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EXHIBIT 10.1
WALLACE COMPUTER SERVICES, INC.
DIRECTOR RETAINER FEE PLAN
1. Purpose. Wallace Computer Services, Inc., a Delaware corporation
(the "Company"), hereby adopts this Director Retainer Fee Plan (the "Plan") to
promote the long-term growth and financial success of the Company by attracting
and retaining directors of outstanding ability and assisting the Company in
promoting a greater identity of interest between the Company's directors and its
stockholders.
2. Administration.
(1) The Plan shall be administered by the Compensation Committee
of the Board of Directors (the "Board") unless another shall be
appointed by the Board, which Committee shall consist solely of two or
more non-employee directors (the "Committee"). The members of the
Committee shall be appointed by, and may be changed at any time and
from time to time in the discretion of the Board.
(2) The Committee shall have the authority (i) to exercise all of
the powers granted to it under the Plan, (ii) to construe, interpret
and implement the Plan and all documents executed pursuant to the Plan
(including all Election Forms), (iii) to prescribe, amend and rescind
rules relating to the Plan, (iv) to make any determination necessary or
advisable in administering the Plan and (v) to correct any defect,
supply any omission and reconcile any inconsistency in the Plan.
(3) The determination of the Committee on all matters relating to
the Plan or any document executed pursuant to the Plan shall be
conclusive.
(4) No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan.
3. Definitions.
"Annual Retainer Fee" shall mean the annual retainer fee then
currently paid to active members of the Board of Directors of the
Company for services rendered as a member of the Board. The Annual
Retainer Fee shall accrue at the rate of 25% of the fee on each
February 1, May 1, August 1, and November 1 during the period of
service of the Director.
"Director's Fees" shall mean the sum of (i) the Annual Retainer
Fee, (ii) any board and committee meeting fees, and (iii) any fees
payable to a director by virtue of service as a chairperson.
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Director Retainer Fee Plan
"Eligible Director" shall mean any director of the Company or any
affiliate of the Company.
"Payment Date" shall mean January 15th of the year following the
period of service.
"Shares" shall mean shares of common stock, par value $1.00 per
share, of the Company and any other stock into which such common
stock shall thereafter be changed by reason of any merger,
reorganization, recapitalization, consolidation, split-up,
combination of shares or similar event as set forth in and in
accordance with this Section 5.
"Valuation Dates" shall mean each of February 1, May 1, August 1,
and November 1.
4. Common Shares Subject to the Plan.
4.1 Shares Available for Awards. Subject to Section 4.2 (relating to
adjustments upon changes in capitalization), as of any date, the total
number of Shares issuable under the Plan shall be 100,000. Shares that
shall be paid to the Eligible Directors pursuant to the Plan shall be
treasury Shares.
4.2 Adjustments. In the event of any merger, reorganization,
recapitalization, consolidation, sale or other distribution of all or
substantially all of the assets of the Company, any stock dividend, split,
spin-off, split-up, split-off, distribution of securities or other property
by the Company, or other change in the Company's corporate structure
affecting the Shares, the Shares then credited pursuant to Section 5.3 and
the number of Shares issuable under the Plan shall be appropriately
adjusted as determined by the Committee in its sole discretion.
5. Payment of Director's Fees.
5.1 Payment in Shares. On the Payment Date, the Company shall pay to
each Eligible Director, forty percent of their Annual Retainer Fee in
Shares. Shares payable under this Section shall be valued on each Valuation
Date by dividing forty percent of the accrued portion of the Annual
Retainer Fee by the Fair Market Value on such date. Such Shares will be
distributed to the Eligible Directors annually on each Payment Date unless
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Director Retainer Fee Plan
such Eligible Director has elected to defer receipt of such Shares pursuant
to Section 5.3 below.
5.2 Election To Receive Shares.
(1) An Eligible Director may elect to receive payment of all or
part of accrued Director's Fees (not converted pursuant to Section 5.1)
in Shares valued at the Fair Market Value on the applicable Valuation
Date. The election shall be made by submitting an election form to the
Committee no later than the end of the calendar year prior to the year
for which the election is made. The election shall indicate the
percentage of the Director's Fees that are to be paid in Shares.
Notwithstanding the foregoing to the contrary, any individual who first
becomes an Eligible Director on a date other than the first day of the
calendar year shall make an election for that calendar year promptly
upon becoming an Eligible Director.
(2) Any election made under this Section 5.2 shall continue in
full force and effect until revoked by notice to the Committee, until
superseded by a subsequent election or unless no longer permitted by
law or regulations (including Rule 16b-3), provided, however that no
revocation of an election or supersession of such form by a subsequent
election shall be effective with respect to any Director's Fees which
become payable to the Eligible Director until the end of the calendar
year following date of such revocation or supersession.
(3) Shares elected pursuant to this Section will be distributed
to the Eligible Directors on each Payment Date unless such Eligible
Director has elected to defer receipt of such Shares pursuant to
Section 5.3 below.
(4) Amounts deferred pursuant to other deferred compensation
plans shall not be available for conversion into Shares under this
Plan.
5.3 Elective Deferrals.
(1) An Eligible Director may elect to defer the receipt of the
Director's Fees, to the extent such payments are to be made in the form
of Shares, by submitting an election form (a "Deferred Payment Election
Form") to the
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Committee prior to the calendar year of service with respect to which
such Director's Fees are to be paid to the Eligible Director
indicating: (i) the percentage of the Retainer and/or Meeting Fees that
are to be deferred; (ii) the date on which the commencement of payment
of the Deferred Amounts should begin, as contemplated by Section 5.4(a)
(the "Distribution Date"); and (iii) whether distributions shall be
made in a lump sum, installments or a combination thereof.
Notwithstanding the foregoing sentence to the contrary, any individual
who first becomes an Eligible Director during a calendar year shall
make an election for that calendar year promptly upon becoming an
Eligible Director.
(2) A Deferred Payment Election Form shall become effective with
respect to the Eligible Director's Director's Fees becoming payable
with respect to services performed in the calendar year following the
calendar year in which such Deferred Payment Election Form is submitted
to the Committee; provided, that any individual who first becomes an
Eligible Director during a calendar year shall make an election for
that calendar year promptly upon becoming an Eligible Director. An
election under this Section 5.3 shall continue in effect until revoked
by notice in writing to the Committee, until superseded by a new
Deferred Payment Election Form or unless no longer permitted by law or
regulation (including under Rule 16b-3), provided, however, that no
revocation of a Deferred Payment Election Form or supersession of such
form by submission of a new Deferred Payment Election Form shall be
effective to make any change with respect to amounts deferred pursuant
to previously filed Deferred Payment Election Forms or shall be
effective with respect to the Retainer and Meeting Fees to be paid to
the Eligible Director in respect to services in the calendar year in
which such revocation or supersession occurs.
(3) An Eligible Director may designate, in a Deferred Payment
Election Form, one or more beneficiaries to receive any distributions
under the Plan upon the death of the Eligible Director, and such
designation may be changed at any time by submitting a new designation
to the Committee, which shall become effective immediately upon receipt
by the Committee.
(4) Any dividends or other distributions paid on deferred Shares
will be accumulated and, after applying income thereon and deducting
expenses of the trust, will be used on the last business day of each
year to purchase Shares at the Fair Market Value on such date.
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Director Retainer Fee Plan
5.4 Distribution of Deferral Amount.
(1) Distribution Date. Each Eligible Director shall designate on
a Deferred Payment Election Form one of the following dates as a
Distribution Date with respect to the Deferred Amount: (i) the first
day of the month following the Eligible Director's death; (ii) the
first day of the month following the termination of service or
retirement of an Eligible Director as a member of the Board; (iii) the
first day of the month following an Eligible Director's Disability (as
defined in Section 7); (iv) a fixed date in the future at least one
year after the date of such deferral as specified by the Eligible
Director on a Deferred Payment Election Form, provided that such date
is within the Eligible Director's life expectancy determined at the
time of the election; or (v) the earliest to occur of (i), (ii), (iii)
or (iv).
(2) Distribution Method. Distributions shall be made in 10 annual
installments, or with the approval of the Committee, in a single
distribution. In either case such distribution will be in the form of
whole Shares, and in the case of a single distribution or 10th
installment, cash representing any fractional interest in a Share
valued at the Fair Market Value on the date as of which such
distribution is made.
6. Fair Market Value. "Fair Market Value" shall mean, with respect
to each Share for any date:
(1) the closing price of the Shares on The New York Stock
Exchange as reported in the Midwest edition of the Wall Street Journal
for such date (or if not then trading on the New York Stock Exchange,
the closing price of the Shares on the stock exchange or
over-the-counter market on which the Shares are principally trading on
such date), or if, there were not sales on such date, on the closest
preceding date on which there were sales of Shares; or
(2) if there shall be no public market for the Shares on such
date, the fair market value of the Shares as determined in good faith
by the Committee based upon a valuation of an independent appraiser.
7. Definition of Disability. "Disability" shall mean any condition
which, in the opinion of a physician selected by the Committee, causes an
Eligible Director to be unable to substantially perform services as a member of
the Board for the remainder of the Eligible Director's lifetime.
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8. Issuance of Certificates. Certificates for Shares that have not
been deferred pursuant to Section 5.3 shall be issued as soon as practicable
after the Payment Date.
8.1 Restrictions on Transferability. All Shares delivered under the
Plan shall be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable or legally necessary under any laws, rules,
regulations and other legal requirements, including, without limitation, those
of any stock exchange upon which the Shares are then listed and any applicable
federal, state or foreign securities law.
8.2 Compliance with Laws. Anything to the contrary herein
notwithstanding, the Company shall not be required to issue any Shares under the
Plan if, in the opinion of the Company's legal counsel, the issuance and
delivery of such Shares would constitute a violation by the Eligible Director or
the Company of any applicable law or regulation of any governmental authority,
including, without limitation, federal and state securities laws and the rules
of any stock exchange on which the Company's securities may then be listed. If
and to the extent that the Committee determines that it would be illegal,
impracticable or inadvisable to issue Shares under the Plan, or to the extent
Shares are unavailable, the Committee shall make any distribution of Shares
otherwise required under the Plan in cash or such other property as may be
reasonably acceptable to the distributee.
9. Withholding and Other Obligations. The Company shall require as a
condition of delivery of any Shares to an Eligible Director that such Eligible
Director remit an amount sufficient to satisfy any foreign, federal, state,
local and other governmental withholding tax requirements relating thereto and
any indebtedness or other obligation of the Eligible Directors to the Company.
10. Plan Amendments and Termination. The Board may suspend or
terminate the Plan at any time and may amend it at any time and from time to
time, in whole or in part, provided that no amendment or termination may
adversely affect any rights of any Eligible Director that have accrued prior to
the date of such amendment or termination.
11. Listing, Registration and Legal Compliance. If the Committee shall
at any time determine that any Consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the granting of any award
under the Plan, the issuance of Shares or other rights hereunder or the taking
of any other action hereunder (each such action being hereinafter referred to as
a "Plan Action"), then such Plan Action shall not be taken, in whole or in part,
unless and until such Consent shall have been effected or obtained. The term
"Consent" as used herein with respect to any Plan Action means (i) the listing,
registration or qualification of any Shares issued under the Plan on any
securities exchange or under any foreign, federal, state or local law, rule or
regulation, (ii) any and all consents, clearances and approvals in respect
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of a Plan Action by any governmental or other regulatory bodies or (iii) any and
all written agreements and representations by an Eligible Director with respect
to the disposition of Shares or with respect to any other matter which the
Committee shall deem necessary or desirable in order to comply with the terms of
any such listing, registration or qualification or to obtain an exemption from
the requirement that any such listing, qualification or registration be made.
12. Right of Discharge Reserved. Nothing in the Plan shall confer upon
any Eligible Director the right to continue in the service of the Company or
affect any right that the Company may have to terminate the service of such
Eligible Director.
13. Other Payments or Awards. Nothing contained in the Plan shall be
deemed in any way to limit or restrict the Company, any affiliate or the Board
from making any award or payment to any person under any other plan, arrangement
or understanding, whether now existing or hereafter in effect.
14. Rights Not Transferable or Subject to Alienation. No rights
granted to an Eligible Director under this Plan may be sold, assigned or
otherwise transferred by the Eligible Director other than by will or to a
beneficiary as described in Section 5.3 herein; all rights granted to an
Eligible Director under this Plan may be exercised during the Eligible
Director's lifetime only by such Eligible Director. An Eligible Director's
rights to payments under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by his creditors or his beneficiaries.
15. Rights as a Shareholder. An Eligible Director shall have no rights
as a shareholder of the Company with respect to any Shares issuable under the
Plan until such Shares have been delivered to the Eligible Director.
16. Indemnification. The Company hereby indemnifies members of the
Committee and the Board for and to hold each of them harmless against any and
all liabilities, losses, costs or expenses (including legal fees and expenses)
of whatsoever kind and nature which may be imposed on, incurred by or asserted
against them at any time by reason of their action under this plan if they did
not act dishonestly or in willful or grossly negligent violation of the law or
regulation under which such liability, loss, cost or expense is not insured
against or exceeds any insurance recovery.
17. Unfunded Plan. The Plan shall be unfunded and shall not create (or
be construed to create) a trust or separate fund. The Plan shall not establish
any fiduciary relationship between the Company and any Eligible Director or
other person and shall constitute a mere promise by the Company to make payments
in the future. The Company may, in its sole discretion, establish a separate
grantor trust to hold assets set aside to provide benefits under the
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Plan, provided that no Eligible Director shall have an interest in the assets of
any such trust and the assets of such trust shall be available to pay claims of
the Company's general creditors on such terms and conditions as the trust may
provide. To the extent any person holds any rights by virtue of a pending
deferral under the Plan, such rights shall be no greater than the rights of an
unsecured general creditor of the Company.
18. Governing Law. The Plan shall be governed by, and construed in
accordance with, the laws of the State of Illinois.
19. Severability. If any portion of the Plan is declared by any court
or governmental authority to be invalid, such invalidity shall not affect any
portion not declared to be invalid. Any portion so declared to be invalid shall,
if possible, be construed in a manner which will give effect to the terms of
such portion to the fullest extent possible while remaining valid.
20. Notices. All notices and other communications hereunder shall be
given in writing and shall be personally delivered or sent by registered or
certified mail, return receipt requested or by reputable overnight delivery
service. Any notice shall be deemed given on the date of delivery or mailing,
and if mailed, shall be addressed (a) to the Company, at 2275 Cabot Drive,
Lisle, Illinois 60532, Attention: Board of Directors, and (b) to an Eligible
Director, at the Eligible Director's principal residential address last
furnished to the Company. Either party may, by notice, change the address to
which notice to such party is to be given.
21. Section Headings. The Section headings contained herein are for
convenience only and are not intended to define or limit the contents of said
Sections.
22. Effective Date. This Plan shall become effective as of January 8,
1998.
23. Exculpation. It is understood that the obligations incurred by the
Company with respect to this Plan do not constitute personal obligations of the
Directors, officers, employees or shareholders and shall not create or involve
any claim against, or personal liability on the part of, them or any of them.
The Eligible Directors agree not to seek recourse against any such Directors,
officers, employees or shareholders, or any of them or any of their personal
assets for satisfaction of any liability or with respect to the Plan.
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IN WITNESS WHEREOF, Wallace Computer Services, Inc. has caused these
presents to be executed in its name by its proper officers and its duly attested
Corporate Seal to be hereunto affixed pursuant to the authority granted by its
Board of Directors.
WALLACE COMPUTER SERVICES, INC.
By: __________________________
Robert J. Cronin
Chairman and CEO
ATTEST:
____________________________
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