteen (18) month period following the end of Executive’s employment with the Companies, the Executive agrees that, prior to accepting employment with a Customer or Supplier of the Companies, the Executive will give notice to the Chief Executive Officer of the Companies. The Companies reserve the right to make such Customer or Supplier aware of the Executive’s obligations under Section 6 of this Agreement.

17

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

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

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

Notwithstanding the foregoing, all rights of the Executive under this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, estates, executors, administrators, heirs and beneficiaries. All amounts payable to the Executive hereunder shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs or representatives.

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

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

Section 10.Amendment. This Agreement may not be amended or modified at any time except by a written instrument approved by the Board, and executed by the Companies and the Executive; provided, however, that any attempted amendment or modification without such approval and execution shall be null and void ab initio and of no effect.

Section 11.Payment; Taxes and Withholding. The Company shall be responsible as employer for payment of all cash compensation and severance payments provided herein and Holding shall cause the Company to make such payments. The Executive shall not be entitled to receive any additional compensation from either of the Companies for any services the Executive provides to Holding or the Companies’ Subsidiaries. The Company shall be entitled to withhold from any amounts to be paid to the Executive hereunder any federal, state, local, or foreign withholding or other taxes or charges which it is from time to time required to withhold. The

18

Company shall be entitled to rely on an opinion of counsel if any question as to the amount or requirement of any such withholding shall arise. Executive shall be solely responsible for the payment of all taxes due and owing with respect to wages, benefits, and other compensation provided to him hereunder.  This Agreement is intended to satisfy, or be exempt from the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.

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

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

If to the Companies:

United Stationers Inc.

United Stationers Supply Co.

One Parkway North Blvd.

Suite 100

Deerfield, IL

60015-2559Attention:

General Counsel

If to the Executive:

P. Cody Phipps

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

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

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

Section 16.Indemnification. The provisions set forth in the Indemnification Agreement appended hereto as Attachment A are hereby incorporated into this Agreement and made a part hereof. The parties shall execute the Indemnification Agreement contemporaneously with the execution of this Agreement.

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

19

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

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

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

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

Section 22.Entire Agreement. This Agreement, including the Indemnification Agreement and any other written undertakings by the Executive referred to herein, supersedes all other agreements, arrangements or understandings (whether written or oral) between the Companies and the Executive with respect to the subject matter of this Agreement, including without limitation the Prior Agreement and the Executive’s employment relationship with the Companies and any of their Subsidiaries, and this Agreement contains the sole and entire agreement among the parties hereto with respect to the subject matter hereof.

20

***

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

EXECUTED ON :		UNITED STATIONERS INC.
	, 2008	By:
			Name: Richard W. Gochnauer
			Title:   President and Chief Executive Officer
EXECUTED ON:		UNITED STATIONERS SUPPLY CO.
	, 2008	By:
			Name: Richard W. Gochnauer
			Title:   President and Chief Executive Officer
EXECUTED ON:		EXECUTIVE:
	, 2008
		P. Cody Phipps

21

EX-10.39

Exhibit 10.39

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made, entered into and effective as of December 31, 2008 (the “Effective Date”) by and among UNITED STATIONERS INC., a Delaware corporation (hereinafter, together with its successors, referred to as “Holding”), UNITED STATIONERS SUPPLY CO., an Illinois corporation (hereinafter, together with its successors, referred to as the “Company”, and, together with Holding, the “Companies”), and Patrick T. Collins (hereinafter referred to as the “Executive”).

WHEREAS, the Companies and Executive are parties to an Executive Employment Agreement dated October 19, 2004 (the “Prior Agreement”), which the parties desire to amend and restate in its entirety as set forth in this Agreement; and

WHEREAS, in October 2004, the American Jobs Creation Act of 2004 (the “Act”) was enacted, Section 885 of which Act added new provisions to the Internal Revenue Code pertaining to deferred compensation and for which the Treasury Department has issued final regulations and guidance regarding the deferred compensation provisions of the Act permitting service providers and service recipients a transition period to modify existing deferred compensation arrangements to bring them into compliance with the Act; and

WHEREAS, the parties agree that it is in their mutual best interests to modify, amend and clarify the terms and conditions of the Prior Agreement, as set forth in this Agreement, with the full intention of complying with the Act so as to avoid the additional taxes and penalties imposed under the Act; and

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

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

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

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

1

the Company; and

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

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

Section 1.Definitions.

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

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

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

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

“Cause” shall mean (i) conviction of or plea of nolo contendere to, a felony (excluding motor vehicle violations); (ii) theft or embezzlement, or attempted theft or embezzlement, of money or property or assets of the Company or any of its Affiliates; (iii) illegal use of drugs; (iv) material breach of this Agreement or any employment-related undertakings provided in a writing signed by the Executive prior to or concurrently with this Agreement; (v) gross negligence or willful misconduct in the performance of Executive’s duties; (vi) breach of any fiduciary duty owed to the Company, including, without limitation, engaging in competitive acts while employed by the Company; or (vii) the Executive’s willful refusal to perform the assigned duties for which the Executive is qualified as directed by the Executive’s Supervising Officer (as hereinafter defined) or the Board; provided, that in the case of any event constituting Cause within clauses (iv) through (vii) which is curable by the Executive, the Executive has been given written notice by the Companies of such event said to constitute

2

Cause, describing such event in reasonable detail, and has not cured such action within thirty (30) days of such written notice as reasonably determined by the Chief Executive Officer. For purposes of this definition of Cause, action or inaction by the Executive shall not be considered “willful” unless done or omitted by the Executive (A) intentionally or not in good faith and (B) without reasonable belief that the Executive’s action or inaction was in the best interests of the Companies, and shall not include failure to act by reason of total or partial incapacity due to physical or mental illness.

“Change of Control” shall mean (a) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of the combined voting power of Holding’s then outstanding voting securities entitled to vote generally in the election of directors (“Voting Securities”); provided, however, that the acquisition or holding of Voting Securities by (i) Holding of any of its subsidiaries, (ii) an employee benefit plan (or a trust forming a part thereof) maintained by Holding or any of its subsidiaries, or (iii) any Person in which the Executive has a substantial equity interest shall not constitute a Change of Control. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the issuance of Voting Securities by Holding, and after such issuance of Voting Securities by Holding, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person to more than 50% of the Voting Securities of Holding, then a Change of Control shall occur; (b) At any time during a period of two consecutive years, the individuals who at the beginning of such period constituted the Board (the “Incumbent Board”) cease for any reason to constitute more than 50% of the Board; provided, however, that if the election, or nomination for election by Holding’s stockholders, of any new director was approved by a vote of more than 50% of the directors then comprising the Incumbent Board, such new director shall, for purposes of this subsection (b), be considered as though such person were a member of the Incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of (i) either an actual “Election Consent” (as described in Rule 14a-l I promulgated under the Exchange Act) or other actual solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by reason of an agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest; (c) Consummation of a merger, consolidation or reorganization or approval by Holding’s stockholders of a liquidation or dissolution of Holding or the occurrence of a liquidation or dissolution of Holding (“Business Combination”), unless, following such Business Combination: (1) the Persons with Beneficial Ownership of Holding, immediately before such Business Combination, have Beneficial Ownership of more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity) resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns Holding or all or substantially all of Holding’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) in substantially the same proportions as their Beneficial Ownership of the Voting Securities

3

immediately before such Business Combination, (2) the individuals who were members of the Incumbent Board immediately prior to the execution of the initial agreement providing for such Business Combination constitute more than 50% of the members of the board of directors (or comparable governing body of a noncorporate entity) of the Surviving Company; and (3) no Person (other than Holding, any of its subsidiaries or any employee benefit plan (or any trust forming a part thereof) maintained by Holding, the Surviving Company or any Person who immediately prior to such Business Combination had Beneficial Ownership of 30% or more of the then Voting Securities) has Beneficial Ownership of 30% or more of the then combined voting power of the Surviving Company’s then outstanding voting securities; provided, that notwithstanding this clause (3), a Change of Control shall notbe deemed to occur solely because any Person acquired Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided, however that a Business Combination with a Person in which the Executive has a substantial equity interest shall not constitute a Change of Control, or (d) Approval by Holding’s stockholders of an agreement for the assignment, sale, conveyance, transfer, lease or other disposition of all or substantially all of the assets of Holding to any Person (other than a Person in which the Executive has a substantial equity interest and other than a subsidiary of Holding or other entity, the Persons with Beneficial Ownership of which are the same Persons with Beneficial Ownership of Holding and such Beneficial Ownership is in substantially the same proportions), or the occurrence of the same. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by such Person; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such acquisition of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person, then a Change of Control shall occur.

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

“Good Reason” shall mean (i) any material breach by the Companies of this Agreement without Executive’s written consent, (ii) any material reduction, without the Executive’s written consent, in the Executive’s duties, responsibilities or authority; provided, however, that for purposes of this clause (ii), neither (A) a change in the Executive’s Supervising Officer or the number or identity of the Executive’s direct reports, nor (B) a change in the Executive’s title, duties, responsibilities or authority as a result of a realignment or restructuring of the Companies’ executive organizational chart nor (C) a change in the Executive’s title, duties, responsibilities or authority as a result of a realignment or restructuring of the Companies shall necessarily be deemed by itself to materially reduce Executive’s duties, responsibilities or authority, as long as, in the case of either (A), (B) or (C), Executive continues to report to either the Chief Executive Officer or Chief Operating Officer of the Companies or to the Supervising Officer to whom he reported immediately prior to the Change of Control or a Supervising Officer of equivalent responsibility and authority, or (iii) without Executive’s written consent: (A) a material reduction in the Executive’s Base Salary, (B) the relocation of the Executive’s principal place of employment more than fifty (50) miles from its location on the date of a Change in Control, or (C) the relocation of the

4

Company’s corporate headquarters office outside of the metropolitan area in which it is located on the date of a Change in Control. For purposes of this Agreement, a Change of Control, alone, does not constitute Good Reason. Furthermore, notwithstanding the above, the occurrence of any of the events described above will not constitute Good Reason unless the Executive gives the Companies written notice within thirty (30) days after the initial occurrence of any of such events that the Executive believes that such event constitutes Good Reason, and the Companies thereafter fail to cure any such event within sixty (60) days after receipt of such notice.

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

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

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

“Annual Bonus”	Section 4(b)
“Base Salary”	Section 4(a)
“Bonus Plan”	Section 4(b)
“Code”	Section 2
“Confidential information or proprietary data”	Section 6(a)(2)
“Customer”	Section 6(d)(2)
“Disability”	Section 5(c)
“Employment Period”	Section 2
“Retirement”	Section 5(f)
“Supervising Officer”	Section 3(a)
“Supplier”	Section 6(d)(2)
“Term” and “Termination Date”	Section 2

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

5

Section 3.Duties.

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

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

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

(a)the Executive shall receive, at such intervals and in accordance with such Company payroll policies as may be in effect from time to time, an annual salary (pro rata for any partial year) equal to $337,394.16 (“Base Salary”). The Base Salary shall be reviewed by the Board from time to time and may, in the Board’s sole discretion, be increased when deemed appropriate by the Board; if so increased, it shall not thereafter be reduced (other than an across-the-board reduction applied in the same percentage at the same time to all of the Companies’ senior executives at the same grade level);

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

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

6

accordance with the Companies’ policies;

(d)the Executive shall be entitled to participate in all incentive, savings and retirement plans, stock option plans, practices, policies and programs applicable generally to other senior executives of the Companies at the same grade level and as determined by the Board from time to time;

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

(f)the Executive shall be entitled to not less than twenty (20) paid vacation days per calendar year (pro rata for any partial year); and

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

Section 5.Termination of Employment.

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

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

(c)If the Employment Period is terminated prior to the expiration of the Term by the Companies for any reason other than Cause or the Executive’s permanent disability, as defined in the Companies’ Board-approved disability plan or policy as in effect from time to

7

time (“Disability”) and other than within two (2) years following a Change of Control, then, as the Executive’s exclusive right and remedy in respect of such termination:

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

(ii)the Executive shall be entitled to an amount equal to one and one-half (1-1/2) times the Executive’s then existing Base Salary, to be paid in such intervals and at such times in accordance with the Company’s payroll practices in effect from time to time over the eighteen (18) month period following the Termination Date; but in no event shall such amount paid under this Section 5(c)(ii) exceed the lesser of (A) $460,000.00 or (B) two (2) times Executive’s annualized compensation based upon the annual rate of pay for services to the Companies for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service), consistent with the parties’ intention that the payments under this Section 5(c)(ii) constitute a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(iii)in the event that an amount equal to one and one-half times (1½) the Executive’s then-existing Base Salary exceeds the limitations of Subsections 5(c)(ii)(A) or (B) above, then the Executive shall be entitled to an additional lump sum payment equal to the difference between (x) one and one-half (1½) times the Executive’s then-existing Base Salary and (y) the amount payable to Executive under Subsection 5(c)(ii), such lump sum payable to Executive on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date;

(iv)the Executive shall be entitled to a payment in an amount equal to one and one-half (1½) times the actual Annual Bonus award which would otherwise be payable for the calendar year during which the Termination Date occurs, as if the Executive had been employed for all of such calendar year based on actual performance, to be paid at such time as the Annual Bonus award would otherwise be paid in accordance with the Company’s policies;

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs anchor arrangements as in effect for the Executive immediately prior to the Termination Date beginning on the Termination Date and continuing until the earlier of: (A) the eighteen (18) month anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer; provided that Executive timely pays the Executive’s portion of such coverage, and provided further that if the Company determines that the coverage to be provided under this Section 5(c)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed

8

income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(c)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 18 month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date; and

(vii)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition assistance services provided by a career transition assistance firm selected by the Executive and paid for by the Companies in an amount not to exceed twenty percent (20%) of the sum of (i) the Executive’s then existing Base Salary and (ii) the target incentive compensation award for the calendar year during which the Termination Date occurs. The Executive shall not be eligible to receive cash in lieu of executive level career transition assistance services.

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

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

(ii)the Executive shall be entitled to a lump-sum payment in an mount equal to two (2) times the Executive’s then existing Base Salary, to be paid within thirty (30) days following the Termination Date;

(iii)the Executive shall be entitled to a lump-sum payment in an amount equal to two (2) times the Executive’s target incentive compensation award for the calendar year during which the Termination Date occurs, to be paid within thirty (30) days following the Termination Date;

(iv)the Executive shall he entitled to a lump-sum payment to be paid within thirty (30) days following the Termination Date in an amount equal to the pro-rata target

9

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

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Change of Control beginning on the Termination Date and continuing until the earlier of: (A) the second anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer provided that Executive timely pays the Executive’s portion of such coverage. and provided further that if the Company determines that the coverage to be provided under this Section 5(d)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(d)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 24-month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date;

(vii)the Executive shall receive a lump sum cash payment, payable to Executive within thirty (30) days following the Termination Date, in an amount equal to the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had two (2) additional years of credit for purposes of age, benefit service and vesting;

(viii)if the Executive’s outstanding stock options have not by then fully vested pursuant to the terms of the Companies’ applicable stock option plan(s) and applicable option agreement(s), then to the extent permitted in the Companies’ applicable stock option plan(s) and as provided in the applicable stock option agreement(s), the Executive shall continue to vest in the Executive’s unvested stock options following the Termination Date;

10

(ix)for the period commencing on the Termination Date and ending not later than the last day of the second calendar year after the Termination Date, the Executive shall be entitled to receive executive level career transition assistance services provided by a career transition assistance firm selected by the Executive and paid for by the Companies in an amount not to exceed twenty percent (20%) of the sum of (i) the Executive’s then existing Base Salary and (ii) the target incentive compensation award for the calendar year during which the Termination Date occurs. The Executive shall not he eligible to receive cash in lieu of executive level career transition assistance services; and

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

(e)Any amounts payable pursuant to Sections 5(c) and 5(d) above shall be considered severance payments and, except for the Executive’s vested benefits under the Companies’ employee benefit plans (other than severance plans), shall be in full and complete satisfaction of the obligations of the Companies to the Executive in connection with the termination of the Executive’s employment. The Company shall deliver a Form 1 099 to the Executive reflecting such payments.

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

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

(ii)in the event the Employment Period is terminated as a result of

11

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

In the event the Employment Period is terminated as a result of Executive’s death, such lump sum payment shall be made within 30 days following the Termination Date; in the event the Employment Period is terminated as a result of Executive’s Disability, such lump sum payment shall be made on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date; and in the event the Employment Period is terminated as a result of Executive’s Retirement, such lump sum payment shall be made on the later of the date that Annual Bonus payments are made to other participants in the plan or the first regular payroll date of the Company to occur following the date that is six months after the Termination Date.

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

(h)Notwithstanding anything to the contrary contained in this Section 5, the Executive shall be required to execute the Companies’ then current standard release agreement as a condition to receiving any of the payments and benefits provided for in Sections 5(c) and (d), excluding the Accrued Benefits in accordance with Section 5(a), and no payments and benefits provided for in Sections 5(c) and (d) other than the Accrued Benefits in accordance with Section 5(a) shall be payable to Executive unless and until all applicable consideration and rescission periods for the release agreement have expired, Executive has not rescinded the release agreement and Executive is in compliance with each of the terms and conditions of such release agreement and this Agreement as of the date of such payments and benefits.  It is acknowledged and agreed that the then current standard release agreement shall not diminish or terminate the Executive’s rights under this Agreement.

(i)In the event of a termination of the Executive’s employment entitling the Executive to benefits under Section 5(c) above, the Executive shall use reasonable efforts to obtain employment suitable to his education, training and experience, and, upon obtaining any such other employment shall promptly notify the Companies thereof. The remaining obligation of the Companies under Section 5(c) shall be offset by any compensation earned by the Executive from such other employment during the eighteen month period commencing on his Termination Date. Except as set forth in the first sentence of this Section 5(i) and subject to the Executive’s affirmative obligations pursuant to Section 6, the Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Companies under this Agreement.

(j)Notwithstanding any provision to the contrary contained in this Agreement, if the cash payments due and the other benefits to which Executive shall become entitled under Section 5(d), either alone or together with other payments in the nature of compensation to Executive which are contingent on a change in the ownership or effective control of the Company or in the

12

ownership of a substantial portion of the assets of the Company or otherwise, would constitute a “parachute payment” (as defined in Section 280G of the Code or any successor provision thereto), such payments or benefits shall be reduced (but not below zero) to the largest aggregate amount as will result in no portion thereof being subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or being non-deductible to the Company for Federal Income Tax purposes pursuant to Section 280G of the Code (or any successor provision thereto), provided, however, that no such reduction shall occur, and this Section 5(j) shall not apply, in the event that the amount of such reduction would be more than 10% of the aggregate value of such payments and benefits.  The Companies shall in good faith determine the amount of any reduction to be made pursuant to this Section 5(j), and shall make such reduction by first reducing amounts payable under Section 5(d)(i) and thereafter by reducing amounts payable under the following Sections of this Agreement in the following order, as necessary to achieve the reduction:  5(d)(iii), 5(d)(iv), 5(d)(vi), 5(d)(vii).  Amounts payable as reimbursements under Sections 5(d)(v) and 5(d)(x), if any, shall not be subject to reduction.  No modification of, or successor provision to, Section 280G or Section 4999 subsequent to the date of this Agreement shall, however, reduce the benefits to which the Executive would be entitled under this Agreement in the absence of this Section 5(j) to a greater extent than they would have been reduced if Section 280G and Section 4999 had not been modified or superseded subsequent to the date of this Agreement, notwithstanding anything to the contrary provided in the first sentence of this Section 5(j).

(k)Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that Section 5(j) above does not apply and any payment or distribution of any type to or in respect of the Executive made directly or indirectly, by the Companies or by any other party in connection with a Change of Control, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), is or will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

(i)All computations and determinations relevant to Section 5(k) and this subsection 5(k)(i) shall be made by a national accounting firm selected and reimbursed by the Companies from among the ten (10) largest accounting firms in the United States as determined by gross revenues (the “Accounting Firm”), subject to the Executive’s consent (not to be unreasonably withheld), which firm may be the Companies’ accountants. Such determinations shall include whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code). In making the initial determination hereunder as to whether a Gross-Up Payment is required, the Accounting Firm shall determine that no Gross-Up Payment is required if the Accounting Firm is able to conclude that no “Change of Control” has occurred (within the meaning of Section 280G of the Code). If the Accounting Firm determines that a Gross-Up Payment is required, the Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter both to the Companies and the Executive by no

13

later than thirty (30) days following the Termination Date, if applicable, or such earlier time as is requested by the Companies or the Executive (if the Executive reasonably believes that any of the Total Payments may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Companies with a written statement that such Accounting Firm has concluded that it is more likely than not that no Excise Tax is payable (including the reasons therefore) and the Executive is not required to report any Excise Tax on Executive’s federal income tax return.

(ii)If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within twenty (20) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Companies by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Companies and the Executive, absent manifest error.

(iii)As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Companies should have been made (“Underpayment”), or that Gross-Up Payments will have been made by the Companies which should not have been made (“Overpayments”). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with an amount which after payment of all taxes thereon is equal to any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Companies to or for the benefit of the Executive.

(iv)In the case of an Overpayment, the Executive shall, at the direction and expense of the Companies, take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Companies, and otherwise reasonably cooperate with the Companies to correct such Overpayment, provided, however, that the Executive shall not in any event be obligated to return to the Companies an amount greater than the portion of the Overpayment that Executive has retained after payment of all taxes thereon or has recovered as a refund from the applicable taxing authorities.

(v)The Executive shall notify the Companies in writing of any claim by the Internal Revenue Service relating to the possible application of the Excise Tax under Section 4999 of the Code to any of the payments and amounts referred to herein and shall afford the Companies, at their expense, the opportunity to control the defense of such claim (for the sake of clarity, if the Internal Revenue Service is successful in any such claim or the Executive reaches a final settlement with the Internal Revenue Service with respect to such claim (after having afforded the Companies, at their expense, the opportunity to control the defense of such claim), the amount of the Excise Tax resulting from such successful claim or settlement shall be determinative as to whether or not there has been an Underpayment or an Overpayment for purposes of subsection 5(k)(iii).

14

(vi)Without limiting the intent of this Section 5(k) to make the Executive whole, on an after-tax basis, from the application of the Excise Taxes, all determinations by the Accounting Firm shall be made with a view to minimizing the application of Sections 280G and 4999 of the Code of any of the Total Payments, subject, however, to the following: the Accounting Firm shall make its determination on the basis of “substantial authority” (within the meaning of Section 6230 of the Code) and shall provide opinions to that effect to both the Companies and the Executive upon the request of either of them.

(vii)Notwithstanding any provision above to the contrary, any Gross-Up Payment payable under this Section 5(k) shall be made by the end of the calendar year following the calendar year in which the Executive remits the taxes.  Further, notwithstanding any provision above to the contrary, any right to reimbursement under this Section 5(k) of expenses incurred by Executive due to a tax audit or litigation addressing the existence or amount of a tax liability shall be made by the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or litigation are remitted, or where as a result of the audit or litigation no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.  Any Gross-Up Payment and any reimbursement of expenses payable under this Section 5(k) shall not be made before the date that is six months after the Termination Date.

Section 6.Further Obligations of the Executive.

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

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

(i)Business, financial and strategic information, such as sales and

15

earnings information and trends, material, overhead and other costs, profit margins, accounting information, banking and financing information, pricing policies, capital expenditure/investment plans and budgets, forecasts, strategies, plans and prospects.

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

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

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

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

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

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

(c)During (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the eighteen (18) month period following the end of Executive’s employment with the Companies,, the Executive shall not within the United States and Canada in

16

any capacity (whether as an owner, employee, consultant or otherwise) at any time perform, manage, supervise, or be responsible or accountable for anyone else who is performing services — which are the same as, substantially similar or related to the services the Executive is providing, or during the last two years of the Executive’s employment by the Companies has provided, for the Companies or their Subsidiaries — for, or on behalf of, any other Person who or which is (1) a wholesaler of office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (2) a provider of services the same as or substantially similar to those provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period, or (3) engaged in a line of business other than described in (1) or (2) hereinabove which is the same or substantially similar to the lines of business engaged in by the Companies or their Subsidiaries, or to any line of business which to the Executive’s knowledge is under active consideration or planning by the Companies and their Subsidiaries, (luring the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period,.

(d)(1)During (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer for or on behalf of any Person other than the Companies or any of their Subsidiaries with respect to the purchase of (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines, or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (B) services the same as or substantially similar to those provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services provided to such Customer from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period. Without limiting the foregoing, (i) during the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) insofar as the Executive maybe employed by, or acting for or on behalf of, a Supplier at any time within the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer to switch the purchase of the products or services described hereinabove from the Companies or their Subsidiaries to Supplier.

(2)For purposes of this Agreement, a “Customer” is any Person who or which has ordered or purchased by or from the Companies or any of their Subsidiaries (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, audio/visual and business machines or such other products whether or not related to the foregoing, (B) services provided by or from the

17

Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s Employment Period. For purposes of this Agreement, a “Supplier” is any Person who or which has furnished to the Companies or their Subsidiaries for resale (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products audio/visual and business machines or such other products whether or nor related to the foregoing (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after Employment Period.

(e)During the Executive’s employment by the Companies, whether during or after the Employment Period, and during the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, induce or solicit any employee of the Companies or any of their Subsidiaries for the purpose of causing such employee to terminate his or her employment with the Companies or such Subsidiary.

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

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

(h)During the Executive’s employment with the Companies, whether during or after Employment Period, and during the eighteen (18) month period following the end of Executive’s employment with the Companies, the Executive agrees that, prior to accepting employment with a Customer or Supplier of the Companies, the Executive will give notice to the Chief Executive Officer of the Companies. The Companies reserve the right to make such Customer or Supplier aware of the Executive’s obligations under Section 6 of this Agreement.

(i)During and following Executive’s Employment Period, the Executive shall

18

furnish a copy of this Section 6 in its entirety to any prospective employer prior to accepting employment with such prospective employer.

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

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

Notwithstanding the foregoing, all rights of the Executive under this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, estates, executors, administrators, heirs and beneficiaries. All amounts payable to the Executive hereunder shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs or representatives.

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

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

Section 10. Amendment. This Agreement may not be amended or modified at any time except by a written instrument approved by the Board, and executed by the Companies and the Executive; provided, however, that any attempted amendment or modification without such approval and execution shall be null and void ab initio and of no effect.

Section 11. Payment; Taxes and Withholding. The Company shall be responsible as employer for payment of all cash compensation and severance payments provided herein and Holding shall cause the Company to make such payments. The Executive shall not be entitled to receive any additional compensation from either of the Companies for any services the Executive provides to Holding or the Companies’ Subsidiaries. The Company shall be

19

entitled to withhold from any amounts to be paid to the Executive hereunder any federal, state, local, or foreign withholding or other taxes or charges which it is from time to time required to withhold. The Company shall be entitled to rely on an opinion of counsel if any question as to the amount or requirement of any such withholding shall arise. Executive shall be solely responsible for the payment of all taxes due and owing with respect to wages, benefits, and other compensation provided to him hereunder.  This Agreement is intended to satisfy, or be exempt from, the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.

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

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

If to the Companies:

United Stationers the

United Stationers Supply Co.

One Parkway North Blvd.,

Deerfield, IL 60015-2559

Attention: General Counsel

If to the Executive:

Patrick T. Collins

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

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

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

Section 16.Indemnification. The provisions set forth in the Indemnification Agreement appended hereto as Attachment A are hereby incorporated into this Agreement and made a part hereof. The parties shall execute the Indemnification Agreement contemporaneously with the execution of this Agreement.

20

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

Section 18.Arbitration. Any dispute, controversy or question arising under, out of, or relating to this Agreement (or the breach thereof), or, the Executive’s employment with the Companies or termination thereof, shall be referred for arbitration in Chicago, Illinois to a neutral arbitrator selected by the Executive and the Companies (or if the parties are unable to agree on selection of such an arbitrator, one selected by the American Arbitration Association pursuant to its rules referred to below) and this shall be the exclusive and sole means for resolving such dispute. Such arbitration shall be conducted in accordance with the National Rules for Resolution of Employment Disputes of the American Arbitration Association. Except as provided in Section 5(d)(ix) above, the arbitrator shall have the discretion to award reasonable attorneys’ fees, costs and expenses to the prevailing party. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Nothing in this Section I8 shall be construed so as to deny the Companies the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the Executive’s covenants in Section 6 hereof. Moreover, this Section 18 and Section 12 hereof shall not be applicable to any dispute, controversy or question arising under, out of, or relating to the Indemnification Agreement.

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

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

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

Section 22. Entire Agreement. This Agreement, including the Indemnification Agreement and any other written undertakings by the Executive referred to herein, supersedes all other agreements. arrangements or understandings (whether written or oral) between the Companies and the Executive with respect to the subject matter of this Agreement including without limitation the Prior Agreement and the Executive’s employment relationship with the Companies and any of their Subsidiaries, and this Agreement contains the sole and entire agreement among the parties hereto with respect to the subject matter hereof.

21

***

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

EXECUTED ON :		UNITED STATIONERS INC.
	, 2008	By:
			Name: Richard W. Gochnauer
			Title:   President and Chief Executive Officer
EXECUTED ON:		UNITED STATIONERS SUPPLY CO.
	, 2008	By:
			Name: Richard W. Gochnauer
			Title:   President and Chief Executive Officer
EXECUTED ON:		EXECUTIVE:
	, 2008
		Patrick T. Collins

22

APPENDIX I

23

EX-10.40

Exhibit 10.40

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made, entered into and effective as of December 31, 2008 (the “Effective Date”) by and among UNITED STATIONERS INC., a Delaware corporation (hereinafter, together with its successors, referred to as “Holding”), UNITED STATIONERS SUPPLY CO., an Illinois corporation (hereinafter, together with its successors, referred to as the “Company”, and, together with Holding, the “Companies”), and Victoria J. Reich (hereinafter referred to as the “Executive”).

WHEREAS, the Companies and Executive are parties to an Executive Employment Agreement dated June 11, 2007 (the “Prior Agreement”), which the parties desire to amend and restate in its entirety as set forth in this Agreement; and

WHEREAS, in October 2004, the American Jobs Creation Act of 2004 (the “Act”) was enacted, Section 885 of which Act added new provisions to the Internal Revenue Code pertaining to deferred compensation and for which the Treasury Department has issued final regulations and guidance regarding the deferred compensation provisions of the Act permitting service providers and service recipients a transition period to modify existing deferred compensation arrangements to bring them into compliance with the Act; and

WHEREAS, the parties agree that it is in their mutual best interests to modify, amend and clarify the terms and conditions of the Prior Agreement, as set forth in this Agreement, with the full intention of complying with the Act so as to avoid the additional taxes and penalties imposed under the Act; and

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

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

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

WHEREAS, Executive will have access to confidential, proprietary and trade secret information of the Companies and their subsidiaries, and it is desirable and in the best interests of the Companies and their shareholders to protect confidential, proprietary and trade secret information of the Companies and their subsidiaries, to prevent unfair competition by former

1

executives of the Companies following separation of their employment with the Company and to secure cooperation from former executives with respect to matters related to their employment with the Company; and

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

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

SECTION 1.Definitions.

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

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

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

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

“Cause” shall mean (i) conviction of, or plea of nolo contendere to, a felony (excluding motor vehicle violations); (ii) theft or embezzlement, or attempted theft or embezzlement, of money or property or assets of the Company or any of its Affiliates; (iii) illegal use of drugs; (iv) material breach of this Agreement or any employment-related undertakings provided in a writing signed by the Executive prior to or concurrently with this Agreement; (v) gross negligence or willful misconduct in the performance of Executive’s duties; (vi) breach of any fiduciary duty owed to the Company, including, without limitation, engaging in competitive acts while employed by the Company; or (vii) the Executive’s willful refusal to

2

perform the assigned duties for which the Executive is qualified as directed by the Executive’s Supervising Officer (as hereinafter defined) or the Board; provided, that in the case of any event constituting Cause within clauses (iv) through (vii) which is curable by the Executive, the Executive has been given written notice by the Companies of such event said to constitute Cause, describing such event in reasonable detail, and has not cured such action within thirty (30) days of such written notice as reasonably determined by the Chief Executive Officer.  For purposes of this definition of Cause, action or inaction by the Executive shall not be considered “willful” unless done or omitted by the Executive (A) intentionally or not in good faith and (B) without reasonable belief that the Executive’s action or inaction was in the best interests of the Companies, and shall not include failure to act by reason of total or partial incapacity due to physical or mental illness.

“Change of Control” shall mean (a) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of the combined voting power of Holding’s then outstanding voting securities entitled to vote generally in the election of directors (“Voting Securities”); provided, however, that the acquisition or holding of Voting Securities by (i) Holding of any of its subsidiaries, (ii) an employee benefit plan (or a trust forming a part thereof) maintained by Holding or any of its subsidiaries, or (iii) any Person in which the Executive has a substantial equity interest shall not constitute a Change of Control.  Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the issuance of Voting Securities by Holding, and after such issuance of Voting Securities by Holding, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person to more than 50% of the Voting Securities of Holding, then a Change of Control shall occur; (b) At any time during a period of two consecutive years, the individuals who at the beginning of such period constituted the Board (the “Incumbent Board”) cease for any reason to constitute more than 50% of the Board; provided, however, that if the election, or nomination for election by Holding’s stockholders, of any new director was approved by a vote of more than 50% of the directors then comprising the Incumbent Board, such new director shall, for purposes of this subsection (b), be considered as though such person were a member of the Incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of (i) either an actual “Election Consent” (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by reason of an agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest; (c) Consummation of a merger, consolidation or reorganization or approval by Holding’s stockholders of a liquidation or dissolution of Holding or the occurrence of a liquidation or dissolution of Holding (“Business Combination”), unless, following such Business Combination:  (1) the Persons with Beneficial Ownership of Holding, immediately before such Business Combination, have Beneficial Ownership of more than 50% of the combined voting power of the then outstanding

3

voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity) resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns Holding or all or substantially all of Holding’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) in substantially the same proportions as their Beneficial Ownership of the Voting Securities immediately before such Business Combination, (2) the individuals who were members of the Incumbent Board immediately prior to the execution of the initial agreement providing for such Business Combination constitute more than 50% of the members of the board of directors (or comparable governing body of a noncorporate entity) of the Surviving Company; and (3) no Person (other than Holding, any of its subsidiaries or any employee benefit plan (or any trust forming a part thereof) maintained by Holding, the Surviving Company or any Person who immediately prior to such Business Combination had Beneficial Ownership of 30% or more of the then Voting Securities) has Beneficial Ownership of 30% or more of the then combined voting power of the Surviving Company’s then outstanding voting securities; provided, that notwithstanding this clause (3), a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by Holding in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided, however that a Business Combination with a Person in which the Executive has a substantial equity interest shall not constitute a Change of Control, or (d) Approval by Holding’s stockholders of an agreement for the assignment, sale, conveyance, transfer, lease or other disposition of all or substantially all of the assets of Holding to any Person (other than a Person in which the Executive has a substantial equity interest and other than a subsidiary of Holding or other entity, the Persons with Beneficial Ownership of which are the same Persons with Beneficial Ownership of Holding and such Beneficial Ownership is in substantially the same proportions), or the occurrence of the same.  Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by such Person; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such acquisition of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person, then a Change of Control shall occur.

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

“Good Reason” shall mean (i) any material breach by the Companies of this Agreement without Executive’s written consent, (ii) any material reduction, without the Executive’s written consent, in the Executive’s duties, responsibilities or authority; provided, however, that for purposes of this clause (ii), neither (A) a change in the Executive’s Supervising Officer or the number or identity of the Executive’s direct reports, nor (B) a change in the Executive’s title, duties, responsibilities or authority as a result of a realignment or restructuring of the Companies’ executive organizational chart nor (C) a change in the Executive’s title, duties, responsibilities or authority as a result of a realignment or restructuring of the Companies shall necessarily be deemed by itself to materially reduce Executive’s duties, responsibilities or

4

authority, as long as, in the case of either (A), (B) or (C), Executive continues to report to either the Chief Executive Officer or Chief Operating Officer of the Companies or to the Supervising Officer to whom she reported immediately prior to the Change of Control or a Supervising Officer of equivalent responsibility and authority, or (iii) without Executive’s written consent:  (A) a material reduction in the Executive’s Base Salary, (B) the relocation of the Executive’s principal place of employment more than fifty (50) miles from its location on the date of a Change in Control, or (C) the relocation of the Company’s corporate headquarters office outside of the metropolitan area in which it is located on the date of a Change in Control.  For purposes of this Agreement, a Change of Control, alone, does not constitute Good Reason.  Furthermore, notwithstanding the above, the occurrence of any of the events described above will not constitute Good Reason unless the Executive gives the Companies written notice within thirty (30) days after the initial occurrence of any of such events that the Executive believes that such event constitutes Good Reason, and the Companies thereafter fail to cure any such event within thirty (30) days after receipt of such notice.

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

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

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

Annual Bonus”	Section 4(b)
“Base Salary”	Section 4(a)
“Bonus Plan”	Section 4(b)
“Confidential information or proprietary data”	Section 6(a)(2)
“Customer”	Section 6(d)(2)
“Disability”	Section 5(c)
“Employment Period”	Section 2
“Retirement”	Section 5(f)
“Supervising Officer”	Section 3(a)
“Supplier”	Section 6(d)(2)
“Term” and “Termination Date”	Section 2

SECTION 2.Term and Employment Period.  Subject to Section 19 hereof, the term of this Agreement (“Term”) shall commence on the Effective Date of this Agreement and shall continue until the effective date of termination of the Executive’s employment hereunder pursuant to Section 5 of this Agreement.  The period during which the Executive is employed by the

5

Companies pursuant to this Agreement is referred to herein as the “Employment Period.”  The date on which termination of the Executive’s employment hereunder shall become effective is referred to herein as the “Termination Date.” For purposes of Section 5 of this Agreement only, the Termination Date shall mean the date on which a “separation from service” has occurred for purposes of Section 409A of the Internal Revenue Code and the regulations and guidance thereunder (the “Code”).

SECTION 3.Duties.

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

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

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

(a)the Executive shall receive, at such intervals and in accordance with such Company payroll policies as may be in effect from time to time, an annual salary (pro rata for any partial year) equal to $416,000.16 (“Base Salary”).  The Base Salary shall be reviewed by the Board from time to time and may, in the Board’s sole discretion, be increased when deemed appropriate by the Board; if so increased, it shall not thereafter be reduced (other than an across-the-board reduction applied in the same percentage at the same time to all of the Companies’ senior executives at the same grade level);

(b)during the Employment Period, the Executive shall be eligible to earn an annual incentive compensation award under the Companies’ management incentive or bonus plan, or a successor plan thereto, as shall be in effect from time to time (the “Bonus Plan”), subject to achievement of performance goals determined in accordance with the terms of the

6

Bonus Plan (such annual incentive compensation award, the “Annual Bonus”), with such Annual Bonus to be payable in a cash lump sum at such time as bonuses are ordinarily paid to the Companies’ senior executives at the same grade level.  Certain details of Executive’s participation in the Bonus Plan are included in Appendix A hereto and made a part hereof;

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

(d)the Executive shall be entitled to participate in all incentive, savings and retirement plans, stock option plans, practices, policies and programs applicable generally to other senior executives of the Companies at the same grade level and as determined by the Board from time to time.  Executive shall be granted the equity incentives in accordance with Appendix A as attached hereto and made a part hereof;

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

(f)the Executive shall be entitled to not less than twenty (20) paid vacation days per calendar year (pro rata for any partial year);

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

(h)appended hereto as Appendix B and made a part hereof is a summary of the current employee benefit plans and perquisites available to the Executive, which plans and perquisites are subject to change by the Company from time to time.

SECTION 5.Termination of Employment.

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

(b)Any termination by the Companies, or by the Executive, of the Employment Period shall be communicated by written notice of such termination to the Executive, if such notice is delivered by the Companies, and to the Companies, if such notice is

7

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

(c)If the Employment Period is terminated prior to the expiration of the Term by the Executive for Good Reason or by the Companies for any reason other than Cause or the Executive’s permanent disability, as defined in the Companies’ Board-approved disability plan or policy as in effect from time to time (“Disability”) and other than within two (2) years following a Change of Control, then, as the Executive’s exclusive right and remedy in respect of such termination:

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

(ii)the Executive shall be entitled to an amount equal to one and one-half (1½) times the Executive’s then existing Base Salary, to be paid in such intervals and at such times in accordance with the Company’s payroll practices in effect from time to time over the eighteen (18) month period following the Termination Date; but in no event shall such amount paid under this Section 5 (c)(ii) exceed the lesser of (A) $460,000.00 or (B) two (2) times Executive’s annualized compensation based upon the annual rate of pay for services to the Companies for the calendar year prior to the calendar year in which the Termination Date occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service), consistent with the parties’ intention that the payments under this Section 5(c)(ii) constitute a “separation pay plan due to involuntary “separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii);

(iii)in the event that an amount equal to one and one-half (1 ½) times the Executive’s then-existing Base Salary exceeds the limitations of Subsections 5 (c) (ii)(A) or (B) above, then the Executive shall be entitled to an additional lump sum payment equal to the difference between (x) one and one-half (1 ½) times the Executive’s then existing Base Salary and (y) the amount payable to Executive under Subsection 5(c)(ii), such lump sum payble to Executive on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date:

(iv)the Executive shall be entitled to a payment in an amount equal to one and one-half (1 ½ ) times the actual Annual Bonus award which would otherwise be payable for the calendar year during which the Termination Date occurs, as if the Executive had been employed for all of such calendar year based on actual performance, to be paid at such time as the Annual Bonus award would otherwise be paid in accordance with the Company’s policies;

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or

8

dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Termination Date, beginning on the Termination Date and continuing until the earlier of:  (A) the eighteen (18) month anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer; provided that Executive timely pays the Executive’s portion of such coverage, and provided further that if the Company determines that the coverage to be provided under this Section 5(c)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(c)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. §1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 18 month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date; and

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

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

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

9

(ii)the Executive shall be entitled to a lump-sum payment in an amount equal to two (2) times the Executive’s then existing Base Salary, to be paid within thirty (30) days following the Termination Date;

(iii)the Executive shall be entitled to a lump-sum payment in an amount equal to two (2) times the Executive’s target incentive compensation award for the calendar year during which the Termination Date occurs, to be paid within thirty (30) days following the Termination Date;

(iv)the Executive shall be entitled to a lump-sum payment to be paid within thirty (30) days following the Termination Date in an amount equal to the pro-rata target incentive compensation award for the calendar year during which the Termination Date occurs.  Such pro-rata target incentive compensation award shall be determined by multiplying the target incentive compensation award amount by a fraction, the numerator of which is the number of days in the calendar year of the Termination Date elapsed prior to the Termination Date and the denominator of which is three hundred and sixty-five (365).

(v)the Executive shall continue to be covered, upon the same terms and conditions described in Section 4(e) hereof, by the same or equivalent medical and/or dental insurance plans, programs and/or arrangements as in effect for the Executive immediately prior to the Change of Control, beginning on the Termination Date and continuing until the earlier of:  (A) the second anniversary following the date of the Executive’s Termination Date, and (B) the date the Executive receives substantially equivalent coverage under the plans, programs and/or arrangements of a subsequent employer; provided that Executive timely pays the Executive’s portion of such coverage, and provided further that if the Company determines that the coverage to be provided under this Section 5(d)(v) would cause a self-insured plan maintained by the Company to be in violation of the nondiscrimination requirements of Section 105(h) of the Code, then such coverage will be paid for by the Executive by means of the Company reporting imputed income to Executive on a monthly basis for the fair market value of such coverage plus additional imputed amounts to pay any income tax at source on resulting wages subject to FICA or the income tax withholding provisions of federal or state tax law, including pyramiding wages and taxes (and the Company shall be responsible for depositing all applicable withholding amounts in a timely manner with the appropriate tax authority), with the intent that any amounts payable under this Section 5(d)(v) that are not otherwise excluded from deferred compensation under Code Section 409A shall be excluded from deferred compensation pursuant to a “separation pay plan due to involuntary separation from service” under Treas. Reg. §1.409A-1(b)(9)(iii);

(vi)the Executive shall receive a lump sum payment in an amount equal to the amount the Company would otherwise expend for 24-month’s coverage for its share of the premiums for life and disability insurance plans or programs as in effect for Executive immediately prior to the Termination Date, payable to Executive within thirty (30) days following the Termination Date;

10

(vii)the Executive shall receive a lump sum cash payment, payable to Executive within thirty (30) days following the Termination Date, in an amount equal to the additional benefit value (on a present value, differential basis) that would be payable to Executive under the Company’s defined benefit retirement plan if he had two additional years of credit for purposes of age, benefit service and vesting;

(viii)if the Executive’s outstanding stock options have not by then fully vested pursuant to the terms of the Companies’ applicable stock option plan(s) and applicable option agreement(s), then to the extent permitted in the Companies’ applicable stock option plan(s) and as provided in the applicable stock option agreement(s), the Executive shall continue to vest in the Executive’s unvested stock options following the Termination Date;

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

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

(e)Any amounts payable pursuant to Sections 5(c) and 5(d) above shall be considered severance payments and, except for the Executive’s vested benefits under the Companies’ employee benefit plans (other than severance plans), shall be in full and complete satisfaction of the obligations of the Companies to the Executive in connection with the termination of the Executive’s employment.  The Company shall deliver a W-2 Form to the Executive reflecting such payments.

(f)If the Employment Period is terminated as a result of the Executive’s death, Disability or retirement, as defined in the Companies’ Board-approved retirement plan or

11

policy, as in effect from time to time (“Retirement”), then the Executive shall be entitled to (i) the Executive’s Accrued Benefits in accordance with Section 5(a), (ii) any benefits that may be payable to the Executive under any applicable Board-approved disability, life insurance or retirement plan or policy in accordance with the terms of such plan or policy, and (iii) a lump sum payment in an amount equal to:

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

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

In the event the Employment Period is terminated as a result of Executive’s death, such lump sum payment shall be made within 30 days following the Termination Date; in the event the Employment Period is terminated as a result of Executive’s Disability, such lump sum payment shall be made on the first regular payroll date of the Company to occur following the date that is six months after the Termination Date; and in the event the Employment Period is terminated as a result of Executive’s Retirement, such lump sum payment shall be made on the later of the date that Annual Bonus payments are made to other participants in the plan or the first regular payroll date of the Company to occur following the date that is six months after the Termination Date.

(g)Notwithstanding anything to the contrary contained in this Section 5, the Executive shall be required to execute the Companies’ then current standard release agreement as a condition to receiving any of the payments and benefits provided for in Sections 5(c) and (d), excluding the Accrued Benefits in accordance with Section 5(a), and no payments and benefits provided for in Sections 5(c) and (d) other than the Accrued Benefits in accordance with Section 5(a) shall be payable to Executive unless and until all applicable consideration and rescission periods for the release agreement have expired, Executive has not rescinded the release agreement and Executive is in compliance with each of the terms and conditions of such release agreement and this Agreement as of the date of such payments and benefits.  It is acknowledged and agreed that the then current standard release agreement shall not diminish or terminate the Executive’s rights under this Agreement or the Indemnification Agreement.

(h)In the event of a termination of the Executive’s employment entitling the Executive to benefits under Section 5(c) above, the Executive shall use reasonable efforts to obtain employment suitable to her education, training and experience, and, upon obtaining any

12

such other employment shall promptly notify the Companies thereof.  The remaining obligation of the Companies under Section 5(c) shall be offset by any compensation earned by the Executive from such other employment during the eighteen-month period commencing on her Termination Date.  Except as set forth in the first sentence of this Section 5(i) and subject to the Executive’s affirmative obligations pursuant to Section 6, the Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Companies under this Agreement. Notwithstanding any provision to the contrary contained in this Agreement, if the cash payments due and the other benefits to which Executive shall become entitled under Section 5(d), either alone or together with other payments in the nature of compensation to Executive which are contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company or otherwise, would constitute a “parachute payment” as defined in Section 280G of the Code (or any successor provision thereto), such payments or benefits shall be reduced (but not below zero) to the largest aggregate amount as will result in no portion thereof being subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or being non-deductible to the Company for Federal Income Tax purposes pursuant to Section 280G of the Code (or any successor provision thereto), provided, however, that no such reduction shall occur, and this Section 5(j) shall not apply, in the event that the amount of such reduction would be more than 10% of the aggregate value of such payments and benefits. The Companies shall in good faith determine the amount of any reduction to be made pursuant to this Section 5(j), and shall make such reduction by first reducing amounts payable under Section 5(d)(i) and thereafter by reducing amounts payable under the following Sections of this Agreement in the following order, as necessary to achieve the reduction: 5(d)(iii), 5(d)(iv), 5(d)(vi), 5(d)(vii). Amounts payable as reimbursements under Sections 5(d)(v) and 5 (d)(x), if any, shall not be subject to reduction. No modification of, or successor provision to, Section 280G or Section 4999 subsequent to the date of this Agreement shall, however, reduce the benefits to which the Executive would be entitled under this Agreement in the absence of this Section 5(j) to a greater extent than they would have been reduced if Section 280G and Section 4999 had not been modified or superseded subsequent to the date of this Agreement, notwithstanding anything to the contrary provided in the first sentence of this Section 5(j).

(i)Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that Section 5(j) above does not apply and any payment or distribution of any type to or in respect of the Executive made directly or indirectly, by the Companies or by any other party in connection with a Change of Control, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), is or will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

(i)All computations and determinations relevant to Section 5(k) and this subsection 5(k)(i) shall be made by a national accounting firm selected and

13

reimbursed by the Companies from among the ten (10) largest accounting firms in the United States as determined by gross revenues (the “Accounting Firm”), subject to the Executive’s consent (not to be unreasonably withheld), which firm may be the Companies’ accountants.  Such determinations shall include whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code).  In making the initial determination hereunder as to whether a Gross-Up Payment is required, the Accounting Firm shall determine that no Gross-Up Payment is required if the Accounting Firm is able to conclude that no “Change of Control” has occurred (within the meaning of Section 280G of the Code).  If the Accounting Firm determines that a Gross-Up Payment is required, the Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter both to the Companies and the Executive by no later than thirty (30) days following the Termination Date, if applicable, or such earlier time as is requested by the Companies or the Executive (if the Executive reasonably believes that any of the Total Payments may be subject to the Excise Tax).  If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Companies with a written statement that such Accounting Firm has concluded that it is more likely than not that no Excise Tax is payable (including the reasons therefor) and the Executive is not required to report any Excise Tax on Executive’s federal income tax return.

(ii)If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within twenty (20) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Companies by the Accounting Firm.  Any determination by the Accounting Firm shall be binding upon the Companies and the Executive, absent manifest error.

(iii)As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Companies should have been made (“Underpayment”), or that Gross-Up Payments will have been made by the Companies which should not have been made (“Overpayment”).  In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred.  In the case of an Underpayment, the amount of such Underpayment (together with an amount which after payment of all taxes thereon is equal to any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Companies to or for the benefit of the Executive.

(iv)In the case of an Overpayment, the Executive shall, at the direction and expense of the Companies, take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Companies, and otherwise reasonably cooperate with the Companies to correct such Overpayment, provided, however, that the Executive shall not in any event be obligated to return to the Companies an amount greater than the portion of the Overpayment that Executive has retained after payment of all taxes thereon or has recovered as a refund from the applicable taxing authorities.

14

(v)The Executive shall notify the Companies in writing of any claim by the Internal Revenue Service relating to the possible application of the Excise Tax under Section 4999 of the Code to any of the payments and amounts referred to herein and shall afford the Companies, at their expense, the opportunity to control the defense of such claim (for the sake of clarity, if the Internal Revenue Service is successful in any such claim or the Executive reaches a final settlement with the Internal Revenue Service with respect to such claim (after having afforded the Companies, at their expense, the opportunity to control the defense of such claim), the amount of the Excise Tax resulting from such successful claim or settlement shall be determinative as to whether or not there has been an Underpayment or an Overpayment for purposes of subsection 5(k)(iii).

(vi)Without limiting the intent of this Section 5(k) to make the Executive whole, on an after-tax basis, from the application of the Excise Taxes, all determinations by the Accounting Firm shall be made with a view to minimizing the application of Sections 280G and 4999 of the Code of any of the Total Payments, subject, however, to the following:  the Accounting Firm shall make its determination on the basis of “substantial authority” (within the meaning of Section 6230 of the Code) and shall provide opinions to that effect to both the Companies and the Executive upon the request of either of them.

(vii)Notwithstanding any provision above to the contrary, any Gross-Up Payment payable under this Section 5(k) shall be made by the end of the calendar year following the calendar year in which the Executive remits the taxes. Further, notwithstanding any provision above to the contrary, any right to reimbursement under this Section 5(k) of expense incurred by Executive due to a tax audit or litigation addressing the existence or amount of a tax liability shall be made by the end of the calendar year following the calendar year in which the taxes that are the subject of the audit or litigation are remitted, or where as a result of the audit or litigation no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation. Any Gross-Up Payment and any reimbursement of expense payable under this Section 5(k) shall not be made before the date that is six months after the Termination Date.

SECTION 6.Further Obligations of the Executive.

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

(2)For purposes of this Agreement, “confidential information or proprietary data” means information and data prepared, compiled, or acquired by or for

15

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

(ii)Business, financial and strategic information, such as sales and earnings information and trends, material, overhead and other costs, profit margins, accounting information, banking and financing information, pricing policies, capital expenditure/investment plans and budgets, forecasts, strategies, plans and prospects.

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

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

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

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

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

(b)All records, files, documents and materials, in whatever form and media, relating to the Companies’ or any of their Subsidiaries’ business (including, but not limited to, those containing or reflecting any confidential information or proprietary data) which the Executive prepares, uses, or comes into contact with, including the originals and all copies

16

thereof and extracts and derivatives therefrom, shall be and remain the sole property of the Companies or their Subsidiaries.  Upon termination of the Executive’s employment for any reason, whether during or after the Employment Period, the Executive shall immediately return all such records, files, documents, materials and other property of the Companies and their Subsidiaries in the Executive’s possession, custody or control, in good condition, to the Companies.

(c)The Companies maintain, and Executive acknowledges and agrees, the Companies have and will entrust Executive with proprietary information, strategies, knowledge, customer relationships and know-how which would be detrimental to the Companies’ interest in protecting relationships with Customers and/or Suppliers if Executive were to provide services or otherwise participate in the operation of a competitor of the Companies.  Therefore, during (i) the Executive’s employment by the Companies, whether during or after the Employment Period, and (ii) the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not in any capacity (whether as an owner, employee, consultant or otherwise) at any time perform, manage, supervise, or be responsible or accountable for anyone else who is performing services — which are the same as, substantially similar or related to the services the Executive is providing, or during the last two years of the Executive’s employment by the Companies has provided, for the Companies or their Subsidiaries — for, or on behalf of, any other Person who or which is (1) a wholesaler of office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (2) a provider of services the same as or substantially similar to those provided by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, or (3) engaged in a line of business other than described in (1) or (2) hereinabove which is the same or substantially similar to the lines of business engaged in by the Companies or their Subsidiaries, or to any line of business which to the Executive’s knowledge is under active consideration or planning by the Companies and their Subsidiaries, during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.

(d)(1)During (i) the Executive’s employment by the Companies, whether during or after the Employment Period.  and (ii) the eighteen (18) month period following the end of the Executive’s employment with the Companies, the Executive shall not at any time, directly or indirectly, solicit any Customer for or on behalf of any Person other than the Companies or any of their Subsidiaries with respect to the purchase of (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines, or such other products whether or not related to the foregoing provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period, (B) services the same as or substantially similar to those provided by the Companies or their Subsidiaries to such Customer during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period or (C) products or services

17

from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services provided to such Customer from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.  Without limiting the foregoing, (i) during the Executive’s employment by the Companies and (ii) insofar as the Executive may be employed by, or acting for or on behalf of, a Supplier at any time within the eighteen (18) month period following the end of the Executive’s employment with the Companies, whether during or after the Employment Period, the Executive shall not at any time, directly or indirectly, solicit any Customer to switch the purchase of the products or services described hereinabove from the Companies or their Subsidiaries to Supplier.

(2)For purposes of this Agreement, a “Customer” is any Person who or which has ordered or purchased by or from the Companies or any of their Subsidiaries (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or not related to the foregoing, (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.  For purposes of this Agreement, a “Supplier” is any Person who or which has furnished to the Companies or their Subsidiaries for resale (A) office products, including traditional office products, computer consumable products, office furniture, janitorial and/or sanitation products, food service paper/non-food products, audio/visual and business machines or such other products whether or nor related to the foregoing (B) services provided by or from the Companies or any of their Subsidiaries or (C) products or services from a line of business other than as described in (A) or (B) herein which are the same or substantially similar to the products and services from a line of business engaged in by the Companies or their Subsidiaries during the last twelve (12) months of the Executive’s employment with the Companies, whether during or after the Employment Period.

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

(f)Following the end of the Executive’s Employment Period, the Executive shall not, directly or indirectly, make or cause to be made (and shall prohibit the officers, directors, employees, agents and representatives of any Person controlled by Executive not to make or cause to be made) any disparaging, derogatory, misleading or false statement, whether orally or in writing, to any Person, including members of the investment community, press, and customers, competitors and advisors to the Companies, about the Companies, their respective parents, Subsidiaries or Affiliates, their respective officers or members of their boards of

18

directors, or the business strategy or plans, policies, practices or operations of the Companies, or of their respective parents, Subsidiaries or Affiliates.

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

(h)During the Executive’s employment with the Companies, whether during or after the Employment Period and during the eighteen (18) month period following the end of Executive’s employment with the Companies, the Executive agrees that, prior to accepting employment with a Customer or Supplier of the Companies, the Executive will give notice to the Chief Executive Officer of the Companies.  The Companies reserve the right to make such Customer or Supplier aware of the Executive’s obligations under Section 6 of this Agreement.

(i)During the Executive’s employment by the Companies and during the twenty-four (24) month period following the end of Executive’s Employment Period, the Executive shall furnish a copy of this Section 6 in its entirety to any prospective employer prior to accepting employment with such prospective employer.

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

SECTION 7.Successors.  The Companies may assign their rights under this Agreement to any successor to all or substantially all the assets of the Companies, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Companies.  Any such assignment by the Companies shall remain subject to the Executive’s rights under Section 5 hereof.  The rights of the Executive under this Agreement may not be assigned or encumbered by the Executive, voluntarily or involuntarily, during the Executive’s lifetime, and any such purported assignment shall be void ab initio.  Notwithstanding the foregoing, all rights of the Executive under this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, estates, executors, administrators, heirs and beneficiaries.  All amounts payable to the Executive hereunder shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs or representatives.

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

19

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

SECTION 10.Amendment.  This Agreement may not be amended or modified at any time except by a written instrument approved by the Board, and executed by the Companies and the Executive; provided, however, that any attempted amendment or modification without such approval and execution shall be null and void ab initio and of no effect.

SECTION 11.Payment; Taxes and Withholding.  The Company shall be responsible as employer for payment of all cash compensation and severance payments provided herein and Holding shall cause the Company to make such payments.  The Executive shall not be entitled to receive any additional compensation from either of the Companies for any services the Executive provides to Holding or the Companies’ Subsidiaries.  The Company shall be entitled to withhold from any amounts to be paid to the Executive hereunder any federal, state, local, or foreign withholding or other taxes or charges which it is from time to time required to withhold.  The Company shall be entitled to rely on an opinion of counsel if any question as to the amount or requirement of any such withholding shall arise. Executive shall be solely responsible for the payment of all taxes due and owing with respect to wages, benefits, and other compensation provided to him hereunder. This Agreement is intended to satisfy, or be exempt from, the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly The Company will reimburse Executive for her reasonable legal fees and expenses incurred in connection with the negotiation and preparation of this Agreement.

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

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

If to the Companies:

United Stationers Inc.

United Stationers Supply Co.

One Parkway North Blvd.

Suite 100

Deerfield, Illinois  60015-2559

Attention:  General Counsel

20

If to the Executive:

Victoria Reich

(at her last address on file with the Company)

With a required copy to:

Vedder, Price, Kaufman & Kammholz, P.C.

222 North LaSalle Street

Suite 2600

Chicago, IL  60601

Attention:  William J. Bettman, Esq.

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

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

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

SECTION 16.Indemnification.  The provisions set forth in the Indemnification Agreement appended hereto as Attachment A are hereby incorporated into this Agreement and made a part hereof.  The parties shall execute the Indemnification Agreement contemporaneously with the execution of this Agreement.

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

SECTION 18.Arbitration.  Any dispute, controversy or question arising under, out of, or relating to this Agreement (or the breach thereof), or, the Executive’s employment with the Companies or termination thereof, shall be referred for arbitration in Chicago, Illinois to a neutral arbitrator selected by the Executive and the Companies (or if the parties are unable to agree on selection of such an arbitrator, one selected by the American Arbitration Association pursuant to its rules referred to below) and this shall be the exclusive and sole means for resolving such dispute.  Such arbitration shall be conducted in accordance with the National Rules for Resolution of Employment Disputes of the American Arbitration Association.  Except as provided in Section 5(d)(ix) above, the arbitrator shall have the discretion to award reasonable attorneys’ fees, costs and expenses to the prevailing party.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Nothing in this Section 18 shall be construed so as to deny the Companies the right and power to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by the Executive of any of the Executive’s covenants in Section 6 hereof.  Moreover, this Section 18 and Section 12

21

hereof shall not be applicable to any dispute, controversy or question arising under, out of, or relating to the Indemnification Agreement.

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

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

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

SECTION 22.Entire Agreement.  This Agreement, including Appendix A, Appendix B, the Indemnification Agreement and any other written undertakings by the Executive referred to herein, supersedes all other agreements, arrangements or understandings (whether written or oral) between the Companies and the Executive with respect to the subject matter of this Agreement, including without limitation the Prior Agreement and the Executive’s employment relationship with the Companies and any of their Subsidiaries, and this Agreement contains the sole and entire agreement among the parties hereto with respect to the subject matter hereof.

***

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

EXECUTED ON :		UNITED STATIONERS INC.
	, 2008	By:
			Name: Richard W. Gochnauer
			Title:   President and Chief Executive Officer
EXECUTED ON:		UNITED STATIONERS SUPPLY CO.
	, 2008	By:
			Name: Richard W. Gochnauer
			Title:   President and Chief Executive Officer

22

EXECUTED ON:		EXECUTIVE:
	, 2008
		Victoria J. Reich

23

ATTACHMENT 1

24

APPENDIX A

Short-Term Incentive Plan, Long-Term Incentive Plan,
and Signing Bonus

I.Short-Term Incentive Plan

As a key member of the management team, Executive will participate in the Company’s Management Incentive Plan (MIP), which will provide Executive with the opportunity to earn a cash award after year-end if a set of predetermined goals are achieved, with a possible payout of up to 200% of Executive’s target incentive award.  Executive’s target MIP award for 2007 will be 60% of Executive’s annual base salary and Executive’s payout will be pro-rated to reflect the number of days worked in calendar year 2007.

II.Long-Term Incentive Plan

Executive will participate in the Company’s Long-Term Incentive Plan (LTIP) at an economic value target percent of 120% of base salary effective with the 2007 annual LTIP grant (currently anticipated to be made on September 1, 2007).

III.Signing Bonus

Executive will receive 50,000 non-qualified stock options as a signing bonus (the “Initial Options”).  The Initial Options have a ten-year life and vest over a three-year period with one-third of the Initial Options becoming exercisable each year.  The strike price for the Initial Options will be the closing price on the date of the next Human Resources Committee meeting following the date hereof.  In addition, Executive will receive 7,500 shares of restricted stock (the “Initial Restricted Stock”), all of which will vest upon the third anniversary of the date hereof, subject to the terms and conditions set forth in the United Stationers Inc. 2004 Long-term Incentive Plan Restricted Stock Award Agreement.  Notwithstanding anything to the contrary contained herein or in any plan or award agreement related to the Initial Options or Initial Restricted Stock (collectively, the “Signing Bonus Equity”), all Signing Bonus Equity which are not then vested shall vest in full upon the Companies’ termination of Executive’s employment without Cause or upon the Executive’s termination of employment for Good Reason.  The award agreements for the Signing Bonus Equity shall reflect the foregoing.

1

APPENDIX B

Current Benefits and Perquisites

Other Benefits

The Company will reimburse Executive’s allowable medical care expenses after all other Company or non-Company insurance policies and medical plans, covering the participant, have paid benefits.  Reimbursement limits are based on grade level.  Executive’s limit is $30,000 per year.

Executive will receive not less than 4 weeks (20 days) of paid vacation per year.

Executive is eligible for a yearly perquisite allowance of $20,000 per year paid in equal bi-monthly installments.  This allowance is in lieu of the Company offering individual perquisite programs.

In addition, Executive is eligible for the following general benefits:

Health Care Coverage

The Company offers comprehensive Group Medical and Group Dental plans for eligible associates and their dependents.  If elected, coverage begins on the first day after thirty (30) days of continuous employment.

The Open Access Plus, OAP (similar to a PPO), and the Network Plan, HMO, are the two healthcare plans offered at most locations through CIGNA Healthcare.  Prescription Drugs and Dental coverage is also offered to all associates.  Coverage may be elected for Executive or for Executive and eligible dependents.  Associates who participate in these plans will share in the premium costs by payroll deductions.

Vision Care Program

This program provides discounts on comprehensive vision care benefits including examinations, lenses and frames.  Associates who participate in this program will pay the premium costs by payroll deduction.  The minimum participation commitment is two (2) years.  The plan administrator is Vision Service Plan (VSP) of California.

Retiree Medical Program

Upon retirement with the Company, Executive may be eligible to participate in the Medical Insurance Program for Retirees, provided you meet the requirements of the program.

Short-Term Disability (STD)

The Company-provided short-term disability program covers exempt associates who have completed thirty (30) or more days of continuous service.  Disabled or ill associates receive full pay for the first month of disability and then 60% of base salary for up to four (4) additional

1

months.  This coverage begins after five (5) days of continuous disability or illness and is provided by the Company at no cost to the associate.  As they are needed, occasional sick days are paid under the short-term disability provision at full pay.

Long-Term Disability (LTD)

Coverage under the Company’s long-term disability program becomes effective after five (5) months of total disability.  This program provides a monthly income equal to 60% of base salary at the time disability was determined, less any additional benefits payable, such as payments made under the Social Security Act.  The maximum monthly benefit payable under the program is $15,000 for Officers.

The Company provides this benefit at no cost to the associate.  Benefits paid, as a result of a disability, are considered to be taxable income.  The program also allows the option to pay the premium through after-tax payroll deductions.

Life Insurance and Accidental Death and Dismemberment (AD&D) Insurance

The Company provides life insurance equal to two and one half times (2½) annual salary rounded to the nearest whole thousand to a maximum of $1.2 million for Officers.  The Company also provides AD&D coverage equal to the amount of life insurance.

In addition, eligible dependents are also covered under the life insurance program according to the following schedule:

Spouse	$4,000
Dependent Children	$200 from 14 days, but less than 6 months
	$1,000 over 6 months of age

Life insurance, AD&D coverage and dependent life insurance are provided at no cost to the associate.

Supplemental Term Life Insurance

The Company provides associates the opportunity to purchase additional term life insurance for themselves and eligible dependents.  Evidence of Insurability (EOI) may be required to qualify for this program.

Supplemental Accidental Death and Dismemberment (AD&D) Insurance

The Company provides associates the opportunity to purchase additional AD&D insurance for themselves and eligible dependents.

Travel and Accident Insurance

The Company provides travel and accident insurance in the amount of $300,000 for Officers.  This benefit is provided at no cost to the associate.

2

Employee Assistance Program (EAP)

The EAP provides associates and their immediate family members with confidential counseling and referral services.

Flexible Spending Account (FSA)

This plan allows eligible associates to direct pre-tax income into two different savings accounts, an un-reimbursed medical account or a dependent care account.  The pre-tax income may be used to pay for expenses that are not covered by the medical plan or costs associated with dependant care.

Pension Plan

The Company offers a pension plan to United Stationers’ non-union associates who are at least 21 years of age and who have completed one (1) year of continuous service.  A normal retirement pension is equal to 1% of annual compensation for each year of credited service to a maximum of 40 years of service subject to IRS restrictions.  Benefits in this plan do not vest until five (5) full years of service have been completed.  Normal retirement age is 65 in this plan.  Early retirement benefits may be available if the associate is 55 and has completed ten (10) years of service at the time of his or her retirement or termination.  The Company pays the entire cost of this benefit.  In addition to participation in the qualified pension plan, Executive will be provided five (5) years of additional age and service credits (to be provided on a nonqualified basis) for purposes of computing Executive’s pension benefit.  Such additional benefits will be calculated on the basis of Executive’s annual compensation as of the date hereof and, notwithstanding section 4(h) hereof, shall not be subject to change.

401(k) Savings Plan

The United Stationers 401(k) Savings Plan (the “Plan”) allows Executive the opportunity to make pre-tax and after-tax payroll contributions upon meeting the 30 day eligibility period.  Effective January 1, 2006, the Plan will automatically enroll all newly hired associates in the 401(k) Plan at a contribution rate of 3%.  Unless otherwise changed, the contribution will be defaulted to a Company designated Fund.

Executive will have the opportunity to “opt out” of enrollment in the Plan within 45 days of Executive’s eligibility date.

The main highlights (subject to certain Plan and IRS restrictions) of the 401(k) Plan include:

·Before-tax associate contributions - up to 25% of salary

·After-tax associate contributions - up to 10% of salary

·Catch-up contributions for those 50 yrs or older - up to 75% of salary

·The Company matches 50% of the first 6% of an associate’s before-tax contribution

3

Deferred Compensation Plan

A participant may elect to defer any portion of future compensation (base salary and/or bonus) to a Fidelity Investment deferred account.  Full details can be found in the Summary Plan Document.  The available investment funds for allocations of deferrals are the same as the 401(k) Plan.

Tuition Reimbursement

The Company will provide financial assistance to associates, who have completed service requirements, taking educational courses or seeking professional certification to improve their ability to carry out their responsibilities within the Company.

Associate Purchase Program

Associates may purchase at Company cost any regularly stocked item that the Company carries, provided the item is for their personal use or for that of their immediate family.  Associate purchases for resale to any person outside the immediate family are prohibited.  Non-stocked items cannot be purchased through the Company.  All purchases will be paid for by automatic payroll deduction or personal check as permitted by law.

4

EX-10.42

Exhibit 10.42

UNITED STATIONERS INC.

AND SUBSIDIARIES

AMENDED AND RESTATED

MANAGEMENT INCENTIVE PLAN

(As Amended and Restated Effective January 1, 2009)

SECTION 1.

EFFECTIVENESS AND PURPOSE

1.1          Establishment and Later Restatement and Effectiveness of the Plan.  United Stationers Inc.  (“USI”) initially established the Plan as of January 1, 2000, as an annual incentive compensation plan for key Employees, and it first became effective as of May 10, 2000 upon its approval by USI’s stockholders.  As of January 1, 2005, the Plan was amended, restated, and continued as of January 1, 2005, upon its approval by USI’s stockholders.  As of January 1, 2009 (the “Effective Date” of the Plan as amended, restated and continued and as set forth herein) the Plan has been again amended, restated, and continued in the form set forth in this document for the purpose of compliance with section 409A of the Code (as defined in the Plan).  The Plan, as amended and restated herein, shall be applicable to any awards determined or made hereunder for any periods beginning on or after the Effective Date.  Awards determined or made under the Plan for any periods prior to the Effective Date shall be subject to the Plan as in effect from time to time prior to the Effective Date, and the provisions of the Plan, as amended and restated herein, shall be inapplicable to such awards except to the extent necessary for such awards to comply with section 409A of the Code.

1.2          Purpose.  The purpose of the Plan is to motivate and reward Participants for the achievement of operational individual goals.

SECTION 2.

DEFINITIONS

2.1          Definitions.  Whenever used herein, the following terms shall have the respective meanings set forth below, unless otherwise expressly provided.  When the defined meaning is intended, the term is capitalized.

(a)           “Base Salary” shall mean the regular salary, before any salary reduction contributions made to the Company’s 401(k) or Section 125 plans or other deferred compensation plans, but not including any awards under this Plan and not including any other bonuses, incentive pay, or special awards, earned by a Participant.

(b)           “Board” shall mean the Board of Directors of USI.

(c)           “Cause” shall mean failure to follow directives and policies of USI or any subsidiaries, insubordination, willful malfeasance, gross negligence, or acts of dishonesty.

(d)           “Code” shall mean the Internal Revenue Code of 1986, as amended.

(e)           “Committee” shall mean (I) the Human Resources Committee with respect to Employees who are reasonably likely to be treated as “covered employees” for the Plan Year under Section 162(m) of the Code and executive officers of USI; (ii) the Chief Executive Officer of United Stationers Supply Co.  with respect to Employees who are not reasonably likely to be treated as “covered employees” for the Plan Year under Section 162(m) of the Code and who are not executive officers of USI; or (iii) such other officer, committee or committees appointed by the Board to serve as the administering committee for any group of Employees under the Plan.

(f)            “Company” shall mean USI and its direct and indirect consolidated subsidiaries.

(g)           “Effective Date” shall have the meaning set forth in Subsection 1.1.

(h)           “Employee” shall mean an employee of the Company who is in a position meeting the defined eligibility criteria for participation in the Plan, as stated in Subsection 3.1.

(i)            “Final Award” shall mean the award earned by a Participant based on a comparison of actual year-end results against the Performance Goals established at the beginning of the Plan Year.

(j)            “Human Resources Committee” shall mean the Human Resources Committee or comparable compensation committee of the Board of Directors of USI.

(k)           “Participant” shall mean an Employee who is approved by the Committee for participation in the Plan for a specified Plan Year,

(l)            “Performance Goals” may be based on any one or more of the following measures applicable to the Company, as selected by the Committee for any Plan Year: (a) earnings per share; (b) net earnings/ income; (c) net operating earnings/income; (d) net operating earnings/income after taxes; (e) net operating earnings/income per share; (f) EPS from continuing operations; (g) EBIT; (h) stock price appreciation; (i) total shareholder return; (j) relative total shareholder return (for example, as compared to peer group performance); (k) sales/revenues, or any component thereof; (I) sales/revenue growth; (m) unit volume; (n) gross or operating margins/margin contribution; (o) economic value added or economic profit; (p) return on assets (net assets or operating assets); (q) return on equity; (r) return on invested capital or invested capital efficiency; (s) working capital or working capital efficiency; (t) cash flow/free cash flow; (u) net cash provided by operating activities; (v) cash return on assets; (w) waste recovery, cost control and/or operating efficiency targets; (x) expense targets; and (y) safety goals.  Each goal may be expressed on an absolute and/or relative basis, may be based on or otherwise employ comparisons based on internal targets, the past performance of the Company and/or the past or current performance of other companies, and in the case of earnings-based measures, may use or employ comparisons relating to capital, shareholders equity and/or shares outstanding, investments or assets or net assets.  Such

2

Performance Goals may exclude charges for restructurings, discontinued operations and extraordinary, unusual, non-recurring or other items specified by the Committee.

(m)          “Plan” shall mean (i) this Amended and Restated Management Incentive Plan with respect to any awards determined or made for any periods beginning on or after the Effective Date, (ii) the Management Incentive Plan in the form established as of January 1, 2000 and as in effect from time to time prior to January 1, 2005 with respect to any awards determined or made for any periods beginning on or after January 1, 2000 and ended prior to January 1, 2005, and (iii) the Management Incentive Plan in the form established as of January 1, 2005 and as in effect from time to time prior to the Effective Date with respect to any awards determined or made for any periods beginning on or after January 1, 2005 and ended prior to the Effective Date ; provided, however, that the provisions of this Amended and Restated Management Incentive Plan shall apply to awards determined or made for any periods ended prior to the Effective Date to the extent necessary for such awards to comply with section 409A of the Code.

(n)           “Plan Year” shall mean the Company’s fiscal year, which, as of the Effective Date, is the calendar year.

(o)           “Subsidiary” shall mean any direct or indirect subsidiary of USI, including, as of the effective date of the Restated Plan, United Stationers Supply Co.  and any of its subsidiaries.

(p)           “Target Incentive Award” shall mean the award to be paid to a Participant for meeting the respective target levels of the Performance Goals applicable to such Participant in a particular Plan Year.  Such Target Incentive Awards shall be expressed as a percentage of a Participant’s actual Base Salary on January 1st of the Plan Year, with promotional adjustments or other Base Salary changes that occur during the Plan Year made on a pro-rata basis, using whole months.

(q)           “Top 5 Employees” shall mean Employees who are reasonably likely to be treated as “covered employees” for the Plan Year under Section 162(m) of the Code.

(r)            “USI” shall have the meaning set forth in Subsection 1.1.

2.2          Gender and Number.  Except when otherwise indicated by the context, any masculine terminology used herein also shall include the feminine, and the definition of any term in the singular shall include the plural,

SECTION 3.

ELIGIBILITY AND PARTICIPATION

3.1          Eligibility.  Eligibility for participation in the Plan will be limited to those key Employees who, by the nature and scope of their position, regularly and directly make or influence policy or operating decisions which impact the profitability and earnings results of the Company.  However, any Employee participating in a sales incentive, commission arrangement,

or who is currently receiving consulting payments pursuant to a consulting agreement shall be excluded from participation in this Plan.

3.2           Participation.  Participation in the Plan shall be determined annually by the Committee.  Employees approved for participation shall be notified of their selection.

3.3           Partial Plan Year Participation.  The Committee may allow an individual who becomes eligible during the Plan Year to participate in the Plan.  In such case, the Participant’s Final Award shall be prorated based on the number of full months of participation during the pertinent Plan Year.

A Participant whose incentive category level is changed during the Plan Year shall be eligible for a bonus based on the number of months spent in each incentive category during the Plan Year.  The proration shall be determined by multiplying the Final Award for a full year of participation at each incentive category level by a fraction, the numerator of which shall be the number of months spent at the incentive category level and the denominator of which shall be twelve (12).  The Participant’s Final Award shall be the sum of the prorated awards calculated for the time spent at each incentive category level, with consideration to changes in Base Salary, when appropriate.

3.4           No Right to Participate.  Participation by an Employee in a prior Plan Year does not provide a right or entitlement to be selected for participation in a current or future Plan Year.

SECTION 4.

AWARD DETERMINATION

4.1           Performance Goals.  The Human Resources Committee shall establish for each Plan Year one or more Performance Goals and a level of performance for each at which one hundred percent (100%) of the Target Incentive Award shall be earned.  The Human Resources Committee also shall establish for each Performance Goal a range of performance levels above and below this target performance level, including levels at which the maximum and minimum incentive awards shall be earned, with other intermediate performance attainment between such levels to yield awards prorated between the levels established by the Human Resources Committee.  The Committee will establish the Performance Goals applicable for each Participant, taking into consideration such Participant’s duties and responsibilities, as well as the related Target Incentive Awards and maximum and minimum award levels for such Participant.

4.2           Adjustment of Performance Targets.  Subject to the final sentence of Subsection 4.3, the Human Resources Committee shall have the right to adjust the Performance Goals (either up or down) during the Plan Year if it determines that external changes or other unanticipated business conditions have materially affected the fairness of the Performance Goals and unduly influenced the Company’s ability to meet them.  Further, the Human Resources Committee shall have the right to adjust the Performance Goals and the Final Award amounts in the event of a Plan Year consisting of less than twelve (12) months.

4.3           Final Award Determinations.  At the end of each Plan Year, the Committee shall review performance against Performance Goals and compute Final Awards for each Participant. 

4

Participants must be actively employed by the Company on the last day of the Plan Year, except as provided in Subsections 6.1 and 6.3, to receive an award for that Plan Year.  Notwithstanding the immediately preceding sentence of this Subsection 4.3, with respect to any portion of a Final Award that is based on a Participant’s personal performance evaluation that is completed after the end of the Plan Year, the Participant must be actively employed by the Company on the date of payment of such portion of the Final Award to receive such portion.  Final Award amounts, may be adjusted (either up or down) based on the Committee’s assessment of Company performance results and Participant performance.  In addition, notwithstanding anything herein to the contrary, with respect to the Top 5 Employees, the Committee may only make adjustments under Subsection 4.2 and this Subsection 4.3 which would reduce Final Awards to the Top 5 Employees and may not make adjustments which would increase Final Awards to the Top 5 Employees; provided, that no payment that is intended to be performance-based compensation (as that term is used in Section 162(m) of the Code) for any Plan Year shall be paid until the Committee has certified in writing the achievement of the Performance Goals for that year.

4.4           Maximum Final Award.  For any Top 5 Employee, the maximum Final Award for any Plan Year shall not exceed the lesser of two hundred percent (200%) of the Participant’s Target Incentive Award or two million dollars ($2,000,000).

SECTION 5.

PAYMENT OF FINAL AWARDS

5.1           Form and Timing of Payment.  Payment of Final Awards shall be made in cash following the end of the Plan Year as soon as practicable thereafter as the Committee shall determine, but not later than the 15th day of the third month of the Plan Year next following such Plan Year.  Notwithstanding the immediately preceding sentence of this Subsection 5.1, with respect to any portion of a Final Award that is based on a Participant’s personal performance evaluation that is completed after the end of the Plan Year, payment of such portion of the Final Award shall be made in cash on April 15 of the Plan Year next following such Plan Year; provided, however, that for purposes of determining compliance with section 409A of the Code, a payment will be considered to satisfy the requirement of this sentence if distribution of such portion of a Final Award is made no later than the end of the Plan Year following the end of the applicable Plan Year with respect to which the Final Award was earned.  The Final Awards shall be a liability of the Company when the Plan Year concludes.

SECTION 6.

TERMINATION OF EMPLOYMENT

6.1           Termination of Employment due to Death.  In the event a Participant’s employment is terminated by reason of death, the Final Award shall be reduced to reflect participation prior to termination.  This reduction shall be determined by multiplying the Final Award for a full year of participation by a fraction, the numerator of which shall be the number of full months of participation through the date of termination and the denominator of which shall be twelve (12).  The prorated Final Award thus determined shall be paid when other awards under the Plan are paid following the end of the Plan Year.

6.2          Termination for Cause.  In the event a Participant’s employment is terminated for Cause prior to the end of the Plan Year, the Participant shall not be entitled to an award for the Plan Year in which the termination occurs.

6.3          Termination for other than Cause or Death.  In the event a Participant’s employment is terminated for reasons other than Cause, a full or prorated Final Award may be paid at the Committee’s discretion. Any full or prorated Final Award thus determined shall be paid when other awards under the Plan are paid following the end of the Plan Year.(1)

6.4          Special 409A Rules.

(a)           Notwithstanding any other provision of the Plan to the contrary, if any payment hereunder is subject to section 409A of the Code, if such payment is to be paid on account of the Participant’s separation from service and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code), such payment shall be delayed until the first day of the seventh month following the Participant’s separation from service (or, if later, the date on which such payment is otherwise to be paid under the Plan).  Any payment which is to be made as of the first day of the seventh month following separation from service shall be made no later than 30 days after such date.

(b)           References in the Plan to the Participant’s termination of employment (including references to the Participant’s employment termination, and to the Participant terminating employment, a Participant’s separation from service, and other similar reference) shall mean, respectively, the Participant ceasing to be employed by the Company and all Related Companies, subject to the following:

(i)           The employment relationship will be deemed to have ended at the time the Participant and the applicable company reasonably anticipate that a level of bona fide services the Participant would perform for the Company and Related Companies after such date would permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36 month period (or the full period of service to the Company and Related Companies if the Participant has performed services for the Company and Related Companies for less than 36 months).  In the absence of an expectation that the Participant will perform at the above-described level, the date of termination of employment will not be delayed solely by reason of the Participant continuing to be on the Company’s and Related Companies’ payroll after such date.

(ii)           The employment relationship will be treated as continuing intact while the Participant is on a bona fide leave of absence (determined in accordance with Treas. Reg. §409A-1(h)).

(iii)          The determination of a Participant’s termination of employment by reason of a sale of assets, sale of stock, spin-off, or other similar transaction of the

 (1) Confirm that payment would be made at the time other awards are paid or otherwise provide payment date.

6

Company or a Related Company will be made in accordance with Treas. Reg. §1.409A-1(h).

SECTION 7.

RIGHTS OF PARTICIPANTS

7.1          Employment.  Nothing in this Plan shall interfere with or limit in any way the right of the Company to terminate or change a Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company, Nothing herein contained shall limit or affect in any manner or degree the normal and usual powers of management, exercised by the officers and the Board to change the duties or the character of employment of any employee of the Company or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved.

7.2          Nontransferability.  No right or interest of any Participant in this Plan shall be assignable or transferable or subject to any lien, directly, by operation of law or otherwise, including execution, levy, garnishment, attachment, pledge, and bankruptcy.

SECTION 8.

ADMINISTRATION

8.1          Administration.  This Plan shall be administered by the Human Resources Committee in accordance with the provisions contained herein.

8.2          Questions of Construction and Interpretation.  The determination of the Human Resources Committee in construing or interpreting this Plan or making any decision with respect to the Plan shall be final, binding, and conclusive upon all persons.  The Human Resources Committee’s interpretative responsibility shall include any and all definitions in the Plan, including, but not limited to, interpretations of Cause.

8.3          Liability.  The Board, the Human Resources Committee, the Committee, or any other persons acting under the direction of either, shall not be liable and shall be held harmless for any act or failure to act hereunder.

SECTION 9.

AMENDMENTS

9.1           Amendments.  The Company, in its absolute discretion, without notice, at any time and from time to time, subject to the requirements of section 409A of the Code,  may modify or amend, in whole or in part, any or all of the provisions of this Plan, or suspend or terminate it entirely; provided, that no such modification, amendment, suspension, or termination, may without the consent of the Participant (or his beneficiary in the case of death of the Participant) reduce after the end of the Plan Year the right of a Participant (or the Participant’s beneficiary as the case may be) to a payment or distribution in accordance with the provisions contained in this

Plan or change to the detriment of a Participant any potential rights in that Plan Year pursuant to Section 11 of this Plan.

SECTION 10.

REQUIREMENTS OF LAW

10.1        Governing Law.  The Plan shall be construed in accordance with and governed by the laws of the State of Illinois.

10.2        Withholding Taxes.  USI or any Subsidiary, as appropriate, shall have the right to deduct from all payments under the Plan any Federal, state or other taxes required by law to be withheld with respect to such payments.

SECTION 11.

MERGER, CONSIDERATION, OR ACQUISITION

11.1        Payment Upon Change of Control.  If the Plan terminates upon or after a Change of Control of USI during the Plan Year in which the Change of Control occurs, a Participant in the Plan for the Plan Year during which a Change of Control occurs shall be entitled to an amount equal to the Participant’s Target Incentive Award for such Plan Year.  Such amount shall be paid in cash to the Participant on or after the date of termination of the Plan, but in no event later than the last day of the Plan Year in which the Change of Control occurs.  Notwithstanding this Subsection 11.1 or Subsection 11.2 below, if any award under the Plan constitutes deferred compensation (within the meaning of section 409A of the Code) and becomes payable upon a Change of Control, a change of control event that otherwise is a Change of Control under the Plan shall be a Change of Control for purposes of the Plan only if such event also satisfies the requirements of Treas. Reg. §1.409A-3(i)(5).

11.2        Definition of Change of Control.  The term “Change of Control” shall mean any one or more of the following events:

(a)           Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and used in Sections 13(d) and 14(d) thereof, including a “group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of the combined voting power of USI’s then outstanding voting securities entitled to vote generally in the election of directors (“Voting Securities”); provided, however, that the acquisition or holding of Voting Securities by (i) USI or any Subsidiaries, or (ii) an employee benefit plan (or a trust forming a part thereof) maintained by USI or any Subsidiaries shall not constitute a Change of Control; and provided further that the acquisition or holding of Voting Securities by any Person in which a Participant has a substantial equity interest shall not constitute a Change of Control with respect to such Participant.  Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as

8

a result of the issuance of Voting Securities by USI in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the issuance of Voting Securities by USI, and after such issuance of Voting Securities by USI, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person to more than 50% of the Voting Securities of USI, then a Change of Control shall occur.

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

(c)          Consummation of a merger, consolidation or reorganization or approval by USI’s stockholders of a liquidation or dissolution of USI or the occurrence of a liquidation or dissolution of USI (“Business Combination”), unless, following such Business Combination:

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

(ii)           the individuals who were members of the Incumbent Board immediately prior to the execution of the initial agreement providing for such Business Combination constitute more than 50% of the members of the board of directors (or comparable governing body of a noncorporate entity) of the Surviving Company; and

(iii)          no Person (other than USI, any Subsidiaries or any employee benefit plan (or any trust forming a part thereof) maintained by the Company, the

Surviving Company or any Person who immediately prior to such Business Combination had Beneficial Ownership of 30% or more of the then Voting Securities) has Beneficial Ownership of 30% or more of the then combined voting power of the Surviving Company’s then outstanding voting securities.  Notwithstanding this subsection (iii), a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by USI in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided, however, that a Business Combination with a Person in which a Participant has a substantial equity interest shall not constitute a Change of Control with respect to such Participant.

(d)           Approval by USI’s stockholders of an agreement for the assignment, sale, conveyance, transfer, lease or other disposition of all or substantially all of the assets of USI to any Person (other than a Person in which the Participant has a substantial equity interest (in which case there shall not be a Change of Control with respect to such Participant) and other than a subsidiary of USI or other entity, the Persons with Beneficial Ownership of which are the same Persons with Beneficial Ownership of USI and such Beneficial Ownership is in substantially the same proportions), or the occurrence of the same.

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by such Person; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such acquisition of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increase the percentage of the Voting Securities Beneficially Owned by such Person, then a Change of Control shall occur.

Notwithstanding anything to the contrary herein, provided the Human Resources Committee (constituted of members of the Incumbent Board) in good faith determines that an event which would otherwise be a Change of Control is not a change of effective control of USI, a Change of Control shall not be deemed to have occurred.

SECTION 12.

INDEMNIFICATION

12.1        Indemnification.  Each person who is or shall have been a member of the Human Resources Committee, the Committee or the Board or who is or shall have been an Employee of the Company shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with any claim, action, suit, or proceeding to which he may be a party by reason of any action taken or failure to act under the Plan.  The foregoing right of indemnification shall not be exclusive of any

10

other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or By-Laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

SECTION 13.

EXPENSES OF THE PLAN

13.1         Expenses of the Plan.  The expenses of administering the Plan shall be borne by the Company.

EX-10.43

Exhibit 10.43

UNITED STATIONERS INC.

2004 LONG-TERM INCENTIVE PLAN

(As amended and restated January 1, 2009)

SECTION 1

GENERAL

1.1. Purpose. The United Stationers Inc. 2004 Long-Term Incentive Plan (the “Plan”) has been established by United Stationers Inc. (the “Company”) to promote the long-term growth and financial success of the Company and the interests of its stockholders by: (i) attracting and retaining individuals with excellent managerial talent upon whom, in large measure, the sustained progress, growth and profitability of the Company depend; (ii) motivating those selected as participants, by means of appropriate performance-based incentives, to achieve long-term performance goals; (iii) further aligning the interests of selected employee and Director participants with those of the Company’s other stockholders and providing them with an effective means to acquire and maintain equity interests in the Company; and (iv) providing incentive compensation opportunities that are competitive with those of other similar companies.

1.2. Participation. Subject to the terms and conditions of the Plan, the Committee shall determine and designate, from time to time, from among the Eligible Individuals, those persons who will be granted one or more Awards, and thereby become “Participants” in the Plan.

1.3. Operation, Administration, and Definitions. The operation and administration of the Plan, including the Awards made under the Plan, shall be subject to the provisions of Section 5 (relating to operation and administration). Capitalized terms in the Plan shall be defined as set forth in Section 9.

SECTION 2

OPTIONS AND SARS

2.1. Options. The grant of an “Option” entitles the Participant to purchase shares of Stock at an Exercise Price established by the Committee. Any Option granted under this Section 2 may be either a non-qualified option (an “NQO”) or an incentive stock option (an “ISO”), as determined in the discretion of the Committee.

(a) An “NQO” is an Option that is not intended to be an “incentive stock option” as that term is described in section 422(b) of the Code.

(b) An “ISO” is an Option that is intended to satisfy the requirements applicable to an “incentive stock option” described in section 422(b) of the Code and shall be subject to the following conditions, limitations and restrictions:

(i)   ISOs may be granted only to employees of the Company or a Subsidiary that is a subsidiary or parent corporation of the Company, within the meaning of section 424 of the Code.

(ii)  ISOs shall not be granted under the Plan after the 10-year anniversary of the date on which the Plan is adopted by the Board or, if earlier, the date on which the Plan is approved by the Company’s stockholders.

(iii) To the extent required by applicable law, if the Committee permits an ISO to be exercised by a Participant more than three months after the Participant has ceased being an employee of the Company or a subsidiary as that term is defined in Code section 424(f), or more than 12 months if the Participant is permanently and totally disabled, within the meaning of section 22(e) of the Code, the ISO shall thereafter be treated as an NQO.

(iv) To the extent required by applicable law, the Committee shall not permit an ISO to be transferred by an employee other than by will or the laws of descent and distribution, and any ISO granted under this Plan shall be exercisable only by the employee during the employee’s lifetime.

2.2. Stock Appreciation Rights. A stock appreciation right (an “SAR”) entitles the Participant to receive, in cash or Stock (as determined in accordance with Subsection 5.7), value equal to (or otherwise based on) the excess of: (a) the Fair Market Value of a specified number of shares of Stock at the time of exercise; over (b) an Exercise Price established by the Committee.

2.3. Exercise Price. The “Exercise Price” of each Option and SAR granted under this Section 2 shall be established by the Committee or shall be determined by a method established by the Committee at the time the Option or SAR is granted; provided, that the Exercise Price shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant (or, if greater, the par value of a share of Stock).

2.4. Exercise. An Option and an SAR shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the Committee. In no event, however, shall an Option or SAR expire later than ten years after the date of its grant.

2.5. Payment of Option Exercise Price. The payment of the Exercise Price of an Option granted under this Section 2 shall be subject to the following:

(a)   Subject to the following provisions of this Subsection 2.5, the full Exercise Price for shares of Stock purchased upon the exercise of any Option shall be paid at the time of such exercise (except that, in the case of an exercise arrangement approved by the Committee and described in Paragraph 2.5(c), payment may be made as soon as practicable after the exercise).

(b)   The Exercise Price shall be payable in cash, or by tendering, by either actual delivery of shares or by attestation, shares of Stock acceptable to the Committee, and valued at the then current value as of the day of exercise, or in any combination thereof, all as determined by the Committee. The Committee may limit payments made with shares of Stock pursuant to this Paragraph 2.5(b) to shares held by the Participant for not less than six months prior to the payment date.

(c)   The Committee may permit a Participant to elect to pay the Exercise Price upon the exercise of an Option by irrevocably authorizing a third party to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise.

(d)   The Committee, in its sole discretion, may permit the Participant to elect to pay the Exercise Price by any other method.

2.6. Repricing. Except for either adjustments pursuant to Paragraph 5.2(f) (relating to the adjustment of shares), or reductions in the Exercise Price approved by the Company’s stockholders, (i) the Exercise Price for any outstanding Option or SAR previously granted under the Plan may not be decreased after the date of grant nor may an outstanding Option or SAR previously granted under the Plan be surrendered to the Company as consideration for the grant of a replacement Option or SAR with a lower exercise price, and (ii) any other action with respect to Awards that is treated as a repricing under accounting principles generally accepted in the United States is prohibited.  Notwithstanding anything in this Subsection 2.6 to the contrary, in no event shall the Exercise Price of any Option, as reduced or otherwise adjusted,  be less than the Fair Market Value of a share of Stock on the date of grant of such Option.

2.7. Grants of Options and SARs. An Option may, but need not be, in tandem with an SAR, and an SAR may, but need not be, in tandem with an Option. Except as otherwise provided by the Committee, if an Option is in tandem with an SAR, the exercise price of both the Option and SAR shall be the same, and the exercise of the Option or SAR with respect to a share of Stock shall cancel the corresponding tandem SAR or Option right with respect to such share. If an SAR is in tandem with an Option but is granted after the grant of the Option, or if an Option is in tandem with an SAR but is granted after the grant of the SAR, the later granted tandem Award shall have the same exercise price as the earlier granted Award; provided, however, that the exercise price for the later granted Award shall not be less than the Fair Market Value of the Stock at the time of such grant.

SECTION 3

FULL VALUE AWARDS

3.1. Full Value Awards. A “Full Value Award” is a grant of one or more shares of Stock or a right to receive one or more shares of Stock in the future, with such grant subject to one or more of the following, as determined by the Committee:

(a)   The grant shall be in return for the Participant’s previously performed services, or in return for the Participant surrendering other compensation that may be due. Awards under this Paragraph (a) may include, without limitation, bonus stock. Generally, “bonus stock” is the grant of stock in return for previously performed services or the surrender of other compensation that may be due.

(b)   The grant shall be contingent on the achievement of performance or other objectives during a specified period. Awards under this Paragraph (b) may include, without limitation, performance shares and performance units. Generally, “performance shares” are grants of actual shares of stock whose payment is contingent on performance as measured against predetermined objectives over a one-year or multi-year period of time. Generally, “performance units” are grants of stock units whose payment is contingent on performance as measured against predetermined objectives over a one-year or multi-year period of time and whose value fluctuates with stock price changes and performance against objectives.

(c) The grant shall be subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals relating to completion of service by the Participant or achievement of performance or other objectives. Awards under this Paragraph (c) may include, without limitation, restricted stock and restricted stock units. Generally, “restricted stock” and “restricted stock units” are grants of actual shares of stock or stock units subject to restrictions and risk of forfeiture until vested by continued employment and/or attainment of specified performance objectives.

The grant of Full Value Awards may also be subject to such other conditions, restrictions and contingencies as determined by the Committee.

3.2. Performance-Based Compensation. The Committee may designate a Full Value Award being granted to a Participant as intended to be “performance-based compensation” as that term is used in section 162(m) of the Code. Any such Award designated as intended to be “performance-based compensation” shall be conditioned on the achievement of one or more Performance Measures, to the extent required by Code section 162(m). For Awards under this Section 3 intended to be “performance-based compensation,” the grant of the Awards and the establishment of the Performance Measures shall be made during the period required under Code section 162(m).

3.3. Restrictions on Awards. If the right to become vested in a Full Value Award granted under this Section 3 is conditioned on the completion of a specified period of service with the Company or the Subsidiaries, without achievement of Performance Measures or other performance objectives being required as a condition of vesting, and without it being granted in lieu of other compensation, then the required period of service for full vesting shall be not less than three years (subject to acceleration of vesting, to the extent provided by the Committee, in the event of the Participant’s death, disability, retirement, Change of Control or termination of employment).

SECTION 4

CASH INCENTIVE AWARD

A “Cash Incentive Award” is the grant of a right to receive a payment of cash (or in the discretion of the Committee, Stock having value equivalent to the cash otherwise payable) that is contingent on achievement of performance objectives over a specified period established by the Committee. The grant of Cash Incentive Awards may also be subject to such other conditions, restrictions and contingencies, as determined by the Committee. The Committee may designate a Cash Incentive Award granted to any Participant as “performance-based compensation” as that term is used in section 162(m) of the Code. To the extent required by Code section 162(m), any such Award so designated shall be conditioned on the achievement of one or more performance objectives. The performance objectives shall be based on Performance Measures as selected by the Committee. For Awards under this Section 4 intended to be “performance-based compensation,” the grant of the Awards and the establishment of the performance objectives shall be made during the period required under Code section 162(m). Except as otherwise provided in the applicable plan, arrangement or agreement, distribution of any Cash Incentive Awards by the Company or its Subsidiaries (whether granted this Plan or otherwise), for a performance period ending in a calendar year, shall be made to the Participant not later than March 15 of the following calendar year; provided, however, that for purposes of determining compliance with Code section 409A, a payment will be considered to satisfy the requirement of this sentence if distribution is made no later than the end of the calendar year following the end of the applicable performance period.

SECTION 5

OPERATION AND ADMINISTRATION

5.1. Effective Date. Subject to the approval of the stockholders of the Company at the Company’s 2004 annual meeting of its stockholders, the Plan shall be effective as of May 1, 2004 (the “Effective Date”). No Awards may be granted under the Plan prior to its approval by stockholders. In the event of Plan termination, the Plan shall remain in effect as long as any Awards under it are outstanding; provided, however, that no Awards may be granted under the Plan after the ten-year anniversary of the Effective Date.

5.2. Shares Subject to Plan. The shares of Stock for which Awards may be granted under the Plan shall be subject to the following:

(a) The shares of Stock with respect to which Awards may be made under the Plan shall be shares currently authorized but unissued or currently held or to the extent permitted by applicable law, subsequently acquired by the Company as treasury shares, including shares purchased in the open market or in private transactions.

(b) Subject to the following provisions of this Subsection 5.2, the maximum number of shares of Stock that may be delivered to Participants and their beneficiaries under the Plan shall be equal to the sum of Paragraphs (i) and (ii) below:

(i) 4,625,000 shares of Stock; provided, however, that for purposes of applying the limitations of this Paragraph (b), each share of Stock delivered pursuant to Section 3 (relating to Full Value Awards), shall be counted as covering 1.85 shares of Stock, and shall reduce the number of shares of Stock available for delivery under this Paragraph (b) by 1.85 shares.

(ii) Any shares of Stock that are represented by awards granted under the 2000 Management Equity Plan and the 1992 Management Equity Plan of the Company (the “Prior Equity Plans”) that are forfeited, expire or are canceled after the Effective Date without delivery of shares of Stock or which result in the forfeiture of the shares of Stock back to the Company to the extent that such shares would have been added back to the reserve under the terms of the applicable Prior Equity Plan.

(c) To the extent provided by the Committee pursuant to Subsection 5.7, any Award may be settled in cash rather than Stock.

(d) Any shares of Stock subject to an Award which for any reason expires or terminates unexercised or is not earned in full may again be made subject to an Award under the Plan. The following shares of Stock may not again be made available for issuance as Awards under the Plan: (i) shares of Stock not issued or delivered as a result of the net settlement of an outstanding SAR, (ii) shares of Stock used to pay the exercise price or withholding taxes related to an outstanding Award, or (iii) shares of Stock repurchased on the open market with the proceeds of the option exercise price.

(e) Subject to Paragraph 5.2(f), the following additional maximums are imposed under the Plan:

(i) The maximum number of shares that may be covered by Awards granted to any one Participant pursuant to Section 2 (relating to Options and SARs) shall be 500,000 shares during any one-calendar-year period. If an Option is in tandem with an SAR, such that the exercise of the Option or SAR with respect to a share of Stock cancels the tandem SAR or Option right, respectively, with respect to such share, the tandem Option and SAR rights with respect to each share of Stock shall be counted as covering but one share of Stock for purposes of applying the limitations of this Paragraph (i).

(ii) To the extent required by applicable law, the aggregate Fair Market Value (as of the date of grant) of the shares of Stock with respect to which the ISOs granted to any employee first become exercisable during any calendar year may not exceed $100,000. For purposes of this $100,000 limit, the employee’s ISOs under this Plan and all other plans maintained by the Company and its Subsidiaries will be aggregated. To the extent any ISOs would exceed the $100,000 limit, the ISO shall thereafter be treated as an NQO.

(iii) For Full Value Awards that are intended to be “performance-based compensation” (as that term is used for purposes of Code section 162(m)), no more than 300,000 shares of Stock may be delivered pursuant to such Awards granted to any one Participant during any one-calendar-year period (regardless of whether settlement of the Award is to occur prior to, at the time of, or after the time of vesting); provided that Awards described in this Paragraph (iii) shall be subject to the following:

(A)    If the Awards are denominated in Stock but an equivalent amount of cash is delivered in lieu of delivery of shares of Stock, the foregoing limit shall be applied based on the methodology used by the Committee to convert the number of shares of Stock into cash.

(B)    If delivery of Stock or cash is deferred until after shares of Stock have been earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the date the shares are earned shall be disregarded.

(iv) For Cash Incentive Awards that are intended to be “performance-based compensation” (as that term is used for purposes of Code section 162(m)), no more than $2,000,000 may be paid to any one Participant for performance periods beginning in any one calendar year, regardless of whether the applicable performance period during which the Award is earned ends in the same year in which it begins or in a later calendar year; provided that Awards described in this Paragraph (iv) shall be subject to the following:

(A)  If the Awards are denominated in cash but an equivalent amount of Stock is delivered in lieu of delivery of cash, the foregoing limit shall be applied to the cash based on the methodology used by the Committee to convert the cash into shares of Stock.

(B)   If delivery of Stock or cash is deferred until after cash has been earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the date the cash is earned shall be disregarded.

(f)    In the event of a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the Committee shall proportionally adjust outstanding Awards to preserve the benefits or potential benefits of the Awards. Action by the Committee may include: (i) adjustment of the number and kind of shares (or other securities) which may be delivered under the Plan; (ii) adjustment of the number and kind of shares (or other securities) subject to outstanding Awards; (iii) adjustment of the Exercise Price of outstanding Options and SARs; and (iv) any other adjustments to outstanding Awards that the Committee determines to be equitable, which may include, without limitation, (I) replacement of Awards with other Awards which the Committee determines have comparable value and which are based on stock of a company resulting from or involved in the transaction, (II) cancellation of the Award in return for cash payment of the current value of the Award, determined as though the Award is fully vested at the time of payment, provided that in the case of an Option, the amount of such payment may be the excess of value of the Stock subject to the Option at the time of the transaction over the exercise price; and (III) replacement with other types of Awards.  In no event shall this Paragraph 5.2(f) be construed to permit an adjustment (including a replacement) of an Option, SAR or other Award if such modification either: (x) would result in accelerated recognition of income or imposition of additional tax under Code section 409A; or (y) would cause the Option, SAR or other Award subject to the adjustment (or cause a replacement Option, SAR or other award) to be subject to Code section 409A, provided that the restriction of this clause (y) shall not apply to any Option, SAR or other Award that, at the time it is granted or otherwise, is designated as being deferred compensation subject to Code section 409A.

(g)   The maximum number of shares of Stock that may be delivered to Participants and their beneficiaries with respect to ISOs granted under the Plan shall be 4,625,000 shares; provided, however, that to the extent that shares not delivered must be counted against this limit as a condition of satisfying the rules applicable to ISOs, such rules shall apply to the limit on ISOs granted under the Plan.

5.3. General Restrictions. Delivery of shares of Stock or other amounts under the Plan shall be subject to the following:

(a)   Notwithstanding any other provision of the Plan, the Company shall have no obligation to deliver any shares of Stock or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity.

(b)   To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

5.4. Tax Withholding. All distributions under the Plan are subject to withholding of all applicable taxes, and the Committee may condition the delivery of any shares or other benefits under the Plan on satisfaction of the applicable withholding obligations.

Except as otherwise provided by the Committee, such withholding obligations may be satisfied (i) through cash payment by the Participant, (ii) through the surrender of shares of Stock which the Participant already owns (provided, however, that to the extent shares described in this clause (ii) are used to satisfy more than the minimum statutory withholding obligation, as described below, then, except as otherwise provided by the Committee, payments made with shares of Stock in accordance with this clause (ii) shall be limited to shares held by the Participant for not less than six months prior to the payment date), or (iii) through the surrender of shares of Stock to which the Participant is otherwise entitled under the Plan; provided, however, that such shares under this clause (iii) may be used to satisfy not more than the Company’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal, state and local tax purposes, including payroll taxes, that are applicable to such supplemental taxable income).

5.5. Grant and Use of Awards. In the discretion of the Committee, a Participant may be granted any Award permitted under the provisions of the Plan, and more than one Award may be granted to a Participant. Subject to Subsection 2.6 (relating to repricing), Awards may be granted as alternatives to or replacement of awards granted or outstanding under the Plan or any other plan or arrangement of the Company or a Subsidiary (including a plan or arrangement of a business or entity, all or a portion of which is acquired by the Company or a Subsidiary). Subject to the overall limitation on the number of shares of Stock that may be delivered under the Plan, the Committee may use available shares of Stock as the form of payment for compensation, grants or rights earned or due under any other compensation plans or arrangements of the Company or a Subsidiary, including the plans and arrangements of the Company or a Subsidiary assumed in business combinations. Notwithstanding the provisions of Subsection 2.3, Options and SARs granted under the Plan in replacement for awards under plans and arrangements of the Company or a Subsidiary assumed in business combinations may be adjusted by the Committee to preserve the benefit of the award.  The provisions of this Subsection 5.5 shall be subject to the provisions of Subsection 5.18.

5.6. Dividends and Dividend Equivalents. An Award (including without limitation an Option or SAR Award) may provide the Participant with the right to receive dividend payments or dividend equivalent payments with respect to Stock subject to the Award, provided that, except as otherwise provided by the Committee, payment of any dividend or dividend equivalent shall be subject to the same conditions, restrictions and contingencies (including vesting) as the underlying shares of Stock, and further provided that such dividend and dividend equivalent payments shall be subject to adjustment by the Committee pursuant to Paragraph 5.2(f) (relating to the adjustment of shares).  The provisions of this Subsection 5.6 shall be subject to the provisions of Subsection 5.18.

5.7. Settlement of Awards. The settlement of Awards under the Plan shall be subject to the following:

(a)   The obligation to make payments and distributions with respect to Awards may be satisfied through cash payments, the delivery of shares of Stock, the granting of replacement Awards, or combination thereof as the Committee shall determine. Satisfaction of any such obligations under an Award, which is sometimes referred to as “settlement” of the Award, may be subject to such conditions, restrictions and contingencies as the Committee shall determine. The Committee may permit or require the deferral of any Award payment, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest or dividend equivalents, and may include converting such credits into deferred Stock equivalents.

(b)   Each Subsidiary shall be liable for payment of cash due under the Plan with respect to any Participant to the extent that such benefits are attributable to the services rendered for that Subsidiary by the Participant. Any disputes relating to liability of a Subsidiary for cash payments shall be resolved by the Committee; provided, however, that no such dispute shall result in a delay in payment to a Participant beyond the latest date by which such payment is due under the terms of the applicable Award.

(c)   Except for Options and SARs designated at the time of grant or otherwise as intended to be subject to Code section 409A, this Subsection 5.7 shall not be construed to permit the deferred settlement of Options or SARs, if such settlement would result in deferral of compensation under Treas. Reg. §1.409A-1(b)(5)(i)(A)(3) (except as permitted in paragraphs (i) and (ii) of that section).

(d)   The provisions of this Subsection 5.7 shall be subject to the provisions of Subsection 5.18.

5.8. Transferability. Except as otherwise provided by the Committee (subject to Paragraph 2.1(b)(iv)), Awards under the Plan are not transferable except as designated by the Participant by will or by the laws of descent and distribution.

5.9. Form and Time of Elections. Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification, or revocation thereof, shall be in writing filed with the Committee at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Committee shall require.

5.10. Agreement With Company. An Award under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Committee shall, in its sole discretion, prescribe. The terms and conditions of any Award to any Participant shall be reflected in such form of written document as is determined by the Committee. A copy of such document shall be provided to the Participant, and the Committee may, but need not require that the Participant sign a copy of such document. Such document is referred to in the Plan as an “Award Agreement” regardless of whether any Participant signature is required.  Except for Awards designated at the time of grant or otherwise as intended to be deferred compensation subject to Code section 409A, this Subsection 5.10 shall not be construed to permit the grant of an Award if such action would cause the Award being granted to be subject to Code section 409A.

5.11. Action by Company or Subsidiary. Any action required or permitted to be taken by the Company or any Subsidiary shall be by resolution of its board of directors, or by action of one or more members of its board of directors (including a committee of the board) who are duly authorized to act for the board, or (except to the extent prohibited by applicable law or applicable rules of any stock exchange) by a duly authorized officer of the Company or Subsidiary.

5.12. Gender and Number. Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and the plural shall include the singular.

5.13. Limitation of Implied Rights.

(a)   Neither a Participant nor any other person shall, by reason of participation in the Plan, acquire any right in or title to any assets, funds or property of the Company or any Subsidiary whatsoever, including, without limitation, any specific funds, assets, or other property which the Company or any Subsidiary, in its sole discretion, may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right to the Stock or amounts, if any, payable under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person.

(b)   The Plan does not constitute a contract of employment, and selection as a Participant will not give any participating employee or other individual the right to be retained in the employ of the Company or any Subsidiary or the right to continue to provide services to the Company or any Subsidiary, nor any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. Except as otherwise expressly provided in an Award Agreement or the Plan, no Award under the Plan shall confer upon the holder thereof any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights or any rights to receive any additional Awards under the Plan or any other Plan or arrangement of the Company or any Subsidiary.

5.14. Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or parties.

5.15. Section 83(b) Election. For an Award of Stock that is subject to a substantial risk of forfeiture, the Committee may: (a) permit the Participant to make an election to accelerate the recognition of income from the Award to the date of grant by properly filing an election under section 83(b) of the Code; (ii) not permit the Participant from making such an election; or (iii) require the Participant to make such an election as a condition of receiving such Award. In the absence of a provision in the Award Agreement to the contrary, such an Award of Stock shall be deemed to permit the Participant to make such election.

5.16. Registration. If the Committee determines that registration of Awards under the Plan is necessary or appropriate, it may use a Form S-8 or, in the event that such a form is unavailable because the Awards are granted to employees of companies which are not at least 50% owned by the Company or for any other reason, the Committee may direct the Company to use such other registration procedures as it deems appropriate.

5.17. Governing Law. The Plan and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law of Delaware or any other jurisdiction.

5.18         Limitations under Code Section 409A.  The provisions of the Plan shall be subject to the following:

(a)           No provision of the Plan shall be construed to permit the grant of an Option or SAR if such action would cause the Option or SAR being granted or the option or stock appreciation right being replaced to be subject to Code section 409A,

provided that this paragraph (a) shall not apply to any Option or SAR (or option or stock appreciation right granted under another plan) being replaced that, at the time it is granted or otherwise, is designated as being deferred compensation subject to Code section 409A.

(b)           Except with respect to an Option or SAR that, at the time it is granted or otherwise, is designated as being deferred compensation subject to Code section 409A, no Option or SAR shall condition the receipt of dividends with respect to an Option or SAR on the exercise of such Award, or otherwise provide for payment of such dividends in a manner that would cause the payment to be treated as an offset to or reduction of the exercise price of the Option or SAR pursuant Treas. Reg. §1.409A-1(b)(5)(i)(E).

(c)           The Plan shall not be construed to permit a modification of an Award, or to permit the payment of a dividend or dividend equivalent, if such actions would result in accelerated recognition of taxable income or imposition of additional tax under Code section 409A.

SECTION 6

CHANGE OF CONTROL

6.1. Effect of Change of Control. Notwithstanding any provision in the Plan (including, without limitation, Paragraph 5.2(f)) and unless otherwise indicated in the Award Agreement, upon the occurrence of a Change of Control:

(a)   If (i) a Participant’s Date of Termination does not occur between the date of grant of an Option or SAR and the date of a Change of Control; and (ii) as of the Change of Control, the Participant is not vested in all of such Option or SAR, then, as of the date of the Change of Control, the Participant shall become vested in the Affected Portion of such Option or SAR.

(b)   If (i) a Participant’s Date of Termination does not occur between the date of grant of a Full Value Award and the date of a Change of Control (regardless of whether settlement of the Award is to occur prior to, at the time of, or after vesting); and (ii) as of the Change of Control, the Participant is not vested in all of such Award, then, as of the date of the Change of Control, the Participant shall become vested in the Affected Portion of such Award. If (i) a Participant’s Date of Termination does not occur between the date of grant of a Cash Incentive Award and the date of a Change of Control (regardless of whether settlement of the Award is to occur at the time of or after vesting); and (ii) as of the Change of Control, the Participant is not vested in all of such Award, then, as of the date of the Change of Control, the Participant shall become vested in the Affected Portion of such Award.

(c)  For purposes of this Subsection 6.1, the “Affected Portion” of any Option or SAR or other Award (excluding a Cash Incentive Award) shall be 50% of the shares covered by the Award as to which the Award is not vested immediately prior to the Change of Control; provided that if the vesting of the Award is contingent on the achievement of performance objectives (that is, objectives other than the completion of service, and referred to as “Performance-Contingent Vesting”), the Affected Portion of the Award shall be the number of shares that would be delivered to the Participant if the target level of performance objectives were achieved for the applicable performance period multiplied by a fraction, the numerator of which is the number of days during the period beginning on the first day of the performance period and ending on the date of the Change of Control and the denominator of which is the number of days in the total performance period. For purposes of this Subsection 6.1, the “Affected Portion” of a Cash Incentive Award shall be 50% of the amount covered by the Award which is not vested immediately prior to the Change of Control; provided that if the vesting of the Cash Incentive Award is Performance-Contingent Vesting, the “Affected Portion” of such Cash Incentive Award shall be the amount that would be earned by the Participant if the target level of performance objectives were achieved for the applicable performance period multiplied by a fraction, the numerator of which is the number of days during the period beginning on the first day of the performance period and ending on the date of the Change of Control (but not less than 365 days or, if the performance period is less than 365 days, the number of days in the total performance period) and the denominator of which is the number of days in the total performance period.

(d) If different portions of any Award that are not vested on the date of a Change of Control are scheduled to vest on different dates, then the provisions of this Subsection 6.1 shall be applied to each such portion as though it were a separate Award.

(e)  Subject to Paragraph (f) below, the vesting of the portion of any Award that is not the Affected Portion of the Award shall vest without regard to the acceleration effected by reason of this Subsection 6.1.

(f)  Except as otherwise provided by the Committee, if the Performance-Contingent Vesting of any Award is accelerated by reason of this Subsection 6.1, then at the end of the applicable performance period for such Award, the Participant shall become vested in the number of shares or cash amount in which the Participant would have become vested in accordance with the terms of the Award, if any (without regard to the acceleration under this Subsection 6.1) reduced by the number of shares or cash amount vested under the Award by reason of the acceleration under this Subsection 6.1.

(g) If (i) during the two-year period following the date of the Change of Control, a Participant’s Date of Termination occurs by the Company or its Subsidiaries without Cause or by the Participant for Good Reason, and (ii) at the Date of Termination, any Award granted before the Change of Control is not fully vested, then any and all such Awards granted before the Change of Control held by the Participant shall become fully vested (and, in the case of Options or SARs, exercisable) on the Date of Termination.

(h) If (i) a Participant’s Date of Termination occurs during an Anticipated Change of Control by the Company or its Subsidiaries without Cause or by the Participant for Good Reason, and (ii) within two years following the Date of Termination, a Change of Control occurs, then the Participant’s Awards (including Awards that otherwise may have expired on or after the Date of Termination and prior to the Change of Control date unless inclusion of such expired Awards would result in the imposition of additional tax under Code section 409A) shall become vested and, in the case of Options or SARs, exercisable by the Participant (or, in the event of the Participant’s death after the Date of Termination, the Participant’s beneficiary) on the date of the Change of Control, and, in the case of Options or SARs, shall remain exercisable for the exercise period that would have applied if the Date of Termination (by the Company or its Subsidiaries without Cause or by the Participant for Good Reason) occurred on the Change of Control date, provided that such exercise period shall expire in no event later than the date on which the Option or SAR would have expired if the Participant had remained employed by the Company or its Subsidiaries or, if later, 30 days after the Change of Control (provided that in no event shall an ISO be exercisable more than ten years after the date of grant).

6.2. Definition of Change of Control. For purposes of the Plan, the term “Change of Control” shall mean:

(a) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more of the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors (“Voting Securities”); provided, however, that the acquisition or holding of Voting Securities by (i) the Company or any of its subsidiaries, or (ii) an employee benefit plan (or a trust forming a part thereof) maintained by the Company or any of its subsidiaries shall not constitute a change of control; and provided further that the acquisition or holding of Voting Securities by any Person in which a Participant has a substantial equity interest shall not constitute a Change of Control with respect to such Participant. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the issuance of Voting Securities by the Company in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the issuance of Voting Securities by the Company, and after such issuance of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person to more than 50% of the Voting Securities of the Company, then a Change of Control shall occur.

(b)           At any time during a period of two consecutive years, the individuals who at the beginning of such period constituted the Board (the “Incumbent Board”) cease for any reason to constitute more than 50% of the Board; provided, however, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of more than 50% of the directors then comprising the Incumbent Board, such new director shall, for purposes of this Paragraph (b), be considered as though such person were a member of the Incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of (i) either an actual “Election Contest” (as described in Rule 14a-1 1 promulgated under the Exchange Act) or other actual solicitation of proxies or contest by or on behalf of a Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by reason of an agreement intended to avoid or settle any actual or threatened Election Contest or Proxy Contest.

(c) Consummation of a merger, consolidation or reorganization or approval by the Company’s stockholders of a liquidation or dissolution of the Company or the occurrence of a liquidation or dissolution of the Company (“Business Combination”), unless, following such Business Combination:

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

(ii)  the individuals who were members of the Incumbent Board immediately prior to the execution of the initial agreement providing for such Business Combination constitute more than 50% of the members of the board of directors (or comparable governing body of a noncorporate entity) of the Surviving Company; and

(iii) no Person (other than the Company, any of its subsidiaries or any employee benefit plan (or any trust forming a part thereof) maintained by the Company, the Surviving Company or any Person who immediately prior to such Business Combination had Beneficial Ownership of 30% or more of the then Voting Securities) has Beneficial Ownership of 30% or more of the then combined voting power of the Surviving Company’s then outstanding voting securities; provided, that notwithstanding this clause (iii), a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than 30% of Voting Securities as a result of the issuance of Voting Securities by the Company in exchange for assets (including equity interests) or funds with a fair value equal to the fair value of the Voting Securities so issued; provided, however that a Business Combination with a Person in which a Participant has a substantial equity interest shall not constitute a Change of Control with respect to such Participant.

(d) Approval by the Company’s stockholders of an agreement for the assignment, sale, conveyance, transfer, lease or other disposition of all or substantially all of the assets of the Company to any Person (other than a Person in which a Participant has a substantial equity interest (in which case there shall not be a Change of Control with respect to such Participant) and other than a subsidiary of the Company or other entity, the Persons with Beneficial Ownership of which are the same Persons with Beneficial Ownership of the Company and such Beneficial Ownership is in substantially the same proportions), or the occurrence of the same. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by such Person; provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such acquisition of Voting Securities by the Company, such Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the Voting Securities Beneficially Owned by such Person, then a Change of Control shall occur.

Notwithstanding this Subsection 6.2 or Subsection 6.3 below, if any Award under the Plan constitutes Deferred Compensation (as defined in Paragraph 9(m)(vi) below) and becomes payable upon a Change of Control, a change of control event that otherwise is a Change of Control under the Plan shall be a Change of Control for purposes of the Plan only if such event also satisfies the requirements of Treas. Reg. §1.409A-3(i)(5).

6.3. Definition of Anticipated Change of Control. An “Anticipated Change of Control” shall exist during any period in which the circumstances described in Paragraphs (a) or (b), below, exist (provided, however, that an Anticipated Change of Control shall cease to exist not later than the occurrence of a Change of Control):

(a)   The Company enters into an agreement, the consummation of which would result in the occurrence of a Change of Control, provided that an Anticipated Change of Control described in this Paragraph (a) shall cease to exist upon the expiration or other termination of all such agreements.

(b)   Any person (including, without limitation, the Company) publicly announces an intention to take or to consider taking actions the consummation of which would constitute a Change of Control; provided that an Anticipated Change of Control described in this Paragraph (b) shall cease to exist upon the withdrawal of such intention, or upon a reasonable determination by the Committee that there is no reasonable chance that such actions would be consummated.

SECTION 7

COMMITTEE

7.1. Administration. The authority to control and manage the operation and administration of the Plan shall be vested in a committee (the “Committee”) in accordance with this Section 7. The Committee shall be selected by the Board, and shall consist solely of two or more members of the Board who are outside directors within the meaning of section 162(m)(4)(C)(i) of the Code and the applicable regulations and nonemployee directors within the meaning of Rule 16b-3 under the Exchange Act. The Human Resources Committee shall administer the Plan unless otherwise determined by the Board. The Board may delegate the authority to grant and administer non-employee director compensation to the Governance Committee. If the Committee does not exist, or for any other reason determined by the Board, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee.

7.2. Powers of Committee. The Committee’s administration of the Plan shall be subject to the following:

(a) Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the Eligible Individuals those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such Awards, and (subject to the restrictions imposed by Section 8) to amend, cancel or suspend Awards.

(b) To the extent that the Committee determines that the restrictions imposed by the Plan preclude the achievement of the material purposes of the Awards in jurisdictions outside the United States, the Committee will have the authority and discretion to modify those restrictions as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States.

(c) The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any Award Agreement made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan.

(d) Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons.

(e) In controlling and managing the operation and administration of the Plan, the Committee shall take action in a manner that conforms to the articles and by-laws of the Company, and applicable state corporate law.

7.3. Delegation by Committee. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange or automated quotation system on which the Stock is listed, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time.

7.4. Information to be Furnished to Committee. The Company and Subsidiaries shall furnish the Committee with such data and information as it determines may be required for it to discharge its duties. The records of the Company and Subsidiaries as to an employee’s or Participant’s employment (or other provision of services), termination of employment (or cessation of the provision of services), leave of absence, reemployment and compensation shall be conclusive on all persons unless determined to be incorrect. Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the terms of the Plan.

SECTION 8

AMENDMENT AND TERMINATION

The Board may, at any time, amend or terminate the Plan, and the Board or the Committee may amend any Award Agreement, provided that no amendment or termination may, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), adversely affect the rights of any Participant or beneficiary under any Award granted under the Plan prior to the date such amendment is adopted by the Board or the Committee (if applicable); and further provided that adjustments pursuant to Paragraph 5.2(f) shall not be subject to the foregoing limitations of this Section 8; and further provided that the provisions of Subsection 2.7 (relating to repricing) cannot be amended unless the amendment is approved by the Company’s stockholders.  No amendment or termination of the Plan shall be adopted or effective if it would result in accelerated recognition of income or imposition of additional tax under Code section 409A or, except as otherwise provided in the amendment, would cause amounts that were not otherwise subject to Code section 409A to become subject to Code section 409A.

SECTION 9

DEFINED TERMS

In addition to the other definitions contained herein, the following definitions shall apply:

(a) Affected Portion. The term “Affected Portion” shall have the meaning set forth in Paragraph 6.1(c).

(b) Anticipated Change of Control. The term “Anticipated Change of Control” shall have the meaning set forth in Subsection 6.3.

(c) Award. The term “Award” means any award or benefit granted under the Plan, including, without limitation, the grant of Options, SARs, Full Value Awards and Cash Incentive Awards.

(d) Award Agreement. The term “Award Agreement” shall have the meaning set forth in Subsection 5.10.

(e) Board. The term “Board” means the Board of Directors of the Company.

(f)  Bonus Stock. The term “bonus stock” shall have the meaning set forth in Paragraph 3.1(a).

(g)    Cash Incentive Award. The term “Cash Incentive Award” shall have the meaning set forth in Section 4.

(h)   Cause. Except as otherwise provided by the Committee, and subject to the last sentence of this definition, “Cause” shall mean: (i) the Participant’s continued failure to perform substantially the duties of the Participant with the Company and its Subsidiaries (other than any such failure resulting from incapacity due to physical or mental illness or death), after a written demand for improvement and substantial performance is delivered to the Participant (by the Board for the chief executive officer of the Company, by the chief executive officer of the Company for officers other than the chief executive officer, and by an officer of the Company for Participants other than officers) which specifically identifies the failure which, when judged by objective standards, is clearly and significantly detrimental to the Company and its Subsidiaries; (ii) the Participant’s engaging in an intentional, fraudulent act in the conduct of the business of the Company or its Subsidiaries which is demonstrably injurious to the Company or its Subsidiaries; or (iii) the Participant’s conviction of, or plea of guilty or nolo contendere to, any criminal violation (other than a traffic-related violation) involving dishonesty, fraud, breach of trust or sexual offense or any criminal felony violation (other than a traffic-related violation). If a non-employee director ceases to be a member of the Board, he or she shall be treated as having been terminated by a Company without Cause on the date of such cessation unless the director is removed from the Board for cause (as that term is defined in Article Sixth, Section 5 of the Company’s Restated Certificate of Incorporation as in effect on the Effective Date).

(i) Change of Control. The term “Change of Control” shall have the meaning set forth in Subsection 6.2.

(j) Code. The term “Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code shall include reference to any successor provision of the Code.

(k) Committee. The term “Committee” shall have the meaning set forth in Subsection 7.1.

(l) Company. The term “Company” shall have the meaning set forth in Subsection 1.1.

(m) Date of Termination. The term “Date of Termination” with respect to an Award granted to any Participant shall mean the first day occurring on or after the grant date of the Award on which the Participant is not employed by the Company or any Subsidiary, regardless of the reason for the termination of employment; provided that a termination of employment shall not be deemed to occur by reason of a transfer of the Participant between the Company and a Subsidiary or between two Subsidiaries; and further provided that the Participant’s employment shall not be considered terminated while the Participant is on a leave of absence from the Company or a Subsidiary approved by the Participant’s employer. If, as a result of a sale or other transaction, the Participant’s employer ceases to be a Subsidiary (and the Participant’s employer is or becomes an entity that is separate from the Company), and the Participant is not, at the end of the 30-day period following the transaction, employed by the Company or an entity that is then a Subsidiary, then the occurrence of such transaction shall be treated as the Date of Termination caused by the Participant being discharged by the employer. For purposes of applying the foregoing definition of Date of Termination, a Participant shall be deemed to be employed by the Company or Subsidiary during any period in which he or she is a member of the Board of Directors of the Company or a Subsidiary.  With respect to Awards that constitute Deferred Compensation, references to the Participant’s termination of employment (including references to the Participant’s employment termination, and to the Participant terminating employment, a Participant’s separation from service, and other similar reference) and references to a Participant’s termination as a

director (including separation from service and other similar references) shall mean, respectively, the Participant ceasing to be employed by, or ceasing to perform director services for, the Company and the Affiliates, subject to the following:

(i)    The employment relationship or director relationship will be deemed to have ended at the time the Participant and the applicable company reasonably anticipate that a level of bona fide services the Participant would perform for the Company and the Affiliates after such date would permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36 month period (or the full period of service to the Company and the Affiliates if the Participant has performed services for the Company and the Affiliates for less than 36 months).  In the absence of an expectation that the Participant will perform at the above-described level, the date of termination of employment or termination as a director will not be delayed solely by reason of the Participant continuing to be on the Company’s and the Affiliates’ payroll after such date.

(ii)   The employment or director relationship will be treated as continuing intact while the Participant is on a bona fide leave of absence (determined in accordance with Treas. Reg. §409A-1(h)).

(iii)  The determination of a Participant’s termination of employment or termination as a director by reason of a sale of assets, sale of stock, spin-off, or other similar transaction of the Company or an Affiliate will be made in accordance with Treas. Reg. §1.409A-1(h).

(iv)  If a Participant performs services both as an employee of the Company or an Affiliate, and a member of the board of directors of the Company or an Affiliate, the determination of whether termination of employment or termination of service as a director shall be made in accordance with Treas. Reg. §1.409A-1(h)(5) (relating to dual status service providers).

(v)   For purposes of this Paragraph 9(m), the term “Affiliates” means all persons with whom the Company is considered to be a single employer under Code section 414(b) and all persons with whom the Company would be considered a single employer under Code section 414(c) thereof.

(vi)  For purposes of this Paragraph 9(m), the term “Deferred Compensation” means payments or benefits that would be considered to be provided under a nonqualified deferred compensation plan as that term is defined in Treas. Reg. §1.409A-1.

(n) Effective Date. The term “Effective Date” shall have the meaning set forth in Subsection 5.1.

(o) Eligible Individual. Subject to the provisions of Paragraph 2.1(b) (relating to ISOs), the term “Eligible Individual” means any employee of the Company or a Subsidiary, and any non-employee member of the Board of Directors of the Company or the Board of Directors of any Subsidiary.

(p) Exchange Act. The term “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(q) Exercise Price. The term “Exercise Price” shall have the meaning set forth in Subsection 2.3.

(r) Fair Market Value. Except as otherwise provided by the Committee, “Fair Market Value” for a share of Stock for a day shall be the closing price per share on such day on the principal exchange on which shares of Stock are listed or admitted to trading or on the Nasdaq National Market or the Nasdaq SmallCap Market (or the closing bid if no sales were reported); if shares of Stock are listed or admitted to trading on an exchange but such day is not a trading day, Fair Market Value shall be determined as of the last preceding trading day. If the preceding sentence is not applicable, Fair Market Value shall be determined in good faith by the Committee in accordance with Treas. Reg. 1.409A-1(b)(5)(iv).

(s) Full Value Award. The term “Full Value Award” shall have the meaning set forth in Subsection 3.1.

(t) Good Reason. Except as otherwise provided by the Committee, “Good Reason” shall exist upon the occurrence of any of the following events: (i) a diminution in the Participant’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities (including the assignment to the Participant of any duties inconsistent with the Participant’s position, authority, duties or responsibilities), excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or its Subsidiaries promptly after receipt of notice thereof given by the Participant; (ii) the Company or its Subsidiaries shall (A) reduce the base salary or bonus or incentive opportunity of the Participant or (B) 

substantially reduce in the aggregate the Participant’s benefits; or (iii) the Company shall require the Participant to relocate the Participant’s principal business office to any location more than 50 miles from its location prior to the Change of Control or Anticipated Change of Control.

(u) ISO. The term “ISO” shall have the meaning set forth in Subsection 2.1.

(v) NQO. The term “NQO” shall have the meaning set forth in Subsection 2.1.

(w) Option. The term “Option” shall have the meaning set forth in Subsection 2.1.

(x) Participant. The term “Participant” shall have the meaning set forth in Subsection 1.2.

(y) Performance-Based Compensation. The term “Performance-Based Compensation” shall have the meaning ascribed to it under section 162(m) of the Code.

(z) Performance-Contingent Vesting. The term “Performance-Contingent Vesting” shall have the meaning set forth in Paragraph 6.1(c).

(aa) Performance Measures. The “Performance Measures” may be based on any one or more of the following, as selected by the Committee: (a) earnings per share; (b) net earnings/income; (c) net operating earnings/income; (d) net operating earnings/income after taxes; (e) net operating earnings/income per share; (f) EPS from continuing operations; (g) EBIT; (h) stock price appreciation; (i) total shareholder return; (j) relative total shareholder return (for example, as compared to peer group performance); (k) sales/revenues, or any component thereof; (l) sales/revenue growth; (m) unit volume; (n) gross or operating margins/margin contribution; (o) economic value added or economic profit; (p) return on assets (net assets or operating assets); (q) return on equity; (r) return on invested capital or invested capital efficiency; (s) working capital or working capital efficiency; (t) cash flow/free cash flow; (u) net cash provided by operating activities; (v) cash return on assets; (w) waste recovery, cost control and/or operating efficiency targets; (x) expense targets; and (y) safety goals. Each goal may be expressed on an absolute and/or relative basis, may be based on or otherwise employ comparisons based on internal targets, the past performance of the Company and/or the past or current performance of other companies, and in the case of earnings-based measures, may use or employ comparisons relating to capital, shareholders equity and/or shares outstanding, investments or assets or net assets.

(bb) Performance Shares. The term “performance shares” shall have the meaning set forth in Paragraph 3.1(b).

(cc) Performance Units. The term “performance units” shall have the meaning set forth in Paragraph 3.1(b).

(dd) Plan. The “Plan” means the United Stationers Inc. 2004 Long-Term Incentive Plan.

(ee) Prior Equity Plans. The term “Prior Equity Plans” shall have the meaning set forth in Paragraph 5.2(b)(ii).

(ff) Restricted Stock. The term “restricted stock” shall have the meaning set forth in Paragraph 3.1(c).

(gg) Restricted Stock Units. The term “restricted stock units” shall have the meaning set forth in Paragraph 3.1(c).

(hh) SAR. The term “SAR” shall have the meaning set forth in Subsection 2.2.

(ii) Stock. The term “Stock” means Common Stock of the Company.

(jj) Subsidiary. For purposes of the Plan and subject to Subsection 2.1(b) (relating to ISOs), the term “Subsidiary” means any corporation, partnership, joint venture or other entity during any period in which at least a fifty percent voting or profits interest is owned, directly or indirectly, by the Company (or by any entity that is a successor to the Company), and any other business venture designated by the Committee in which the Company (or any entity that is a successor to the Company) has a significant interest.

EX-21

Exhibit 21

UNITED STATIONERS INC. CORPORATE ENTITY CHART AS OF DECEMBER 2008 United Stationers Inc. United Stationers  Supply Co. United Stationers  Technology  Services LLC United Stationers  Financial  Services LLC Lagasse, Inc. Azerty de Mexico,  S.A. de C.V. United Supply US (Division) United Worldwide  Limited United Stationers Hong Kong Limited  USS Receivables Company, Ltd. Azerty US (Division) ORS Nasco, Inc. Oklahoma Rig, Inc. Oklahoma Rig &  Supply Co. Trans, Inc.

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 333-66352, No. 333-37665, No. 333-134058 and No. 333-120563) pertaining to the Company’s various employee benefit plans, of our reports dated February 27, 2009, with respect to the consolidated financial statements and schedule of United Stationers Inc. and the effectiveness of internal controls over financial reporting of United Stationers Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2008.

Chicago, Illinois
February 27, 2009
	/s/ ERNST & YOUNG LLP

1

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AS ADOPTED PURSUANT TO
SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Richard W. Gochnauer, certify that:

1.

I have reviewed this annual report on Form 10-K of United Stationers Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 27, 2009 /s/ RICHARD W. GOCHNAUER
Richard W. Gochnauer
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
AS ADOPTED PURSUANT TO
SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Victoria J. Reich, certify that:

1.

I have reviewed this annual report on Form 10-K of United Stationers Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 27, 2009
/s/ VICTORIA J. REICH
Victoria J. Reich
Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of United Stationers Inc. (the "Company") on Form 10-K for the year ended December 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Richard W. Gochnauer, President and Chief Executive Officer of the Company, and Victoria J. Reich, Senior Vice President and Chief Financial Officer of the Company, each hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ RICHARD W. GOCHNAUER
Richard W. Gochnauer
President and Chief Executive Officer
February 27, 2009

/s/ VICTORIA J. REICH
Victoria J. Reich
Senior Vice President and
Chief Financial Officer
February 27, 2009