Exhibit 10.19
R.R. DONNELLEY & SONS
COMPANY
PERFORMANCE UNIT AWARD (2004
PIP)
This Performance Unit Award
(“Award”) is granted as of March 25, 2004, by R. R.
Donnelley & Sons Company (the “Company”) to
(“Grantee”) and is modified and clarified in certain
respects as of March 24, 2005.
1. Grant of Award . The
Company hereby credits to Grantee
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 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. 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
1
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 March 31,
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
(which, in the case of the Performance Units that are based on the
Normalized Earnings Per Share Matrix, will be reasonably determined
based upon the Company’s internal forecasts on the
Acceleration Date through the end of March 31, 2007).
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
reg
