ESSENDANT INC (Form: 10-Q, Received: 07/23/2015 17:23:40)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

¨	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

ESSENDANT 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)

Indicate by check mark whether 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 and Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

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

Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

On July 20, 2015, the registrant had outstanding 38,007,081 shares of common stock, par value $0.10 per share.

ESSENDANT INC.

FORM 10-Q

For the Quarterly Period Ended June 30, 2015

TABLE OF CONTENTS

		Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014		3
Condensed Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2015 and 2014		4
Condensed Consolidated Statements of Comprehensive Income for the Three Months and Six Months Ended June 30, 2015 and 2014		5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014		6
Notes to Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
Item 4. Controls and Procedures		25
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		25
Item 1A. Risk Factors		25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 6. Exhibits		27
SIGNATURES		28

P ART I – FINANCIAL INFORMATION

I TEM 1.

FINANCIAL STATEMENTS

ESSENDANT INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	(Unaudited)			(Audited)
	As of June 30,			As of December 31,
	2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	29,935		$	20,812
Accounts receivable, less allowance for doubtful accounts of $18,157 in 2015 and $19,725 in 2014		667,062			702,527
Inventories		875,465			926,809
Assets related to held for sale disposal group		7,880			-
Other current assets		29,595			30,042
Total current assets		1,609,937			1,680,190
Property, plant and equipment, net		130,216			138,217
Goodwill		402,545			398,042
Intangible assets, net		88,622			111,958
Other long-term assets		48,439			41,810
Total assets	$	2,279,759		$	2,370,217
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	465,953		$	485,241
Accrued liabilities		190,257			192,792
Liabilities related to held for sale disposal group		7,169			-
Current maturities of long-term debt		28			851
Total current liabilities		663,407			678,884
Deferred income taxes		12,362			17,763
Long-term debt		661,143			713,058
Other long-term liabilities		102,577			104,394
Total liabilities		1,439,489			1,514,099
Stockholders’ equity:
Common stock, $0.10 par value; authorized - 100,000,000 shares, issued - 74,435,628 shares in 2015 and 2014		7,444			7,444
Additional paid-in capital		411,504			412,291
Treasury stock, at cost – 36,349,375 shares in 2015 and 35,719,041 shares in 2014		(1,070,183	)		(1,042,501	)
Retained earnings		1,557,281			1,541,675
Accumulated other comprehensive loss		(65,776	)		(62,791	)
Total stockholders’ equity		840,270			856,118
Total liabilities and stockholders’ equity	$	2,279,759		$	2,370,217

See notes to condensed consolidated financial statements.

ESSENDANT INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Net sales	$	1,341,799	$	1,320,037	$	2,674,174	$	2,574,176
Cost of goods sold		1,129,737		1,120,577		2,257,662		2,187,633
Gross profit		212,062		199,460		416,512		386,543
Operating expenses:
Warehousing, marketing and administrative expenses		158,159		142,186		356,531		291,035
Operating income		53,903		57,274		59,981		95,508
Interest expense, net		4,778		3,833		9,617		7,207
Income before income taxes		49,125		53,441		50,364		88,301
Income tax expense		18,864		20,110		24,095		33,113
Net income	$	30,261	$	33,331	$	26,269	$	55,188
Net income per share - basic:	$	0.80	$	0.86	$	0.69	$	1.41
Average number of common shares outstanding - basic		37,765		38,816		37,939		39,004
Net income per share - diluted:	$	0.79	$	0.85	$	0.69	$	1.40
Average number of common shares outstanding - diluted		38,106		39,226		38,317		39,435
Dividends declared per share	$	0.14	$	0.14	$	0.28	$	0.28

See notes to condensed consolidated financial statements.

ESSENDANT INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(Unaudited)

	For the Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2015		2014			2015			2014
Net income	$	30,261	$	33,331		$	26,269		$	55,188
Other comprehensive income, net of tax
Unrealized translation adjustment		209		562			(4,421	)		17
Minimum pension liability adjustments		932		580			1,864			1,161
Unrealized interest rate swap adjustments		48		(626	)		(428	)		(785	)
Total other comprehensive gain (loss), net of tax		1,189		516			(2,985	)		393
Comprehensive income	$	31,450	$	33,847		$	23,284		$	55,581

See notes to condensed consolidated financial statements.

ESSENDANT INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

	For the Six Months Ended
	June 30,
	2015			2014
Cash Flows From Operating Activities:
Net income	$	26,269		$	55,188
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		24,198			19,430
Share-based compensation		3,268			4,294
Loss on the disposition of property, plant and equipment		57			96
Amortization of capitalized financing costs		451			460
Excess tax benefits related to share-based compensation		(433	)		(638	)
Asset impairment charges		24,034			-
Deferred income taxes		(8,365	)		(5,317	)
Changes in operating assets and liabilities (net of acquisitions):
Decrease (increase) in accounts receivable, net		28,330			(17,650	)
Decrease in inventory		44,984			39,290
Increase in other assets		(10,173	)		(2,765	)
Increase in accounts payable		3,152			21,961
Decrease in checks in-transit		(19,240	)		(28,545	)
Decrease (increase) in accrued liabilities		4,794			(1,106	)
Decrease in other liabilities		(478	)		(5,809	)
Net cash provided by operating activities		120,848			78,889
Cash Flows From Investing Activities:
Capital expenditures		(11,931	)		(10,335	)
Proceeds from the disposition of property, plant and equipment		18			869
Acquisition, net of cash acquired		(532	)		(26,161	)
Net cash used in investing activities		(12,445	)		(35,627	)

Cash Flows From Financing Activities:
Net repayments under revolving credit facility		(52,738	)		(14,489	)
Borrowings under Receivables Securitization Program		-			9,300
Repayment of debt		-			(135,000	)
Proceeds from the issuance of debt		-			150,000
Net disbursements from share-based compensation arrangements		(759	)		(1,788	)
Acquisition of treasury stock, at cost		(31,227	)		(31,152	)
Payment of cash dividends		(10,699	)		(10,991	)
Excess tax benefits related to share-based compensation		433			638
Payment of debt issuance costs		(36	)		(615	)
Net cash used in financing activities		(95,026	)		(34,097	)
Effect of exchange rate changes on cash and cash equivalents		(135	)		4
Transfer of cash to held for sale		(4,119	)		-
Net change in cash and cash equivalents		9,123			9,169
Cash and cash equivalents, beginning of period		20,812			22,326
Cash and cash equivalents, end of period	$	29,935		$	31,495
Other Cash Flow Information:
Income tax payments, net	$	31,618		$	25,236
Interest paid		9,451			4,621

See notes to condensed consolidated financial statements.

ESSENDANT INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The accompanying Condensed Consolidated Financial Statements represent Essendant Inc. (“ESND”) (formerly known as United Stationers Inc.) with its wholly owned subsidiary Essendant Co. (formerly known as United Stationers Supply Co.), and Essendant Co’s subsidiaries (collectively, “Essendant” or the “Company”). The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts of ESND and its subsidiaries. All intercompany transactions and balances have been eliminated. The Company operates in a single reportable segment as a leading distributor of workplace essentials.

The accompanying Condensed Consolidated Financial Statements are unaudited, except for the Condensed Consolidated Balance Sheet as of December 31, 2014, which was derived from the December 31, 2014 audited financial statements. The Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements, prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to such rules and regulations. Accordingly, the reader of this Quarterly Report on Form 10-Q should refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for further information.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of Essendant at June 30, 2015 and the results of operations and cash flows for the six months ended June 30, 2015 and 2014. The results of operations for the three and six months ended June 30, 2015 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year.

Inventory

The Company used the last-in, first-out (“LIFO”) method for valuing approximately 77% and 74% of its total inventory as of June 30, 2015 and December 31, 2014, respectively. The remaining inventory was valued under the first-in, first-out (“FIFO”) accounting method. An actual valuation of inventory under the LIFO method can be made only at the end of each fiscal year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, and are subject to the final year-end LIFO inventory valuation. Inventory valued under the FIFO and LIFO accounting methods was 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 $124.2 million and $118.6 million higher than reported as of June 30, 2015 and December 31, 2014, respectively.

The six-month change in the LIFO reserve as of June 30, 2015 resulted in a $5.6 million increase in cost of goods sold related to 2015 inflation. The six-month change in the LIFO reserves as of June 30, 2014 resulted in a $1.6 million increase in costs of goods sold which included LIFO liquidations relating to decrements in the Company’s office products and furniture pools which resulted in a $3.4 million liquidation of LIFO inventory quantities carried at lower costs in prior years as compared with the cost of purchases in 2014. This liquidation was more than offset by LIFO expense of $5.0 million related to 2014 inflation.

New Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest- Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , that simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement guidance for debt issuance costs. The ASU will be effective for Essendant financial statements issued for fiscal years beginning after December 15, 2015, and early application is permitted. The Company is currently evaluating the timing of implementation of the new guidance but expect it will have an immaterial impact on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-05, “ Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” , that provides guidance to customers about whether a cloud computing arrangement includes a software license. If such an arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for it as a service contract. This ASU will be effective for Essendant for annual periods beginning after December 15, 2015, and early application is permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

In May 2014, the F ASB issue d ASU No. 2014-09, Revenue From Contracts With Customers , that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional d isclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have th e option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. This standard is effective for fiscal years b eginning after December 15, 2017 , including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

2. Acquisitions and Dispositions

Acquisition of CPO Commerce, Inc.

On May 30, 2014, Essendant Co. completed the acquisition of CPO, a leading online retailer of brand name power tools and equipment. The acquisition of CPO significantly expanded the Company’s digital resources and capabilities to support resellers as they transition to an increasingly online environment. CPO’s expertise will strengthen Essendant’s ability to offer features like improved product content, real-time access to inventory and pricing, digital marketing and merchandising, and an enhanced digital platform to our resellers and manufacturing partners.

The purchase price was $37.8 million, including $5.5 million related to the estimated fair value of contingent consideration. The contingent consideration ultimately paid will be determined based on CPO’s sales during a three-year period immediately following the acquisition date. The final payments related to the contingent consideration will be determined by actual achievement in the earn-out periods and will be between zero and $10 million. Any changes to the estimated fair value after the original purchase accounting was completed were recorded in “warehousing, marketing and administrative expenses” in the period in which the change occurred. The Company financed the 100% stock acquisition with borrowings under the Company’s available committed bank facilities.

The fair value of the assets and liabilities acquired were determined using various valuation methods including selling price, a market approach, and discounted cash flows using both an income and cost approach.

The final allocation of the purchase price was as follows (amounts in thousands):

Purchase price, net of cash acquired				$	32,225
Accounts receivable	$	(2,956	)
Inventories		(13,051	)
Other current assets		(269	)
Property, plant and equipment, net		(488	)
Intangible assets		(12,800	)
Total assets acquired					(29,564	)
Accounts payable		16,911
Accrued liabilities		2,580
Deferred income taxes		3,453
Other long-term liabilities		90
Total liabilities assumed					23,034
Goodwill				$	25,695

The purchased identifiable intangible assets were as follows (amounts in thousands):

	Total		Estimated Life
Customer relationships	$	5,200	3 years
Trademark		7,600	15 years
Total	$	12,800

Acquisition of MEDCO

On October 31, 2014, Essendant Co. completed the acquisition of all of the capital stock of Liberty Bell Equipment Corp., a United States wholesaler of automotive aftermarket tools and equipment, and its affiliates (collectively, MEDCO) including G2S Equipement de Fabrication et d’Entretien ULC, a Canadian wholesaler. MEDCO advances a key pillar of the Company’s strategy, which is to diversify into higher growth and margin channels and categories. It also brings expanded categories and services to customers.

The purchase price was $150.4 million, including $4.7 million related to the estimated fair value of contingent consideration. The contingent consideration ultimately paid will be determined based on MEDCO’s sales and EBITDA during a three-year period immediately following the acquisition date. Additionally, $6.0 million was reserved as a payable upon completion of an eighteen month indemnification period. The final payments related to the contingent consideration will be determined by actual achievement in the earn-out periods and will be between zero and $10 million. Any changes to the estimated fair value after the original purchase accounting is completed will be recorded in “warehousing, marketing and administrative expenses” in the period in which a change occurs. This acquisition was funded through a combination of cash on hand and cash available under the Company’s committed bank facilities.

The Company has developed a preliminary estimate of the fair value of assets acquired and liabilities assumed for purposes of allocating the purchase price. The estimate is subject to change as the valuation activities are completed. The fair value of the assets and liabilities acquired were estimated using various valuation methods including estimated selling price, a market approach, and discounted cash flows using both an income and cost approach.

At June 30, 2015, the preliminary allocation of the purchase price was as follows (amounts in thousands):

Purchase price, net of cash acquired				$	145,873
Accounts receivable	$	(44,815	)
Inventories		(55,491	)
Other current assets		(1,299	)
Property, plant and equipment, net		(4,408	)
Other assets		(442	)
Intangible assets		(39,330	)
Total assets acquired					(145,785	)
Accounts payable		32,383
Accrued liabilities		5,254
Deferred income taxes		1,333
Other long-term liabilities		52
Total liabilities assumed					39,022
Goodwill				$	39,110

The purchased identifiable intangible assets were as follows (amounts in thousands):

	Total		Estimated Life
Customer relationships	$	36,920	4-15 years
Trademarks		2,410	1.5-15 years
Total	$	39,330

Any changes to the preliminary allocation of the purchase price, some of which may be material, will be allocated to residual goodwill.

Assets Held for Sale

On February 10, 2015, the Company approved a plan to sell its subsidiary in Mexico, which is not strategic to the Company. The Company plans to dispose of the entity in 2015. As of the approval date, in accordance with Accounting Standards Codification (ASC) 360-10-45-9 Property, Plant, and Equipment , the Mexican subsidiary met all of the criteria to be classified as a held-for-sale asset disposal group. In accordance with ASC 350-20-40, Intangibles – Goodwill and Other , the Company allocated a proportionate share of the goodwill balance from the office product and janitorial and breakroom supply reporting unit based on the subsidiary’s relative fair value to the reporting unit and performed an impairment test for the allocated goodwill utilizing the cost approach to value the entity. Based upon the impairment test, the $3.3 million of goodwill allocated to the subsidiary was determined to be fully impaired. Additionally, in conjunction with classifying the subsidiary as a held-for-sale asset disposal group, the Company revalued the subsidiary to fair value using the cost-approach method less the estimated cost to sell. The carrying value, including a $10.1 million cumulative foreign currency translation adjustment, of the disposal group was then compared to the fair value less the estimated cost to sell, resulting in a pre-tax impairment loss of $10.1 million. The goodwill impairment of $3.3 million, the held-for-sale impairment of $10.1 million and the $0.1 million estimated cost to sell were recorded in the first quarter of 2015 within “warehousing, marketing and administrative expenses.” During the second quarter, the Company recorded an additional $1.4 million within “warehousing, marketing and administrative expenses.” Additional financial statement impacts may occur during the remainder of 2015 as this transaction is completed.

As of June 30, 2015, the carrying amounts, excluding intercompany accounts, of the Mexican subsidiary by major classes of assets and liabilities included in the Consolidated Balance Sheet were as follows (in thousands):

	Amount
Assets held for sale:
Cash and cash equivalents	$	4,119
Accounts receivable, less allowance for doubtful accounts		6,720
Inventories		6,527
Other current assets		418
Net property, plant equipment		110
Other assets		657
Held-for-sale valuation allowance		(10,671	)
Total assets held for sale	$	7,880

Liabilities held for sale:
Accounts payable		3,447
Accrued liabilities		3,184
Other long-term liabilities		538
Total liabilities held for sale	$	7,169

Agreement to Purchase Nestor Sales LLC

On July 14, 2015, Essendant Co signed an agreement to acquire Nestor Sales LLC, a leading wholesaler and distributor of tools, equipment and supplies to the transportation industry. The all cash purchase price is $38.5 million, subject to closing adjustments. This acquisition accelerates the Company’s growth in the automotive aftermarket, complements the Company’s existing industrial offerings while providing access to new customer segments, and advances a key strategic pillar to diversify into higher growth and margin channels and categories. The acquisition is expected to be completed in the third quarter of 2015, subject to customary closing conditions. This acquisition will be funded through a combination of cash on hand and cash available under our revolving credit facility.

3. Share-Based Compensation

As of June 30, 2015, the Company has two active equity compensation plans. On May 20, 2015 the Company’s stockholders approved certain amendments to the Amended and Restated 2004 Long-Term Incentive Plan (“LTIP) which included the renaming of the LTIP to the “2015 Long-Term Incentive Plan” (as amended and restated, the “2015 Plan”). Under the 2015 Plan, award vehicles include, but are not limited to, stock options, restricted stock awards, restricted stock units (“RSUs”), and performance-based awards. Associates and non-employee directors of the Company are eligible to become participants in the plan. The Nonemployee Directors’ Deferred Stock Compensation Plan allows non-employee directors to elect to defer receipt of all or a portion of their retainer and meeting fees.

The Company granted 206,479 shares of restricted stock and 145,552 RSUs during the first six months of 2015. No stock options were granted during the first six months of 2015. During the first six months of 201 4 , the Company granted 62,594 shares of restricted stock, 147,725 RSUs, and 5 ,538 stock options.

4. Severance and Restructuring Charges

During the second quarter of 2015, the Company recorded a $0.1 million pre-tax reversal of expense relating to facility consolidations. During the first quarter of 2015, the Company recorded a $6.0 million pre-tax charge relating to a workforce reduction and a $0.4 million pre-tax charge relating to facility consolidations. These charges were included in “warehousing, marketing and administrative expenses.” Cash outflows for these actions will occur primarily in 2015 and were approximately $2.4 million in the six months ended June 30, 2015. As of June 30, 2015, the Company has accrued liabilities for these actions of $3.9 million. The Company estimated an additional $2.7 million will be incurred in the remainder of 2015 due to facility closures related to this action, for a total 2015 expense of approximately $9.0 million.

5. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill are noted in the following table (in thousands):

Goodwill, balance as of December 31, 2014	$	398,042
Impairment		(3,319	)
Purchase accounting adjustments		9,184
Currency translation adjustment		(1,362	)
Goodwill, balance as of June 30, 2015	$	402,545

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):

	June 30, 2015								December 31, 2014
								Weighted								Weighted
								Average								Average
	Gross					Net		Useful	Gross					Net		Useful
	Carrying		Accumulated			Carrying		Life	Carrying		Accumulated			Carrying		Life
	Amount		Amortization			Amount		(years)	Amount		Amortization			Amount		(years)
Intangible assets subject to amortization
Customer relationships and other intangibles	$	121,766	$	(46,228	)	$	75,538	16	$	125,761	$	(41,123	)	$	84,638	16
Non-compete agreements		4,660		(2,981	)		1,679	4		4,672		(2,364	)		2,308	4
Trademarks		12,112		(2,307	)		9,805	14		14,428		(1,716	)		12,712	13
Total	$	138,538	$	(51,516	)	$	87,022		$	144,861	$	(45,203	)	$	99,658
Intangible assets not subject to amortization
Trademarks		1,600		-			1,600	n/a		12,300		-			12,300	n/a
Total	$	140,138	$	(51,516	)	$	88,622		$	157,161	$	(45,203	)	$	111,958

In the first quarter of 2015, the Company recorded a pre-tax non-cash impairment charge of $10.2 million to write-down the trademarks of ORS Nasco and certain OKI brands to their fair value related to the corporate name change that was effective June 1, 2015. This impairment charge was recorded in “warehousing, marketing and administrative expenses.” The Company utilized the discounted cash flow method to determine the fair value of these trademarks based upon management’s current forecasted future revenues from the trademarks. The trademarks had a total value of $1.0 million at June 30, 2015.

The following table summarizes the amortization expense to be incurred in 2015 and over the next four years on intangible assets (in thousands):

Year	Amount
2015	$	14,863
2016		11,910
2017		9,801
2018		7,248
2019		5,477

6. Accumulated Other Comprehensive Income (Loss)

The change in Accumulated Other Comprehensive Income (Loss) (“AOCI”) by component, net of tax, for the period ended June 30, 2015 was as follows (amounts in thousands):

	Foreign Currency Translation			Cash Flow Hedges			Defined Benefit Pension Plans			Total
AOCI, balance as of December 31, 2014	$	(11,923	)	$	274		$	(51,142	)	$	(62,791	)
Other comprehensive (loss) income before reclassifications		(4,421	)		(864	)		-			(5,285	)
Amounts reclassified from AOCI		-			436			1,864			2,300
Net other comprehensive (loss) income		(4,421	)		(428	)		1,864			(2,985	)
AOCI, balance as of June 30, 2015	$	(16,344	)	$	(154	)	$	(49,278	)	$	(65,776	)

The following table details the amounts reclassified out of AOCI into the income statement during the three-month and six-month period ending June 30, 2015 respectively (in thousands):

	Amount Reclassified From AOCI
	For the Three			For the Six
	Months Ended			Months Ended
	June 30,			June 30,			Affected Line Item In The Statement
Details About AOCI Components	2015			2015			Where Net Income is Presented
Gain on interest rate swap cash flow hedges, before tax	$	339		$	703		Interest expense, net
		(129	)		(267	)	Tax provision
	$	210		$	436		Net of tax
Amortization of defined benefit pension plan items:
Prior service cost and unrecognized loss	$	1,525		$	3,050		Warehousing, marketing and administrative expenses
		(593	)		(1,186	)	Tax provision
		932			1,864		Net of tax
Total reclassifications for the period	$	1,142		$	2,300		Net of tax

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, restricted stock units and deferred stock units are considered dilutive securities. For the three-month and six-month periods ending June 30, 2015 and 2014, 0.3 million and 0.5 million shares of such securities, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect would be antidilutive. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Numerator:
Net income	$	30,261	$	33,331	$	26,269	$	55,188
Denominator:
Denominator for basic earnings per share -
weighted average shares		37,765		38,816		37,939		39,004
Effect of dilutive securities:
Employee stock options and restricted units		341		410		378		431
Denominator for diluted earnings per share -
Adjusted weighted average shares and the effect of dilutive securities		38,106		39,226		38,317		39,435
Net income per share:
Net income per share - basic	$	0.80	$	0.86	$	0.69	$	1.41
Net income per share - diluted	$	0.79	$	0.85	$	0.69	$	1.40

Common Stock Repurchases

As of December 31, 2014, the Company had Board authorization to repurchase $42.4 million of common stock. In February 2015, the Board of Directors authorized the Company to purchase an additional $100.0 million of common stock. During the three-month periods ended June 30, 2015 and 2014, the Company repurchased 378,462 and 459,922 shares of the Company’s common stock at an aggregate cost of $15.2 million and $17.9 million, respectively. During the six-month periods ended June 30, 2015 and 2014, the Company repurchased 781,141 and 791,291 shares of the Company’s common stock at an aggregate cost of $31.5 million and $31.7 million, respectively. 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 the first six months of 2015 and 2014, the Company reissued 150,807 and 91,904 shares, respectively, of treasury stock to fulfill its obligations under its equity incentive plans.

8. Debt

ESND is a holding company and, as a result, its primary sources of funds are cash generated from operating activities of its direct operating subsidiary, Essendant Co., and from borrowings by Essendant Co. The 2013 Credit Agreement, the 2013 Note Purchase Agreement, and the Receivables Securitization Program (each as defined in Note 9 of the Company’s Form 10-K for the year ended December 31, 2014) restrict Essendant Co.’s ability to transfer cash to ESND.

Debt consisted of the following amounts (in millions):

	As of		As of
	June 30, 2015		December 31, 2014

2013 Credit Agreement	$	311.1	$	363.0
2013 Note Purchase Agreement		150.0		150.0
Receivables Securitization Program		200.0		200.0
Mortgage & Capital Lease		0.1		0.9
Total	$	661.2	$	713.9

As of June 30, 2015, 77.3% of the Company’s outstanding debt, excluding capital leases, was priced at variable interest rates based primarily on the applicable bank prime rate or London InterBank Offered Rate (“LIBOR”).

The Company had outstanding letters of credit of $ 11.1 million under the 2013 Credit Agreement as of June 30 , 2015 and Decembe r 31, 201 4 .

Borrowings under the 2013 Credit Agreement bear interest at LIBOR for specified interest periods or at the Alternate Base Rate (as defined in the 2013 Credit Agreement), plus, in each case, a margin determined based on the Company’s permitted debt to EBITDA ratio calculated as provided in Section 6.20 of the 2013 Credit Agreement (the “Leverage Ratio”). Depending on the Company’s Leverage Ratio, the margin on LIBOR-based loans ranges from 1.00% to 2.00% and on Alternate Base Rate loans ranges from 0% to 1.00%. As of June 30, 2015, the applicable margin for LIBOR-based loans was 1.375% and for Alternate Base Rate loans was 0.375%. Essendant Co. is required to pay the lenders a fee on the unutilized portion of the commitments under the 2013 Credit Agreement at a rate per annum between 0.15% and 0.35%, depending on the Company’s Leverage Ratio.

On June 26, 2015, the Company and its subsidiaries Essendant Co., Essendant Financial Services LLC (“EFS") and Essendant Receivables LLC ("ESR") entered into a Third Omnibus Amendment to Transaction Documents (the “Omnibus Amendment”) with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch ("BTMU") and PNC Bank, National Association (“PNC Bank”). The Omnibus Agreement amended the transaction documents of the Receivable Securitization Program to reflect rebranded legal entity names. On June 29, 2015, Lagasse, LLC, a subsidiary of Essendant Co. merged into Essendant Co. All accounts receivable originated by Lagasse prior to the merger are excluded from the Program. The Omnibus Agreement amended the Transaction Documents to also exclude “Excluded Receivables” from the Receivables Securitization Program, which are defined as “any receivable which, at the time of such Receivable’s origination, was processed on the [enterprise resource planning system previously used by Lagasse, LLC].”

As of June 30, 2015 and December 31, 2014, $380.3 million and $360.3 million, respectively, of receivables had been sold to the Investors (as defined in Note 9 of the Company’s Form 10-K for the year ended December 31, 2014). ESR had $200.0 million outstanding under the Receivables Securitization Program as of June 30, 2015 and December 31, 2014.

For additional information about the 2013 Credit Agreement, the 2013 Note Purchase Agreement, and the Receivables Securitization Program, see Note 9 of the Company’s Form 10-K for the year ended December 31, 2014.

9. Pension and Post-Retirement Benefit Plans

The Company maintains pension plans covering union and certain non-union employees. For more information on the Company’s retirement plans, see Note 11 to the Company’s Consolidated Financial Statements in the Form 10-K for the year ended December 31, 2014. A summary of net periodic pension cost related to the Company’s pension plans for the three and six months ended June 30, 2015 and 2014 was as follows (dollars in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2015			2014			2015			2014
Service cost - benefit earned during the period	$	400		$	327		$	800		$	655
Interest cost on projected benefit obligation		2,270			2,242			4,540			4,485
Expected return on plan assets		(2,805	)		(2,557	)		(5,610	)		(5,115	)
Amortization of prior service cost		75			45			150			90
Amortization of actuarial loss		1,450			905			2,900			1,810
Net periodic pension cost	$	1,390		$	962		$	2,780		$	1,925

The Company made cash contributions of $2.0 million to its pension plans during each of the six month periods ended June 30, 2015 and 2014. Additional contributions, if any, for 2015 have not yet been determined. As of June 30, 2015 and December 31, 2014, respectively, the Company had accrued $48.0 million and $50.3 million of pension liability within “Other Long-Term Liabilities” on the Condensed Consolidated Balance Sheets.

Defined Contribution Plan

The Company has defined contribution plans covering certain salaried associates and non-union hourly paid associates (the “Plan”). The Plan permits associates to defer a portion of their pre-tax and after-tax salary as contributions to the Plan. The Plan also provides for Company-funded discretionary contributions as well as matching associates’ salary deferral contributions, at the discretion of the Board of Directors. The Company recorded expense of $1.5 million and $2.9 million for the Company match of employee contributions to the Plan for the three and six months ended June 30, 2015. During the same periods last year, the Company recorded expense of $1.3 million and $2.7 million to match employee contributions.

10. Derivative Financial Instruments

The Company uses derivative instruments to manage a portion of exposures to fluctuations in interest rates. The Company does not enter into derivative financial instruments for trading or speculative purposes. The fair values of these instruments are determined by using quoted market forward rates (level 2 inputs) and reflect the present value of the amount that the Company would pay for contracts involving the same notional amounts and maturity dates. These instruments qualify for hedge accounting and the changes in fair value are reported as a component of other comprehensive earnings (losses) net of tax effects.

As of June 30, 2015 and December 31, 2014, the fair value of the Company's interest rate swap included in the Company’s Condensed Consolidated Balance Sheet as a component of “Other long-term liabilities” was $0.9 million and $0.3 million respectively. The purpose of the interest rate swap is to convert a portion of the Company’s floating-rate debt to a fixed-rate basis. The swap matures in July 2017. The Company had no other derivative instruments as of June 30, 2015 or December 31, 2014.

11. Fair Value Measurements

The Company measures certain financial assets and liabilities, including interest rate swap derivatives, at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates (see Note 10 “Derivative Financial Instruments”, for more information on these interest rate swaps).

Accounting guidance on fair value establishes a hierarchy for those instruments measured at fair value which 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 level to apply to an asset or liability 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 Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 (in thousands):

	Fair Value Measurements as of June 30, 2015
			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
Liabilities
Interest rate swap liability		872		-		872		-
Total	$	872	$	-	$	872	$	-

	Fair Value Measurements as of December 31, 2014
			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
Liabilities
Interest rate swap liability		253		-		253		-
Total	$	253	$	-	$	253	$	-

The carrying amount of accounts receivable at June 30, 2015, including $380.3 million of receivables sold under the Receivables Securitization Program, approximates fair value because of the short-term nature of this item.

As of June 30, 2015, the held for sale assets and liabilities detailed in Note 2 “Acquisitions and Dispositions” were measured at fair value on a nonrecurring basis. No other assets or liabilities were measured at fair value on a nonrecurring basis.

12. Other Assets and Liabilities

Receivables related to supplier allowances totaling $86.4 million and $124.4 million were included in “Accounts receivable” in the Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014, respectively.

Accrued customer rebates of $51.7 million and $63.2 million as of June 30, 2015 and December 31, 2014, respectively, were included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

13. Income Taxes

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items.

For the three and six months ended June 30, 2015, the Company recorded income tax expense of $18.9 million and $24.1 million on pre-tax income of $49.1 million and $50.4 million, for an effective tax rate of 38.4% and 47.8%, respectively. For the three months and six months ended June 30, 2014, the Company recorded income tax expense of $20.1 million and $33.1 million on pre-tax income of $53.4 million and $88.3 million, respectively, for an effective tax rate of 37.6% and 37.5%, respectively.

The Company's U.S. statutory rate is 35.0%. The most significant factor impacting the effective tax rate for the three and six months ended June 30, 2015 was the discrete tax impacts of the impairment charges for financial reporting purposes related to placing a non-strategic business for sale in the first quarter. There were no significant discrete items for the three and six months ended June 30, 2014.

14. Legal Matters

The Company has been named as a defendant in an action filed before the United States District Court for the Central District of California on May 1, 2015. The complaint alleges that the Company sent unsolicited fax advertisements to two named plaintiffs, as well as thousands of other persons and entities, in violation of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005 ("TCPA"). After filing the complaint, the plaintiff filed a motion asking the Court to certify a class of plaintiffs comprised of persons and entities who allegedly received fax advertisements from the Company. Under the TCPA, recipients of unsolicited fax advertisements can seek damages of $500 per fax for inadvertent violations and up to $1,500 per fax for knowing and willful violations. Other reported TCPA lawsuits have resulted in a broad range of outcomes, with each case being dependent on its own unique set of facts and circumstances. The Company is vigorously contesting class certification and liability. Litigation of this kind, however, is likely to lead to settlement negotiations, including negotiations prompted by pre-trial civil court procedures. Regardless of whether the litigation is resolved at trial or through settlement, the Company believes that a loss associated with resolution of pending claims is probable. However, the amount of any such loss, which could be material, cannot be reasonably estimated because the Company is continuing to evaluate its defenses based on its internal review and investigation of prior events, new information and future circumstances.

The Company is also involved in other legal proceedings arising in the ordinary course of or incidental to its business. The Company has established reserves, which are not material, for potential losses that are probable and reasonably estimable that may result from those proceedings. In many cases, however, it is difficult to determine whether a loss is probable or even possible or to estimate the amount or range of potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated. The Company believes that such ordinary course legal proceedings will be resolved with no material adverse effect upon its financial condition or results of operations.

I TEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Quarterly Report on Form 10-Q 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 in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2014.

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

Company Overview

Essendant Inc. (formerly known as United Stationers Inc.) is a leading supplier of workplace essentials, with 2014 net sales of approximately $5.3 billion. Essendant Inc. stocks over 160,000 items from over 1,600 manufacturers. These items include a broad spectrum of manufacturer-branded and private branded technology products, traditional office products, office furniture, janitorial and breakroom supplies, and industrial supplies. Essendant sells through a network of 74 distribution centers to approximately 30,000 reseller customers, who in turn sell directly to end consumers.

Our strategy is comprised of three key elements:

1) Strengthen our core office, janitorial, and breakroom business with a common operating and IT platform, an aligned customer care and sales team, and advanced digital services;

2) Win online by growing our business-to-business (B2B) sales with major e-commerce players and by enabling the online success of our resellers by providing digital capabilities and tools to support them; and

3) Expand and diversify our business into higher growth and higher margin channels and categories.

Execution on these priorities will help us achieve our goal of becoming the fastest and most convenient solution for workplace essentials.

Key Trends and Recent Results

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

Recent Results

Second quarter sales were $1.34 billion, up 1.6% over the prior-year quarter driven by $86.7 million of incremental sales in the industrial supplies category from our 2014 acquisitions. Excluding 2014 acquisitions, sales in the industrial supply category declined 11.6% due to energy sector impacts. Sales in the janitorial and breakroom category grew 3.1%.

The gross margin rate in the second quarter of 2015 was 15.8%, compared to the prior-year quarter gross margin rate of 15.1%. This increase reflects favorable impacts from our 2014 acquisitions and improved product margin. Gross profit for the second quarter of 2015 was $212.1 million, compared to $199.5 million in the second quarter of 2014.

Operating expenses in the second quarter of 2015 were $158.2 million or 11.8% of sales, compared with $142.2 million or 10.8% of sales in the prior-year quarter. Excluding the impacts of $0.5 million pre-tax charge for accelerated amortization related to intangible assets impaired in the first quarter of 2015, $0.1 million partial reversal of the facility consolidation charge taken in the first quarter, and $1.4 million pre-tax charge related to exiting our non-strategic business in Mexico (“repositioning charges”), adjusted operating expenses were $156.4 million or 11.7% of sales.

Operating income for the quarter ended June 30, 2015 was $53.9 million or 4.0% of sales, including $1.7 million of expense related to repositioning charges detailed previously. Adjusted operating income in the second quarter of 2015 was $55.6 million or 4.1% of sales, versus $57.3 million or 4.3% of sales in the second quarter of 2014.

·	Diluted earnings per share for the second quarter of 2015 was $0.79, including $0.03 of expense related to the repositioning charges. Adjusted diluted earnings per share were $0.82 compared with diluted earnings per share of $0.85 in the prior-year

period. We remain focused on driving flat to slightly improved adjusted earnings per share growth in the back half of 2015, but must overcome significant hurdles from the energy sector dow nturn to achieve our goal.

On July 13, 2015 we entered into an agreement to acquire Nestor Sales LLC (“Nestor”), a leading wholesaler and distributor of tools, equipment and supplies to the transportation industry. The all cash purchase price is $38.5 million, subject to closing adjustments. Nestor’s annual sales are approximately $70.0 million. Nestor accelerates our growth in the automotive aftermarket and complements our existing industrial offerings while providing access to new customer segments. It also advances a key pillar of our strategy, diversification into higher growth and margin channels and categories. We expect the acquisition, which is subject to customary closing conditions, to be completed in the third quarter of 2015. This acquisition will be funded through a combination of cash on hand and cash available under our revolving credit facility. The transaction is expected to be slightly dilutive in 2015 and $0.04 to $0.05 accretive to earnings in 2016.

Repositioning for Sustained Success

As previously announced, we are taking decisive actions to reposition our business, provide enhanced customer service, and generate sustained long-term success. These actions are as follows:

Our initiative to combine the office products and janitorial operating platforms is intended to help us become the fastest, most convenient solution for workplace essentials. We will deliver this through our nationwide distribution network and logistics capabilities, order efficiency with enhanced ecommerce capabilities, broad product portfolio, superior product category knowledge and commercial expertise. Physical implementation is expected to begin in 2015 and will cascade into the first half of 2016. In the first half of 2015, expenses related to this initiative were $2.4 million and are expected to total approximately $13.0 million in 2015. Upon completion, we expect total cost savings through this network consolidation and reduced expenses of $5.0 to $10.0 million in the second half of 2016, and $15.0 to $20.0 million on an annual basis thereafter.

Restructuring actions are being taken in 2015 to improve our operational utilization, labor spend and inventory performance. This includes workforce reductions and facility consolidations over five quarters beginning in the first quarter of 2015. In the first half of 2015, we recorded a pre-tax charge of $6.0 million relating to initial workforce reductions and $0.3 million relating to facility consolidations. We are currently estimating additional charges of approximately $2.7 million later in 2015 related to facility closures for a total of approximately $9.0 million for the full year of 2015. We expect these actions will produce cost savings of approximately $6.0 million, for a net cost of $3.0 million, in 2015 and approximately $10.0 million annually, beginning in 2016.

We will exit certain non-strategic channels and categories during 2015 to further align our portfolio of product categories and channels with our strategies. In the first quarter of 2015, we began active sales efforts relating to Azerty de Mexico, a non-strategic subsidiary with operations in Mexico. As a result, we classified this subsidiary as held for sale and have recorded non-cash charges of $14.0 million and a $0.9 million charge in the first half of 2015. This subsidiary had sales of $41.9 million in the first half of 2015 compared to $52.5 million in the same period of last year. Additional financial impacts, both cash and non-cash, may occur during the remainder of 2015 as we complete this transaction.

On June 1, 2015 we officially rebranded to Essendant Inc. in order to communicate more accurately our purpose and vision. When we announced in the first quarter of 2015 our decision to rebrand the company, the ORS Nasco trademark and certain OKI brands were tested for impairment. Upon completion of the impairment test of these intangible assets, management determined the trademarks were impaired and recorded a pre-tax, non-cash, impairment charge and accelerated amortization totaling $11.0 million in the first half of 2015. It was also determined that the useful lives do not extend past 2015. The remaining value of these intangibles was $1.0 million at June 30, 2015.

For a further discussion of selected trends, events or uncertainties the Company believes may have a significant impact on its future performance, readers should refer to “Key Trends and Recent Results” under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2014.

Critical Accounting Policies, Judgments and Estimates

During the first six months of 2015, there were no significant changes to the Company’s critical accounting policies, judgments or estimates from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Adjusted Operating Income, Net Income and Earnings Per Share

The following tables presents Adjusted Operating Expenses, Adjusted Operating Income, Adjusted Net Income, and Adjusted Diluted Earnings Per Share for the three and six-month periods ended June 30, 2015 and 2014 (in thousands, except per share data) excluding the effects of the pre-tax charges related to workforce reductions and facility consolidations, intangible asset impairment charge and accelerated amortization related to rebranding efforts, and an impairment charge, certain transaction costs, and foreign currency volatility related to the held-for-sale classification of our Mexican subsidiary. Generally Accepted Accounting Principles require that the effects of these items be included in the Condensed Consolidated Statements of Income. Management believes that excluding these items is an appropriate comparison of its ongoing operating and to the results of last year. It is helpful to provide readers of its financial statements with a reconciliation of these items to its Condensed Consolidated Statements of Income reported in accordance with Generally Accepted Accounting Principles.

	For the Three Months Ended June 30,
	2015						2014
				% to					% to
	Amount			Net Sales			Amount		Net Sales
Net Sales	$	1,341,799			100.0	%	$	1,320,037		100.0	%
Gross profit	$	212,062			15.8	%	$	199,460		15.1	%
Operating expenses	$	158,159			11.8	%	$	142,186		10.8	%
Workforce reduction and facility consolidation charge		138			0.0	%		-		-
Rebranding - intangible asset amortization		(512	)		0.0	%		-		-
Asset held for sale related costs		(1,361	)		(0.1	%)		-		-
Adjusted operating expenses	$	156,424			11.7	%	$	142,186		10.8	%
Operating income	$	53,903			4.0	%	$	57,274		4.3	%
Operating expense items noted above		1,735			0.1	%		-		-
Adjusted operating income	$	55,638			4.1	%	$	57,274		4.3	%
Net income	$	30,261					$	33,331
Operating expense items noted above, net of tax		942						-
Adjusted net income	$	31,203					$	33,331
Diluted earnings per share	$	0.79					$	0.85
Per share operating expense items noted above		0.03						-
Adjusted diluted earnings per share	$	0.82					$	0.85
Adjusted diluted earnings per share - change over the prior year period		(3.5	%)
Weighted average number of common shares - diluted		38,106						39,226

	For the Six Months Ended June 30,
	2015						2014
				% to					% to
	Amount			Net Sales			Amount		Net Sales
Net Sales	$	2,674,174			100.0	%	$	2,574,176		100.0	%
Gross profit	$	416,512			15.6	%	$	386,543		15.0	%
Operating expenses	$	356,531			13.3	%	$	291,035		11.3	%
Workforce reduction and facility consolidation charge		(6,295	)		(0.2	%)		-		-
Rebranding - intangible asset impairment and amortization		(10,975	)		(0.4	%)		-		-
Asset held for sale impairment and related costs		(14,927	)		(0.6	%)		-		-
Adjusted operating expenses	$	324,334			12.1	%	$	291,035		11.3	%
Operating income	$	59,981			2.2	%	$	95,508		3.7	%
Operating expense items noted above		32,197			1.2	%		-		-
Adjusted operating income	$	92,178			3.4	%	$	95,508		3.7	%
Net income	$	26,269					$	55,188
Operating expense items noted above, net of tax		24,837						-
Adjusted net income	$	51,106					$	55,188
Diluted earnings per share	$	0.69					$	1.40
Per share operating expense items noted above		0.64						-
Adjusted diluted earnings per share	$	1.33					$	1.40
Adjusted diluted earnings per share - change over the prior year period		(5.0	%)
Weighted average number of common shares - diluted		38,317						39,435

Results of Operations—Three Months Ended June 30, 2015 Compared with the Three Months Ended June 30, 2014

Net Sales. Net sales for the second quarter of 2015 were $1.34 billion. The following table summarizes net sales by product category for the three-month periods ended June 30, 2015 and 2014 (in thousands):

	Three Months Ended June 30,
	2015		2014 ⁽¹⁾
Janitorial and breakroom supplies	$	368,343	$	357,242
Technology products		349,702		369,700
Traditional office products (including cut-sheet paper)		293,800		330,175
Industrial supplies		214,990		145,151
Office furniture		78,499		78,631
Freight revenue		30,299		29,638
Services, Advertising and Other		6,166		9,500
Total net sales	$	1,341,799	$	1,320,037

(1)	Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications include changes to shift to a single operational item hierarchy. These changes did not impact the Condensed Consolidated Statements of Income.

Sales in the janitorial and breakroom supplies product category increased 3.1% in the second quarter of 2015 compared to the second quarter of 2014. This category accounted for 27.5% of the Company’s second quarter 2015 consolidated net sales. Sales increased from being named the primary supplier for Office Depot’s janitorial business and e-tail growth.

Sales in the technology products category (primarily ink and toner) decreased 5.4% from the second quarter of 2014. This category accounted for 26.1% of net sales for the second quarter of 2015. This decline is primarily attributable to the loss of business with large

national customers a nd lower sales at our Mexican subsidiary. These were partially offset by growth in e-tail customers and technology rese llers .

Sales of traditional office products decreased in the second quarter of 2015 by 11.0% versus the second quarter of 2014. Traditional office supplies represented 21.9% of the Company’s consolidated net sales for the second quarter of 2015. This decline was driven by a decline in cut-sheet paper sales as we exit low margin business and losing the first-call supplier status with Office Depot. The traditional office products decline was partially offset by continued growth in e-tailers and a rebound in government spending. Net of incremental sales in janitorial products to Office Depot, we estimate the impact of the 2014 changes to our relationship to be a $0.14 to $0.22 reduction in earnings per share in 2015.

Industrial supplies sales in the second quarter of 2015 increased by 48.1% compared to the same prior-year period. Sales of industrial supplies accounted for 16.0% of the Company’s net sales for the second quarter of 2015 and reflected solid sales momentum from our acquisitions, which contributed $86.7 million in incremental sales and positively impacted earnings per share. Without the acquisitions, industrial sales declined 11.6% over the prior-year quarter. Approximately 25% of our core industrial business is exposed to energy sector resellers which have been impacted by the decline in oil prices resulting in sales declines in our general industrial and energy channels. We expect this impact to continue throughout the year.

Office furniture sales in the second quarter of 2015 decreased 0.2% compared to the second quarter of 2014. Office furniture accounted for 5.9% of the Company’s second quarter of 2015 consolidated net sales. Within this category, the loss of sales at Office Depot was mostly offset by growth in other large customers and e-tailers.

The remainder of the Company’s second quarter 2015 net sales was composed of freight and other revenues.

Gross Profit and Gross Margin Rate. Gross profit for the second quarter of 2015 was $212.1 million, compared to $199.5 million in the second quarter of 2014. The gross margin rate of 15.8% was up 69 basis points (bps) from the prior-year quarter gross margin rate of 15.1%. Our acquisitions added an incremental 29 basis points to our gross margin rate in the quarter. Excluding the impact of our acquisitions, our gross margin rate benefited from a favorable product mix.

Operating Expenses. Operating expenses for the second quarter were $158.2 million or 11.8% of sales, including $1.7 million related to repositioning actions. Adjusted operating expenses were $156.4 million or 11.7% of sales compared with $142.2 million or 10.8% of sales in the same period last year. The $14.2 million increase was driven by $12.8 million of incremental expenses from acquisitions.

Interest Expense, net. Interest expense, net for the second quarter of 2015 was $4.8 million compared to $3.8 million in the second quarter of 2014. This was driven by higher debt outstanding related to our acquisition in the fourth quarter of 2014. Interest expense is expected to be higher in 2015 than in the prior year.

Income Taxes. Income tax expense was $18.9 million for the second quarter of 2015, compared with $20.1 million for the same period in 2014. The Company’s effective tax rate was 38.4% for the current-year quarter and 37.6% for the same period in 2014.

Net Income. Net income for the second quarter of 2015 totaled $30.3 million or $0.79 per diluted share, including $0.9 million after-tax, or $0.03 per diluted share, of costs related to repositioning actions. Adjusted net income was $31.2 million, or $0.82 per diluted share, compared with net income of $33.3 million or $0.85 per diluted share for the same three-month period in 2014.

Results of Operations—Six Months Ended June 30, 2015 Compared with the Six Months Ended June 30, 2014

Net Sales. Net sales for the first six months of 2015 were $2.67 billion. The following table summarizes net sales by product category for the six-month periods ended June 30, 2015 and 2014 (in thousands):

	Six Months Ended June 30,
	2015 ⁽¹⁾		2014 ⁽¹⁾
Janitorial and breakroom supplies	$	725,318	$	686,668
Technology products		703,083		724,780
Traditional office products (including cut-sheet paper)		590,305		654,434
Industrial supplies		425,262		279,009
Office furniture		156,635		153,656
Freight revenue		62,258		58,818
Services, Advertising and Other		11,313		16,811
Total net sales	$	2,674,174	$	2,574,176

(1)

Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications include changes between several product categories due to several specific products being reclassified to different categories. These changes did not impact the Condensed Consolidated Statements of Income.

Sales in the janitorial and breakroom supplies product category increased 5.6% in the first six months of 2015 compared to the first six months of 2014. This category accounted for 27.1% of the Company’s first six months of 2015 consolidated net sales. Sales growth in this category was driven by being named the primary supplier for Office Depot’s janitorial business, growth in e-tail and increased sales to independent dealer customers.

Sales in the technology products category (primarily ink and toner) decreased in the first six months of 2015 by 3.0% versus the first six months of 2014. This category accounted for 26.3% of net sales for the first six months of 2015. Sales declined due to the loss of business with Office Depot, lower sales at our Mexican subsidiary and reduced demand in our independent channel. The sales decline was partially offset by growth in e-tailers and technology resellers.

Sales of traditional office products decreased in the first six months of 2015 by 9.8% versus the first six months of 2014. Traditional office supplies represented 22.1% of the Company’s consolidated net sales for the first six months of 2015. The decline in this category was primarily driven by the decline of cut-sheet paper as we exited low margin business and the loss of first call supplier status with Office Depot.

Industrial supplies sales in the first six months of 2015 increased by 52.4% compared to the same prior-year period and accounted for 15.9% of the Company’s net sales for the first six months of 2015. Our acquisitions contributed $176.8 million in incremental sales. Excluding sales from acquisitions, industrial supplies sales declined 11.0% over the same period last year, due to declines in our general industrial and energy channels. We expect this impact to continue throughout the year.

Office furniture sales in the first six months of 2015 increased 1.9% compared to the first six months of 2014. Office furniture accounted for 5.9% of the Company’s first six months of 2015 consolidated net sales. Improved sales with a large national customer and growth in e-tail and independent resellers more than offset lost sales to Office Depot.

The remainder of the Company’s first six months of 2015 net sales was composed of freight and other revenues.

Gross Profit and Gross Margin Rate. Gross profit for the first six months of 2015 was $416.5 million, compared to $386.5 million in the first six months of 2014. The gross margin rate of 15.6% was up 56 basis points (bps) from the prior-year period gross margin rate of 15.0%. This increase was due to acquisitions (37 bps) and a favorable product mix.

Operating Expenses. Operating expenses for the first six months of 2015 were $356.5 million or 13.3% of sales, compared with $291.0 million or 11.3% of sales in the same period last year. Current period operating expenses were affected by acquisitions which added an incremental $30.3 million in operating expenses. The Company incurred approximately $2.4 million in the first six months of 2015 related to the initiative to combine the Company’s office product and janitorial platforms.

Interest Expense, net. Interest expense, net for the first six months of 2015 was $9.6 million compared to $7.2 million in the first six months of 2014.

Income Taxes. Income tax expense was $24.1 million for the first six months of 2015, compared with $33.1 million for the same period in 2014. The Company’s effective tax rate was 47.8% for the current-year period and 37.5% for the same period in 2014.

Net Income. Net income for the first six months of 2015 totaled $26.3 million or $0.69 per diluted share, including $24.8 million after-tax, or $0.64 per diluted share, of costs related to repositioning actions. Adjusted net income was $51.1 million, or $1.33 per diluted share, compared with net income of $55.2 million or $1.40 per diluted share for the same six-month period in 2014.

Cash Flows

The following discussion focuses on information included in the accompanying Condensed Consolidated Statements of Cash Flows.

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2015 totaled $120.8 million, compared with $78.9 million in the same six-month period of 2014. The 53% improvement over the prior year demonstrates our commitment to effectively manage working capital.

Investing Activities

Net cash used in investing activities for the first six months of 2015 was $12.4 million, compared with $35.6 million for the six months ended June 30, 2014. For the full year 2015, the Company expects capital spending, excluding acquisitions, to be approximately $30.0 million to $35.0 million. On July 14, 2015, the Company’s Board of Directors approved the payment of a $0.14 per share dividend payable to stockholders of record as of September 15, 2015 to be paid on October 15, 2015.

Financing Activities

Net cash used in financing activities for the six months ended June 30, 2015 totaled $95.0 million, compared with $34.1 million in the prior-year period. Net cash used in financing activities during the first six months of 2015 was impacted by $52.7 million in net repayments under debt arrangements, $31.2 million in share repurchases and $10.7 million in payments of cash dividends.

Liquidity and Capital Resources

Essendant’s growth has historically been funded by a combination of cash provided by operating activities and debt financing. We believe that our cash from operations and collections of receivables, coupled with our sources of borrowings and available cash on hand, are sufficient to fund currently anticipated requirements. These requirements include payments of interest and dividends, scheduled debt repayments, capital expenditures, working capital needs, restructuring activities, the funding of pension plans, and funding for additional share repurchases and acquisitions, if any. Due to our credit profile over the years, external funds have been available at an acceptable cost. We believe that current credit arrangements are sound and that the strength of our balance sheet affords us the financial flexibility to respond to both internal growth opportunities and those available through acquisitions.

Financing available from debt and the sale of accounts receivable as of June 30, 2015, is summarized below (in millions):

Availability

Maximum financing available under:
2013 Credit Agreement	$	700.0
2013 Note Purchase Agreement		150.0
Receivables Securitization Program ⁽¹⁾		200.0
Maximum financing available			$	1,050.0
Amounts utilized:
2013 Credit Agreement		311.1
2013 Note Purchase Agreement		150.0
Receivables Securitization Program ⁽¹⁾		200.0
Outstanding letters of credit		11.1
Total financing utilized				672.2
Available financing, before restrictions				377.8
Restrictive covenant limitation				-
Available financing as of June 30, 2015			$	377.8

(1)	The Receivables Securitization Program provides for maximum funding available of the lesser of $200.0 million or the total amount of eligible receivables less excess concentrations and applicable reserves.

The Company’s outstanding debt consisted of the following amounts (in millions):

	As of			As of
	June 30,			December 31,
	2015			2014
2013 Credit Agreement	$	311.1		$	363.0
2013 Note Purchase Agreement		150.0			150.0
Receivables Securitization Program		200.0			200.0
Mortgage & Capital Lease		0.1			0.9
Debt		661.2			713.9
Stockholders’ equity		840.3			856.1
Total capitalization	$	1,501.5		$	1,570.0

Debt-to-total capitalization ratio		44.0	%		45.5	%

We believe that our operating cash flow and financing capacity, as described, provide adequate liquidity for operating the business for the for eseeable future. Refer to Note 8 , “Debt”, for further descriptions of the provisions of our financing facilities as well as Note 9 “Debt” in our Annual Report on Form 10-K for the year-ended December 31, 2014 .

Contractual Obligations

During the six-month period ended June 30, 2015, contractual obligations have increased $78.2 million from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014, driven by the renewed corporate office building lease and other facility lease renewals.

I TEM 3.

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. There were no material changes to the Company’s exposures to market risk during the first six months of 2015 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

I TEM 4.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, the principal executive officer and the principal financial officer concluded that our disclosure controls and procedures are effective in providing reasonable assurance that material information required to be disclosed in our reports filed with or submitted to the Securities and Exchange Commission under the Securities Exchange Act is made known to management, including the principal executive officer and the principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended June 30, 2015, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

I TEM 1.

LEGAL PROCEEDINGS.

I TEM 1A.

RISK FACTORS.

For information regarding risk factors, see “Risk Factors” in Item 1A of Part I of the Company’s Form 10-K for the year ended December 31, 2014. There have been no material changes to the risk factors described in such Form 10-K.

I TEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(a)	Not applicable.

(b)	Not applicable.

(c)	Common Stock Purchases.

During the six-month periods ended June 30, 2015 and 2014, the Company repurchased 781,141 and 791,291 shares of common stock at an aggregate cost of $31.5 million and $31.7 million, respectively. On February 11, 2015, the Board of Directors authorized the Company to purchase an additional $100.0 million of common stock. The Company repurchased 885,181 million shares for $35.5 million year-to-date through July 20, 2015. As of that date, the Company had approximately $106.9 million remaining of existing share repurchase authorization from the Board of Directors.

2015 Fiscal Month	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
April 1, 2015 to April 30, 2015		86,793	$	41.98		86,793	$	122,548,958
May 1, 2015 to May 31, 2015		115,048		39.81		115,048		117,968,784
June 1, 2015 to June 30, 2015		176,621		39.57		176,621		110,979,546
Total Second Quarter		378,462	$	40.45		378,462	$	110,979,546

I TEM 6.

EXHIBITS

(a)

Exhibits

This Quarterly Report on Form 10-Q includes as exhibits certain documents that the Company has previously filed with the SEC. Such previously filed documents are incorporated herein by reference from the respective filings indicated in parentheses at the end of the exhibit descriptions (all made under the Company’s file number of 0-10653). Each of the management contracts and compensatory plans or arrangements included below as an exhibit is identified as such by a double asterisk at the end of the related exhibit description.

Exhibit No.		Description
3.1*		Third Restated Certificate of Incorporation of the Company, dated as of June 1, 2015

3.2*		Amended and Restated Bylaws of the Company, dated as of June 1, 2015

4.1		Note Purchase Agreement, dated as of November 25, 2013, among USI, USSC, and the note purchasers identified therein (the “2013 Note Purchase Agreement”) (Exhibit 4.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 19, 2014 (the “2013 Form 10-K”))

4.2		Parent Guaranty, dated as of November 25, 2013, by USI in favor of the holders of the promissory notes identified therein (Exhibit 4.5 to the 2013 Form 10-K)

4.3		Subsidiary Guaranty, dated as of November 25, 2013, by all of the domestic subsidiaries of USSC (Exhibit 4.6 to the 2013 Form 10-K)

10.1		Essendant Inc. 2015 Long-Term Incentive Plan effective as of May 20, 2015 (Appendix A to the 2015 DEF 14-A Proxy Statement)**

10.2		Letter Agreement dated June 4, 2015 among Essendant Inc., Essendant Co. and Robert B. Aiken, Jr. (Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 9, 2015)**

10.3		Third Omnibus Amendment to Transaction Documents dated as of June 26, 2015 between Essendant Co., Essendant Receivables LLC, Essendant Financial Services LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, and PNC Bank, National Association (Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on July 2, 2015)

31.1*		Certification of Chief Executive Officer, dated as of July 23, 2015, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer, dated as of July 23, 2015, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Chief Executive Officer and Chief Financial Officer, dated as of July 23, 2015, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101*		The following financial information from Essendant Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2015, filed with the SEC on July 23, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statement of Income for the three-month and six-month periods ended June 30, 2015 and 2014, (ii) the Condensed Consolidated Balance Sheet at June 30, 2015 and December 31, 2014, (iii) the Condensed Consolidated Statement of Cash Flows for the six-month periods ended June 30, 2015 and 2014, and (iv) Notes to Condensed Consolidated Financial Statements.

*	- Filed herewith

**	- Represents a management contract or compensatory plan or arrangement

SIGNATURES

Pursuant to the requirements 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.

			ESSENDANT INC.
			(Registrant)

Date: July 23, 2015			/s/ Todd A. Shelton
			Todd A. Shelton
			Senior Vice President and Chief Financial Officer

Exhibit 3.1

THIRD RESTATED CERTIFICATE OF INCORPORATION
OF
ESSENDANT INC.

Essendant Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify as follows:

A.	The Corporation’s original certificate of incorporation was filed under the name United Stationers Inc. in the office of the Secretary of State of Delaware on August 18, 1981.

This Third Restated Certificate of Incorporation restates and integrates and does not further amend the Certificate of Incorporation of the Corporation as heretofore amended and supplemented, and there is no discrepancy between those provisions and the provisions of this Third Restated Certificate of Incorporation.

C.	This Third Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation in accordance with Section 245 of the General Corporation Law of the State of Delaware.

D.	The text of the Third Restated Certificate of Incorporation is as follows:

FIRST : The name of the corporation is:

ESSENDANT INC.

SECOND : The address of its registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington 19801, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

THIRD : The nature of the business or purposes to be conducted or promoted by the Corporation are:

1. To acquire by purchase, subscription or otherwise, and to own, hold, sell, negotiate, assign, hypothecate, deal in, exchange, transfer, mortgage, pledge or otherwise dispose of, alone or in syndicate or otherwise in conjunction with others, any shares of the capital stock, scrip, rights, participating certificates, certificates of interest, or any voting trust certificates in respect of the shares of capital stock of, or any bonds, mortgages, securities, evidences of indebtedness, acceptances, commercial paper, choses in action, and obligations of every kind and description (all of the foregoing being hereinafter sometimes called “securities”) issued or created by any public, quasi-public or private corporation, joint stock company, association, partnership, common law trust, firm or individual, or of any combinations, organizations or entities whatsoever, irrespective of their forms or the names by which they may be described, or of the Government of the United States of America, or any foreign government, or of any state, territory, municipality or other political subdivision, or of any government

agency; and to issue in exchange therefor, in the manner permitted by law, shares of the capital stock, bonds or other obligations of the Corporation; and while the holder or owner of any such securities, to possess and exercise in respect thereof any and all rights, powers and privileges of ownership, including the right to vote thereon; and, to the extent now or hereafter permitted by law, to aid by loan, guarantee or otherwise those issuing, creating or responsible for any such securities; and to do any and all lawful things designed to protect, preserve, improve or enhance the value of any such securities.

2. To carry on and conduct any and every kind of manufacturing, distribution and service business; to manufacture, process, fabricate, rebuild, service, purchase or otherwise acquire, to design, invent or develop, to import or export, and to distribute, lease, sell, assign or otherwise dispose of and generally deal in and with raw materials, products, goods, wares, merchandise and real and personal property of every kind and character; and to provide services of every kind and character.

3. To conduct any lawful business, to exercise any lawful purpose and power, and to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law.

4. In general, to possess and exercise all the powers and privileges granted by the Delaware General Corporation Law or by any other law of Delaware or by this Certificate of Incorporation together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Corporation.

FOURTH : The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 120,000,000 shares, consisting of (a) 15,000,000 shares of a class designated as Preferred Stock, par value $0.01 per share (the “Preferred Stock”), (b) 100,000,000 shares of a class designated as Common Stock, par value $0.10 per share (the “Common Stock”), and (c) 5,000,000 shares of a class designated as Nonvoting Common Stock, par value $0.01 per share (the “Nonvoting Common Stock”).

The designations and the powers, preferences, rights, qualifications, limitations, and restrictions of the Preferred Stock, Common Stock and Nonvoting Common Stock are as follows:

1. Provisions Relating to the Preferred Stock .

(a) The Preferred Stock may be issued from time to time in one or more classes or series, the shares of each class or series to have such designations and powers, preferences, and rights, and qualifications, limitations, and restrictions thereof, as are stated and expressed herein and in the resolution or resolutions providing for the issue of such class or series adopted by the board of directors of the Corporation as hereafter prescribed.

(b) Authority is hereby expressly granted to and vested in the board of directors of the Corporation to authorize the issuance of the Preferred Stock from time to time in one or more classes or series, and with respect to each class or series of the Preferred Stock, to fix and state by the resolution or resolutions from time to time adopted providing for the issuance thereof the following:

(i) whether or not the class or series is to have voting rights, full, special, or limited, or is to be without voting rights, and whether or not such class or series is to be entitled to vote as a separate class either alone or together with the holders of one or more other classes or series of stock;

(ii) the number of shares to constitute the class or series and the designations thereof;

(iii) the preferences, and relative, participating, optional, or other special rights, if any, and the qualifications, limitations, or restrictions thereof, if any, with respect to any class or series;

(iv) whether or not the shares of any class or series shall be redeemable at the option of the Corporation or the holders thereof or upon the happening of any specified event, and, if redeemable, the redemption price or prices (which may be payable in the form of cash, notes, securities, or other property), and the time or times at which, and the terms and conditions upon which, such shares shall be redeemable and the manner of redemption;

(v) whether or not the shares of a class or series shall be subject to the operation of retirement or sinking funds to be applied to the purchase or redemption of such shares for retirement, and, if such retirement or sinking fund or funds are to be established, the annual amount thereof, and the terms and provisions relative to the operation thereof;

(vi) the dividend rate, whether dividends are payable in cash, stock of the Corporation, or other property, the conditions upon which and the times when such dividends are payable, the preference to or the relation to the payment of dividends payable on any other class or classes or series of stock, whether or not such dividends shall be cumulative or noncumulative, and if cumulative, the date or dates from which such dividends shall accumulate;

(vii) the preferences, if any, and the amounts thereof which the holders of any class or series thereof shall be entitled to receive upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Corporation;

(viii) whether or not the shares of any class or series, at the option of the Corporation or the holder thereof or upon the happening of any specified event, shall be convertible into or exchangeable for, the shares of any other class or classes or of any other series of the same or any other class or classes of stock, securities, or other property of the Corporation and the conversion price or prices or ratio or ratios or the rate or rates at which such exchange may be made, with such adjustments, if any, as shall be stated and expressed or provided for in such resolution or resolutions; and

(ix) such other special rights and protective provisions with respect to any class or series as may to the board of directors of the Corporation seem advisable.

(c) The shares of each class or series of the Preferred Stock may vary from the shares of any other class or series thereof in any or all of the foregoing respects. The board of directors of the Corporation may increase the number of shares of the Preferred Stock designated for any existing class or series by a resolution adding to such class or series authorized and unissued shares of the Preferred Stock not designated for any other class or series. The board of directors of the Corporation may decrease the number of shares of the Preferred Stock designated for any existing class or series by a resolution subtracting from such class or series authorized and unissued shares of the Preferred Stock designated for such existing class or series, and the shares so subtracted shall become authorized, unissued, and undesignated shares of the Preferred Stock.

(d) The certificate of designations for the Series A Junior Preferred Stock of the Corporation is set forth on Annex A attached hereto.

2. Provisions Relating to the Common Stock and Nonvoting Common Stock .

(a) Identical Rights . Except as otherwise provided in this Article Fourth, all shares of Common Stock and Nonvoting Common Stock shall be identical and shall entitle the holder thereof to the same rights and privileges.

(b) Dividends . From and after the date of issuance, the holders of outstanding shares of Common Stock and Nonvoting Common Stock shall be entitled to receive dividends on the shares of Common Stock and Nonvoting Common Stock when, as, and if declared by the board of directors, out of funds legally available for such purpose. All holders of shares of Common Stock and Nonvoting Common Stock shall share ratably, in accordance with the numbers of shares held by each such holder, in all dividends or distributions on shares of Common Stock payable in cash, in property or in securities of the Corporation (other than shares of Common Stock). All dividends or distributions declared on shares of Common Stock and Nonvoting Common Stock which are payable in shares of Common Stock or Nonvoting Common Stock shall be declared on both classes of shares at the same rate, provided that any such dividend or

distribution shall be payable in shares of the class of Common Stock or Nonvoting Common Stock held by the stockholder to whom the dividend or distribution is payable.

(c) Stock Splits, Etc . The Corporation shall not in any manner subdivide (by stock split, stock dividend, or otherwise), or combine (by reverse stock split, or otherwise) the outstanding shares of Common Stock or Nonvoting Common Stock unless the outstanding shares of the other class shall be proportionately subdivided or combined. No reclassification or any other adjustment or modification of the rights or preferences shall be effected (including without limitation pursuant to a merger, consolidation or liquidation involving the Corporation) with respect to either the Common Stock or the Nonvoting Common Stock unless both the Common Stock and Nonvoting Common Stock are reclassified or the rights or preferences are adjusted or modified in exactly the same manner and at the same time. In this regard, and without limiting the generality of the foregoing, in the case of any consolidation or merger of the Corporation with or into any other entity (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of the Common Stock), or in case of any sale or transfer of all or substantially all the assets of the Corporation, or the reclassification of the Common Stock into any other form of capital stock of the Corporation, whether in whole or in part, each share of Nonvoting Common Stock shall, after such consolidation, merger, sale, or transfer or reclassification, be converted into the kind and amount of shares of stock and other securities and property which such holder would have been entitled to receive upon such consolidation, merger, sale, or transfer or reclassification if such holder had held such Common Stock issuable upon the conversion of such share of Nonvoting Common Stock immediately prior to such consolidation, merger, sale, or transfer or reclassification; provided, however, that no such shares of stock or other securities into which shares of Nonvoting Common Stock are so converted shall have any voting rights whatsoever.

(d) Liquidation . In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Corporation, the holders of shares of Common Stock and Nonvoting Common Stock shall be entitled to share ratably, in accordance with the number of shares held by each such holder, in all of the assets of the Corporation available for distribution to the holders of shares of Common Stock.

(e) Voting Rights . Except as otherwise provided herein or by law, the entire voting power of the Corporation shall be vested in the holders of shares of Common Stock and each holder of shares of Common Stock shall be entitled to one vote for each share of Common Stock held of record by such holder; provided that, without the consent of the holders of record of at least 5l% of Nonvoting Common Stock at the time outstanding (assuming, for the purposes of this provision, that the holders of rights to acquire shares of Nonvoting Common Stock shall be deemed to be the holders of the shares of Nonvoting

Common Stock which are at the time issuable upon the full exercise thereof whether or not such holders are then entitled to exercise such rights pursuant to the terms thereof), given in writing or by the vote at any regular or special meeting of stockholders of the Corporation, the Corporation shall not:

(i) amend, alter, modify, or repeal any provision of this Certificate of Incorporation or the By‑Laws of the Corporation in any manner which adversely affects the relative rights, preferences, qualifications, powers, limitations or restrictions of the Nonvoting Common Stock, or amend, alter, modify, or repeal this Section 2(e);

(ii) increase or decrease the authorized number of shares of any class of capital stock of the Corporation or authorize, issue, or otherwise create securities convertible into or exercisable for any shares of capital stock of the Corporation other than the shares of Common Stock and Nonvoting Common Stock authorized hereunder and the shares of Series A, Series B, and Series C Preferred Stock designated in that certain Certificate of the Powers, Designations, Preferences, and Rights of the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock dated March 30, 1995;

(iii) voluntarily effect an exchange or reclassification of shares of Nonvoting Common Stock into shares of another class of capital stock of the Corporation; or

(iv) effect a merger or consolidation of the Corporation with another corporation, unless the certificate or articles of incorporation of the surviving corporation shall provide that the shares of the capital stock of such surviving corporation into which the shares of Nonvoting Common Stock hereunder shall be converted shall have the identical rights and privileges as the shares of capital stock of such surviving corporation into which the shares of Common Stock hereunder shall be converted, other than the voting rights in this Section 2(e) and the conversion and other rights in Section 3 below which shall not be adversely affected by such merger or consolidation.

3. Conversion .

(a) Right to Conversion . Subject to and upon compliance with the provisions of this Section 3, any holder of shares of Nonvoting Common Stock shall be entitled at any time and from time to time to convert each share of Nonvoting Common Stock held by such holder into a share of Common Stock at the conversion rate of one share of Common Stock for one share of Nonvoting Common Stock.

(b) Procedure . The conversion of any shares of Nonvoting Common Stock into shares of Common Stock shall be effected by the holder of the shares

of Nonvoting Common Stock to be converted surrendering the certificate therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the shares of Common Stock or at such other place as the Corporation is willing to accept such surrender accompanied by written notice to the Corporation at such office or other place that it elects to so convert and stating the number of shares of Nonvoting Common Stock being converted. Thereupon the Corporation shall promptly issue and deliver at such office or other place to such holder a certificate or certificates for the number of shares of Common Stock to which such holder is entitled, registered in the name of such holder or a designee of such holder as specified in such notice. Such conversion shall be deemed to have been made at the close of business on the date of such surrender of the shares to be converted in accordance with the procedure set forth in the first sentence of this Section 3(b) and the Person entitled to receive the shares issuable upon such conversion shall be treated for all purposes as having become the record holder of such shares at such time. In the event of the conversion of less than all of the shares of Nonvoting Common Stock into shares of Common Stock evidenced by the certificate so surrendered, the Corporation shall execute and deliver to or upon the written order of such holder, without charge to such holder, a new certificate evidencing the shares of Nonvoting Common Stock not converted.

(c) Reservation . The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, or any shares of Common Stock held in its treasury, solely for the purpose of issue upon conversion of the shares of Nonvoting Common Stock as provided herein, such number of shares of Common Stock as shall then be issuable upon the conversion of all outstanding shares of Nonvoting Common Stock. The shares of Common Stock so issuable shall when so issued be duly and validly issued, fully paid, and nonassessable.

(d) Certain Legal Requirements . No person subject to the provisions of Regulation Y shall, and no such Person shall permit any of its Bank Holding Company Affiliates to, convert any shares of Nonvoting Common Stock held by it into shares of Common Stock, and the Corporation shall not be required to convert any such shares of Nonvoting Common Stock, if after giving effect to such conversion, (i) such Person and its Bank Holding Company Affiliates would own more than 5% of the total issued and outstanding shares of Common Stock or (ii) such Person would Control the Corporation (and, for purposes of this clause (ii), a reasoned opinion of counsel to such Person (which is based on facts and circumstances deemed appropriate by such counsel) to the effect that such Person does not control the Corporation shall be conclusive).

4. Definitions .

As used in this Article Fourth, the terms indicated below shall have the following respective meanings:

(a) “ Bank Holding Company Affiliate ” shall mean, with respect to any person subject to the provisions of Regulation Y, (i) if such Person is a bank holding company, any company directly or indirectly controlled by such bank holding company, and (ii) otherwise, the bank holding company that controls such Person and any company (other than such Person) directly or indirectly controlled by such bank holding company.

(b) “ Control ” (including, with its correlative meanings, “ controlled by ” and “ under common control with ”) shall mean, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.

(c) “ Person ” means an individual, partnership, association, joint venture, corporation, business, trust, estate, unincorporated organization, or government or any department, agency or subdivision thereof.

(d) “ Regulation Y ” shall mean Regulation Y promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. § 225) or any successor regulation.

FIFTH : In furtherance and not in limitation of the power conferred by statute, the board of directors is expressly authorized:

1. To make, alter or repeal the by-laws of the Corporation.

2. To authorize and cause the mortgage or pledge of the property and assets of the Corporation.

3. To set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created.

SIXTH : All power of the Corporation shall be exercised by or under the direction of the board of directors except as otherwise provided herein or required by law. For the management of the business and for the conduct of the affairs of the Corporation, and in further creation, definition, limitation and regulation of the power of the CorporaTion and of its directors and of its stockholders, it is further provided as follows:

1. Election of Directors . Election of directors need not be by written ballot unless the by-laws of the Corporation shall so provide.

2. Number, Tenure and Qualifications . The total number of directors which shall constitute the whole board shall be nine (9), but this number may be increased or decreased from time to time by amendment of the by-laws by the directors or the stockholders from time to time, provided that in no case shall the number of directors constituting the whole board be less than three (3). The directors shall be divided into three (3) classes with respect to their term of office, class I, class II, and class III, as

nearly equal in number as possible, to be determined by the board of directors. The directors shall be elected at the annual meetings of the stockholders, except as provided in Section 4 of this Article Sixth. At the 1987 annual meeting of stockholders, the class I directors shall be elected to a term of office expiring at the 1988 annual meeting of stockholders, the class II directors shall be elected to a term of office expiring at the 1989 annual meeting of stockholders and the class III directors shall be elected to a term of office expiring at the 1990 annual meeting of stockholders; and, in each case, each director shall hold office until his respective successor shall have been elected and qualified. At each annual election of directors held after the 1987 annual meeting of stockholders, the directors elected to succeed those directors whose terms then expire shall be elected to a term of office expiring at the third succeeding annual meeting of stockholders and shall hold office until their respective successors are elected and qualified. In the event of any change in the number of directors, any resultant increase or decrease in the number of directorships shall be apportioned among the three classes of directors so as to maintain all classes as nearly equal in number of directors as possible, as shall be determined by the whole board of directors at the time of such increase or decrease. Directors need not be stockholders or residents of Delaware.

3. Business at Annual Meetings; Nominations to Board of Directors .

(a) At any annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be: (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors; (ii) otherwise properly brought before the meeting by or at the direction of the board of directors; or (iii) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the corporation not later than the close of business on the tenth (10th) day following the date on which notice of such annual meeting is first given to stockholders. A stockholder’s notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (A) a brief description of the business desired to be brought before the annual meeting; (B) the name and address (which shall be the same as they appear in the Corporation’s records if the stockholder is a record holder) of the stockholder proposing such business; (C) the class and number of shares of the Corporation which are beneficially owned by the stockholder; and (D) any material interest of the stockholder in such business. The presiding officer of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 3(a), and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

(b) Nominations . Subject to the rights of holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, nominations for the election of directors may be made by the board of directors or a committee appointed by the board of directors or by any stockholder entitled to vote in the election of directors generally. However, any stockholder entitled to vote in the election of directors generally may nominate one or more persons for election as directors at a meeting only if written notice of such stockholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the secretary of the Corporation not later than (i) with respect to an election to be held at an annual meeting of stockholders, ninety (90) days prior to the anniversary date of the immediately preceding annual meeting, and (ii) with respect to an election to be held at a special meeting of stockholders for the election of directors, the close of business on the seventh (7th) day following the date on which notice of such meeting is first given to stockholders. Each such notice shall set forth: (a) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the stockholder is a record owner of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the United States Securities and Exchange Commission; and (e) the consent of each such nominee to serve as a director of the Corporation if so elected. The presiding officer of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.

4. Newly Created Directorships and Vacancies . Except as otherwise fixed pursuant to the provisions of Article Fourth hereof relating to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation or the right to elect directors under specified circumstances, newly created directorships resulting from any increase in the number of directors and any vacancies on the board of directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the board of directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director’s successor shall have been elected and qualified. No decrease in the number of directors constituting the board of directors shall shorten the term of any incumbent director.

5. Removal of Directors . Subject to the rights of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation or the right to elect directors under specified circumstances, any director may be removed by the holders of a majority of the voting power of the then outstanding shares of the “Voting Stock” (defined in Article Seventh), voting together as a single class, but only for cause. Except as may otherwise be provided by law, cause for removal shall be construed to exist only if:

(a) the director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal, or

(b) the director whose removal is proposed has been adjudged by a court of competent jurisdiction to be liable for (i) any breach of the director’s duty of loyalty to the Corporation or its stockholders or (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law.

6. Stockholder Action . Except as otherwise required by law and subject to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation:

(a) special meetings of stockholders of the Corporation may be called only by the chairman of the board, the president, the board of directors pursuant to a resolution approved by a majority of the entire board of directors, or at the written request of the holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock acting together as a single class. Such request shall state the purpose or purposes of the proposed meeting. The notice of any such special meeting shall be issued within sixty (60) days after the Corporation’s receipt of such request. Written notice of a special meeting stating the time, place and object thereof shall be given to each stockholder entitled to vote thereat, at least fifty (50) days before the date fixed for the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice; and

(b) any action required or permitted to be taken at any annual or special meeting of the stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, only if a consent in writing setting forth the actions so taken shall be signed by the holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock acting together as a single class. All such consents must be executed and delivered to the secretary of the corporation not less than thirty (30) days nor more than sixty (60) days prior to the action to be taken pursuant to such consent.

7. By-Law Amendments . The board of directors shall have power to make, alter, amend and repeal the by-laws (except to the extent that any by-laws adopted by the stockholders may expressly prohibit amendment by the board of directors). Any

by-laws made by the directors under the powers conferred hereby may be altered, amended or repealed by the directors or by the stockholders. Anything to the contrary herein contained notwithstanding, no by-law shall be adopted or amended by the board of directors or the stockholders which shall be inconsistent with any of the terms and provisions of this certificate of incorporation

8. Additional Powers of Directors . In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the corporation; subject, nevertheless, to the provisions of the statutes of Delaware, of this certificate of incorporation, and to any by-laws from time to time made by the stockholders; provided, however, that no by-laws so made shall invalidate any prior act of the directors which would have been valid if such by-laws had not been made.

SEVENTH : Vote Required for Certain Business Combinations .

1. Higher Vote for Certain Business Combinations .

(a) In addition to any affirmative vote required by law or this certificate of incorporation, and except as otherwise expressly provided in Section 2 of this Article Seventh:

(i) any merger or consolidation of the Corporation or any “Subsidiary” (as herein defined) with (a) any “Interested Stockholder” (as herein defined) or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an “Affiliate” (as herein defined) of an Interested Stockholder; or

(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of the assets of the Corporation or any Subsidiary having a Fair Market Value equal to ten percent (10%) or more of the total assets reflected on the Corporation’s most recently published consolidated balance sheet; or

(iii) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for securities or other property (or a combination thereof), other than solely cash, having a Fair Market Value equal to ten percent (10%) or more of the total assets reflected on the corporation’s most recently published consolidated balance sheet; or

(iv) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or

(v) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder;

shall, in the case of each of clauses (i) through (v) above, require the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding shares of “Voting Stock” (as herein defined) of the Corporation voting together as a single class (it being understood that for purposes of this Article Seventh, each share of the Voting Stock shall have the number of votes granted to it pursuant to Article Fourth of this certificate of incorporation).

(b) Other Vote Requirements Not Controlling . Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise.

2. When Higher Vote is Not Required . The provisions of Section 1 of this Article Seventh shall not be applicable to any particular “Business Combination” (as herein defined), and such Business Combination shall require only such affirmative vote as is required by law and any other provision of this certificate of incorporation, if all of the conditions specified in either of the following paragraphs (a) and (b) are met:

(a) Approval by Disinterested Directors . The Business Combination shall have been approved by a majority of the “Disinterested Directors” (as herein defined); or

(b) Price and Procedural Requirements . All of the following conditions shall have been met:

(i) The aggregate amount of the cash and the “Fair Market Value” (as hereinafter defined) as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of the following:

(A) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting

dealers’ fees) paid by the Interested Stockholder for any shares of Common Stock acquired by it (1) within the two-year period immediately prior to the first public announcement of the proposal of the Business Combination (the “Announcement Date”) or (2) in the transaction in which it became an Interested Stockholder, whichever is higher; and

(B) the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date being referred to in this Article Seventh as the “Determination Date”), whichever is higher.

(ii) The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any other class of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this paragraph (b)(ii) shall be required to be met with respect to every class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock);

(A) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it (1) within the two-year period immediately prior to the Announcement Date or (2) in the transaction in which it became an Interested Stockholder, whichever is higher;

(B) (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation; and

(C) the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher.

(iii) The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration for such class of Voting Stock shall be either cash or the form used to acquire the

largest number of shares of such class of Voting Stock previously acquired by it. The price determined in accordance with paragraphs (b)(i) and (b)(ii) of this Section 2 shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event.

(iv) After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (a) except as approved by a majority of the Disinterested Directors, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on the outstanding Preferred Stock; (b) there shall have been (1) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors, and (2) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure so to increase such annual rate is approved by a majority of the Disinterested Directors; and (c) such Interested Stockholder shall have not become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder becoming an Interested Stockholder.

(v) After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances guarantees pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise.

(vi) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to public stockholders of the Corporation at least thirty (30) days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).

3. Certain Definitions . For the purposes of this Article Seventh:

(a) The term “ Person ” means any individual, firm, corporation or other entity.

(b) The term “ Interested Stockholder ” means any person (other than the Corporation or any Subsidiary) who or which:

(i) is the beneficial owner, directly or indirectly, of twenty percent (20%) or more of the voting power of the outstanding Voting Stock; or

(ii) is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of twenty percent (20%) or more of the voting power of the then outstanding Voting Stock; or

(iii) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.

Anything in this Section 3(b) to the contrary notwithstanding, the term “Interested Stockholder” shall not include (A) the Corporation, or (B) any person or entity which, at the date of adoption of this certificate of incorporation by the Board of Directors (the “Adoption Date”) and at all times (except during one or more periods not exceeding seven (7) days in length) between the Adoption Date and the date of the proposed Business Combination, holds at least one of the capacities listed below:

(1) is a Subsidiary;

(2) is an employee benefit plan of the Corporation or any Subsidiary;

(3) is a member of the Executive Committee of the Board of Directors of the Corporation;

(4) is a beneficial owner of fifteen percent (15%) or more of the outstanding common stock of the Corporation; or

(5) is any entity in which one or more of the persons or entities referred to in clauses (B)(1), (B)(2), (B)(3) or (B)(4) of this Section 3(b) owns or holds more than fifty percent (50%) of the equity interest or voting power.

(c) The term “ Business Combination ” as used in this Article Seventh means any transaction which is referred to in any one or more of clauses (i) through (v) of paragraph (a) of Section 1 of this Article Seventh.

(d) A person shall be a “ Beneficial Owner ” of any Voting Stock:

(i) which such person or any of its “Affiliates” or “Associates” (as herein defined) beneficially owns, directly or indirectly; or

(ii) which such person or any of its Affiliates or Associates has (a) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (b) the right to vote pursuant to any agreement, arrangement or understanding; or

(iii) which is beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.

(e) For the purposes of determining whether a person is an Interested Stockholder pursuant to paragraph (b) of this Section 3, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of Paragraph (d) of this Section 3 but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

(f) The term “ Affiliate ” of, or a person “ Affiliated ” with, a specific person, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(g) The term “ Associate ” used to indicate a relationship with any person, means (1) any corporation or organization (other than this Corporation or a majority-owned subsidiary of this Corporation) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities, (2) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, (3) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person, or (4) any investment company registered under the Investment Company Act of 1940 for which such person or any affiliate of such person serves as investment adviser.

(h) The term “ Subsidiary ” means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the

Corporation; provided, however, that for the purposes of the definitions of Interested Stockholder set forth in paragraph (b) of this Section 3, the term “Subsidiary” shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation.

(i) The term “ Disinterested Director ” means any member of the Board of Directors who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Disinterested Director who is unaffiliated with the Interested Stockholder and is recommended to succeed a Disinterested Director by a majority of Disinterested Directors then on the Board of Directors.

(j) The term “ Fair Market Value ” means: (i) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing last sale price or closing bid quotation with respect to a share of such stock during the 30‑day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Board of Directors in good faith; and (ii) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the Board of Directors in good faith.

(k) The term “ Voting Stock ” means all outstanding shares of capital stock of the Corporation or another corporation entitled to vote generally in the election of directors, and each reference to a proportion of shares of Voting Stock shall refer to such proportion of the votes entitled to be cast by such shares.

(l) In the event of any Business Combination in which the Corporation survives, the phrase “consideration other than cash to be received” as used in paragraphs (b)(i) and (b)(ii) of Section 2 of this Article Seventh shall include the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares.

(m) The term “ Announcement Date ” shall have the meaning specified in Section 2(b)(i)(A).

(n) The term “ Determination Date ” shall have the meaning specified in Section 2(b)(i)(B).

4. Powers of the Board of Directors . A majority of the Directors shall have the power and duty to determine for the purposes of this Article Seventh, on the basis of information known to them after reasonable inquiry: (a) whether a person is an Interested Stockholder, (b) the number of shares of Voting Stock beneficially owned by any person, (c) whether a person is an Affiliate or Associate of another, and (d) the Fair Market Value of any assets which are the subject of any Business Combination. A majority of the Directors shall have the further power to interpret all of the terms and provisions of this Article Seventh.

5. No Effect on Fiduciary Obligations of Interested Stockholders . Nothing contained in this Article Seventh shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.

EIGHTH : The Corporation shall indemnify any person who was, is, or is threatened to be made a party to a proceeding (as hereinafter defined) by reason of the fact that he or she (i) is or was a director or officer of the Corporation or (ii) while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise, to the fullest extent permitted under the Delaware General Corporation Law, as the same exists or may hereafter be amended. Such right shall be a contract right and as such shall run to the benefit of any director or officer who is elected and accepts the position of director or officer of the Corporation or elects to continue to serve as a director or officer of the Corporation while this Article Eighth is in effect. Any repeal or amendment of this Article Eighth shall be prospective only and shall not limit the rights of any such director or officer or the obligations of the Corporation with respect to any claim arising from or related to the services of such director or officer in any of the foregoing capacities prior to any such repeal or amendment to this Article Eighth. Such right shall include the right to be paid by the Corporation expenses incurred in investigating or defending any such proceeding in advance of its final disposition to the maximum extent permitted under the Delaware General Corporation Law, as the same exists or may hereafter be amended. If a claim for indemnification or advancement of expenses hereunder is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim, and if successful in whole or in part, the claimant shall also be entitled to be paid the expenses of prosecuting such claim. It shall be a defense to any such action that such indemnification or advancement of costs of defense is not permitted under the Delaware General Corporation Law, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its board of directors or any committee thereof, independent legal counsel, or stockholders) to have made its determination prior to the commencement of such action that indemnification of, or advancement of costs of defense to, the claimant is permissible in the circumstances nor an actual determination by the Corporation (including its board of directors or any committee thereof, independent legal counsel, or stockholders) that such indemnification or advancement is not permissible shall be a defense to the action or create a presumption that such indemnification or advancement is not permissible. In the event of the death of any person having a right of

indemnification under the foregoing provisions, such right shall inure to the benefit of his or her heirs, executors, administrators, and personal representatives. The rights conferred above shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, by-law, resolution of stockholders or directors, agreement, or otherwise.

The Corporation may additionally indemnify any employee or agent of the Corporation to the fullest extent permitted by law.

Without limiting the generality of the foregoing, to the extent permitted by then applicable law, the grant of mandatory indemnification pursuant to this Article Eighth shall extend to proceedings involving the negligence of such person.

As used herein, the term “proceeding” means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative, any appeal in such an action, suit, or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding.

NINTH : A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or amendment of this Article Ninth by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation arising from an act or omission occurring prior to the time of such repeal or amendment. In addition to the circumstances in which a director of the Corporation is not personally liable as set forth in the foregoing provisions of this Article Ninth, a director shall not be liable to the Corporation or its stockholders to such further extent as permitted by any law hereafter enacted, including without limitation any subsequent amendment to the Delaware General Corporation Law.

TENTH : Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any

reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

ELEVENTH : Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the Corporation.

TWELFTH : The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. The foregoing and anything contained elsewhere in this certificate of incorporation to the contrary notwithstanding, the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock, voting together as a single class, shall be required to alter, amend, repeal, or adopt any provision inconsistent with Article Sixth, Section 2; Article Sixth, Section 3; Article Sixth, Section 4; Article Sixth, Section 6; and Article Seventh.

AMENDED AND RESTATED

BYLAWS

ESSENDANT INC.

A Delaware Corporation

As of June 1, 2015

TABLE OF CONTENTS

Article I	OFFICES	1
1.1	Registered Office and Agent	1
1.2	Other Offices	1
Article II	MEETINGS OF STOCKHOLDERS	1
2.1	Annual Meeting	1
2.2	Special Meetings	2
2.3	Place of Meetings	2
2.4	Notice of Meeting	2
2.5	Advance Notice of Stockholder Business; Nominations to Board of Directors	3
2.6	Voting List	6
2.7	Quorum	6
2.8	Required Vote; Withdrawal of Quorum	7
2.9	Method of Voting; Proxies; Meeting by Remote Communication	7
2.1	Record Date	8
2.11	Conduct of Meetings	9
2.12	Inspectors	10
2.13	Adjournments	10
2.14	Action Without a Meeting	11
Article III	DIRECTORS	12
3.1	Management	12
3.2	Number; Qualification; Election; Term	12
3.3	Chairman	12
3.4	Change in Number	13
3.5	Removal; Resignation	13
3.6	Newly Created Directorships and Vacancies	13
3.7	Nomination of Director Candidates	13
3.8	Meetings of Directors, Corporate Officers; Books and Records	13
3.9	First Meeting	13
3.10	Election of Officers	13
3.11	Regular Meetings	13
3.12	Special Meetings	14
3.13	Notice	14
3.14	Quorum; Majority Vote	14
3.15	Procedure	14
3.16	Compensation	15
3.17	Action by Written Consent	15
3.18	Telephonic Meetings Permitted	15
3.19	Reliance upon Records	15
3.20	Interested Directors	16

Article IV	COMMITTEES	16
4.1	Designation	16
4.2	Number; Qualification; Term	16
4.3	Authority	17
4.4	Committee Changes	17
4.5	Alternate Members of Committees	17
4.6	Regular Meetings	17
4.7	Special Meetings	18
4.8	Quorum; Majority Vote	18
4.9	Minutes	18
4.10	Responsibility	18
4.11	Action Telephonically or Without Meeting	18
Article V	NOTICE	18
5.1	Method	18
5.2	Waiver	19
Article VI	OFFICERS	19
6.1	Number; Titles; Term of Office	19
6.2	Removal; Resignation	19
6.3	Vacancies	20
6.4	Authority	20
6.5	Compensation	20
6.6	The President	20
6.7	The Vice Presidents	21
6.8	The Secretary	21
6.9	Assistant Secretaries	21
6.10	The Treasurer	21
6.11	Subordinate Officers; Delegated Authority to Appoint Subordinate Officers	21
6.12	Bond	22
6.13	Assistant Treasurers	22
Article VII	CERTIFICATES AND STOCKHOLDERS	22
7.1	Certificates for Shares	22
7.2	Replacement of Lost or Destroyed Certificates	22
7.3	Transfer of Shares	23
7.4	Registered Stockholders	23
7.5	Regulations	23
7.6	Legends	23
Article VIII	INDEMNIFICATION	23
8.1	Right to Indemnification of Directors and Officers	23
8.2	Advancement of Expenses of Directors and Officers	24
8.3	Claims by Officers or Directors	24

8.4	Indemnification of Employees	24
8.5	Advancement of Expenses of Employees	25
8.6	Non-Exclusivity of Rights	25
8.7	Other Indemnification	25
8.8	Insurance	25
8.9	Amendment or Repeal	25
Article IX	MISCELLANEOUS PROVISIONS	25
9.1	Dividends	25
9.2	Reserves	25
9.3	Books and Records	26
9.4	Fiscal Year	26
9.5	Seal	26
9.6	Resignations	26
9.7	Securities of Other Corporations	26
9.8	Invalid Provisions	26
9.9	Mortgages, etc	26
9.10	Checks	27
9.11	Headings	27
9.12	References	27
9.13	Amendments	27

AMENDED AND RESTATED BYLAWS

ESSENDANT INC.

A Delaware Corporation

PREAMBLE

These bylaws have been amended and restated as of June 1, 2015. These bylaws are subject to, and governed by, the General Corporation Law of the State of Delaware (the “ DGCL ”) and the certificate of incorporation, as it may be amended and in effect from time to time (the “ Certificate of Incorporation ”) of Essendant Inc., a Delaware corporation (the “ Corporation ”). In the event of a direct conflict between the provisions of these bylaws and the mandatory provisions of the DGCL or the provisions of the Certificate of Incorporation, such provisions of the DGCL or the Certificate of Incorporation, as the case may be, will be controlling.

Article I

OFFICES

1.1 Registered Office and Agent . The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware or as otherwise designated from time to time by the appropriate filing by the Corporation in the office of the Secretary of State of the State of Delaware. The name and address of the registered agent of the Corporation is The Corporation Trust Company or as otherwise designated from time to time by the appropriate filing by the Corporation in the office of the Secretary of State of the State of Delaware.

1.2 Other Offices . The Corporation may also have offices at such other places, both within and without the State of Delaware, as the board of directors may from time to time determine or as the business of the Corporation may require.

Article II

MEETINGS OF STOCKHOLDERS

2.1 Annual Meeting . An annual meeting of stockholders of the Corporation shall be held each calendar year on such date and at such time as shall be designated from time to time by the board of directors and stated in the notice of the meeting. At such meeting, the stockholders shall elect directors and transact such other business as may properly be brought before the meeting. If the election of directors shall not be held on the day designated herein for any annual meeting, or at any adjournment thereof, the

board of directors shall cause the election to be held at a special meeting of the stockholders as soon thereafter as may be convenient.

2.2 Special Meeting . A special meeting of the stockholders shall be held as provided in the Certificate of Incorporation and in Article V hereof.

2.3 Place of Meetings . An annual meeting of stockholders may be held at any place within or without the State of Delaware designated by the board of directors. A special meeting of stockholders may be held at any place within or without the State of Delaware designated in the notice of the meeting. Notwithstanding the foregoing, the board of directors may, in its sole discretion, determine that the meeting shall not be held at any place, but shall be held solely by means of remote communication, subject to such guidelines and procedures as the board of directors may adopt, as permitted by applicable law.

2.4 Notice of Meeting .

(a) Written or printed notice stating the place, day, and time of an annual meeting of the stockholders and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting shall be delivered not less than ten nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the officer or person(s) calling the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is to be sent by mail, it shall be directed to such stockholder at his address as it appears on the records of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that notices to him be mailed to some other address, in which case it shall be directed to him at such other address. Notice of any annual meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy and shall not, at the beginning of such annual meeting, object to the transaction of any business because the annual meeting is not lawfully called or convened, or who shall, either before or after the annual meeting, submit a signed waiver of notice, in person or by proxy.

(b) Notices of special meetings of the stockholders shall be issued as provided in the Certificate of Incorporation and in Article V hereof.

(c) Without limiting the foregoing paragraphs of this Section 2.4, any notice to stockholders of a meeting given by the Corporation pursuant to this Section 2.4 or the Certificate of Incorporation, shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation and shall also be deemed revoked if (1) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and (2) such inability becomes known to the Secretary or Assistant Secretary of the Corporation, the transfer agent or other person responsible for the giving of notice;

provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. Notice given by a form of electronic transmission in accordance with these bylaws shall be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the stockholder has consent to receive notice; (ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (iii) if by a posting on an electronic network, together with separate notice to the stockholder of such specific posting, upon the later of such posting and the giving of such separate notice; and (iv) if by another form of electronic transmission, when directed to the stockholder.

(d) For purposes of these bylaws, " electronic transmission " means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

2.5	Advance Notice of Stockholder Business; Nominations to Board of Directors.

(a) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business (other than the nomination for election to the Board of Directors, which must comply with paragraph (b) below and the Certificate of Incorporation) must be, in addition to the requirements contained in the Certificate of Incorporation: (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (B) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (C) otherwise properly brought before the meeting by a stockholder of the Corporation (i) who is a stockholder of record on the record date for the determination of stockholders entitled to vote at such meeting, on the date such stockholder provides timely notice to the Corporation as provided herein and on the date of the annual meeting and (ii) who complies with the notice procedures set forth in this paragraph (a) and the Certificate of Incorporation. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the date on which notice of such annual meeting is first given to stockholders. A stockholder’s notice to the secretary shall set forth, in addition to any information required pursuant to the Certificate of Incorporation, as to each matter the stockholder proposes to bring before the annual meeting a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting and as to the stockholder giving the notice and any Stockholder Associated Person (as defined below): (i) the name and record address of such person, (ii) the class or series and number of shares of the Corporation which are beneficially owned

by such person, (iii) the nominee holder for, and number of, shares owned beneficially but not of record by such person, (iv) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any derivative or short positions, profit interests, options or borrowed or loaned shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such person with respect to any share of stock of the Corporation, (v) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the proposal of business on the date of such stockholder’s notice, (vi) a description of all arrangements or understandings between or among such persons in connection with the proposal of such business by such stockholder and any material interest in such business, (vii) a representation that the stockholder giving the notice intends to appear in person or by proxy at the annual meeting to bring such business before the meeting, (viii) notice whether such person intends to solicit proxies in connection with the proposed matter and (ix) any other information that is required to be provided by the stockholder pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “1934 Act”), in his capacity as a proponent to a stockholder proposal. Any information required pursuant to this paragraph or the Certificate of Incorporation shall be supplemented to speak as of the record date for the meeting by the stockholder giving the notice not later than ten (10) days after such record date. In addition to the foregoing, in order to have information with respect to a stockholder proposal included in the proxy statement and form of proxy for a stockholder’s meeting, stockholders must also satisfy the notice and other requirements of the regulations promulgated under the 1934 Act. No business shall be conducted at any annual meeting except in accordance with the procedures set forth in this paragraph (a) and the Certificate of Incorporation. The presiding officer of the annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting and in accordance with the provisions of this paragraph (a) or the Certificate of Incorporation, and, if he should so determine, he shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted. Nothing in this paragraph (a) shall be deemed to affect the rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act.

(b) Only persons who are nominated in accordance with the procedures set forth in this paragraph (b) and the Certificate of Incorporation shall be eligible for election as directors (subject to the rights of holders of any class or series of stock having a preference over common stock as to dividends or upon liquidation). Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the Corporation entitled to vote in the election of directors at the meeting (i) who is a stockholder of record on the record date for the determination of stockholders entitled to vote at such meeting, on the date such stockholder provides timely notice to the Corporation as provided herein and on the date of such meeting and (ii) who complies

with the notice procedures set forth in this paragraph (b) and the Certificate of Incorporation. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made not later than (i) with respect to an election to be held at an annual meeting, ninety (90) days prior to the anniversary date of the immediately preceding annual meeting, and (ii) with respect to an election to be held at a special meeting of stockholders for the election of directors, the close of business on the seventh (7th) day following the date on which notice of such meeting is first given to stockholders. Such stockholder’s notice shall set forth, in addition to any information required pursuant to the Certificate of Incorporation, as to each person whom the stockholder proposes to nominate for election or re-election as a director and as to the stockholder giving the notice and any Stockholder Associated Person: (A) the name, age, business address, residence address and record address of such person, (B) the principal occupation or employment of such person, (C) the class and number of shares of the Corporation which are beneficially owned by such person, (D) a description of all arrangements or understandings between or among such persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder and any relationship between or among the stockholder giving notice and any Stockholder Associated Person, on the one hand, and each proposed nominee, on the other hand, (E) the nominee holder for, and number of, shares owned beneficially but not of record by such person, (F) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any derivative or short positions, profit interests, options or borrowed or loaned shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such person with respect to any share of stock of the Corporation, (G) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director on the date of such stockholder’s notice, (H) a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (I) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the 1934 Act (including, without limitation, the nominee’s written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected). Any information required pursuant to this paragraph or the Certificate of Incorporation shall be supplemented to speak as of the record date for the meeting by the stockholder giving the notice not later than ten (10) days after such record date. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this paragraph (b) and the Certificate of Incorporation. The

presiding officer of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure or the Certificate of Incorporation.

(c) For purposes of this Section 2.5: “Stockholder Associated Person” of any stockholder shall mean (i) any person acting in concert, directly or indirectly, with such stockholder and (ii) any person controlling, controlled by or under common control with such stockholder or any Stockholder Associated Person.

2.6 Voting List . At least ten days before each meeting of stockholders, the Secretary or other officer of the Corporation who has charge of the Corporation’s stock ledger, either directly or through another officer appointed by him or through a transfer agent appointed by the board of directors, shall prepare a complete list of record holders of each class and series of shares of stock entitled to vote thereat, arranged in alphabetical order and showing the address of each record holder and number of shares registered in the name of each record holder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting or (ii) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, the list shall also be open to the examination of any stockholder during the whole time thereof on a reasonably accessible electronic network and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of record holders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

2.7 Quorum . The holders of a majority of the outstanding shares of each class and/or series of capital stock entitled to vote on a matter present in person or by proxy shall constitute a quorum at any meeting of stockholders, except as otherwise provided by law, the Certificate of Incorporation, or these bylaws. If, however, the holders of any two or more classes or series of stock are entitled, or required, pursuant to the terms of the Certificate of Incorporation, to vote together as a single class on any matter coming before such stockholders, the holders of a majority in the aggregate of the outstanding shares of such classes and/or series (except as otherwise provided in the Certificate of Incorporation) present in person or by proxy, shall constitute a quorum for purposes of voting on any matter that may be put before such stockholders in accordance with law, the Certificate of Incorporation or these bylaws. Shares of its own stock belonging to the Corporation shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. If a quorum shall not be present, in person or by proxy, at any meeting of stockholders, the

stockholders entitled to vote thereat who are present, in person or by proxy, or the chairman of the meeting may adjourn the meeting from time to time in accordance with Section 2.13 hereof.

2.8 Required Vote; Withdrawal of Quorum . When a quorum is present at any meeting, the vote of the holders of at least a majority of the outstanding shares having voting power and entitled to vote on a matter who are present, in person or by proxy, shall decide any such matter brought before such meeting, unless such matter is one on which, by express provision of statute, the Certificate of Incorporation, or these bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such matter. The stockholders present at a duly constituted meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

2.9 Method of Voting; Proxies; Meeting by Remote Communication .

(a) Except as otherwise provided in the Certificate of Incorporation or these bylaws, each outstanding share of capital stock which has voting power on the subject matter submitted to a vote by stockholders shall be entitled to one vote on each such matter. Elections of directors need not be by written ballot. At any meeting of stockholders, every stockholder having the right to vote may vote either in person or by a proxy.

(b) At all meetings of stockholders, a stockholder may authorize another person to act for such stockholder by proxy (i) executed in writing by the stockholder or such stockholder's duly authorized officer, director or attorney‑in‑fact or (ii) transmitted by the stockholder or such stockholder's duly authorized officer, director or attorney‑in‑fact by telegram, cablegram or other means of electronic transmission to the proxy holder or to a proxy solicitation firm, proxy support service or like agent duly authorized by the proxy holder to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission sets forth or is submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was duly authorized by the stockholder. Such proxy must be filed with the Secretary of the Corporation or the inspectors of election at or before the time of the meeting. No such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing with the Secretary an instrument in writing revoking the proxy or another duly executed proxy bearing a later date.

(c) If expressly authorized by the board of directors in accordance with these bylaws and applicable law, and subject to such guidelines and procedures as the board of directors may adopt, stockholders and proxy holders not physically present at a meeting

of stockholders may, by means of remote communication (including, without limitation, by means of conference telephone or other communications equipment by means of which persons participating in the meeting can hear each other), (a) participate in a meeting of stockholders and (b) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

2.10 Record Date .

(a) For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders, or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, or exchange of stock or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors. Such date in any case shall not be more than 60 days or less than ten days prior to any such meeting nor more than 60 days prior to any other action. If no record date is fixed:

(i) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

(ii) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

(iii) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more

than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by law or these bylaws, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office in the State of Delaware, principal place of business, or such officer or agent shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by law or these bylaws, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.

2.11 Conduct of Meetings . The Chairman, if such position has been filled, shall preside at all meetings of stockholders as the chairman of the meeting. In the absence or inability to act of the Chairman at any meeting of the stockholders, a chairman of the meeting shall be appointed to preside at such meeting of the stockholders by a majority of the board of directors present at such meeting. The board of directors of the Corporation may adopt by resolution such rules or regulations for the conduct of meetings of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the board of directors, the chair of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chair, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the board of directors or prescribed by the chair of the meeting, may, but shall not be required to, include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting, to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chair shall permit; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof, and (v) limitations on the time allotted to questions or comments by participants. Unless, and to the extent determined by the board of directors or the chair of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure. The Secretary shall keep the records of each meeting of stockholders. In the absence or inability to act of any such officer, such officer’s duties shall be performed by the officer given the authority to act for such absent or non-acting officer under these bylaws or by some other officer appointed by the board of directors.

2.12 Inspectors .

(a) The board of directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act, the chairman of the meeting shall, or if inspectors shall not have been appointed, the chairman of the meeting may, appoint one or more inspectors. No director or candidate for the office of director shall act as an inspector of an election of directors. Inspectors need not be stockholders. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability.

(b) The inspectors shall (i) ascertain the number of shares outstanding and the voting power of each, (ii) determine the number of shares present in person or by proxy at such meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and (v) certify their determination of the number of such shares present in person or by proxy at such meeting and their count of all votes and ballots. In addition, at the time the inspectors make their certification pursuant to this paragraph (b), the inspectors shall specify any information provided in accordance with Section 2.9(b) of these bylaws and any other information permitted by applicable law upon which they relied in determining the validity and counting of proxies and ballots. The inspectors may appoint or retain other persons or entities to assist them in the performance of their duties. On request of the chairman of the meeting, the inspectors shall make a report in writing of any challenge, request, or matter determined by them and shall execute a certificate of any fact found by them.

(c) The chairman of the meeting shall announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting. No ballots, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by any stockholder shall determine otherwise.

2.13 Adjournments . Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other date, time and/or place, and notice need not be given of any such adjourned meeting if the date, time, place, if any, thereof and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting are announced at the meeting at which the adjournment is taken. At any adjourned meeting at which a quorum shall be present, in person or by proxy, any business may be transacted which may have been transacted at the original meeting had a quorum been present; provided that, if the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the

adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting.

2.14 Action Without a Meeting .

(a) Any action required or permitted to be taken by the stockholders of the Corporation at any annual or special meeting of the stockholders may be taken without a meeting only as provided in the Certificate of Incorporation.

(b) A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxy holder, or by a person or persons authorized to act for a stockholder or proxy holder, shall be deemed to be written, signed and dated for the purposes of Section 228(d)(1) of the DGCL and the Certificate of Incorporation, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (A) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxy holder or by a person or persons authorized to act for the stockholder or proxy holder and (b) the date on which such stockholder or proxy holder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the Corporation by delivery to its registered office, its principal place of business or any officer or agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded. Delivery made to a Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the forgoing limitations on delivery, consents given by telegram, cablegram or other electronic transmission may be otherwise delivered to the principal place of business of the Corporation or to an officer or agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the board of directors or governing body of the Corporation.

Article III

DIRECTORS

3.1 Management . The business and property of the Corporation shall be managed by the board of directors. Subject to the restrictions imposed by law, the Certificate of Incorporation, or these bylaws, the board of directors may exercise all the powers of the Corporation.

3.2 Number; Qualification; Election; Term .

(a) The number of directors which shall constitute the entire board of directors shall be nine; provided, that, unless otherwise provided in the Certificate of Incorporation, the number of directors constituting the entire board of directors may be increased or decreased from time to time exclusively by resolution adopted by the board of directors and shall consist of no less than three and no more than fifteen members. The tenure and qualifications of directors on the board of directors of the Corporation shall be as provided herein and in the Certificate of Incorporation. Each director shall hold office until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.

(b) Except as otherwise required by law, the Certificate of Incorporation, or these bylaws, the directors shall be elected at an annual meeting of the stockholders at which a quorum is present. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy and entitled to vote on the election of directors. None of the directors need be a stockholder of the Corporation or a resident of Delaware. Each director must have attained the age of majority.

(c) Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of the Certificate of Incorporation or the resolution or resolutions adopted by the board of directors pursuant to the Certificate of Incorporation and applicable thereto, and such directors so elected shall not be divided into classes pursuant to this bylaw unless expressly provided by such terms.

3.3 Chairman . The board of directors shall elect one of its members as Chairman. The Chairman, if present, shall preside at all meetings of the board of directors. The Chairman shall have the powers and duties usually and customarily associated with the position of a non-executive Chairman and shall have such other powers and duties as may be assigned to him by the board of directors. In his capacity as Chairman, he shall not necessarily be an officer of the Corporation, but he shall be eligible to serve, in addition, as an officer pursuant to Article VI of these bylaws;

provided , however , that under no circumstances shall the Chairman also serve as the President or chief executive officer of the Corporation.

3.4 Change in Number . No decrease in the number of directors constituting the entire board of directors shall have the effect of shortening the term of any incumbent director.

3.5 Removal; Resignation . A director may be removed from the board of directors in accordance with the Certificate of Incorporation. A director may resign from the board of directors as provided in Section 9.6 hereof.

3.6 Newly Created Directorships and Vacancies . Newly created directorships resulting from any increase in the number of directors and any vacancies occurring in the board of directors resulting from death, resignation, disqualification, removal or other cause shall be filled as provided in the Certificate of Incorporation.

3.7 Nomination of Director Candidates . Nominations for election to the board of directors shall be as provided in the Certificate of Incorporation.

3.8 Meetings of Directors, Corporate Officers; Books and Records . The directors may hold their meetings and may have an office or offices and keep the books of the Corporation, except as otherwise provided by statute, in such place or places within or without the State of Delaware as the board of directors may from time to time determine or as shall be specified in the notice of such meeting.

3.9 First Meeting . Each newly elected board of directors may hold its first meeting for the purpose of organization and the transaction of business, if a quorum is present, on the same day and at the same place as the annual meeting of stockholders, and no notice of such meeting shall be necessary. If a newly elected board of directors fails to hold its first meeting on the same day at the same place as the annual meeting of stockholders, the first meeting of the newly elected board of directors after each election of new directors thereto shall be held at such time and place as shall be specified in a notice given as provided in these bylaws for special meetings of the board of directors, or as shall be specified in a written waiver of notice signed by all of the directors.

3.10 Election of Officers . At the first meeting of the board of directors held in conjunction with each annual meeting of stockholders as described in Section 3.9 hereof at which a quorum shall be present, the board of directors shall elect the officers of the Corporation.

3.11 Regular Meetings . Regular meetings of the board of directors shall be held at such times and places as shall be designated from time to time by the board of directors. Notice of such regular meetings shall not be required.

3.12 Special Meetings . Special meetings of the board of directors shall be held whenever called by the Chairman, the President, or, upon the request in writing of two or more directors, by any other officer of the Corporation.

3.13 Notice . The Secretary or, in the absence or inability to act of the Secretary, any person designated by the Chairman or President, shall give notice of each special meeting to each director at least 24 hours before the meeting; provided, however, that if a special meeting of the board of directors is called by the Chairman such meeting may be called upon such notice as the Chairman deems appropriate. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to him. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting. Notice may be given by telephone to the director personally or to any person reasonably believed to be accepting messages for such director, or by electronic transmission, as defined in Section 2.4(d), or otherwise in writing in accordance with Section 5.1 hereof.

3.14 Quorum; Majority Vote . At all meetings of the board of directors, a majority of the directors elected or appointed in the manner provided in these bylaws and the Certificate of Incorporation shall constitute a quorum for the transaction of business. If at any meeting of the board of directors there be less than a quorum present, a majority of those present or any director solely present may adjourn the meeting from time to time without further notice. Unless the act of a greater number is required by law, the Certificate of Incorporation or these bylaws, the act of a majority of the directors present at a meeting at which a quorum is in attendance shall be the act of the board of directors. At any time that the Certificate of Incorporation provides that directors elected by the holders of a class or series of stock shall have more or less than one vote per director on any matter, every reference in these bylaws to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of such directors.

3.15 Procedure . At meetings of the board of directors, business shall be transacted in such order as from time to time the board of directors may determine. The Chairman, if such position has been filled, shall preside at all meetings of the board of directors. In the absence or inability to act of the Chairman at any meeting of the board of directors, a chairman of the meeting shall be chosen by a majority of the board of directors present at such meeting from among the directors present to preside at such meeting of the board of directors. The Secretary of the Corporation shall act as the secretary of each meeting of the board of directors unless the board of directors appoints another person to act as secretary of the meeting. The board of directors shall keep regular minutes of its proceedings which shall be placed in the minute book of the Corporation.

3.16 Compensation . The board of directors shall have the authority to fix the compensation, including any stated retainer, fees and reimbursement of expenses, paid to directors for their services as such, including without limitation for attendance at regular or special meetings of the board of directors; provided, that nothing contained herein shall be construed to preclude any director from serving the Corporation in any other capacity or receiving compensation therefor. No additional compensation for serving as a director or committee member shall be paid to any employee of the Corporation or any subsidiary thereof, other than the reimbursement of expenses. Otherwise, committee members may, by resolution of the board of directors, be allowed a fixed sum and expenses of attendance, if any, for attending any committee meeting.

3.17 Action by Written Consent . Unless otherwise restricted by the Certificate of Incorporation or by these bylaws, any action required or permitted to be taken at a meeting of the board of directors, or of any committee of the board of directors, may be taken without a meeting if all the directors or all the committee members, as the case may be, entitled to vote with respect to the subject matter thereof, consent or consents thereto in writing or by electronic transmission, and such writing or writings or electronic transmission or transmissions shall have the same force and effect as a vote of such directors or committee members, as the case may be, and may be stated as such in any certificate or document filed with the Secretary of State of the State of Delaware or in any certificate delivered to any person. Such writing or writings or electronic transmission or transmissions shall be filed with the minutes of proceedings of the board or committee, as the case may be. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

3.18 Telephonic Meetings Permitted . Members of the board of directors, or any committee designated by the board, may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this bylaw shall constitute presence in person at such meeting.

3.19 Reliance upon Records . Every director, and every member of any committee of the board of directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the board of directors, or by any other person as to matters the director or member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, including, but not limited to, such records, information, opinions, reports or statements as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid, or with which the Corporation's capital stock might properly be purchased or redeemed.

3.20 Interested Directors .

Subject to any other requirements under the U.S. Internal Revenue Code of 1986, as it may be amended from time to time, the federal securities laws, or any other applicable laws or regulations relating to the subject matter in this Section 3.20 (as used in this Section 3.20, “applicable laws or regulations”), no contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board of directors or committee which authorizes the contract or transaction, or solely because any such director’s or officer’s votes are counted for such purpose, if: (a) the material facts as to such director's or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board of directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors are less than a quorum; (b) the material facts as to such director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders having voting power as to such subject matter pursuant to the Certificate of Incorporation, and entitled to vote as to such subject matter, and the contract or transaction is specifically approved in good faith by the vote of such stockholders having such voting power and entitled to vote on such subject matter; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee or the stockholders. Except as otherwise provided in applicable law or regulation, common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction.

Article IV

COMMITTEES

4.1 Designation . The board of directors may, by resolution adopted by a majority of the entire board of directors, designate one or more committees.

4.2 Number; Qualification; Term . Each committee shall consist of one or more directors appointed by resolution adopted by a majority of the entire board of directors. The number of committee members may be increased or decreased from time to time by resolution adopted by a majority of the entire board of directors. Each committee member shall serve as such until the earliest of (i) the expiration of his term as director, (ii) his resignation as a committee member or as a director, or (iii) his death or removal as a committee member or as a director. A committee member may resign from such committee as provided in Section 9.6 hereof.

4.3 Authority . Each committee, to the extent expressly provided in the resolution establishing such committee, shall have and may exercise all of the authority of the board of directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it except to the extent expressly restricted by law, the Certificate of Incorporation, or these bylaws. Notwithstanding the foregoing, no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation under Sections 251, 252, 254, 255, 256, 257, 258, 263 or 264 of the DGCL, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or adopting, amending or repealing the bylaws of the Corporation. Notwithstanding the foregoing, a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in subsection (a) of Section 151 of the DGCL, fix the designations, preferences, and relative, participating, optional or other special rights, and qualifications, limitations, or restrictions of such shares, including, without limitation, as to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series. Unless a resolution of the board, the Certificate of Incorporation or any provision of these bylaws expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the DGCL.

4.4 Committee Changes . The board of directors shall have the power at any time to fill vacancies in, to change the membership of, and to discharge any committee.

4.5 Alternate Members of Committees . The board of directors may designate one or more directors as alternate members of any committee. Any such alternate member may replace any absent or disqualified member at any meeting of the committee. If no alternate committee members have been so appointed to a committee or each such alternate committee member is absent or disqualified, the member or members of such committee present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

4.6 Regular Meetings . Regular meetings of any committee may be held without notice at such time and place as may be designated from time to time by the committee and communicated to all members thereof.

4.7 Special Meetings . Special meetings of any committee may be held whenever called by any committee member. The committee member calling any special meeting shall cause notice of such special meeting, including therein the time and place of such special meeting, to be given to each committee member at least 24 hours before such special meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of any committee need be specified in the notice or waiver of notice of any special meeting.

4.8 Quorum; Majority Vote . At meetings of any committee, a majority of the number of members designated by the board of directors shall constitute a quorum for the transaction of business. If a quorum is not present at a meeting of any committee, a majority of the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. The act of a majority of the members present at any meeting at which a quorum is in attendance shall be the act of a committee, unless the act of a greater number is required by law, the Certificate of Incorporation, or these bylaws.

4.9 Minutes . Each committee shall cause minutes of its proceedings to be prepared and shall report the same to the board of directors upon the request of the board of directors. The minutes of the proceedings of each committee shall be delivered to the Secretary of the Corporation for placement in the minute books of the Corporation.

4.10 Responsibility . The designation of any committee and the delegation of authority to it shall not operate to relieve the board of directors or any director of any responsibility imposed upon it or such director by law.

4.11 Action Telephonically or Without Meeting . Committee members may act by telephonic or other communications equipment or by written consent as provided in Sections 3.17 and 3.18 hereof.

Article V

NOTICE

5.1 Method . Whenever by statute, the Certificate of Incorporation, or these bylaws, notice is required to be given to any committee member, director, or stockholder and no provision is made as to how such notice shall be given, personal notice shall not be required and any such notice may be given (a) in writing, by mail, postage prepaid, addressed to such committee member, director, or stockholder at his address as it appears on the books or (in the case of a stockholder) the stock transfer records of the Corporation, or (b) by any other method permitted by law (including but not limited to electronic transmission (as defined in Section 2.4(d)) or overnight courier service). Any notice required or permitted to be given by mail shall be deemed to be delivered and given at the time when the same is deposited in the United States mail as aforesaid. Any notice required or permitted to be given by overnight courier service shall be deemed to

be delivered and given at the time delivered to such service with all charges prepaid and addressed as aforesaid. Any notice required or permitted to be given by electronic transmission shall be deemed to be delivered and given at the time transmitted with all charges prepaid and addressed as aforesaid.

5.2 Waiver . Whenever any notice is required to be given to any stockholder, director, or committee member of the Corporation by statute, the Certificate of Incorporation, or these bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, or a waiver by electronic transmission (as defined in Section 2.4(d)) by the person entitled to notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. Attendance of a stockholder, director, or committee member at a meeting shall constitute a waiver of notice of such meeting, except where such person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Article VI

OFFICERS

6.1 Number; Titles; Term of Office . The officers of the Corporation shall be a President, a Secretary, a Treasurer, and such other officers as the board of directors may from time to time elect. Elected officers may include, without limitation, one or more Vice Presidents, Senior Vice Presidents or Executive Vice Presidents. Unless any such officer’s title is expressly set forth below, such officer shall have such descriptive title as the board of directors shall determine. Unless a description of such officer’s services is expressly set forth below, such officer shall perform such services as requested by the board of directors or the President. Each officer shall hold office until his successor shall have been duly elected and shall have qualified, until his death, or until he shall resign or shall have been removed in the manner hereinafter provided. Any two or more offices may be held by the same person. None of the officers need be a stockholder or a director of the Corporation or a resident of the State of Delaware.

6.2 Removal; Resignation . Any officer elected or appointed by the board of directors may be removed by the board of directors whenever in its judgment the best interest of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer shall not of itself create contract rights. The chief executive officer, or, in the absence of a chief executive officer, the President, may suspend the powers, authority, responsibilities and compensation of any elected officer or appointed subordinate officer for a period of time sufficient to permit the board or the appropriate committee of the board a reasonable opportunity to consider and act upon a resolution relating to the reinstatement, further suspension or removal of such person. In addition, an officer may resign from office as provided in Section 9.6 hereof.

6.3 Vacancies . Any vacancy occurring in any office of the Corporation (by death, resignation, removal, or otherwise) may be filled by the board of directors, a committee of the board of directors, and/or the chief executive officer (or, in the absence of such officer, the President) in the same manner as provided in the election or appointment of such person.

6.4 Authority . Officers shall have such authority and perform such duties in the management of the Corporation as are provided in these bylaws or as may be determined by resolution of the board of directors not inconsistent with these bylaws.

6.5 Compensation . The compensation, if any, of officers shall be fixed from time to time by the board of directors; provided, however, that the board of directors may delegate the power to determine the compensation of any officer (other than the officer to whom such power is delegated) to the President and/or chief executive officer.

6.6 The President . The President may be the chief executive officer and/or the chief operating officer of the Corporation. If so designated as chief executive officer by the board of directors, he shall have the general direction of the affairs of the Corporation and, if so designated as chief operating officer of the Corporation, he shall have the general direction of the operations of the Corporation. In addition to, or in lieu of, the President acting as chief executive officer and/or chief operating officer, the President shall, unless otherwise directed by the board of directors, have general executive responsibility for the conduct of the business and affairs of the Corporation and shall assume such other duties as the board of directors may assign from time to time. The President may sign certificates for shares of the Corporation, and may sign any policies, deeds, mortgages, bonds, contracts, or other instruments on behalf of the Corporation, unless the board of directors has expressly reserved authority to approve any such documents or instruments for the Board’s approval, and except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or by these bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. The President shall appoint and discharge agents and employees of the Corporation, and in general, shall perform all duties incident to the office of President. Notwithstanding anything to the contrary in these bylaws, during occasions that the President is absent, has vacated his office, or otherwise is unable or refuses to perform the duties of the President, those duties will be performed by the Vice President (in order of their seniority as determined by the board of directors, or, in the absence of such determination, as determined by the length of time they have held the office of Vice President) until such time as the board of directors either makes a determination that another person should act in that capacity or elects a new President. Under no circumstances shall the President serve as Chairman of the corporation.

6.7 The Vice Presidents . The Vice Presidents, including any Executive Vice President or Senior Vice President, shall perform such duties and have such powers as the board of directors or the President may from time to time prescribe.

6.8 The Secretary . Except as otherwise provided in the Certificate of Incorporation or these bylaws, the Secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required; shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors; shall perform such other duties as may be prescribed by the board of directors or the President; and shall keep in safe custody the corporate seal of the Corporation and when authorized by the board of directors, shall affix the same to any instrument requiring it and when so affixed, it shall be attested by the signature of the Secretary or by the signature of an Assistant Secretary.

6.9 Assistant Secretaries . The Assistant Secretaries in the order of their seniority shall, in the event that the Secretary is absent, or has vacated his office, or is unable or unwilling to act, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the board of directors or the President may from time to time prescribe.

6.10 The Treasurer . The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the board of directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the board of directors taking proper vouchers for such disbursements, and shall render to the President and the board of directors, at its regular meetings or when the President or board of directors so requires, an account of all transactions of the Corporation performed under his supervision as Treasurer. The Treasurer shall perform such other duties as may be prescribed by the board of directors or the President.

6.11 Subordinate Officers; Delegated Authority to Appoint Subordinate Officers . In addition to officers elected by the board of directors, the board of directors may from time to time appoint one or more vice presidents (including any executive and/or senior vice presidents), assistant vice presidents, assistant secretaries, assistant treasurers, assistant comptrollers, and such other subordinate officers as the board of directors may deem advisable. The board of directors may grant to any committee of the board, the chief executive officer, or, in the absence of a chief executive officer, the President, the power and authority to appoint such subordinate officers and to prescribe their respective terms of office, powers, authority and responsibilities. Each subordinate officer shall hold his position at the pleasure of the board of directors, the committee of the board appointing him, the chief executive officer, the President and any other officer to whom such subordinate officer reports.

6.12 Bond . If required by the board of directors, the Treasurer and any other officer identified by the board of directors shall give the Corporation a bond (which shall be renewed as required from time to time) or such other security as the board may request in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office and for the restoration to the Corporation, in case of the death, resignation, retirement or removal from office of the Treasurer, of all books, papers, vouchers, money and other property of whatever kind in the possession or under the control of the Treasurer belonging to the Corporation.

6.13 Assistant Treasurers . The Assistant Treasurers, in the order of their seniority, unless otherwise determined by the board of directors, shall in the event the Treasurer is absent, or has vacated his office, or is unable or refuses to act, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the board of directors or the President may from time to time prescribe.

Article VII

CERTIFICATES AND STOCKHOLDERS

7.1 Certificates for Shares . Certificates for shares of stock of the Corporation may be issued in certificated or non-certificated form and shall be in such form as shall be approved by the board of directors. The certificates shall be signed by any authorized officer of the Corporation. Any and all signatures on the certificate may be a facsimile and may be affixed or imprinted with the seal of the Corporation or a facsimile thereof. If any officer, transfer agent, or registrar who has signed, or whose facsimile signature has been placed upon, a certificate has ceased to be such officer, transfer agent, or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. The certificates shall be consecutively numbered and shall be entered in the books of the Corporation (which shall include the books of any transfer agent appointed by the board of directors) as they are issued and shall exhibit the registered owner’s name and the number of shares.

7.2 Replacement of Lost or Destroyed Certificates . The Corporation may direct the issuance of a new certificate or certificates to be issued in place of a certificate or certificates theretofore issued by the Corporation and alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate or certificates representing shares to be lost or destroyed. In addition, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond with a surety or sureties satisfactory to the Corporation in such sum as it may direct as indemnity against any claim, or expense resulting from a claim, that

may be made against the Corporation with respect to the certificate or certificates alleged to have been lost or destroyed.

7.3 Transfer of Shares . Shares of stock of the Corporation shall be transferable only on the books of the Corporation by the holders thereof in person or by their duly authorized attorneys or legal representatives. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, the Corporation or its transfer agent shall issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books. Notwithstanding the foregoing, no new certificate shall be issued unless and until the surrendering stockholder provides a written opinion of counsel reasonably acceptable to the Corporation or other evidence acceptable to the Corporation of compliance with all applicable federal, state and foreign securities laws.

7.4 Registered Stockholders . The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.

7.5 Regulations . The board of directors shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer, and registration or the replacement of certificates for shares of stock of the Corporation, including compliance with applicable law.

7.6 Legends . The Corporation shall have the power and authority to provide that certificates representing shares of stock bear such legends as the Corporation deems appropriate to assure that the Corporation does not become liable for violations of federal or state securities laws or other applicable law.

Article VIII

INDEMNIFICATION

8.1 Right to Indemnification of Directors and Officers . Subject to the other provisions of this article, the Corporation shall indemnify and advance expenses to every director and officer (and to such person’s heirs, executors, administrators or other legal representatives) in the manner and to the full extent permitted by applicable law as it presently exists, or may hereafter be amended, against any and all amounts (including, but not limited to, judgments, fines, payments in settlements, costs of investigation, attorneys’ fees and other expenses) reasonably incurred by or on behalf of such person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “ Proceeding ”), in which such director or officer was or is made or is threatened to be made a party or is otherwise involved by

reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or member of any other corporation, partnership, joint venture, trust, organization or other enterprise. The Corporation shall not be required to indemnify a person in connection with a Proceeding initiated by such person if the Proceeding was not authorized by the board of directors of the Corporation.

8.2 Advancement of Expenses of Directors and Officers . The Corporation shall pay the expenses of directors and officers incurred in defending any Proceeding in advance of its final disposition (“ Advancement of Expenses ”); provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the director or officer to repay all amounts advanced if it should be ultimately determined that the director or officer is not entitled to be indemnified under this article or otherwise; provided, that no bond or other security shall be required to secure such undertaking.

8.3 Claims by Officers or Directors . If a claim for indemnification or Advancement of Expenses by an officer or director under this article is not paid in full within ninety days after a written claim therefor has been received by the Corporation, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or Advancement of Expenses under applicable law.

8.4 Indemnification of Employees . Subject to the other provisions of this article, the Corporation may indemnify and advance expenses to every employee who is not a director or officer (and to such person’s heirs, executors, administrators or other legal representatives) in the manner and to the full extent permitted by applicable law as it presently exists, or may hereafter be amended, against any and all amounts (including judgments, fines, payments in settlement, costs of investigation, attorneys’ fees and other expenses) reasonably incurred by or on behalf of such person in connection with any threatened, pending or completed action, suit or Proceeding in which such employee was or is made or is threatened to be made a party or is otherwise involved by reason of the fact that such person is or was an employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or member of any other corporation, partnership, joint venture, trust, organization or other enterprise. The ultimate determination of entitlement to indemnification of employees who are not officers and directors shall be made in such manner as is provided by applicable law. The Corporation shall not be required to indemnify a person in connection with a Proceeding initiated by such person if the Proceeding was not authorized by the board of directors of the Corporation.

8.5 Advancement of Expenses of Employees . The advancement of expenses of an employee who is not an officer or director shall be made by or in the manner provided by resolution of the board of directors or by a committee of the board of directors of the Corporation.

8.6 Non-Exclusivity of Rights . The rights conferred on any person by this Article VIII shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

8.7 Other Indemnification . The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer or employee of another corporation, partnership, joint venture, trust, organization or other enterprise shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, organization or other enterprise.

8.8 Insurance . The board of directors may, to the full extent permitted by applicable law as it presently exists, or may hereafter be amended from time to time, authorize an appropriate officer or officers to purchase and maintain at the Corporation’s expense insurance: (i) to indemnify the Corporation for any obligation which it incurs as a result of the indemnification of directors, officers, and employees under the provisions of this Article VIII; and (ii) to indemnify or insure directors, officers and employees against liability in instances in which they may not otherwise be indemnified by the Corporation under the provisions of this Article VIII.

8.9 Amendment or Repeal . Any repeal or modification of the foregoing provisions of this Article VIII shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.

Article IX

MISCELLANEOUS PROVISIONS

9.1 Dividends . Subject to provisions of law and the Certificate of Incorporation, dividends may be declared by the board of directors at any regular or special meeting and may be paid in cash, in property, or in shares of stock of the Corporation. Such declaration and payment shall be at the discretion of the board of directors and in compliance with the DGCL.

9.2 Reserves . There may be created by the board of directors out of funds of the Corporation legally available therefor such reserve or reserves as the directors from time to time, in their discretion, consider proper to provide for contingencies, to equalize dividends, or to repair or maintain any property of the Corporation, or for such other purpose as the board of directors shall consider beneficial to the Corporation, and the

board of directors may modify or abolish any such reserve in the manner in which it was created.

9.3 Books and Records . The Corporation shall keep correct and complete books and records of account, shall keep minutes of the proceedings of its stockholders and board of directors and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all stockholders and the number and class of the shares held by each.

9.4 Fiscal Year . The fiscal year of the Corporation shall end on December 31 of each year, provided that the fiscal year may be changed from time to time by resolution of the board of directors.

9.5 Seal . The corporate seal shall have inscribed thereon the name of the Corporation and the words “Corporate Seal Delaware.” The seal of the Corporation may be changed from time to time by the board of directors. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

9.6 Resignations . Any director or committee member may resign by giving notice in writing or by electronic transmission to the board of directors, the Chairman, the President, or the Secretary. Any officer may resign by giving written notice to the board of directors, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if no time is specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

9.7 Securities of Other Corporations . The President or any Vice President (including any Executive or Senior Vice President) of the Corporation shall have the power and authority to transfer, endorse for transfer, vote, consent, or take any other action with respect to any securities of another issuer which may be held or owned by the Corporation and to make, execute, and deliver any waiver, proxy, or consent with respect to any such securities.

9.8 Invalid Provisions . If any part of these bylaws shall be held invalid or inoperative for any reason, the remaining parts, so far as it is possible and reasonable, shall remain valid and operative.

9.9 Mortgages, etc. With respect to any deed, deed of trust, mortgage, or other instrument executed by the Corporation through its duly authorized officer or officers, the attestation to such execution by the Secretary of the Corporation shall not be necessary to constitute such deed, deed of trust, mortgage, or other instrument a valid and binding obligation against the Corporation unless the resolutions, if any, of the board of directors authorizing such execution expressly state that such attestation is necessary.

9.10 Checks . All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.

9.11 Headings . The headings used in these bylaws have been inserted for administrative convenience only and do not constitute matter to be construed in interpretation.

9.12 References . Whenever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where appropriate.

9.13 Amendments . Subject to the provisions of the Certificate of Incorporation, these bylaws may be altered, amended or repealed at any regular meeting of the stockholders (or at any special meeting thereof duly called for that purpose) by a majority vote of the shares represented and entitled to vote at such meeting; provided that in the notice of such special meeting notice of such purpose shall be given. Subject to the laws of the State of Delaware, the Certificate of Incorporation and these bylaws, the board of directors may by majority vote of those present at any meeting at which a quorum is present alter, amend or repeal these bylaws, or enact such other bylaws as in their judgment may be advisable for the regulation of the conduct of the affairs of the Corporation.

9.14 Forum for Adjudication of Certain Disputes .

(a) Unless the Corporation consents in writing to the selection of an alternative forum (an “ Alternative Forum Consent ”), the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation or any director, officer, stockholder, employee or agent of the Corporation arising out of or relating to any provision of the DGCL or the Corporation’s certificate of incorporation or bylaws, or (iv) any action asserting a claim against the Corporation or any director, officer, stockholder, employee or agent of the Corporation governed by the internal affairs doctrine of the State of Delaware; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein. Failure to enforce the foregoing provisions would cause the Corporation irreparable harm and the Corporation shall be entitled to equitable relief, including injunctive relief and specific

performance, to enforce the foregoing provisions. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 9.14 of Article IX. The existence of any prior Alternative Forum Consent shall not act as a waiver of the Corporation ’ s ongoing consent right as set forth above in this Section 9.14 of Article IX with respect to any current or future actions or claims.

(b) If any action the subject matter of which is within the scope of paragraph (a) of this Section 9.14 is filed in a court other than a court located within the State of Delaware (a “ Foreign Action ”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce paragraph (a) above (an “ Enforcement Action ”) and (ii) having service of process made upon such stockholder in any such Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AS ADOPTED PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Robert B. Aiken, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Essendant 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;

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: July 23, 2015		/s/ Robert B. Aiken
		Robert B. Aiken
		President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

AS ADOPTED PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Todd A. Shelton, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Essendant 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;

(a)

(b)

(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)

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: July 23, 2015		/s/ Todd A. Shelton
		Todd A. Shelton
		Senior Vice President and Chief Financial Officer

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 Quarterly Report of Essendant Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Robert B. Aiken, President and Chief Executive Officer of the Company, and Todd A. Shelton, 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/ Robert B. Aiken

Robert B. Aiken

President and Chief Executive Officer

July 23, 2015

/s/ Todd A. Shelton

Todd A. Shelton

Senior Vice President and Chief Financial Officer

July 23, 2015