Suzanne Bettman Employment Agreement



 Exhibit 10.26 
 MOORE WALLACE INCORPORATED 
 Moore Wallace Executive Offices 
 1200 Lakeside Drive 
 Bannockburn, Illinois
60015 
 January 27, 2004 
 Via Fax:
773-871-7066 
 Suzanne S. Bettman 
 521 W. Stratford Place #2

 Chicago, Illinois 60657 
 Dear Sue: 
 On behalf of Moore Wallace Incorporated (the “Company”), we are all extremely pleased that you have agreed to serve as Senior Vice
President, General Counsel & Assistant Corporate Secretary of the Company, effective as of March 1, 2004, 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. Upon the closing of the transaction contemplated by the Combination Agreement,
dated as of November 8, 2003 (the “Combination Agreement”) between R.R. Donnelley & Sons Company and the Company (the “Closing Date”), you shall become Senior Vice President, General Counsel and
Assistant Corporate Secretary of R.R. Donnelley & Sons Company. 
 We and you hereby acknowledge that your employment with the
Company constitutes “at-will” employment and that either party may terminate your employment at any time, upon written notice of termination within a reasonable period of time before the effective date of the termination. Your office will
be located in the Chicago metropolitan area. You will report to an Executive Vice President of Administration. You will also receive such office, staffing and other assistance as is commensurate with that received by other senior executive officers
at your level in the Company. 
 I. Compensation 
 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 signing bonus of U.S. $50,000 within five business days of your execution of this Agreement. 
 (ii) The Company will pay you a base salary (“Base Salary”) at the rate of U.S. $300,000 per year. This Base Salary will
be paid in accordance with the normal payroll practices of the Company. 
 (iii) In respect of each calendar year of the
Company (starting with the 2004 calendar year), you will be eligible to receive an annual bonus (the “Annual Bonus”) in accordance with the Company’s annual incentive compensation plan with a target bonus opportunity of one
hundred percent (100%) of Base Salary; provided, however, that the target bonus opportunity with respect to 2004 shall be guaranteed for calendar year 2004, without pro-ration in consideration of you foregoing your bonus at your
current employer. The performance objectives for your Annual Bonus with respect to each calendar year will be determined by the board of directors of the Company (the “Board”) or any designated committee thereof. 
 (iv) At the first meeting of the Board of Directors following the Closing Date, management will recommend that you receive an incentive
equity award of an amount consistent with officers of your level in the Company. Management will apprise the Board of Directors or its appropriate committee that you hold options to purchase shares of your current employer’s stock and that
those options will expire upon your termination of employment with your current employer. Management 








 
will urge that this special circumstance be taken into account when awarding your initial incentive equity award. It is anticipated that in addition to this
initial incentive equity award that you will be considered for additional awards, with your peers in the Company. 
 (v) In
addition, you will be immediately eligible to participate in any nonqualified pension plans and a Supplemental Executive Retirement Plan in which and to the extent that all executive officers of your level at the Company are eligible to participate
following the combination of the Company and R.R. Donnelley & Sons Company, and you will be eligible for medical, hospital, dental, vision, life and accidental death and dismemberment insurance in accordance with the Company policies.

 (vi) You will be eligible for four (4) weeks vacation annually, 
 (vii) You will receive a car allowance of $1,000 monthly. 
 II. Severance  
 If (i) the Company terminates your employment without Cause, as defined
in Annex A, or (ii) after the Closing Date, you terminate your employment for Good Reason, as defined in Annex A, the Company will pay you an amount equal to one (1) 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 twelve (12) 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, which you were eligible to receive immediately prior to such termination, for a period of twelve (12) months following the Termination Date. 
 “Annualized Total Compensation” means Base Salary plus Annual Bonus (at the target level) for one year at the rate in effect immediately
before the Termination Date. 
 Upon any termination by the Company without Cause or termination by you for Good Reason, in either case,
after the Closing Date, any outstanding stock options, grants, restricted stock awards or other equity grants issued to you from time to time, will vest 100% immediately as of the Termination Date. In the event of any termination of your employment,
you agree to resign from such offices and directorships, if any, of the Company and its subsidiaries and affiliates that you may hold from time to time. 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 or a director of the Company
and its affiliates shall survive any termination of your employment. 
 III. General 
 The Company will provide you with the same indemnification provisions and Directors and Officers insurance as that which is provided to other senior
executives of the Company and you will be entitled to receive a gross-up payment as provided in Annex B. 
 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) from the date hereof until your first day of employment with the Company, during your employment and for twelve (12) months after the termination of your employment, you will not
(a) accept a position with, or provide material services to, an entity that competes with a portion of the Company’s and/or R.R. Donnelley & Sons Company’s business representing more than $25 million of such company’s
revenues on the date of your departure (without respect to whether the transaction contemplated between the Company and R.R. Donnelley & Sons Company is completed), (b) solicit or hire, 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 EVP Business & Legal Affairs or such other officer as the Company may 








 
designate from time to time at his or her office 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. 
 You represent and agree that you have not, as of the date of this agreement, and will not disclose or discuss the terms, provisions or existence of this
letter with anyone (other than your husband), including your current employer upon giving them notice of your decision to leave their employment, without prior written consent by the Company’s Executive Vice President of Business &
Legal Affairs. We have agreed that the announcement of your employment will await a broader announcement that is intended to be made on or about the Closing Date. 
 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 Chicago, Illinois, 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 Illinois. 
 Effective as of
the Closing Date, all references herein to the “Company” shall be deemed to be references to R.R. Donnelley & Sons Company and its subsidiaries and affiliates. 
 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. 
 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 Theodore J. Theophilos, Executive Vice President, Moore Wallace
Incorporated, 1200 Lakeside Drive, Bannockburn, Illinois 60015. 
  

			
	MOORE WALLACE INCORPORATED
		
	By:	 	 /s/ Theodore J. Theophilos

	Name:	 	Theodore J. Theophilos
	Title:	 	Executive Vice President


 Accepted and Agreed as of this day      of January, 2004 
  

	
	 /s/ Suzanne S. Bettman

	 Suzanne S. Bettman









 Annex A 
 Definitions 
 a. “Cause” means (i) the willful and continued failure of
employee to perform substantially his duties with the Company (other than any such failure resulting from employee’s incapacity due to physical or mental illness or any such failure subsequent to employee being delivered a notice of termination
without Cause by the Company) after a written demand for substantial performance is delivered to employee by the Chief Executive Officer or the Board that specifically identifies the manner in which the Chief Executive Officer or the Board believes
that employee has not substantially performed employee’s duties, (ii) the willful engaging by employee 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 employee’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 employee shall be considered “willful” unless done or omitted to be done by employee in bad faith and without reasonable belief that
employee’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 employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Company shall provide the employee a
reasonable amount of time, after a notice and demand for substantial performance is delivered to the employee, to cure any such failure to perform, and if such failure is so cured within a reasonable time thereafter, such failure shall not be deemed
to have occurred. 
 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; 
 (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”); 
 (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. In addition, notwithstanding the foregoing, the consummation of (or any other action pursuant to the consummation of) the transaction contemplated by the Combination Agreement shall not be
a Change in Control. 
 c. “Good Reason” means, without employee’s express written consent, the occurrence of any of
the following events after the Closing Date: 
 1. a change in the employee’s duties or responsibilities (including reporting responsibilities) that
taken as a whole represents a material and adverse diminution of the employee’s duties, responsibilities or status with the Company (other than a temporary change that results from or relates to the incapacitation of the employee due to
physical or mental illness); 
 2. a reduction by the Company in employee’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; 
 3. any requirement of the Company
that employee’s office be more than seventy-five (75) miles from Chicago, Illinois; and 
 4. any material breach of the Agreement by the Company.








 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 employee. Employee’s right to terminate employment for Good Reason shall not be affected by employee’s incapacities due to mental or
physical illness and employee’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 employee must provide notice of termination of
employment within ninety (90) days following employee’s knowledge of an event constituting Good Reason or such event shall not constitute Good Reason under this Agreement. 
 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 employee (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 employee 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 employee an additional payment (a “Gross-Up Payment”) in an amount such that after payment by employee of all taxes (including any Excise
Tax) imposed upon the Gross-Up Payment, employee 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 employee 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 employee 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 employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to
employee without giving rise to the Excise Tax (the “Safe Harbor Cap”), and no Gross-Up Payment shall be made to employee. 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 employee. 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 employee within fifteen (15) business days
of the receipt of notice from the Company or the employee 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, employee 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
employee, it shall furnish employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on employee’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 employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon
the Company and employee, 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 employee 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 employee. In the event the amount of the Gross-up Payment exceeds the amount necessary to reimburse the employee 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 employee (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. Employee 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 employee 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 employee 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.