Item 5.02.
|
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
Changes in Directors
On September 30, 2016, effective as of 11:59 p.m. Eastern Time, the following directors of the Company tendered their resignations as
directors of the Company: Richard L. Crandall, Judith H. Hamilton, Richard K. Palmer, Thomas J. Quinlan III and Oliver R. Sockwell. Also on September 30, 2016, effective as of 11:59 p.m. Eastern Time, the following directors of the Company
retired as directors of the Company: Susan M. Cameron and Michael T. Riordan. John C. Pope, Susan M. Gianinno and Jeffrey M. Katz remain directors of the Company.
On October 1, 2016, the Board of Directors of the Company (the Board) determined the number of directors would be seven and
the following individuals were appointed to the Board of Directors of the Company (the Board) to fill the vacancies created by the foregoing resignations and retirements and to serve in such capacity until such time as their successors
are duly elected and qualify:
|
|
|
|
|
|
|
Daniel L. Knotts
Timothy R. McLevish
Jamie Moldafsky
P. Cody Phipps
|
|
|
Biographical information concerning these individuals is included in the Current Report on Form 8-K, dated
August 29, 2016 and such information is incorporated into this Item 5.02 by reference.
Mr. Pope remains as the Chairperson of
the Board. On October 1, 2016, Mr. Pope, Mr. McLevish and Mr. Katz were appointed to serve as members of the Audit Committee of the Board. Mr. McLevish was appointed as the Chairperson of the Audit Committee. The Board has
determined that each member of the Audit Committee (i) is independent within the meaning of the rules of both the New York Stock Exchange (NYSE) and the SEC, (ii) has the requisite attributes of an audit
committee financial expert as defined by regulations promulgated by the SEC and that such attributes were acquired through relevant education and/or experience, (iii) is financially literate as required by the rules of the
NYSE, (iv) has accounting or related financial management expertise as required by the rules of the NYSE and is able to read and understand fundamental financial statements, including balance sheets, income statements and cash flow
statements, and (v) has not participated in the preparation of the financial statements of the Company or any of its subsidiaries at any time during the past three years.
Also on October 1, 2016, the Board renamed the Governance, Responsibility and Technology Committee of the Board to be the Corporate
Responsibility and Governance Committee. Ms. Gianinno, Mr. Katz and Ms. Moldafsky were appointed to serve as members of the Corporate Responsibility and Governance Committee of the Board. Ms. Gianinno was appointed as the
Chairperson of the Corporate Responsibility and Governance Committee. The Board has determined that each member of the Corporate Responsibility and Governance Committee is independent for purposes of serving on the Corporate
Responsibility and Governance Committee within the meaning of the NYSE listing rules.
Ms. Gianinno, Mr. McLevish and
Mr. Phipps were appointed to serve as members of the Human Resources Committee of the Board. Mr. Phipps was appointed as the Chairperson of the Human Resources Committee. The Board has determined that each member of the Human Resources
Committee is independent for purposes of serving on the Human Resources Committee within meaning of the NYSE listing rules.
Changes in Executive Officers
On October 1, 2016, the following individuals were elected to serve as executive officers of the Company, in the offices designated until
their successors are duly elected and qualify:
|
|
|
|
|
|
|
Daniel L. Knotts
|
|
Chief Executive Officer
|
|
|
Thomas M. Carroll III
|
|
Chief Administrative Officer
|
|
|
Jeffrey G. Gorski
|
|
Controller and Chief Accounting Officer
|
|
|
John Pecaric
|
|
Executive Vice President, Chief Commercial Officer and President of International
|
|
|
Terry D. Peterson
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Deborah L. Steiner
|
|
Executive Vice President, Secretary and Chief Compliance Officer
|
Biographical information concerning these individuals is included in the Current Report on Form 8-K, dated
August 29, 2016 and such information is incorporated into this Item 5.02 by reference.
Employment Agreement with Daniel L.
Knotts
On October 1, 2016, RR Donnelley entered into an employment agreement with Daniel L. Knotts, which provides for
Mr. Knotts employment as the Chief Executive Officer of RR Donnelley.
The employment agreement provides for an annual base
salary of $950,000. Mr. Knotts will be eligible to participate in RR Donnelleys annual incentive compensation plan, with a target bonus opportunity of 125% of his annual base salary. Mr. Knotts will also be eligible to receive equity
grants in amounts that align to general market practices, a monthly car allowance, a financial planning allowance and certain other perquisites or employee benefits provided to other executive officers.
In connection with the Distributions, Mr. Knotts received a one-time grant of restricted stock units with an aggregate value equal to
$2,375,000. The grant will vest ratably on each of the first three anniversaries of the grant date, subject to Mr. Knotts continued employment with RR Donnelley.
If Mr. Knotts employment is terminated without cause by RR Donnelley or by Mr. Knotts with good reason
not following a change in control, each as defined in the agreement, then, subject to his execution of a release of claims, Mr. Knotts is entitled to the following benefits from RR Donnelley: (i) a severance payment equal to
two times the sum of his annual base salary and target annual bonus as in effect for the year prior to the termination, payable in equal installments over the 24 months following the termination date; (ii) two years of benefit continuation;
(iii) immediate vesting of all outstanding stock options, restricted stock or restricted stock unit awards; (iv) vesting of all performance shares or performance share units in accordance with the applicable award agreement; (v) a pro
rata bonus under RR Donnelleys annual bonus program equal to the amount Mr. Knotts would have received on the basis of RR Donnelleys actual performance for the year, multiplied by a fraction, the numerator of which is the number of
days in the year elapsed prior to the date of termination, and the denominator of which is 365; and (vi) a lump sum payment of $75,000.
If Mr. Knotts employment is terminated without cause by RR Donnelley or by Mr. Knotts with good reason
within two years following a change in control, then, subject to his execution of a release of claims, he is entitled to the same benefits from RR Donnelley as described in the immediately preceding paragraph, except the severance
payment described in the preceding paragraph will be equal to three times the sum of Mr. Knotts annual base salary and target annual bonus as in effect for the year prior to the termination and will generally be payable in a lump sum as
soon as reasonably practicable following the termination date.
The employment agreement contains certain restrictive covenants by
Mr. Knotts, including a noncompetition agreement that restricts Mr. Knotts ability to engage in competitive activities for 18 months following a termination of his employment with RR Donnelley.
The description above is qualified in its entirety by reference to Mr. Knotts employment agreement, which is attached as Exhibit
10.3 hereto and incorporated into this Item 5.02 by reference.
Employment Agreement with Thomas M. Carroll III
On October 1, 2016, RR Donnelley entered into an employment agreement with Thomas M. Carroll III, which provides for
Mr. Carrolls employment as Executive Vice President and Chief Administrative Officer of RR Donnelley.
The employment agreement
provides for an annual base salary of $450,000. Mr. Carroll will be eligible to participate in RR Donnelleys annual incentive compensation plan, with a target bonus opportunity of 80% of his annual base salary. Mr. Carroll will also
be eligible to receive equity grants in amounts that are similar to other employees at his level at RR Donnelley and that align to general market practices, a monthly car allowance and certain other perquisites or employee benefits provided to other
executive officers.
In connection with the Distributions, Mr. Carroll received a one-time grant of restricted stock units with an
aggregate value equal to $450,000. The grant will vest ratably on each of the first three anniversaries of the grant date, subject to Mr. Carrolls continued employment with RR Donnelley.
If Mr. Carrolls employment is terminated without cause by RR Donnelley or by Mr. Carroll with good
reason, both as defined in the agreement, then, subject to his execution of a release of claims, Mr. Carroll is entitled to the following benefits from RR Donnelley: (i) a severance payment equal to one and one-half times the sum of
his annual base salary and target annual bonus as in effect for the year prior to the termination, payable in equal installments twice monthly for the 18 months following the termination date; (ii) 18 months of benefit continuation; and
(iii) immediate vesting of all outstanding stock options, grants, restricted stock awards or other equity grants (other than performance shares or performance share units).
The employment agreement contains certain restrictive covenants by Mr. Carroll, including a noncompetition agreement that restricts
Mr. Carrolls ability to engage in competitive activities for 18 months following a termination of his employment with RR Donnelley.
The description above is qualified in its entirety by reference to Mr. Carrolls employment agreement, which is attached as Exhibit
10.4 hereto and incorporated into this Item 5.02 by reference.
Employment Agreement with Jeffrey G. Gorski
On October 1, 2016, RR Donnelley entered into an employment agreement with Jeffrey G. Gorski, which provides for Mr. Gorskis
employment as Senior Vice President and Chief Accounting Officer of RR Donnelley.
The employment agreement provides for an annual base
salary of $285,000. Mr. Gorski will be eligible to participate in RR Donnelleys annual incentive compensation plan, with a target bonus opportunity of 50% of his annual base salary. Mr. Gorski will also be eligible to receive equity
grants in amounts that are similar to other employees at his level at RR Donnelley and that align to general market practices, a monthly car allowance, a financial planning allowance and certain other perquisites or employee benefits provided to
other executive officers.
In connection with the Distributions, Mr. Gorski received a one-time grant of restricted stock units with
an aggregate value equal to $285,000. The grant will vest ratably on each of the first three anniversaries of the grant date, subject to Mr. Gorskis continued employment with RR Donnelley.
If Mr. Gorskis employment is terminated without cause (as defined in the agreement) by RR Donnelley, then, subject to
his execution of a release of claims, Mr. Gorski is entitled to the following benefits from RR Donnelley: (i) a severance payment equal to one times the sum of his annual base salary and target annual bonus as in effect for the year prior
to the termination, payable in equal installments twice monthly for the 12 months following the termination date; (ii) 18 months of benefit continuation; and (iii) vesting of all outstanding stock options, grants, restricted stock awards
or other equity grants under the terms of those plans.
The employment agreement contains certain restrictive covenants by
Mr. Gorski, including a noncompetition agreement that restricts Mr. Gorskis ability to engage in competitive activities for 18 months following a termination of his employment with RR Donnelley.
The description above is qualified in its entirety by reference to Mr. Gorskis employment agreement, which is attached as Exhibit
10.5 hereto and incorporated into this Item 5.02 by reference.
Employment Agreement with John Pecaric
On October 1, 2016, RR Donnelley entered into an employment agreement with John Pecaric, which provides for Mr. Pecarics
employment as Executive Vice President of Global Markets of RR Donnelley.
The employment agreement provides for an annual base salary of
$475,000. Mr. Pecaric will be eligible to participate in RR Donnelleys annual incentive compensation plan, with a target bonus opportunity of 80% of his annual base salary. Mr. Pecaric will also be eligible to receive equity grants
in amounts that are similar to other employees at his level at RR Donnelley and that align to general market practices, monthly car allowance, a financial planning allowance and certain other perquisites or employee benefits provided to other
executive officers.
In connection with the Distributions, Mr. Pecaric received a one-time grant of restricted stock units with an
aggregate value equal to $475,000. The grant will vest ratably on each of the first three anniversaries of the grant date, subject to Mr. Pecarics continued employment with RR Donnelley.
If Mr. Pecarics employment is terminated without cause (as defined in the agreement) by RR Donnelley, then, subject to
his execution of a release of claims, Mr. Pecaric is entitled to the following benefits from RR Donnelley: (i) a severance payment equal to one times the sum of his annual base salary and target annual bonus as in effect for the year prior
to the termination, payable in equal installments twice monthly for the 12 months following the termination date; (ii) 18 months of benefit continuation; and (iii) vesting of all outstanding stock options, grants, restricted stock awards
or other equity grants under the terms of those plans.
The employment agreement contains certain restrictive covenants by
Mr. Pecaric, including a noncompetition agreement that restricts Mr. Pecarics ability to engage in competitive activities for 18 months following a termination of his employment with RR Donnelley.
The description above is qualified in its entirety by reference to Mr. Pecarics employment agreement, which is attached as Exhibit
10.6 hereto and incorporated into this Item 5.02 by reference.
Employment Agreement with Terry D. Peterson
On August 15, 2016, RR Donnelley entered into an employment agreement with Terry D. Peterson, which provides for Mr. Petersons
employment as Executive Vice President and Chief Financial Officer of RR Donnelley, effective as of the Distribution Date.
The employment
agreement provides for an annual base salary of $550,000. Mr. Peterson will be eligible to participate in RR Donnelleys annual incentive compensation plan, with a target bonus opportunity of 80% of his annual base salary.
Mr. Peterson will also be eligible to receive equity grants in amounts that are similar to other employees at his level at RR Donnelley, a monthly car allowance, a financial planning allowance and certain other perquisites or employee benefits
provided to other executive officers.
Mr. Peterson will receive a one-time cash payment of $900,000 in January 2017, $300,000 of
equity scheduled to vest in October 2017, $500,000 of equity scheduled to vest in October 2018 and $500,000 of equity scheduled to vest in October 2019. During the first 90 days of Mr. Petersons employment, he has received housing and
travel expenses for his travel to and from his home in Minnesota to the RR Donnelley offices in Warrenville, Illinois. RR Donnelley will provide relocation benefits at the time of Mr. Petersons relocation to the Chicagoland area. If
Mr. Petersons employment with RR Donnelley is terminated at any time within 12 months of his relocation, he will be responsible for reimbursing RR Donnelley for any and all relocation costs. If Mr. Petersons employment is
terminated without cause by RR Donnelley, as defined in the agreement, before his receipt of the $900,000 one-time cash payment in January 2017 or the vesting of the $300,000 of equity in October 2017, he will receive those amounts in a
single cash payment, subject to Mr. Petersons execution of a release of claims.
If Mr. Petersons employment is
terminated at any time without cause (as defined in the agreement) by RR Donnelley, then, subject to his execution of a release of claims, Mr. Peterson is entitled to the following benefits from RR Donnelley: (i) a severance
payment equal to one times the sum of his annual base salary and target annual bonus as in effect
for the year prior to the termination, payable in equal installments twice monthly for the 12 months following the termination date; (ii) 18 months of benefit continuation; and
(iii) vesting of all outstanding stock options, grants, restricted stock awards or other equity grants under the terms of those plans.
The employment agreement contains certain restrictive covenants by Mr. Peterson, including a noncompetition agreement that restricts
Mr. Petersons ability to engage in competitive activities for 18 months following a termination of his employment with RR Donnelley.
The description above is qualified in its entirety by reference to Mr. Petersons employment agreement, which is attached as Exhibit
10.7 hereto and incorporated into this Item 5.02 by reference.
Employment Agreement with Deborah L. Steiner
On October 1, 2016, RR Donnelley entered into an employment agreement with Deborah L. Steiner, which provides for Ms. Steiners
employment as Executive Vice President and Chief Legal Officer of RR Donnelley.
The employment agreement provides for an annual base
salary of $350,000. Ms. Steiner will be eligible to participate in RR Donnelleys annual incentive compensation plan, with a target bonus opportunity of 80% of her annual base salary. Ms. Steiner will also be eligible to receive
equity grants in amounts that are similar to other employees at her level at RR Donnelley and that align to general market practices, a monthly car allowance, a financial planning allowance and certain other perquisites or employee benefits provided
to other executive officers.
In connection with the Distributions, Ms. Steiner received a one-time grant of restricted stock units
with an aggregate value equal to $350,000. The grant will vest ratably on each of the first three anniversaries of the grant date, subject to Ms. Steiners continued employment with RR Donnelley.
If Ms. Steiners employment is terminated without cause (as defined in the agreement) by RR Donnelley, then, subject to
her execution of a release, Ms. Steiner is entitled to the following benefits from RR Donnelley: (i) a severance payment equal to one times the sum of her annual base salary and target annual bonus as in effect for the year prior to the
termination, payable in equal installments twice monthly for the 12 months following the termination date; (ii) 18 months of benefit continuation; and (iii) vesting of all outstanding stock options, grants, restricted stock awards or other
equity grants under the terms of those plans.
The employment agreement contains certain restrictive covenants by Ms. Steiner,
including a noncompetition agreement that restricts Ms. Steiners ability to engage in competitive activities for 18 months following a termination of her employment with RR Donnelley.
The description above is qualified in its entirety by reference to Ms. Steiners employment agreement, which is attached as Exhibit
10.8 hereto and incorporated into this Item 5.02 by reference.