Exhibit 10.1

POLICY ON PHANTOM STOCK AND CERTAIN PREVIOUSLY EARNED

RETIREMENT BENEFITS FOR DIRECTORS

(Effective January 1, 2009)

Phantom Stock

Pre-2005 Annual Phantom Stock Award

On January 1st of each calendar year before 2005 each non-employee director (a
“Director”) on the Board of Directors (the “Board”) of R.R. Donnelley & Sons
Company (the “Company”) shall have credited to a phantom stock account
established on the Company’s books and records on behalf of such Director the
number of shares of phantom stock (carried to four decimal places) determined by
dividing 65% of the annual retainer fee payable to Directors for such year by
the fair market value of a share of common stock of the Company (“Common Stock”)
on the most recent trading day of the Common Stock occurring before such
January 1st; provided that a Director may have elected as set forth in and
pursuant to the R.R. Donnelley & Sons Company 2004 Performance Incentive Plan
(the “Incentive Plan”) to receive in lieu of crediting all or some of such
shares of phantom stock to a phantom stock account an option to purchase shares
of Common Stock under the Incentive Plan.

Dividends

On each regular quarterly cash dividend payment date in respect of a share of
Common Stock, a Director’s phantom stock account shall be credited with a number
of shares of phantom stock (carried to four decimal places) determined by
dividing (i) the product of the number of shares of phantom stock credited to
the Director’s phantom stock account as of the record date for such dividend
multiplied by the per share amount of the dividend by (ii) the fair market value
of a share of Common Stock on the dividend payment date.

Stock Splits, Capitalization Events, etc.

In the event of any stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than a regular quarterly cash
dividend, the number and class of phantom securities credited to a Director’s
phantom stock account shall be appropriately adjusted by a committee designated
by the Board. If any such adjustment would result in a fractional security being
available under the Plan, such fractional security shall be disregarded and no
payment shall be made.

Conversion to Cash Account

In connection with a Director’s termination of service on the Board, the value
of the Director’s phantom stock account shall be converted to cash (determined
by multiplying the number of shares of phantom stock in such account by the fair
market value of a share of Common Stock on the effective date of such
termination of service) as of the effective date of such Director’s termination
of service, unless the Director elects to receive his or

 

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her phantom stock account in a single payment of whole shares of R.R.
Donnelley & Sons common stock and cash in an amount equal to any fractional
share. Each account to be paid out in installments shall be credited quarterly
(beginning on the last day of the calendar quarter in which the Director
terminates his or her service on the Board) with an amount of interest on the
balance (including interest previously credited) at an annual rate equal to the
yield on the last business day of the calendar quarter in which such termination
of service occurred of the Five-Year Treasury Constant Maturity until such
account is paid in full.

If, as a result of any merger, consolidation, exchange, reclassification, sale
of assets or similar transaction or event, the Common Stock ceases, or as a
result of a transaction or event is intended to cease, to be listed for trading
on the New York Stock Exchange and is not otherwise publicly traded, the value
of each Director’s or former Director’s phantom stock account (such value
determined by multiplying the number of shares of phantom stock credited to the
account by the fair market value of the Common Stock on the effective date of
such transaction or event) shall be converted to a cash amount and credited to a
book-entry cash account. Such cash account shall be credited quarterly
(beginning on the last day of the calendar quarter in which the transaction or
event occurred) with an amount of interest on the balance (including interest
previously credited) at an annual rate equal to the yield on the last business
day of the calendar quarter in which the transaction or event occurred of the
Five-Year Treasury Constant Maturity.

Payments

Default Payment Method

Unless a Director has made an election described under the heading “Lump Sum
Payment Elections” below, the Director’s account shall be paid in ten
(10) annual cash installments beginning on the first day of the calendar quarter
beginning after the later of (i) the calendar quarter in which the Director
attains age 65 and (ii) the calendar quarter in which the Director terminates
service on the Board. Each installment shall be determined by dividing the value
of the Director’s account as of the date of the installment payment by the
number of annual installments remaining to be made, except that the last
installment shall be equal to the balance of the account.

Lump Sum Payment Elections

A Director who served on the Board at any time after December 31, 2004 and
before January 1, 2009 may have elected in writing at any time during such time
period to receive his or her account in a single lump sum within 90 days after
the Director terminated service on the Board either in cash (the value of a
share of phantom stock shall be equal to the fair market value of a share of
Common Stock on the date the Director terminates service on the Board) or in
shares of R.R. Donnelley & Sons Company common stock, provided that such
Director made such an election in a year before the Director terminates service
on the Board.

 

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Death or Disability

If on the date of a Director’s death or the occurrence of a Director’s
disability (within the meaning of section 409A of the Internal Revenue Code of
1986, as amended (the “Code”)), amounts remain to be paid under the Director’s
account, then 100% of the Director’s account shall be paid as soon as
practicable, but no later than ninety (90) days after such date. If the
Director’s account had not yet been converted to cash, then the shares of
phantom stock shall be converted to cash, with the value of each such share of
phantom stock equal to the fair market value of a share of Common Stock on the
date of the Director’s death or the determination of the Director’s disability.
In the case of the Director’s disability, the payment shall be to the Director
and in the case of the Director’s death, to his or her beneficiary or
beneficiaries. If no beneficiary has been designated by a Director for this
purpose, the Director’s beneficiary shall be his or her spouse, or if the
Director is not married on the date of his or her death, the Director’s estate.

Retirement Benefits

Retirement Benefits have not been available to any Director whose service on the
Board began on or after November 18, 1999. Retirement benefits for Directors
whose service began before November 18, 1999 shall determined pursuant to the
“Policy on Retirement Benefits, Phantom Stock Grants and Stock Options for
Directors (Effective January 1, 1997, as revised as of September 24,
1998; November 18, 1999; March 23, 2000; January 1, 2001) (the “Former Policy”).

Miscellaneous

A non-employer director is a director who is not currently an employee of the
Company or any of its subsidiaries and who never has been an employee of the
Company or any of its current or former subsidiaries. The Policy shall be
governed by and construed in accordance with the internal laws of the State of
Delaware without regard to the principles of conflicts of law thereof.

To be entitled to receive any benefits or payments under this Policy, a Director
must agree to consult with and render advice to the Company as requested at
times that do not unreasonably interfere with such Director’s personal or other
business activities. Conduct detrimental to the Company, as determined by the
Board, shall result in forfeiture of all benefits of, or payments to, such
Director under this Policy.

A Director’s rights to receive benefits or payments under this Policy shall be
no greater than the rights of any unsecured general creditor of the Company.

A Director shall not have any rights as a stockholder of the Company with
respect to any shares of phantom stock.

Benefits and payments described herein may not be sold, transferred, assigned,
pledged, hypothecated, encumbered or otherwise disposed of (whether by operation
of law or otherwise) or be subject to execution, attachment or similar process.

The fair market value of a share of Common Stock on any given date shall mean
its closing market price as reported in the New York Stock Exchange-Composite
Transactions in The Wall Street Journal for such date, or if there is no such
sale on that date, then on the last preceding date

 

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on which a sale was reported. If shares of Common Stock are not traded on the
New York Stock Exchange as of the date such fair market value is to be
determined, fair market value of a share of Common Stock shall be its closing
sale price on the primary exchange with which the Common Stock is listed and
traded on such date, or if there is no such sale on that date, then on the last
preceding date on which such a sale was reported. If the Common Stock is not
listed on any national securities exchange but is quoted in the National Market
System of the National Association of Securities Dealers Automated Quotation
System, the fair market value of a share of Common Stock shall be the closing
transaction price reported on such date, or if there is no transaction on that
date, then on the last preceding date on which a transaction was reported. If
the Common Stock is not listed on a national securities exchange or quoted in
the National Market System of the National Association of Securities Dealers
Automated Quotation System, then the fair market value of a share of Common
Stock shall be the amount determined by the committee of the Board based upon a
good faith attempt to value the Common Stock accurately.

This Policy and all determinations made and actions taken pursuant hereto, to
the extent not governed by the Code or the laws of the United States, shall be
governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflict of laws. The Policy is
intended to comply with section 409A of the Code and shall be interpreted
consistent with such intention.

 

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