Form of Restricted Stock Unit Award Agreement for Directors
R.R. DONNELLEY & SONS COMPANY
DIRECTOR RESTRICTED STOCK UNIT AWARD
This Restricted Stock Unit Award (“Award”) is granted as of this xxxxxx day of xxxxxx 2016 (the “Grant Date”) by R.R. Donnelley & Sons Company, a Delaware corporation (the “Company”), to xxxxxx (“Grantee”). This Award is made to Grantee pursuant to the provisions of the Company’s 2012 Performance Incentive Plan (the “2012 PIP”). Capitalized terms not defined herein shall have the meanings specified in the 2012 PIP.
1.Grant of Award. The Company hereby credits to Grantee xxxxxx restricted stock units (the “RSUs”), subject to the restrictions and on the terms and conditions set forth herein. Grantee shall indicate acceptance of this Award by signing and returning a copy hereof.
2.Issuance of Common Stock in Satisfaction of Restricted Stock Units.
(a)Except to the extent otherwise provided in paragraph 2(b) or (c) below, on each of the first, second and third anniversary of xxxxxx (the “Payment Dates”) the number of shares of Common Stock equal to one‑third of the RSUs (the “Payable RSUs”) and cash in the amount of Dividend Equivalents (as defined below) earned with respect to such Payable RSUs pursuant to paragraph 4 below shall be delivered to the Grantee; provided, however, that the Grantee may irrevocably elect, no later than the December 31st preceding the year in which the Grant Date is to occur, to defer the delivery of the shares of Common Stock underlying the Payable RSUs until the date such Grantee ceases to be a member of the Board of Directors of the Company (the “Board”) or otherwise has a separation from service within the meaning of section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”).
(b)On the date Grantee ceases to be a member of the Board or such other date as required by section 409A of the Code, shares of Common Stock with respect to any remaining RSUs (including any Payable RSUs deferred by the Grantee) and cash in the amount of Dividend Equivalents earned with respect to such RSUs pursuant to paragraph 4 below shall be delivered to the Grantee.
(c)Upon the Acceleration Date associated with a Change in Control, shares of Common Stock with respect to any remaining RSUs (including any Payable RSUs deferred by the Grantee) and cash in the amount of Dividend Equivalents earned with respect to such RSUs pursuant to paragraph 4 below shall be delivered to the Grantee in accordance with the terms of the 2012 PIP.
(d)Each RSU shall be cancelled upon the issuance of a share of Common Stock (or cash with respect to fractional shares) with respect thereto.
3. Fractional Shares. Any fractional shares of Common Stock that would otherwise be deliverable as set forth above shall be paid in cash based upon the fair market value of a share of Common Stock on the date of distribution.
4.Dividends. Dividends or other distributions that are payable (other than dividends or distributions for which the record date is prior to the date hereof) during the period commencing on the date hereof and ending on the date on which no RSUs shall remain outstanding (due to issuance of shares of Common Stock (or cash) in satisfaction of RSUs pursuant to paragraphs 2 and 3) on a like number of shares of Common Stock as are equal to the number of RSUs then outstanding shall be credited to a book keeping account for the Grantee (the “Dividend Equivalents”). Such accounts shall be credited quarterly (beginning on the last day of the calendar quarter in which the first credit to the account was made) with an amount of interest on the balance (including interest previously credited) at an annual rate equal to the then current yield obtainable on United States government bonds having a maturity date of approximately five years.
5.Rights as a Shareholder. Prior to issuance, Grantee shall not have the right to vote, nor have any other rights of ownership in, the shares of Common Stock to be issued in satisfaction of the RSUs.
(a)As a condition precedent to the issuance to Grantee of any shares of Common Stock pursuant to this Award, Grantee shall, upon request by the Company, pay to the Company such amount of cash as the Company may be required, under all applicable and allowable laws or regulations, to withhold and pay over as income or other withholding taxes (the “Required Tax Payments”) with respect to the Award and any Dividend Equivalents. 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 or her 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 Common 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 and any Dividend Equivalents (the “Tax Date”), equal to the Required Tax Payments, or (3) directing the Company to withhold a number of shares of Common Stock (or cash) otherwise issuable to Grantee pursuant to this Award and any Dividend Equivalents having a fair market value, determined as of the Tax Date, equal to the Required Tax Payments or any combination of (1)-(3). 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 and any Dividend Equivalents, 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 or, if no such trading in the Common Stock
occurred on such date, then on the next preceding date when such trading occurred.
(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)This Award shall be governed in accordance with the laws of the State of Illinois.
(c)This Award shall be binding upon and inure to the benefit of any successor or successors to the Company.
(d)Neither this Award nor the RSUs nor any rights hereunder or thereunder may be transferred or assigned by Grantee other than:
(1)by will or the laws of descent and distribution;
(2)in whole or in part to one or more transferees; provided that (i) any such transfer must be without consideration, (ii) each transferee must be a “family member” of Grantee, a trust established for the exclusive benefit of Grantee and/or one or more family member of Grantee or a partnership whose sole equity owners are Grantee and/or family members of Grantee, and (iii) such transfer is specifically approved by the Company’s EVP and General Counsel or the Committee following the receipt of a completed Assignment of Restricted Stock Unit Award attached hereto as Exhibit A; or
(3)as otherwise set forth in an amendment to this Award.
In the event the RSUs are transferred as contemplated in this Section 7(d), such transfer shall become effective when approved by the Company’s General Counsel or the Committee (as evidenced by counter execution of the Assignment of Restricted Stock Unit Award on behalf of the Company), and such RSUs may not be subsequently transferred by the transferee other than by will or the laws of descent and distribution. Any transferred RSU shall continue to be governed by and subject to the terms and conditions of the 2012 PIP and this Agreement and the transferee shall be entitled to the same rights as Grantee as if no transfer had taken place. Except as permitted by the foregoing, the RSUs and this Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer,
assign, pledge, hypothecate, encumber or otherwise dispose of the RSUs, the RSUs and all rights hereunder shall immediately become null and void. As used in this Section, "family member" with respect to any person, includes any child, step-child, grandchild, parent, step-parent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law and sister-in-law, including adoptive relationships, and any person sharing the transferor's household (other than a tenant or employee).
(e)The Committee, as from time to time constituted, shall have the right to determine any questions which arise in connection with this Award, the RSUs or the Dividend Equivalents. This Award and the RSUs are subject to the provisions of the 2012 PIP and shall be interpreted in accordance therewith.
IN WITNESS WHEREOF, the Company has caused this Award to be duly executed by its duly authorized officer.
R.R. Donnelley & Sons Company
Name: Suzanne Bettman
Title: General Counsel