TERMINATION PROTECTION
AGREEMENT
The Agreement as of
(the “Effective Date”) by and between Bowne & Co.,
Inc., a New York corporation (together with its subsidiaries and
affiliates and, after a Change in Control Event (as defined
herein), any successor or successors thereto, the
“Corporation”), and
(the “Executive”) is hereby amended and restated as
of December 31, 2008 (the “Amended Date”).
Amounts deferred and vested under this Agreement prior to
January 1, 2005 shall be grandfathered and therefore shall
continue to be governed by the terms of the Agreement as in effect
on
. Any amendments to the Agreement on or after October 4, 2004
will not affect the foregoing grandfathered amounts unless
specifically stated.
WHEREAS , Executive is a skilled and dedicated employee who
has important management responsibilities and talents which benefit
the Corporation; and
WHEREAS , the Corporation believes that its interests will
be served if Executive has fair and reasonable protection from the
risks of a change in ownership or control of the
Corporation;
NOW,
THEREFORE , the parties
hereby agree as follows:
Unless
otherwise indicated, capitalized terms used in this Agreement which
are defined in Schedule A shall have the meanings set forth in
Schedule A.
This amended
Agreement shall be effective as of the Amended Date and shall
remain in effect thereafter. The Corporation may terminate this
Agreement by giving Executive at least two years advance written
notice of termination of the Agreement. Notwithstanding the
foregoing, this Agreement shall, if in effect on the date of a
Change in Control Event, remain in effect for at least two years
and six months following such Change in Control Event, and such
additional time as may be necessary to give effect to the terms of
the Agreement.
3. Severance
and Other Benefits .
If
Executive’s employment with the Corporation is terminated by
the Corporation at any time within the two years and six months
following a Change in Control Event without Cause, or by Executive
for Good Reason, Executive shall be entitled to the benefits
provided hereafter in this Section 3 and as set forth in this
Agreement. If Executive’s employment with the Corporation is
terminated prior to a Change in Control Event at the request of any
individual or entity acquiring ownership and control of the
Corporation, this Agreement shall become effective upon the
subsequent occurrence of a Change in Control Event involving such
acquirer and therefore Executive shall be entitled to the benefits
provided hereafter in this Section 3 and as set forth in this
Agreement. The later of the
termination of
employment or the Change in Control Event shall be the
“Termination Date” for purposes of this
Agreement.
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(a)
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Severance Benefits
. The Corporation shall
pay Executive a lump sum amount, in cash, equal to the sum
of:
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(1) two
(2) times the sum of:
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(A)
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Executive’s Base Salary,
and
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(B)
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Executive’s Target Bonus;
and
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(2)
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Executive’s Target Bonus
multiplied by a fraction, the numerator of which shall equal the
number of days Executive was employed by the Corporation in the
Calendar Year in which the Executive’s employment terminated
and the denominator of which shall equal 365.
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To
the extent the Severance Benefits are subject to Section 409A
of the Code and if the Executive is a “specified
employee” as defined in a resolution of the Board of
Directors setting forth the definition used by the Corporation to
identify such employees in accordance with Section 409A of the
Code, the amount of such Severance Benefits that qualify for the
exception described in Treas. Reg. § 1.409A-1(b)(9)(iii) (for
certain separation pay benefits payable upon an involuntary
termination), shall be paid within ten (10) days after the
Termination Date and the portion of the Severance Benefits that do
not qualify for the foregoing exception (or any other exception to
Section 409A of the Code) shall be accumulated and paid on the
first day of the seventh month following the Termination
Date.
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(b)
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Payment of Accrued But Unpaid
Amounts .
Within ten (10) days after Termination Date, the Corporation
shall pay Executive any unpaid portion of Executive’s bonus
accrued with respect to the Calendar Year ended prior to
Executive’s termination of employment.
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(c)
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Additional Benefit Plan Service and
Age. For
purposes of eligibility for retirement, for early commencement or
actuarial subsidies under any pension plan sponsored by the
Corporation or any subsidiary thereof and for the purposes of any
additional accruals of benefits thereunder, Executive will be
credited with an additional one year of service and age beyond that
accrued as of Executive’s termination of employment, as if
Executive had remained employed and covered by these plans (as in
effect immediately prior to the Change in Control Event) for such
one-year period at the Executive’s current Base Salary and
Target Bonus rate; provided that if any benefits arising from the
grant of additional service and age cannot be provided under a
qualified pension plan of the Corporation or a subsidiary thereof
due to the qualification provisions of the Code, the benefit, or
its equivalent in value, shall be provided under a nonqualified
pension plan of the Corporation, which shall comply in all respects
with Section 409A of the Code.
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(d)
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Continued Welfare
Benefits. Until the date which is two years
after the Termination Date or, if earlier, the date on which
Executive commences full-time employment after the termination of
employment, the Corporation shall, at its expense, provide
Executive with medical and dental benefits, life insurance,
disability and accidental death and dismemberment benefits at the
highest level provided prior to the Change in Control Event and
ending on the date of the termination of employment; provided
however, that if Executive becomes employed by a new employer which
maintains a medical plan (or its equivalent) that either
(i) does not cover Executive with respect to a pre-existing
condition which was covered under the Corporations’ medical
plan, or (ii) does not cover Executive for a designated
waiting period, Executive’s coverage under the
Corporation’s medical plan shall continue (but shall be
limited in the event of non-coverage due to a pre-existing
condition, to the pre-existing condition itself) until the earlier
of the end of the applicable period of non-coverage under the new
employer’s plan or the date which is two years after the
Termination Date.
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(e)
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Effect on Existing Plans.
All provisions relating
to a Change in Control Event applicable to Executive and contained
in any plan, program, agreement or arrangement maintained on the
Termination Date (or thereafter) by the Corporation, including, but
not limited to, any stock option, restricted stock or retirement
plan, shall remain in effect through the date of the Change in
Control Event, and for such period thereafter as is necessary to
carry out such provisions and provide the benefits payable
thereunder, and may not be altered in a manner which adversely
affects Executive without Executive’s express prior written
approval.
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4.
Acceleration of Equity Rights .
Effective as of
the date of a Change in Control Event, the Corporation shall cause
Executive’s outstanding stock options which are not
immediately exercisable to vest and become immediately exercisable
and the restrictions on any equity and equity rights held by
Executive which are scheduled to lapse solely through the passage
of time to lapse.
If Executive
becomes entitled to one or more payments (with a
“payment” including, without limitation, the vesting of
an option or other non-cash benefit or property) pursuant to any
plan, agreement or arrangement of the Corporation (together,
“Severance Payments”) which are or would be subject to
the tax imposed by Section 4999 of the Code (or any similar tax
that may be imposed) (the “Excise Taxes”), the
Corporation shall pay to Executive an additional amount
(“Gross-Up Payment”) such that, after the payment by
Executive of all taxes (including without limitation all income and
employment tax and Excise Tax and treating as a tax the lost tax
benefit resulting from the disallowance of any deduction of
Executive by virtue of the inclusion of the Gross-Up Payment in
Executive’s adjusted gross income), and interest and
penalties with respect to
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such taxes,
imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Taxes imposed upon the
Severance Payments.
For purposes of
determining whether any of the Severance Payments will be subject
to the Excise Tax and the amount of such Excise Tax:
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(i)
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The
Severance Payments shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of
the Code, and all “excess parachute payments” within
the meaning of Section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, unless, and except to the extent
that, in the written opinion of independent compensation
consultants, counsel or auditors of nationally recognized standing
(“Independent Advisors”) selected by the Corporation
and reasonably acceptable to Executive, the Severance Payments (in
whole or in part) do not constitute parachute payments, or such
excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the
base amount within the meaning of Section 280G(b)(3) of the
Code or are otherwise not subject to the Excise Tax;
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(ii)
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The
amount of the Severance Payments which shall be treated as subject
to the Excise Tax shall be equal to the lesser of (A) the total
amount of the Severance Payments or (B) the total amount of
excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying clause
(i) above); and
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(iii)
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The
value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Independent Advisors in accordance with
the principles of Sections 280G(d)(3) and (4) of the
Code.
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For purposes of
determining the amount of the Gross-Up Payment, Executive shall be
deemed (A) to pay federal income taxes at the highest marginal
rate of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made; (B) to pay any applicable
state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to
be made, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes if
paid in such year (determined without regard to limitations on
deductions based upon the amount of Executive’s adjusted
gross income); and (
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