Document:

Stock Option Agreement

  
 Exhibit 10.17

  
 R. R. DONNELLEY & SONS COMPANY 
 STOCK OPTION AGREEMENT 
 (2004 PIP)

  
 R. R. DONNELLEY & SONS COMPANY, a Delaware corporation (herein called
the “Company”), acting pursuant to the provisions of its 2004 Performance Incentive Plan (herein called the “Plan”), hereby grants to [Name] (herein called “Optionee”), as of [Date] (herein called the
“Option Date”), an option (herein called the “Option”) to purchase from the Company [Number of options] shares of common stock of the Company, par value $1.25 per share (herein called “Common Stock”), at a price
of $XXX per share to be exercisable during the term set forth herein, but only upon the following terms and conditions: 
  

	1.	The Option may be exercised by Optionee, in whole or in part, from time to time, during the Option Term (as defined below) only in accordance with the following conditions and
limitations: 

  

	 	(a)	Except as provided in Sections 5 and 7 hereof, Optionee must, at any time the Option becomes exercisable and at any time the Option is exercised, have been continuously in the
employment of the Company since the date hereof, unless otherwise determined by the Committee administering the Plan (the “Committee”). Leave of absence for periods and purposes conforming to the personnel policies of the Company and
approved by the Committee shall not be deemed terminations of employment or interruptions of continuous service. 

  

	 	(b)	(i) Subject to Sections 5 and 7 hereof and subsection (ii) below, at any time on and after the dates indicated in column (1), Optionee may purchase such whole number of shares of
Common Stock which, when added to all shares theretofore purchased under the Option, does not exceed the total number of shares subject to the Option multiplied by the percentage indicated in column (2) opposite such respective date, as follows:

  

				
	 (1)
 Date

	  	(2)
Percentage of Total

	 
	 [Date]
	  	25	%
	 [Date]
	  	25	%
	 [Date]
	  	25	%
	 [Date]
	  	25	%

  
 (ii) Notwithstanding
the foregoing subsection (i), if while any portion of the Option is outstanding and unexercisable, a Change in Control (as defined in the Plan) occurs, then from and after the Acceleration Date (as defined in the Plan), the Option shall be
exercisable with respect to all of the shares of Common Stock subject to the Option. 
  

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 (iii) The Option awarded hereby shall expire on the first business day preceding the fifth anniversary of
the Option Date (the period beginning on the date hereof and ending on such date being the “Option Term”). 
  

	 	(c)	No fractional shares may be purchased at any time. 

  

	2.	Subject to the limitations herein set forth, the Option may be exercised by delivery of notice to the Company, in such form as the Company determines, specifying the number of
shares of Common Stock to be purchased and accompanied by payment in full of the option price (or arrangement made for such payment to the Company’s satisfaction) for the number of shares so purchased. No shares of Common Stock may be purchased
under the Option unless Optionee (or in the event of Optionee’s death, Optionee’s executor, administrator or personal representative or Optionee’s beneficiary designated pursuant to the Beneficiary Designation Form on file with the
Company (herein called a “Beneficiary”)) shall pay to the Company such amount as the Company is advised it is required under applicable federal, state, local or other tax laws to withhold and pay over to governmental taxing authorities by
reason of the purchase of shares of Common Stock pursuant to the Option. 

  
 The option price and any federal, state, local and other taxes required to be withheld in connection with such exercise may be paid (i) in cash, (ii) by delivering previously owned whole shares of Common Stock (which
Optionee has held for at least six months prior to the delivery of such shares or which Optionee purchased on the open market and for which Optionee has good title, free and clear of all liens and encumbrances) having a fair market value, determined
on the date of exercise, equal to the option price and such amount of tax, (iii) with respect to taxes only, by authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having a fair market value equal to
such amount of tax, (iv) in a combination of (i) - (iii), (v) in cash by a broker-dealer acceptable to the Company to whom Optionee has submitted an irrevocable notice of exercise or (vi) to the extent previously expressly authorized by the
Committee, via a cashless exercise arrangement with the Company; provided that the Committee shall have the sole discretion to disapprove of an election pursuant to clause (vi). Payment of the option price and such tax, or any part thereof, in
previously owned shares of Common Stock shall not be effective unless Optionee delivers one or more stock certificates (or otherwise delivers shares of Common Stock or evidence of ownership to the satisfaction of the Company) representing shares
having a fair market value on the date of exercise equal to or in excess of the option price and such tax, or applicable portion thereof, accompanied by such endorsements, signature guarantees or other documents or assurances as may reasonably be
required by the Company. For purposes of this Agreement, the fair market value of the Common Stock on a specified date shall be determined by reference to the average of the high and low transaction prices in trading of the Common Stock on such date
as reported in the New York Stock Exchange-Composite Transactions, or, if no such trading in the Common Stock occurred on such date, then on the next preceding date when such trading occurred. 
  

	3.	Upon exercise of the Option in whole or in part pursuant to Section 2 hereof, the Company shall deliver or cause to be delivered a certificate (or other evidence of ownership)
representing the number of shares specified against payment therefor and shall pay all original issue or transfer taxes and all other fees and expenses incident to such delivery. 

  

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	4.	Optionee shall be entitled to the privileges of ownership with respect to shares subject to the Option only with respect to shares purchased upon exercise of all or part of the
Option and as to which Optionee becomes a stockholder of record. 

  

	 	5.     (a)	If Optionee ceases to be employed by the Company by reason of death or disability as defined in the Company’s long-term disability policy as in effect at the time of the
Optionee’s disability (“Disability”), then from and after the date of death or such Disability the Option shall be exercisable by Optionee, the executor, administrator, personal representative or Beneficiary of Optionee during the
1-year period commencing on the date of Optionee’s death or Disability, but only during the Option Term, with respect to all of the shares of Common Stock subject to the Option. 

  

	 	(b)	If Optionee ceases to be employed by the Company by reason of retirement on or after age 65 then subject to the provisions of Section 7, from and after the effective date of such
cessation of employment the Option shall be exercisable by Optionee during the five-year period commencing on the effective date of such cessation of employment, but only during the Option Term, with respect to all of the shares of Common Stock
subject to the Option. 

  

	 	(c)	If Optionee ceases to be employed by the Company prior to age 65 by reason of a Qualifying Retirement at any time prior to the first anniversary of the Option Date, then subject to
the provisions of Section 7, from and after the effective date of such cessation of employment the Option shall be exercisable only to the extent it is exercisable on the effective date of such cessation of employment by Optionee during the
five-year period commencing on the effective date of such cessation of employment, but only during the Option Term. The portion of the Option which is not exercisable pursuant to the preceding sentence shall be cancelled as of the effective date of
Optionee’s cessation of employment. If Optionee ceases to be employed by the Company prior to age 65 by reason of a Qualifying Retirement at any time on or after the first anniversary of the Option Date, from and after the effective date of
such cessation of employment the Option shall be exercisable by Optionee during the five-year period commencing on the effective date of such cessation of employment, but only during the Option Term, with respect to all of the shares of Common Stock
subject to the Option. For purposes of this Agreement, the term “Qualifying Retirement” shall be defined as follows: 

  

	 	(i)	 Optionee is an active participant in a Company sponsored retirement benefit plan and is eligible to commence benefits thereunder at the time of cessation of
employment and the Company has not terminated Optionee’s employment for cause. An Optionee that is a participant in the Retirement Benefit Plan of R.R. Donnelley & Sons Company (the “ RR Donnelley Pension Plan”) is eligible to
commence benefits under the plan if Optionee is eligible to commence benefits under the traditional formula of the RR Donnelley Pension Plan, or would have been eligible to commence benefits under the traditional formula of the RR Donnelley Pension
Plan had Optionee been a participant in the traditional formula of the RR Donnelley Pension Plan during his/her service with R.R. 

  

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Donnelley & Sons Company and/or any of the entities described in Section 10 hereof at the time of cessation of employment; or

  

	 	(ii)	Optionee is not an active participant in a Company sponsored retirement benefit plan but Optionee would have been eligible to commence benefits under the traditional formula of the
RR Donnelley Pension Plan had Optionee been a participant in the traditional formula of the RR Donnelley Pension Plan during his/her service with R.R. Donnelley & Sons Company and/or any of the entities described in Section 10 hereof at the time
of cessation of employment; or 

  

	 	(iii)	the Committee has otherwise determined the cessation of employment to constitute a Qualifying Retirement. 

  

	 	(d)	If Optionee ceases to be employed by the Company for any reason other than death, retirement on or after age 65, a Qualifying Retirement or Disability, then from and after the
effective date of such cessation of employment the Option shall be exercisable by Optionee during the 90-day period commencing on the effective date of such cessation of employment, but only during the Option Term, to the extent it is exercisable on
the effective date of such cessation of employment. The portion of the Option which is not exercisable pursuant to the preceding sentence shall be cancelled as of the effective date of Optionee’s cessation of employment.

  

	6.	The Option may not be transferred by Optionee other than by will, the laws of descent and distribution or pursuant to the beneficiary designation procedures approved by the Company
or as otherwise set forth in an amendment to this Agreement. The Option is exercisable only by Optionee or Optionee’s guardian, personal representative or similar person or by a permitted transferee. Except as permitted by the foregoing, the
Option 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. Upon any attempt to so sell, transfer,
assign, pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and all rights hereunder shall immediately become null and void. 

  

	7.	In the event of the death of Optionee during the five-year period commencing on the effective date of Optionee’s cessation of employment by reason of retirement under Section
5(b) or (c), the Option may be exercised by the executor, administrator, personal representative or Beneficiary of Optionee during the one-year period commencing on the date of Optionee’s death, but only during the Option Term remaining, and
only to the extent Optionee was entitled to exercise the Option on the date of Optionee’s death. In the event of the death of Optionee (a) during the one-year period commencing on the effective date of Optionee’s cessation of employment by
reason of Disability, or (b) during the 90-day period commencing on the effective date of Optionee’s cessation of employment for reason other than retirement under Section 5(b) or (c), or Disability, the Option may be exercised by the executor,
administrator, personal representative or Beneficiary of Optionee during the Option Term remaining, and only to the extent Optionee was entitled to exercise the Option on the date of Optionee’s death. 

  

	8.	 Notwithstanding anything in the Plan to the contrary, in the event Optionee ceases to be employed by the Company for any reason other than death, retirement under
Section 5(b) or 

  

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(c), or Disability, during the 120-day period commencing on the effective date of Optionee’s cessation of employment (i) the Committee administering the
Plan may, in its sole discretion, cancel this Option, in whole or in part, whether or not vested, and (ii) Optionee shall repay to the Company, within five business days after receipt by Optionee of a written demand therefor, an amount in cash
determined by multiplying (i) the number of shares of Common Stock purchased by Optionee pursuant to the exercise of this Option at any time after the date which is six months prior to the effective date of such cessation of employment by (ii) the
difference between (A) the fair market value of a share of Common Stock on such date of exercise (based upon the average of the high and low prices of the Common Stock on the New York Stock Exchange on the date of exercise) and (B) the purchase
price per share of Common Stock set forth in the first paragraph of this Agreement. Such cancellation or repayment obligation shall be effective as of the date specified by the Committee. Any repayment obligation may be satisfied in Common Stock or
cash or a combination thereof (based upon the closing price of the Common Stock on the New York Stock Exchange on the day prior to the date of payment), and the Company may provide for any offset to any future payments owed by the Company or any
subsidiary to Optionee if necessary to satisfy the payment obligation. This Section 8 shall have no application following a Change in Control. 

  

	9.	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 cash dividend, the number and class of securities subject to the Option and the purchase price per security shall be appropriately adjusted by the
Committee without an increase in the aggregate purchase price, other than an increase resulting from rounding. If any adjustment would result in a fractional security being subject to the Option, the Company shall pay Optionee, in connection with
the first exercise of the Option, in whole or in part, occurring after such adjustment, an amount in cash determined by multiplying (i) the fraction of such security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A) the fair
market value of the Common Stock on the exercise date over (B) the exercise price of the Option; provided, however, that if the fair market value of such fractional security immediately after such adjustment is less than the fair market value
of one share of Common Stock immediately prior to such adjustment, such fractional security shall be disregarded and no payment shall be made. The decision of the Committee regarding the amount and timing of any adjustment pursuant to this Section 9
shall be final, binding and conclusive. 

  

	10.	For purposes of this Agreement, employment by the Company shall be deemed to include employment by a corporation which is a direct or indirect majority-owned subsidiary of the
Company, employment by any other entity designated by the Board of Directors of the Company or the Committee in which the Company has a direct or indirect equity interest and employment by any corporation which succeeds to the obligations of the
Company hereunder. 

  

	11.      (a)    	Optionee shall not, while employed by the Company and for a period of one year from the date of termination of Optionee’s employment with the Company for any reason, including
termination by the Company with or without cause, directly or indirectly, either on Optionee’s own behalf or on behalf of any other person, firm or entity, solicit or provide services which are the same as or similar to the services the Company
provided or offered while Optionee was employed by the Company to any customer or prospective customer of the Company (i) with whom Optionee had direct contact in the course of Optionee’s employment with the Company or about whom Optionee
learned confidential information as a result of his or her employment with the Company and (ii) that, at the time of, or at any time within the two-year period prior to, Optionee’s termination of employment, was a customer or prospective
customer whom the Company was actively soliciting. 

  

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	 	(b)	Optionee shall not while employed by the Company and for a period of one year from the date of termination of Optionee’s employment with the Company for any reason, including
termination by the Company with or without cause, either directly or indirectly solicit, induce or encourage any Company employee(s) who was an employee at such time or was an employee of the Company within six months immediately prior to such time
to terminate their employment with the Company or to accept employment with any competitor, supplier or customer of the Company, nor shall Optionee cooperate with any others in doing or attempting to do so. As used herein, the terms “solicit,
induce or encourage” include, but are not limited to, (i) initiating communications with a Company employee relating to possible employment, (ii) offering bonuses or additional compensation to encourage Company employees to terminate their
employment with the Company and accept employment with a competitor, supplier or customer of the Company, or (iii) referring Company employees to personnel or agents employed by competitors, suppliers or customers of the Company.

  

	12.	The Option is subject to the condition that if the listing, registration or qualification of the shares subject to the Option on any securities exchange or under any state or
federal law, or if the assent or approval of any regulatory body shall be necessary as a condition of, or in connection with, the granting of the Option or the delivery or purchase of shares thereunder, the Option may not be exercised in whole or in
part unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained. The Company agrees to use its best efforts to obtain any such requisite listing, registration, qualification, consent or
approval. 

  

	13.	The Committee, as from time to time constituted, shall have the right to determine any questions which arise in connection with this Agreement or the Option. This Agreement and the
Option are subject to the provisions of the Plan and shall be interpreted in accordance therewith. 

  

	14.	This Agreement shall not be construed as an employment contract and does not give Optionee any right to continued employment by the Company or any affiliate of the Company, and the
fact that the termination of Optionee’s employment occurs during the Option Term shall in no way be construed as giving Optionee the right to continue in the Company’s or any such affiliate’s employ. 

  

	15.	The Option shall not be treated as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code. 

  

	16.	This Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of Optionee,
acquire any rights in the Option. 

  

	17.	 Any notice, including a notice of exercise of the Option, required to be given hereunder to the Company shall be addressed to the Company at its headquarters in
Chicago, Illinois, attention of the Corporate Secretary, and any notice required to be given hereunder to Optionee shall be 

  

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addressed to Optionee at Optionee’s residence address as shown in the Company’s records, subject to the right of either party hereafter to
designate in writing to the other some other address. Any such notice shall be (i) delivered by personal delivery, facsimile, United States mail or by express courier service and (ii) deemed to be received upon personal delivery, upon confirmation
of receipt of facsimile transmission or upon receipt if by United States mail or express courier service; provided, however, that if any notice is not received during regular business hours, it shall be deemed to be received on the next succeeding
business day of the Company. 

  

	18.	The Option, this Agreement, and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by 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 conflicts of laws. 

  
 IN WITNESS WHEREOF, R. R. DONNELLEY & SONS COMPANY has caused this instrument to be executed as of the day and year first above written. 
  

			
	 R. R. DONNELLEY & SONS COMPANY

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

			
	 All of the terms of this Agreement are
 accepted as of this          day of             ,
 200    .

	
	 
	Optionee:

  

 7Performance Unit Award

  
 Exhibit 10.18

  
 R.R. DONNELLEY & SONS COMPANY 
 PERFORMANCE UNIT AWARD (2004 PIP) 
  
 This Performance Unit Award (“Award”) is granted as of [Date], by R. R. Donnelley & Sons Company (the “Company”) to (Name)
(“Grantee”). 
  
 1. Grant of Award. The Company
hereby credits to Grantee XXXXX stock units (the “Performance Units”), subject to the restrictions and on the terms and conditions set forth herein. This Award is made pursuant to the provisions of the R. R. Donnelley & Sons
Company 2004 Performance Incentive Plan (“2004 PIP”). Capitalized terms not defined herein shall have the meanings specified in the 2004 PIP. Grantee shall indicate acceptance of this Award by signing and returning a copy hereof.

  
 2. Determination of Achievement; Distribution of Award.

  
 (a) The number of shares of common stock, par
value $1.25 per share, of the Company (the “Common Stock”) payable in respect of one-half of the Performance Units will be determined based on the performance of the Company against the “Cost Savings Matrix,” and one-half will be
determined based on the performance of the Company against the “Normalized Earnings Per Share Matrix”, each as shown on Attachment A hereto. Promptly following XXXXXX (or promptly following such earlier date as of which, pursuant to
Section 4 hereof, a determination of the attainment by the Company of the targets set forth on the Cost Savings Matrix and/or the Normalized Earnings Per Share Matrix is to be made), the Committee (as defined in the 2004 PIP) shall determine whether
and to what extent the Cost Savings and Normalized Earnings Per Share targets have been met. 
  
 (b) Distribution with respect to this Award shall be made as soon as practicable following the determination described in (a) above.
Distribution of this Award may be made in Common Stock, cash (based upon the fair market value of the Common Stock on the date of distribution) or any combination thereof as determined by the Committee. 
  
 3. Dividends; Voting. 
  
 (a) No dividends or dividend equivalents will accrue with
respect to the Performance Units. 
  
 (b) Grantee
shall have no rights to vote shares of common stock represented by the Performance Units unless and until distribution with respect to this Award is made in Common Stock pursuant to paragraph 2(b) above. 
  

 4. Treatment upon Separation or Termination. 
  
 (a) Notwithstanding any other agreement with Grantee to the
contrary, if Grantee terminates his employment for Good Reason (as defined in the Grantee’s employment agreement) or the Company terminates the Grantee’s employment without Cause (as defined in the Grantee’s employment agreement) (i)
the measurement date for purposes of calculating the number of shares of Common Stock payable in respect of those Performance Units that are linked to Cost Savings shall be the date of termination and (ii) the Performance Units that are linked to
Normalized Earnings Per Share shall vest and be payable, if at all, on the same terms and conditions that would have applied had Grantee’s employment not terminated (i.e., performance measured on February 27, 2007). 
  
 (b) Notwithstanding any other agreement with Grantee to the
contrary, if Grantee’s employment terminates by reason of death or Disability (as defined as “total and permanent” disability under the Company’s long-term disability plan for senior executives), fifty percent of any unvested
Performance Units shall vest and become payable, assuming the attainment of target performance (100% achievement) or, if greater, based on actual performance through the date of death or determination of Disability. 
  
 (c) Notwithstanding any other agreement with Grantee to the
contrary, if Grantee’s employment is terminated by the Company for Cause or is terminated by Grantee other than for Good Reason, any unvested Performance Units shall be forfeited. 
  
 5. Treatment upon Change in Control. Notwithstanding any other agreement with Grantee to the contrary, upon the
Acceleration Date associated with a Change in Control, all of the Performance Units shall vest and become payable with respect to that number of shares of Common Stock that would be payable at target performance (100% achievement) or, if greater,
based on actual performance through the Acceleration Date. 
  
 6.
Withholding Taxes. 
  
 (a) As a condition
precedent to the issuance to Grantee of any shares of Common Stock pursuant to this Award, the Grantee shall, upon request by the Company, pay to the Company such amount of cash as the Company may be required, under all applicable federal, state,
local or other laws or regulations, to withhold and pay over as income or other withholding taxes (the “Required Tax Payments”) with respect to the Award. If Grantee shall fail to advance the Required Tax Payments after request by the
Company, the Company may, in its discretion, deduct any Required Tax Payments from any amount then or thereafter payable by the Company to Grantee. 
  
 (b) Grantee may elect to satisfy his obligation to advance the Required Tax Payments by any of the following means: (1) a cash payment to
the Company, (2) delivery to the Company of previously owned whole shares of 

  

 
Stock for which Grantee has good title, free and clear of all liens and encumbrances, having a fair market value, determined as of the date the obligation to
withhold or pay taxes first arises in connection with the Award (the “Tax Date”), equal to the Required Tax Payments, or (3) directing the Company to withhold a number of shares of Common Stock otherwise issuable to Grantee pursuant to
this Award having a fair market value, determined as of the Tax Date, equal to the Required Tax Payments or any combination of (1)-(3). Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be
disregarded and the remaining amount due shall be paid in cash by Grantee. No certificate representing a share of Common Stock shall be delivered until the Required Tax Payments have been satisfied in full. For purposes of this Award, the fair
market value of a share of Common Stock on a specified date shall be determined by reference to the average of the high and low transaction prices in trading of the Common Stock on such date as reported in the New York Stock Exchange-Composite
Transactions, or, if no such trading in the Common Stock occurred on such date, then on the next preceding date when such trading occurred. 
  
 7. Miscellaneous  
  
 (a) The Company shall pay all original issue or transfer taxes with respect to the issuance or delivery of shares of Common Stock pursuant
hereto and all other fees and expenses necessarily incurred by the Company in connection therewith, and will use reasonable efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable
thereto. 
  
 (b) Nothing in this Award shall
confer upon Grantee any right to continue in the employ of the Company or any other company that is controlled, directly or indirectly, by the Company or to interfere in any way with the right of the Company to terminate Grantee’s employment at
any time. 
  
 (c) No interest shall accrue at any
time on this Award or the Performance Units. 
  
 (d) This Award shall be governed in accordance with the laws of the state of Illinois. 
  
 (e) This Award shall be binding upon and inure to the benefit of any successor or successors to the Company. 
  
 (f) Neither this Award nor the Performance Units nor any
rights hereunder or thereunder may be transferred or assigned by Grantee other than by will or the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company or other procedures approved by the
Company. Any other transfer or attempted assignment, pledge or hypothecation, whether or not by operation of law, shall be void. 
  

 (g) The Committee, as from time to time constituted, shall have the right to determine
any questions which arise in connection with this Agreement or the Performance Units. This Agreement and the Performance Units are subject to the provisions of the Plan and shall be interpreted in accordance therewith. 
  
 (h) If there is any inconsistency between the terms and
conditions of this Award and the terms and conditions of the Employment Agreement, the terms and conditions of the Employment Agreement shall control. 
  
 IN WITNESS WHEREOF, the Company has caused this Award to be duly executed by its duly authorized officer. 
  

			
	 R. R. DONNELLEY & SONS COMPANY

		
	 By:
	 	 

			
	 Name:
	 	 

			
		
	 Accepted:

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