Document:

Exhibit 10.19

R.R. DONNELLEY & SONS COMPANY
PERFORMANCE UNIT AWARD (2012 PIP)

 This Performance Unit Award (“Award”) is granted as of March 2, 2015 (the “Grant Date”), by R. R. Donnelley & Sons Company (the “Company”) to XXXXXXXXX (“Grantee”).   

1.Grant of Award.  This Award is in recognition of your hard work and dedication over the last several years and is granted as an incentive for the Grantee to remain an employee of the Company and share in the future success of the Company.  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 2012 Performance Incentive Plan (“2012 PIP”).  Capitalized terms not defined herein shall have the meanings specified in the 2012 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 the Performance Units will be determined based on the attainment of Cumulative Free Cash Flow against the “Cumulative Free Cash Flow Matrix” and as modified by the “PSU Payout Modifier,” each as shown on Attachment A hereto.  Promptly following the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (or promptly following such earlier date as of which, pursuant to Section 4 hereof, to be made), the Committee (as defined in the 2012 PIP) shall determine the attainment against the “Cumulative Free Cash Flow Matrix” of the Company’s Cumulative Free Cash Flow and any adjustment to such attainment as required pursuant to the “PSU Payout Modifier.”  

(b)Distribution with respect to this Award shall be made to Grantee as soon as practicable following the determination described in (a) above but no later than 60 days thereafter.  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)[NB:  This provision to remain for certain PSU Agreements: 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) the 

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Performance Units 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 December 31, 2017).] 

(b)Notwithstanding any other agreement with Grantee to the contrary, if Grantee’s employment terminates by reason of death or Disability (as defined in the applicable Company long-term disability policy as in effect at the time of Grantee’s disability), 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)Except as set forth in Grantee’s employment agreement, if any, with the Company, if Grantee’s employment terminates for any reason other than by death or Disability, any unvested Performance Units shall be forfeited.    

5.Treatment upon Change in Control.  Notwithstanding anything provided in the 2012 PIP or 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 at the fifty percent payout level with respect to that number of shares of Common Stock that would be payable or, if greater, based on actual performance through the Change in Control 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 that 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 closing stock price in trading of the Common Stock on such date, or, if no such trading in the Common Stock occurred on such date, then on the next preceding date when such trading occurred.

 

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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 that 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:
	
Thomas Carroll

	
Title:
	
EVP, Chief Human Resources Officer

 

 

 

 

 

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All of the terms of this Agreement are accepted as of this ____ day of _________, 2015.

 

 

 

 

___________________________

Grantee:  

 

 

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Attachment A

 

DEFINITIONS:

“Free Cash Flow” for a fiscal year shall be equal to net cash provided by (used in) operating activities of continuing operations for such year less capital expenditures (as reported in the Financial Statements) for such year.  Free Cash Flow shall be adjusted by the Committee, as it shall deem reasonably necessary and appropriate, to avoid any increase or diminution in the opportunity conveyed by the Performance Units that could result from (i) (whether at the time of or subsequent to) any acquisition or disposition of any business or division (whether by merger, stock purchase or sale, sale or purchase of assets, or otherwise) made by the Company or (ii) other significant events that in the Committee’s judgment  have caused an increase or diminution in the opportunity conveyed by the Performance units (including, but not limited to, significant changes in financial or capital structure, significant regulatory changes, or significant changes in tax laws).

 “Cumulative Free Cash Flow” shall equal the sum of the Free Cash Flow amounts for the years ended December 31, 2015, 2016 and 2017.

“Financial Statements” shall mean the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K filed for the applicable year.

“PSU Payout Modifier” shall mean the amount by which any PSU payout shall be adjusted as set forth.

 

CUMULATIVE FREE CASH FLOW MATRIX:

The attainment of Cumulative Free Cash Flow shall be compared to the matrix below to determine the payout under the Performance Units, if any.  

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PSU PAYOUT MODIFIER:

 

6Exhibit 10.32

 

RR Donnelley 

Annual Incentive Plan 

(As amended and restated effective January 15, 2015) 

 

OVERVIEW 

 

The RR Donnelley Annual Incentive Plan (the “Annual Incentive Plan” or the “Plan”) is designed to promote the growth and profitability of RR Donnelley and its subsidiaries with incentives to reward and enhance the retention of eligible employees. Awards are made depending on the Company’s financial performance and on how well an eligible employee performs against individual objectives that link to and support RR Donnelley’s strategic and financial priorities. 

 

The Plan is a sub-plan of the R. R. Donnelley & Sons Company 2012 Performance Incentive Plan (the “2012 PIP”) and is subject to all of the performance conditions established pursuant to the 2012 PIP and the limitations set forth therein. With respect to participants who are subject to Section 162(m) of the Internal Revenue Code, as amended (the “Code”), to the extent that any term of the Plan conflicts with the terms of the 2012 PIP, the terms of the 2012 PIP will apply. 

 

The Human Resources Committee of the Board of Directors (the “Committee’) administers the Plan. The Committee has authority to establish rules and regulations for the Plan’s implementation and administration, including the authority to impose limitations and conditions, with respect to competitive employment or otherwise, that are not inconsistent with the Plan’s purposes. 

 

PARTICIPATION 

 

Eligibility is limited to officers selected by the Committee and other key employees designated as eligible by position in the organization.

 

TARGET AWARD PERCENTAGE AND PLAN FUNDING 

 

Each eligible participant’s target incentive opportunity under the Annual Incentive Plan is a percentage of such participant’s base salary as of December 31 of the Plan Year, or such other amount as determined by the Committee. This is referred to as the “Target Award Percentage” and will be communicated to eligible participants annually. Eligible wages do not include disability benefit payments. The “Plan Year” for any year is the calendar year.   The portion of any Target Award Percentage that is dependent upon achievement of personal objectives may vary based on the participant’s level in the Company (the “Personal Objective Percentage”) and will be communicated to eligible participants annually.

 

Subject to the performance conditions established under the 2012 PIP and the limitations set forth therein, the Company must fund the Plan for a Plan Year for participants to receive an award for that Plan Year. The decision whether or not to fund the Plan for a particular Plan Year, 

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as well as the Plan’s funding level, is made by the Committee in its sole discretion based on financial performance targets set by the Committee, which may not be amended after the end of the Plan Year. Plan funding is based upon the Company’s actual financial performance for the Plan Year against the previously set targets and if the Committee determines that the financial targets have been met, the Plan will be funded.   

 

If the Company funds the Plan awards will be made based upon the Plan’s funding level and the participant’s achievement level of his or her personal objectives, up to 150% of the participant’s Target Award Percentage (or such other percentage as determined by the Committee). The Committee will determine the percentage of the participant’s Target Award Percentage to be paid out based upon the participant’s Personal Objective Percentage, achievement of personal objectives and the Plan’s funding level; such percentages will be communicated to the participant. 

 

Any actual award made under the Annual Incentive Plan can range from 0% to 150% of the Target Award Percentage (or such other percentage as determined by the Committee), depending upon the Plan’s funding level, the participant’s Personal Objective Percentage and achievement of the participant’s personal objectives.   

 

PERSONAL OBJECTIVES 

 

Personal objectives are established for each participant each Plan Year to link and support RR Donnelley’s strategic and financial priorities. A participant’s personal objectives are determined each year in consultation with the participant and his or her manager and are communicated to the participant in writing as part of the objective goal-setting process. The portion of any Target Award Percentage that is dependent upon achievement of personal objectives may vary based on the participant’s level in the Company and will be communicated to eligible participants annually. The Committee’s determination of whether a participant has attained, in whole or in part, the participant’s personal objectives for a Plan Year, shall be final and binding. 

 

AWARD AMOUNT AND PAYMENT 

 

Awards are paid following the Plan Year after the Committee has certified the achievement of performance goals under the 2012 PIP and the Plan funding decisions and personal performance measurements have been made. Except as otherwise provided herein, or by the Committee, at any time prior to the end of such Plan Year, any award to be paid under the Plan shall be paid to recipients within 2 1/2 months after the end of the Plan Year (i.e., by March 15). A participant must be on the payroll of the Company as of the end of the Plan Year (i.e. as of December 31) to receive an award. Special provisions apply to retirees and in the case of a participant’s death or Disability. (Please refer to the Changes in Employment Status section of this document for details.) 

 

The Committee has the discretionary authority prior to the end of the Plan Year to determine to pay any award in installment payments over a specified period of time. The Committee also has discretionary authority to increase or decrease the amount of the award otherwise payable if it determines prior to the end of the Plan Year that an adjustment is appropriate to better reflect the actual performance of the Company and/or the participant; provided, however, that the 

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Committee may not increase the amount of the award payable to a person who is a “covered employee,” as defined in Section 162(m) of the Code, to an amount in excess of the amount earned under the 2012 PIP; provided further, however, the Committee has discretionary authority to decrease the amount of the award otherwise payable at any time for any person designated as an executive officer of the Company for purposes of Section 16 of the Securities Exchange Act of 1934, including after the end of the Plan Year.  Additionally, the Committee has discretionary authority to reduce the amount of the award otherwise payable if it determines that any participant engaged in misconduct. 

 

BENEFITS AND TAX TREATMENT 

 

Award payments are subject to applicable deductions, including social security taxes and federal and applicable state and local income tax withholding. 

 

The treatment of award payments as compensation for purposes of other RR Donnelley employee benefits plans is determined by the terms of the applicable plans. 

 

CHANGES IN EMPLOYMENT STATUS 

 

	
A.
	
PROMOTIONS, DEMOTIONS, TRANSFERS, CHANGES IN ASSIGNMENT 

 

If a participant is promoted, demoted, transferred to or between business units or from corporate during the year, any award payout normally will be calculated by prorating the payouts for each eligible position based on the time assigned to that position. 

 

	
B.
	
NEW HIRE 

 

Employees hired prior to October 1st of the Plan Year shall be eligible to participate in the Annual Incentive Plan in the year of hire if designated. Eligible employees hired after September 30th of the Plan Year shall not be eligible to begin participation in the Plan until the following year, except for those who receive approval for participation from the Company’s Chief Human Resources Officer. 

 

	
C.
	
RETIREMENT, DEATH or DISABILITY 

 

A participant’s retirement*, death, or Disability** during a Plan Year or prior to the payment date will not disqualify a participant from eligibility to receive any award that otherwise would be due under the Plan. 

 

	
*
	
For purposes of the Plan, “retirement” generally means (i) retirement at age 65, or (ii) retirement at or after age 55 with 5 or more years of continuous service. 

 

	
**
	
For purposes of the Plan, “Disability” means disability as defined as in the Company’s long-term disability policy as in effect at the time of the participant’s disability. 

 

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D.
	
OTHER TERMINATION 

 

If participant’s employment terminates for reasons other than retirement (as defined above), death, or Disability (as defined above) prior to the  end of the Plan Year, no award shall be payable. 

 

ADMINISTRATION 

 

The Committee has full discretionary authority to administer the Plan, including the authority to determine the performance achievement attained under the Plan. The Committee may delegate to members of RR Donnelley’s management the authority to administer the Plan and determine performance under the Plan. 

 

RR Donnelley retains the right to amend or terminate the Plan at any time; provided however that awards for any plan year may not be amended or terminated after the completion of such Plan Year except in cases of misconduct of the participant.

 

Questions regarding the Plan should be directed to the Corporate Compensation Department. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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