Exhibit 10.18
R.R. DONNELLEY & SONS
COMPANY
PERFORMANCE UNIT
AWARD
This Performance Unit Award
(“Award”) is granted as of February 27, 2004, by R. R.
Donnelley & Sons Company (the “Company”) to Mark A.
Angelson (“Grantee”) and is hereby clarified in certain
respects. This Award is made pursuant to the terms of the letter
agreement, dated as of November 8, 2003 and as modified and
clarified on March 24, 2005, between the Company and Grantee (the
“Employment Agreement”).
1. Grant of Award . The
Company hereby credits to Grantee 300,000 stock units (the
“Initial 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
Initial 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 February 27, 2007 and March 31, 2007,
respectively (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 to Grantee as soon as practicable
following the determination described in (a) above, provided, that,
under certain circumstances described in the Employment Agreement,
delivery shall be made to the rabbi trust created under the
Employment Agreement. 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 Initial Performance
Units.
(b) Grantee shall have no rights to
vote shares of common stock represented by the Initial Performance
Units unless and until distribution with respect to this Award is
made in Common Stock pursuant to paragraph 2(b) above.
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4. Treatment upon Separation or
Termination .
(a) If Grantee terminates his
employment for Good Reason (as defined in the Employment Agreement)
or the Company terminates the Grantee’s employment without
Cause (as defined in the Employment Agreement) (i) the measurement
date for purposes of calculating the number of shares of Common
Stock payable in respect of those Initial Performance Units that
are linked to Cost Savings shall be the date of termination and
(ii) the Initial 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 March 31, 2007).
(b) If Grantee’s employment
terminates by reason of death or Disability (as defined in the
Employment Agreement), fifty percent of any unvested Initial
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) If Grantee’s employment
terminates by reason of Retirement (as defined in the Employment
Agreement), a pro-rated portion of the Initial 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 February 27, 2007 and
March 31, 2007, respectively). The pro-rated portion of the Initial
Performance Units shall be determined by multiplying the total
number of Initial Performance Units by a fraction, the numerator of
which is the total number of days between February 27, 2004 and the
date of Grantee’s termination by reason of Retirement and the
denominator of which is 1096.
(d) If Grantee’s employment is
terminated by the Company for Cause or is terminated by Grantee
other than for Good Reason or Retirement, any unvested Initial
Performance Units shall be forfeited.
5. Treatment upon Change in
Control . Upon the Acceleration Date associated with a Change
in Control, all of the Initial 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 (which, in the case of the Initial
Performance Units that are based on the Normalized Earnings Per
Share Matrix, will be reasonably determined based upon the
Company’s internal forec
