LSC Communications, Inc. Non-Employee Director Compensation Plan
Exhibit 10.28
LSC Communications, Inc.
Non-Employee Director Compensation Plan
Explanatory Note: Pursuant to the Agreement and Plan of Merger by and among Quad/Graphics, Inc., QLC Merger Sub, Inc. and LSC Communications, Inc. (the “Company”), dated as of October 30, 2018 (the “Merger Agreement”), if the closing of the transaction contemplated by the Merger Agreement has not occurred by May 22, 2019, the Company may grant and pay its non-employee directors the annual cash retainers, including additional cash retainers equal to the value of the equity retainer(s) such directors otherwise would have been entitled to receive, in each case in the amounts set forth below pursuant to the terms of this Non-Employee Director Compensation Plan. Such amounts would be paid on May 23, 2019. The terms of this plan otherwise remain unchanged.
Each director shall receive (A) an annual cash retainer (a “Cash Retainer”) and (B) an annual equity retainer (an “Equity Retainer”) to be paid in the form of a grant of Restricted Stock Units (“RSUs”) each on the date of the Company’s Annual Meeting of Stockholders, as described further below and pursuant to the Company’s Performance Incentive Plan in effect on such date (the “Plan”).
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1) |
Cash Retainer. |
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a) |
Each director shall be entitled to a Cash Retainer equal to $90,000. |
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b) |
Any director in a leadership role shall be entitled to an additional Cash Retainer in the applicable amount described in the table below: |
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Lead Director |
$62,500 |
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Chairman of the Audit Committee |
$25,000 |
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Chairman of the Human Resources Committee |
$25,000 |
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Chairman of the Corporate Responsibility & Governance Committee |
$20,000 |
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2) |
Equity Retainer. |
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a) |
Each director shall be entitled to an Equity Retainer equal to $135,000. |
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b) |
The Lead Director shall be entitled to an additional Equity Retainer equal to $62,500. |
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c) |
The number of shares granted shall be calculated pursuant to the terms of the Plan and shall be rounded down to the nearest share. |
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d) |
RSUs will vest and be payable on the first anniversary of the grant date, but will be payable in full on the earlier of (i) the date the director ceases to be a Director of the Company and (ii) a Change in Control (as defined in the Plan). |
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e) |
Dividend equivalents on the RSUs issued hereunder are deferred, credited with interest quarterly at the same rate as five-year U.S. government bonds and paid out in cash at the same time the corresponding portion of the award becomes payable. |
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f) |
The Company shall make payment of the RSUs in Company common stock. |
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g) |
Each director may, subject to any conditions deemed appropriate from time to time by the Human Resources Committee, defer the delivery of the Equity |
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Effective as of October 30, 2018
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Retainer until the termination of such director’s service on the Board in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (including the applicable regulations thereunder) using such deferral election form as approved by the Human Resources Committee from time to time. |
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3) |
General. |
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a) |
If any director joins the Board on a date other than the date of the Company’s Annual Meeting, then a pro-rata portion of each of the applicable Cash Retainer and Equity Retainer from the date joined to the next Annual Meeting date shall be granted. |
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Each director is expected to comply with the terms of any stock ownership guidelines for non-employee directors that are established by the Company, as in effect from time to time.
Effective as of October 30, 2018