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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
March , 2007 (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 $xx.xx per share to be exercisable during
the term set forth herein, but only upon the following terms and
conditions:
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1.
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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:
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(a)
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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.
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(b)
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(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:
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Date (1)
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Percentage of Total (2)
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25%
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25%
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25%
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25%
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(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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(c)
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No fractional shares may be purchased at any
time.
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2.
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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.
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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.
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3.
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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.
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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.
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(a)
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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.
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(b)
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If Optionee ceases to be employed by the Company
by reason of retirement on or after age 65 or by reason of a
Qualifying Retirement, then, subject to the provisions of
Section 7, from and after the effective date of such cessation
of employment the portion of the Option that is not exercisable
shall continue to vest in accordance with the provisions of
Section 1(b) and 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:
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(i)
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Optionee is an active participant in a Company
sponsored retirement benefit plan and is eligible to commence
benefits thereunder
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