Employment Agreement



 Exhibit 10.26 
  
 Moore Corporation Limited 
 c/o Moore Executive Offices 
 One Canterbury Green 6th Floor 
 Stamford, CT 06901 
  
 February 14, 2003 
  
 Theodore J. Theophilos 
 [ADDRESS] 

 
 Dear Ted: 
  
 On behalf of Moore Corporation Limited (the “Company”), we are all extremely pleased that you have agreed
to serve as Executive Vice President - Business and Legal Affairs of the Company, effective as soon as practicable, but not later than March 17, 2003, in accordance with the provisions of this letter agreement (this “Agreement”),
which, along with any employment and other policies applicable to employees of the Company and its subsidiaries from time to time during the term of your employment, governs the terms of your employment. 
  
 We and you hereby acknowledge that your employment with the Company
constitutes “at-will” employment and that either party may terminate this Agreement at any time, upon written notice of termination within a reasonable period of time before the effective date of the termination. With respect to the terms
of your employment with the Company, you will have the customary duties, responsibilities and authorities of a executive vice president for business and legal affairs at a corporation of a similar size and nature, including being primarily
responsible for the global legal matters pertaining to the Company, the board of directors of the Company (the “Board”), all committees of the Board and all subsidiaries and affiliates of the Company. You will report to the chief
executive officer of the Company. 
  
 I. Compensation 
  
 With respect to compensation for your services as Executive Vice President -
Business and Legal Affairs of the Company, you will receive the following compensation and benefits, from which the Company may withhold any amounts required by applicable law: 
  
 (i) The Company will pay you a base salary (“Base Salary”) at the rate of U.S. $400,000 per
year. This Base Salary will be paid in accordance with the normal payroll practices of the Company. 
  









 (ii) The Company will pay you an annual bonus (the “Annual Bonus”) of
100% of your Base Salary in respect of each fiscal year of the Company in accordance with the Company’s annual incentive compensation plan if the Company achieves the performance objectives set forth by the Board (the “Board”)
(or any designated committee thereof) from time to time. The Annual Bonus shall be approved by the Board and shall be paid on an all-or-nothing basis. 
  
 (iii) You will be eligible to participate in any additional bonus plans or programs established from time to time by the Board (or any
designated committee thereof) if the Board (or any designated committee thereof) so determines, which may be based upon the Company’s achievement of designated performance objectives or other factors set forth by the Board (or any designated
committee thereof) from time to time. 
  
 (iv) In
addition, you will be immediately eligible to participate in any nonqualified pension plans (with no waiting period) and qualified plans, if any (subject to applicable waiting periods), in which the senior executive officers of the Company
customarily participate, and, in any event, you will be eligible (a) to participate in the Company’s Supplemental Executive Retirement Plan and Supplemental Executive Health Plan, (b) for medical, hospital, dental, vision, life and accidental
death and dismemberment insurance in customary amounts, and (c) to receive customary financial planning services. 
  
 (v) You will be eligible for four (4) weeks vacation annually. 
  
 (vi) You will be eligible for a car allowance of $1,400 monthly. 
  
 II. Severance; Change in Control 
  
 If (i) the Company terminates your employment as Executive Vice President-
Business and Legal Affairs without Cause, as defined in Annex A, or (ii) you terminate your employment for Good Reason, as defined in Annex A, the Company will pay you an amount equal to one and one-half (1 -1/2) times your Annualized Total
Compensation (as defined below), subject to the execution by you of a customary release, which amount shall be payable in equal installments over the eighteen (18) month period following the date your employment with the Company is terminated (the
“Termination Date”). The Company will also provide to you a continuation of all benefits, including automobile and other related benefits, if any, which you were eligible to receive immediately prior to such termination, for a
period of eighteen (18) months following the Termination Date. 
  
 “Annualized Total Compensation” means Base Salary plus Annual Bonus (as if all necessary targets and objectives were met) for one year at the rate in effect immediately before the Termination Date. For purposes of
calculating Annualized Total Compensation in connection with this Section II, Annual Bonus shall be computed at a rate no less than the Annual Bonus rate set forth in Section I(ii) hereof. 
  

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 If the Company terminates your employment without Cause, or if you terminate your employment for Good
Reason, following a Change in Control, as defined in Annex A, such amount will be increased to three times rather than one and one-half times Annualized Total Compensation and, if applicable, you will be entitled to receive Gross-Up Payments as
described in Annex B. Any termination by the Company without Cause or termination by you for Good Reason, which takes place within six (6) months prior to a Change in Control, shall be, presumptively, a termination following a Change in Control.
Upon any termination by the Company without Cause or termination by you for Good Reason, all outstanding stock options, grants, restricted stock awards or other equity grants issued to you will vest 100% immediately either as of the Termination Date
(in the case of a termination by the Company without Cause or a termination by you for Good Reason) or prior to the Change in Control becoming effective (solely in the event that upon or in connection with such Change in Control your employment with
the Company is terminated without Cause or you terminate your employment for Good Reason), as applicable. The payments under this paragraph are in lieu of any notice requirements of any Canadian federal or provincial law. 
  
 In the event of any termination of your employment, you agree to resign as an
officer and director of the Company and its subsidiaries and affiliates. Your rights of indemnification under the Company’s and its subsidiaries’ and affiliates’ organizational documents, any plan or agreement at law or otherwise and
your rights thereunder to director’s and officer’s liability insurance coverage for, in both cases, actions as an officer and director of the Company and its affiliates shall survive any termination of your employment. 
  
 In addition, effective immediately, you will be granted a restricted stock
award of 75,000 common shares, no par value, of the Company (“Common Shares”) to be issued under the Company’s stock option plan or long term incentive plan or in accordance with Canadian law or regulation (the “Initial
Grant”). All restricted Common Shares in the Initial Grant shall vest 25% per year over four (4) years beginning on the first anniversary of the date the restricted stock award is granted and then on each succeeding anniversary of the date
the restricted stock award is granted provided you are then employed. Each year, you will also be considered by the Board or the applicable committee thereof to receive additional incentive compensation under the Company’s incentive plans as
may be in effect from time to time after the date of this Agreement. 
  
 III.
General 
  
 You agree (i) that at all times both
during and after your employment, you will respect the confidentiality of Company’s and its subsidiaries’ and affiliates’ confidential information and will not disparage the Company and its subsidiaries and affiliates or their
officers, directors or employees, and (ii) during your employment and for eighteen (18) months thereafter, you will not (a) accept a position with, or provide material services to, an entity that competes with a portion of the Company’s
business representing more than $25 million of the Company’s revenues on the date of your departure, (b) solicit or hire, 

  

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or assist others in the solicitation or hiring of, the Company’s employees or (c) interfere with the Company’s business relationships with any
material customers or suppliers. 
  
 All notices or communications
under this Agreement must be in writing, addressed; (i) if to the Company, to the attention of the Chief Executive Officer at the principal executive offices of the Company from time to time and (ii) if to you, at your address first written above
(or to any other addresses as either party may designate in a notice duly delivered as described in this paragraph). Any notice or communication shall be delivered by facsimile (with proof of transmission), by hand or by courier (with proof of
delivery). Notices and communications may also be sent by certified or registered mail, return receipt requested, postage prepaid, addressed as above. Notice shall be effective upon the actual receipt of notice by the recipient thereof. 

 
 Any controversy or claim arising out of or relating to this Agreement or
the breach of this Agreement that cannot be resolved by you and the Company, including any dispute as to the calculation of any payments hereunder, and the terms of this Agreement, shall be determined by a single arbitrator in New York, New York, in
accordance with the rules of the American Arbitration Association. The decision of the arbitrator shall be final and binding and may be entered in any court of competent jurisdiction. The arbitrator may award the party he determines has prevailed in
the arbitration any legal fees and other fees and expenses that may be incurred in respect of enforcing its respective rights under this Agreement. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New
York. 
  
 This Agreement sets forth the entire agreement between
us with respect to the matters set forth herein, and fully supersedes any prior agreements or understandings between us. This Agreement may be executed in counterparts. This Agreement may not be modified or terminated orally. 
  

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 If the foregoing terms and conditions are acceptable and agreed to by you, please sign on the line
provided below to signify such acceptance and agreement and return the executed copy to the Chief Executive Officer of the Company, One Canterbury Green, Stamford, Connecticut 06901. 
  

					
	 MOORE CORPORATION LIMITED

		
	 By:
	 	 /s/ Mark A. Angelson

	 	 	 Name:
	 	 Mark A. Angelson

	 	 	 Title:
	 	 CEO



  
 Accepted and Agreed as of this
14th day of February, 2003 
  

	
	
	 /s/ Theodore J. Theophilos

	 Theodore J. Theophilos


  

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 Annex A 
  
 Definitions 
  
 a. “Cause” means (i) the willful and continued failure of Executive to perform substantially his duties with the Company (other than any
such failure resulting from Executive’s incapacity due to physical or mental illness or any such failure subsequent to Executive being delivered a notice of termination without Cause by the Company or delivering a notice of termination for Good
Reason to the Company) after a written demand for substantial performance is delivered to Executive by the Chief Executive Officer or the Board that specifically identifies the manner in which the Chief Executive Officer or the Board believes that
Executive has not substantially performed Executive’s duties, (ii) the willful engaging by Executive in conduct which is demonstrably and materially injurious (monetarily or otherwise) to the business, reputation, character or community
standing of the Company or its subsidiaries and affiliates, (iii) conviction of or the pleading of nolo contendere with regard to, a felony or any crime involving fraud, dishonesty or moral turpitude, or (iv) refusal or failure to attempt in
good faith to follow the written direction of the Chief Executive Officer or the Board (provided that such written direction is consistent with Executive’s duty and station) promptly upon receipt of such written direction. A termination for
Cause after a Change in Control shall be based only on events occurring after such Change in Control; provided, however, the foregoing limitation shall not apply to an event constituting Cause which was not discovered by the Company prior to
a Change in Control. For purpose of this paragraph (a), no act or failure to act by Executive shall be considered “willful” unless done or omitted to be done by Executive in bad faith and without reasonable belief that Executive’s
action or omission was in the best interests of the Company or its subsidiaries and affiliates. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of the Company’s
principal outside counsel shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company. 
  

b. “Change in Control” means the occurrence of any one of the following events: 
  
 (i) individuals who, on the date of this Agreement,
constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date of this Agreement, whose election or
nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest
with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; 
  

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 Annex A 
  

 (ii) any “person” (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the “Company Voting Securities”);
provided, however, that the event described in this paragraph (ii) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by the Company or any subsidiary, (B) by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any subsidiary, (C) by any underwriter temporarily holding securities pursuant to an offering of such securities, or (D) pursuant to a Non-Qualifying Transaction (as defined in paragraph (iii));

  
 (iii) the consummation of an arrangement,
amalgamation, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its Subsidiaries that requires the approval of the Company’s stockholders, whether for such transaction or
the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination: (A) more than 50% of the total voting power of (x) the corporation resulting from such Business
Combination (the “Surviving Corporation”), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving
Corporation (the “Parent Corporation”), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately
prior to the Business Combination, (B) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of
35% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) other than persons set forth in (A) through (D) of
paragraph (ii) and (C) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were Incumbent
Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to
be a “Non-Qualifying Transaction”); 
  

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 Annex A 
  

 (iv) the closing of a sale of all or substantially all of the Company’s assets,
other than to an entity or in a manner where the voting securities immediately prior to such sale represent directly or indirectly after such sale at least 50% of the voting securities of the entity acquiring such assets in approximately the same
proportion as prior to such sale; or 
  
 (v) the
stockholders of the Company approve a plan of complete liquidation or dissolution of the Company. 
  
 Notwithstanding the foregoing, a Change in Control of the Company shall not be deemed to occur solely because any person acquires beneficial ownership of
more than 35% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding; provided, that if after such acquisition by the Company such
person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in Control of the Company shall then occur. 
  
 c. “Good Reason” means, without Executive’s express
written consent, the occurrence of any of the following events: 
  
 (i) a change in the Executive’s duties or responsibilities (including reporting responsibilities) that taken as a whole represents a material and adverse diminution of the Executive’s duties,
responsibilities or status with the Company (other than a temporary change that results from or relates to the incapacitation of the Executive due to physical or mental illness); 
  
 (ii) a reduction by the Company in Executive’s rate of annual base salary or annual target bonus
opportunity (including any material and adverse change in the formula for such annual bonus target) as the same may be increased from time to time; 
  
 (iii) any requirement of the Company that Executive’s office be more than seventy-five (75) miles from Bannockburn, Illinois; or

  
 (iv) any material breach of the Agreement by
the Company. 
  
 In addition, upon a change in the Company’s
chief executive officer, the Executive and the Company’s new chief executive officer shall endeavor reasonably and in good faith to agree mutually upon the Executive’s continued role with the Company. If the Executive and the
Company’s new chief executive officer cannot mutually agree upon the Executive’s continued role with the Company and the Company’s chief executive officer on the date of this Agreement no longer has a continuing role with the Company
as a senior executive officer or the Company’s non-executive chairman, such occurrence shall constitute “Good Reason”. 
  

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 Annex A 
  

 Notwithstanding the foregoing, a Good Reason event shall not be deemed to have occurred if the
Company cures such action, failure or breach within ten (10) days after receipt of notice thereof given by Executive. Executive’s right to terminate employment for Good Reason shall not be affected by Executive’s incapacities due to mental
or physical illness and Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason; provided, however, that Executive must provide notice of
termination of employment within ninety (90) days following Executive’s knowledge of an event constituting Good Reason or such event shall not constitute Good Reason under this Agreement. 
  

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 Annex B 
  
 Gross-Up Payments 
  
 (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (or
any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of Executive (whether
pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Annex B) (the “Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Company shall pay to Executive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any Excise Tax)
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. For purposes of determining the amount of the Gross-up Payment, the Executive shall be deemed to (i) pay
federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-up Payment is to be made, and (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the
calendar year in which the Gross-up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. Notwithstanding the foregoing provisions of this Annex B, if it
shall be determined that Executive is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated
as “parachute payments” under Section 280G of the Code, then the amounts payable to Executive under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Executive without giving rise to the
Excise Tax (the “Safe Harbor Cap”), and no Gross-Up Payment shall be made to Executive. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section I(a)(ii), unless an
alternative method of reduction is elected by Executive. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable
hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. 
  
 (b) Subject to the provisions of paragraph (a) of this Annex B, all determinations required to be made under this Annex B,
including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public
accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and 

  

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 Annex B 
  

 
Executive within fifteen (15) business days of the receipt of notice from the Company or the Executive that there has been a Payment, or such earlier time as
is requested by the Company (collectively, the “Determination”). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive may appoint
another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely
by the Company and the Company shall enter into any agreement reasonably requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-up Payment under this Annex B with respect to any Payments shall be
made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion to such effect, and to the effect that failure to report the
Excise Tax, if any, on Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap,
it shall furnish Executive with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Executive, except as provided below. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”) or Gross-up Payments are made by the Company which should not
have been made (“Overpayment”), consistent with the calculations required to be made hereunder. In the event that the Executive thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Executive.
In the event the amount of the Gross-up Payment exceeds the amount necessary to reimburse the Executive for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with
interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Executive (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the
Company. Executive shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax
and the Executive shall permit the Company to control issues related to the Excise Tax (at its expense) to permit a representative of the Company to accompany the Executive to any conference with any taxing authority and to promptly deliver to the
Company copies of any written communications and summaries of any verbal communications with any taxing authority regarding the Excise Tax. 
  

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 [Execution Copy] 

 
 Moore Corporation Limited 
 c/o Moore Executive Offices 
 One
Canterbury Green 6th Floor 
 Stamford, CT 06901 
  
 February 14,
2003 
  
 Theodore J. Theophilos 
 [ADDRESS] 
  
 Dear Ted: 
  
 This letter is to
confirm our agreement with respect to your relocation from Hillsborough, California to the Chicago, Illinois area and other items in connection with your employment. 
  

	 	1.	The Company shall make arrangements, at no cost to you, for a reputable third-party to purchase, on May 30, 2003, from you your home at 510 Eucalyptus Avenue, Hillsborough,
California for the lesser of (i) $4.5 million, or (ii) 110% of a recent appraised value of your home. Such arrangements shall include an understanding that, in the event you enter into an agreement to sell your home independently of such
arrangements prior to May 30, 2003, the third-party arrangement made by the Company shall terminate. 

  

	 	2.	If you sell your home at the above address prior to May 31, 2003, the Company shall pay all sales commissions, closing costs and related closing expenses. 


 

	 	3.	If your home at the above address is purchased pursuant to paragraph 1, your family may remain in that home without any charge to you for a period not to exceed 90 days after such
purchase; provided, that you shall use reasonable efforts to purchase and complete renovations of and move into a home in the Chicago, Illinois areas as soon as practicable after the end of the school year. 

  

	 	4.	 The Company shall pay all moving and transportation expenses for your family and household goods, including the airfare for your family to relocate to the Chicago,
Illinois area. The Company shall also pay for two 



  










 Annex B 
  


	 	 
round-trip tickets for your wife to look for a home in the Chicago, Illinois area. 


  

	 	5.	You will be eligible for special bonus in the amount of 100% of your base salary if within one calendar year following the closing of the Company’s merger with Wallace Computer
Services, Inc., the Company meets or exceeds the target of cost savings set forth in a resolution of the Company’s board of directors. 

  

	 	6.	In addition to the benefits provided in Section I(iv) of your Employment Agreement, dated the date hereof (your “Employment Agreement”), you shall be entitled to
health insurance coverage, if any, available to officers at comparable levels in the Company upon retirement, with any years of service requirement deemed fulfilled. Furthermore, upon termination of your employment with the Company (other than for
Cause), all payments theretofore made or accrued by the Company in respect of your participation in the Supplemental Employee Retirement Plan shall vest. 

  
 Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in your Employment
Agreement. 
  

			
	 MOORE CORPORATION LIMITED

		
	 By:
	 	 /s/ M.A. Angelson

	 	 	 Name: M.A. Angelson

	 	 	 Title: CEO



  

			
	Accepted and Agreed as of this 14th day of February, 2003
	
	 /s/ Theodore J. Theophilos

	 Theodore J. Theophilos


  

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