EXHIBIT 10.1

SOUTHERN GRAPHIC SYSTEMS, INC.

DEFERRED COMPENSATION PLAN

Effective April 1, 2006

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SOUTHERN GRAPHIC SYSTEMS, INC.

DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

 

          Page

FOREWORD

      i

ARTICLE I

  

DEFINITIONS

   1

1.1

  

Appropriate Form

   1

1.2

  

Beneficiary

   1

1.3

  

Board of Directors

   1

1.4

  

Code

   1

1.5

  

Company

   1

1.6

  

Company Matching Contributions

   2

1.7

  

Credits

   2

1.8

  

Earnings

   2

1.9

  

Effective Date

   2

1.10

  

Eligible Employee

   2

1.11

  

Employee

   2

1.12

  

Employer

   2

1.13

  

ERISA

   2

1.14

  

Investment Option

   2

1.15

  

Key Employee

   2

1.16

  

Participant

   3

1.17

  

Plan

   3

1.18

  

Plan Administrator

   3

1.19

  

Plan Year

   3

1.20

  

Retirement

   3

1.21

  

Salary

   3

1.22

  

Salary Deferrals

   3

1.23

  

Savings Plan

   3

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SOUTHERN GRAPHIC SYSTEMS, INC.

DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

 

          Page

1.24

  

Separation from Service

   4

1.25

  

Supplemental Matching Company Credits

   4

1.26

  

Supplemental Salary Reduction Agreement

   4

1.27

  

Supplemental Salary Reduction Credits

   4

1.28

  

Year of Plan Participation

   4

ARTICLE II

  

PARTICIPATION

   5

2.1

  

Election to Participate

   5

2.2

  

Continuation of Participation

   5

ARTICLE III

  

SALARY REDUCTION ELECTIONS AND CREDITS

   6

3.1

  

Supplemental Salary Reduction Credits

   6

ARTICLE IV

  

SUPPLEMENTAL MATCHING COMPANY CREDITS

   7

4.1

  

Supplemental Matching Company Credits

   7

ARTICLE V

  

EARNINGS ON CREDITS

   8

5.1

  

Investment Options

   8

5.2

  

Designation of Investment Options

   8

5.3

  

Changing Investment Options – Future Credits

   8

5.4

  

Transfer Among Investment Options

   8

ARTICLE VI

  

DISTRIBUTION UPON SEPARATION FROM SERVICE

   9

6.1

  

Time of Distribution; Vested Interest

   9

6.2

  

Automatic Form of Payment

   9

6.3

  

Optional Form of Payment

   10

6.4

  

Distribution Upon Death of Participant

   11

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SOUTHERN GRAPHIC SYSTEMS, INC.

DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

 

          Page

6.5

  

Distribution Upon Income Inclusion

   11

ARTICLE VII

  

ADMINISTRATION OF PLAN

   12

7.1

  

Plan Administrator

   12

7.2

  

Powers and Duties

   12

7.3

  

Rules and Regulations of the Plan Administrator

   12

7.4

  

Claims Procedure

   13 ARTICLE VIII   

GENERAL MATTERS

   17

8.1

  

Benefits from General Assets

   17

8.2

  

No Assignment

   17

8.3

  

Expenses of Plan

   17

8.4

  

Amendment or Termination

   18

8.5

  

Limitation on Benefits and Payments

   18

8.6

  

Participation by Subsidiaries and Affiliates

   18

8.7

  

Limitation of Liability

   18

8.8

  

Agent for Service of Process

   19

8.9

  

Delivery of Elections to Plan Administrator

   19

8.10

  

Delivery of Notice to Participants

   19

8.11

  

No Enlargement of Employee Rights

   20

8.12

  

Tax Withholding

   20

8.13

  

Incapacity of Recipient

   20

8.14

  

Unclaimed Benefit

   20 ARTICLE IX   

CONSTRUCTION OF THE PLAN

   21

9.1

  

Construction of the Plan

   21

9.2

  

Headings

   21

9.3

  

Separability

   21

9.4

  

Counterparts

   21

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SOUTHERN GRAPHIC SYSTEMS, INC.

DEFERRED COMPENSATION PLAN

FOREWORD

Effective as of April 1, 2006, Southern Graphic Systems, Inc. (the “Company”)
adopted the Southern Graphic Systems, Inc. Deferred Compensation Plan (the
“Plan”) for the benefit of certain of its executives.

The Plan is intended to enable the Company to attract and retain highly
qualified executives and to encourage those executives to devote their full-time
best efforts to the Company by providing to them supplemental retirement income
in consideration of those efforts. The Plan is intended to constitute an
unfunded plan maintained primarily for the purpose of providing deferred
compensation benefits for a select group of management or highly compensated
employees for purposes of the Employee Retirement Income Security Act of 1974.

 

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ARTICLE I

DEFINITIONS

Where the following words and phrases appear in the Plan, they shall have the
respective meanings as set forth below unless the context clearly indicates the
contrary.

 

1.1 “Appropriate Form” means the written form provided or prescribed by the Plan
Administrator for the particular purpose.

 

1.2 “Beneficiary” means the person, persons or entity designated by the
Participant to receive benefits in the event of the Participant’s death on the
Appropriate Form. In the absence of any effective designation, a Participant’s
Beneficiary shall be the Participant’s surviving legal spouse. If such spouse
dies before receiving payment to which he or she is entitled hereunder, then
payment shall be made to such person or persons, including his or her estate, as
he or she may designate in the last Beneficiary designation received by the
Company from such spouse prior to his or her death. If the Participant is not
survived by a legal spouse, or if such spouse shall fail to so appoint, the said
payment shall be made to the then living children of the Participant, if any, in
equal shares. If there are no surviving children, the payment will be made to
the estate of the later to die of the Participant and (if any) his or her legal
spouse.

 

1.3 “Board of Directors” means the Board of Directors of the Company.

 

1.4 “Code” means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a specific provision of the Code shall include such
provision, any valid regulation or ruling promulgated thereunder and any
comparable provision of future law that amends, supplements or supersedes such
provision.

 

1.5 “Company” means Southern Graphic Systems, Inc. and any successor thereto by
merger, purchase, reorganization or otherwise.

 

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1.6 “Company Matching Contributions” means the amount of “company matching
contributions” made on behalf of a Participant under the Savings Plan.

 

1.7 “Credits” means the aggregate of the Supplemental Matching Company Credits
and Supplemental Salary Reduction Credits credited on a Participant’s behalf.

 

1.8 “Earnings” means the amounts deemed to be credited with respect to a
Participant’s Credits pursuant to Article V.

 

1.9 “Effective Date” means April 1, 2006.

 

1.10 “Eligible Employee” means any “eligible employee”, as defined in the
Savings Plan, who receives regular remuneration in the form of Salary during a
Year of Plan Participation of at least $125,000.

 

1.11 “Employee” means an employee of the Employer, not including an agency
employee, independent contractor or other individual not on the payroll of an
Employer.

 

1.12 “Employer” means the Company and any subsidiary or affiliate of the
Employer that adopts the Plan with respect to its employees.

 

1.13 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA shall
include such provision, any valid regulation or ruling promulgated thereunder
and any comparable provision of future law that amends, supplements or
supersedes such provision.

 

1.14 “Investment Option” means any of the phantom investment vehicles
established under Article V.

 

1.15

“Key Employee” means a key employee within the meaning of Section 416(i) of the
Code, without regard to Section 416(i)(5) thereof, provided that the capital
stock of the

 

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Company or any member of the controlled group of corporations (within the
meaning of Section 414(b) of the Code) of which the Company is a member is
publicly traded on an established securities market or otherwise.

 

1.16 “Participant” means an Eligible Employee participating in the Plan pursuant
to Section 2.1 or any former Employee whose participation has not ceased
pursuant to Section 2.2.

 

1.17 “Plan” means the Southern Graphic Systems, Inc. Deferred Compensation Plan,
as set forth herein and as may be amended from time to time.

 

1.18 “Plan Administrator” means the person, persons or committee designated by
the Board of Directors to administer and supervise the Plan in accordance with
Article VII. In the absence of any such designation, the Company shall be the
Plan Administrator.

 

1.19 “Plan Year” means the twelve consecutive month period beginning each
January 1 and ending December 31, except that the first Plan Year shall begin on
the Effective Date and end on the next following December 31.

 

1.20 “Retirement” means a Participant’s Separation from Service on or after
attainment of (a) age 62 or (b) age 55 and completion of at least a 10-year
“period of vesting service”, as defined in the Savings Plan.

 

1.21 “Salary” means “compensation” as defined in the Savings Plan, without
regard to the limitation imposed by Section 401(a)(17) of the Code.

 

1.22 “Salary Deferrals” means the amount of “pre-tax contributions” made on a
Participant’s behalf under the Savings Plan.

 

1.23 “Savings Plan” means the Southern Graphic Systems, Inc. Savings Plan.

 

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1.24 “Separation from Service” means the termination of a Participant’s
employment relationship with the Employer.

 

1.25 “Supplemental Matching Company Credits” means any amounts credited on a
Participant’s behalf pursuant to Section 4.1.

 

1.26 “Supplemental Salary Reduction Agreement” means the Appropriate Form
evidencing the salary reduction agreement entered into by the Participant
pursuant to the terms of Section 3.1.

 

1.27 “Supplemental Salary Reduction Credits” means any amounts credited on a
Participant’s behalf pursuant to Section 3.1.

 

1.28 “Year of Plan Participation” means any 12-month period beginning on the
first day of the month coincident with or next following the date on which an
Eligible Employee commences and has not ceased participation in this Plan and/or
the Savings Plan and anniversaries thereof.

 

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ARTICLE II

PARTICIPATION

 

2.1 Election to Participate

 

(a) An Eligible Employee shall become a Participant by completing an election in
the form of a Supplemental Salary Reduction Agreement within 30 days from the
first day on which an Employee becomes an Eligible Employee. Any such election
shall apply to subsequent Salary and shall remain in effect until subsequently
changed in accordance with Section 3.1.

 

(b) Any election not made within the time limit described in (a) above shall
only be effective with respect to Salary commencing in the Plan Year subsequent
to that in which the election is made, in accordance with uniform procedures
established by the Plan Administrator.

 

2.2 Continuation of Participation

An Eligible Employee who has become a Participant shall remain a Participant as
long as amounts are payable to or with respect to such Participant under the
Plan.

 

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ARTICLE III

SALARY REDUCTION ELECTIONS AND CREDITS

 

3.1 Supplemental Salary Reduction Credits

An Eligible Employee whose Salary Deferrals are limited by the application of
Section 401(a)(17), 402(g) or 415 of the Code may make an election by executing
a Supplemental Salary Reduction Agreement on the Appropriate Form to have his or
her subsequent Salary reduced by means of payroll reduction and to have an equal
amount deemed to be credited on his or her behalf as Supplemental Salary
Reduction Credits of the excess, if any, of (a) the amount of Salary Deferrals
that would have been credited pursuant to the Savings Plan on his or her behalf
for the Plan Year with respect to which such Supplemental Salary Reduction
Agreement is executed had the limitations imposed by Sections 401(a)(17), 402(g)
and 415 of the Code not been applicable over (b) the amount of Salary Deferrals
actually credited for the applicable Plan Year on behalf of the Participant to
the Savings Plan. Salary reduction under such Supplemental Salary Reduction
Agreement shall be in the same percentage as most recently elected under the
Savings Plan no later than the end of the period described in Section 2.1(a) or
(b), whichever is applicable, during which an election may be effective with
respect to subsequent Salary and shall commence effective with the first payroll
period on or next following cessation of Salary Deferrals on the Eligible
Employee’s behalf to the Savings Plan because of the limitation imposed by
Section 401(a)(17), 402(g) or 415 of the Code, whichever is applicable.

Subject to the provisions of Section 2.1(a) and (b), the Supplemental Salary
Reduction Agreement for any Plan Year shall be executed before the beginning of
the Plan Year and shall remain in full force and effect for subsequent Plan
Years unless revoked by a Participant by written instrument delivered to the
Plan Administrator within the period designated by the Plan Administrator prior
to the beginning of the Plan Year in which such revocation is to be effective.

 

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ARTICLE IV

SUPPLEMENTAL MATCHING COMPANY CREDITS

 

4.1 Supplemental Matching Company Credits

For each payroll period for which Supplemental Salary Reduction Credits are
deemed to be credited on behalf of a Participant, Supplemental Matching Company
Credits shall be credited on behalf of the Participant. The amount of such
Supplemental Matching Company Credits for each payroll period with respect to
which a Supplemental Salary Reduction Agreement is in effect shall be equal to
an amount not greater than 100 percent of that portion of such Supplemental
Salary Reduction Credits that does not exceed 6 percent of the Participant’s
Salary for the payroll period. In no event, however, shall the amount of such
Supplemental Matching Company Credits for each Plan Year with respect to which a
Supplemental Salary Reduction Agreement is in effect equal more than 6 percent
of the Participant’s Salary for the Plan Year, reduced by the amount of the
Company Matching Contributions made for the Plan Year under the Savings Plan.
Such Supplemental Matching Company Credits shall be credited as soon as
administratively feasible following each applicable payroll period, commencing
effective with the first payroll period described in Section 3.1.

 

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ARTICLE V

EARNINGS ON CREDITS

 

5.1 Investment Options

The Plan Administrator from time to time shall establish and maintain one or
more Investment Options to reflect the hypothetical crediting of Earnings with
respect to certain amounts credited on behalf of Participants. The number and
type of Investment Options shall be equivalent to those of the investment funds
under the Savings Plan as are determined by the Plan Administrator in its sole
discretion. Investment Options are phantom investment vehicles only and do not
represent actual investment of amounts.

 

5.2 Designation of Investment Options

A Participant may, in accordance with applicable administrative procedures,
designate the percentages, in 1 percent increments, of Supplemental Salary
Reduction Credits and Supplemental Matching Company Credits that shall be deemed
to be invested in one or more of the Investment Options. A single designation
shall govern the hypothetical crediting of Earnings on all of a Participant’s
Credits. Such designation shall be made at the time that the Participant first
makes a Salary reduction election pursuant to Article III.

 

5.3 Changing Investment Options – Future Credits

A Participant may, in accordance with applicable administrative procedures,
change his or her designation of Investment Options as to subsequent Credits,
subject to the limitations of Section 5.2, at any time. Such change shall
commence effective with the first payroll period next following request for such
change, in accordance with uniform procedures established by the Plan
Administrator.

 

5.4 Transfer Among Investment Options

A Participant may, in accordance with applicable administrative procedures,
elect to transfer all or a portion of the deemed value of Credits and Earnings
credited on his or her behalf between and among Investment Options, subject to
the limitations of Section 5.2, at any time. Such transfer shall commence as
soon as possible following request for such transfer. Notwithstanding the
foregoing, the provisions of this Section 5.4 shall not apply with respect to a
Participant who has incurred a Separation of Service for any reason other than
Retirement.

 

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ARTICLE VI

DISTRIBUTION UPON SEPARATION FROM SERVICE

 

6.1 Time of Distribution; Vested Interest

Except as otherwise specified in this Article VI, Credits and Earnings on a
Participant’s behalf shall be distributed to the Participant upon his or her
Separation from Service provided, however, that if the Participant is a Key
Employee on September 1 of the calendar year prior to the Plan Year in which the
Participant incurs a Separation from Service, the Participant’s monthly
retirement benefit may not commence to be paid prior to the date that is the
6-month anniversary of the Participant’s Separation from Service (or, if
earlier, the date of the Participant’s death.) Any Participant or Beneficiary
who is subject to delayed payments pursuant to this Section 6.1 shall receive a
lump sum cash payment in an amount equal to the payments such individual would
have otherwise received during the period of delay plus interest pursuant to
Section 5.2 or at the rate of 6% compounded annually, whichever is applicable.
Any transfer of employment to a subsidiary or affiliate of an Employer will not
be considered a Separation from Service for purposes of this Article VI.

A Participant shall at all times have a 100% nonforfeitable vested interest in
the Credits and Earnings on his or her behalf.

 

6.2 Automatic Form of Payment

If a Participant has not elected the optional form of payment as provided in
Section 6.3, the Participant’s Credits and Earnings shall be paid to the
Participant as soon as administratively practicable following the Participant’s
Separation from Service in a lump sum.

 

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6.3 Optional Form of Payment

 

(a) A Participant may, by completing an election on the Appropriate Form
received by the Plan Administrator during the election period and pursuant to
the procedures specified in Section 6.3(b) and (c), elect that the Credits and
Earnings on his or her behalf of no less than $50,000 be paid in annual cash
installments over a period of not more than ten (10) years following his or her
Separation from Service by reason of Retirement or death, with no life
contingency. In the event of the death of the Participant prior to receiving ten
(10) annual payments, payments shall continue to be made to his or her
Beneficiary until all guaranteed payments have been made. If the Beneficiary
also dies before all guaranteed payments have been made, further annual payments
shall be made for the remainder of the guaranteed period to the alternate
Beneficiary designated by the Participant. If there is no surviving alternate
Beneficiary to receive the remainder of any guaranteed payments, a single sum
payment of the remaining guaranteed payments shall be paid to the estate of the
last surviving Beneficiary.

 

(b) An election of the optional form of payment under paragraph (a) above may be
made on the Appropriate Form at the time of the Participant’s initial election
to participate and within the time limits described in Section 2.1(a) or (b).
Annual installments pursuant to such election will commence on January 31 of the
first calendar year following the Participant’s Separation from Service and will
continue on each succeeding January 31 until all guaranteed payments have been
made. An election of the optional form of payment not made within the time
limits described in Section 2.1(a) or (b) must be made on the Appropriate Form
at least one year prior to the Participant’s Separation from Service and payment
pursuant to such optional form may not commence for at least five years
following such date. Annual payments pursuant to such election will commence on
January 31 of the sixth (6th) calendar year following the Participant’s
Separation from Service and will continue on each succeeding January 31 until
all guaranteed payments have been made.

 

(c)

An election of the optional form of payment under paragraph (a) above may be
revoked on the Appropriate Form and a new election made at any time and any
number of times during the applicable election period, provided that a
revocation of the optional form of payment and new election of the automatic
form of payment described in Section 6.2 is subject to the provisions of
paragraph (b) above regarding timing and payment

 

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commencement as if the automatic form of payment were substituted for the
optional form of payment. A Participant may change the Beneficiary named in his
or her election of the optional form of payment at any time prior to the date
distribution under the option actually commences. An election of the optional
form of payment shall become effective on the date payments commence and may not
be changed or revoked thereafter.

 

6.4 Distribution Upon Death of Participant

If a Participant dies prior to distribution of his or her Credits and Earnings
pursuant to Section 6.2 or 6.3, distribution of the Participant’s Credits and
Earnings will be made to the Participant’s Beneficiary. The death benefit
payable pursuant to this Section 6.4 will be in accordance with the form of
payment elected and subject to the procedures described in Sections 6.2 and 6.3.

 

6.5 Distribution Upon Income Inclusion

Notwithstanding any other provisions of this Plan, if any amounts credited
hereunder are found, in a final decision by a court of competent jurisdiction or
under an audit closing agreement or other final disposition of the Internal
Revenue Service, to be includable in the gross income of a Participant or
Beneficiary prior to distribution pursuant to the provisions of this Article VI
because of the Plan’s failure to meet the requirements of Section 409A of the
Code and regulations thereunder, such Participant or Beneficiary shall receive
payment of an amount equal to the amount found to be includable in gross income
as soon as administratively practicable. Any additional amounts payable under
the Plan shall be reduced by the amount payable pursuant to the preceding
sentence.

 

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Aarticle VII

ADMINISTRATION OF PLAN

 

7.1 Plan Administrator

The general administration of the Plan and the responsibility for carrying out
the provisions of the Plan shall be delegated to the Plan Administrator. The
Plan Administrator shall be either an individual appointed by the Board of
Directors, an office or position of the Company whose occupant is to act in this
capacity or a committee, as determined from time to time by the Board of
Directors.

 

7.2 Powers and Duties

The Plan Administrator shall have full charge of the administration of the Plan
with all powers necessary to enable it properly to carry out its duties. The
Plan Administrator shall have discretionary authority to determine eligibility
and to grant or deny benefits, including the right to make factual
determinations in connection therewith, and shall have the exclusive right to
construe and interpret the Plan and to decide any and all matters arising
thereunder or in connection with the administration of the Plan. The decisions
of the Plan Administrator will, to the extent permitted by law, be conclusive
and binding upon all persons having or claiming to have any right or interest in
or under the Plan.

 

7.3 Rules and Regulations of the Plan Administrator

The Plan Administrator may promulgate such rules and regulations in connection
with its administration of the Plan as are consistent with the terms and
provisions hereof.

 

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7.4 Claims Procedure

 

(a) Claim for Benefits

For purposes of the Plan, a claim for benefits is a written application for a
benefit or benefits filed with the Plan Administrator or its delegate. A
Participant or Beneficiary or either of their authorized representative who
believes that he or she is entitled to payments other than those initially
determined to be payable (“claimant”) may file a claim for benefits stating the
nature of his or her claim, the facts supporting the claimant’s claim, the
amount claimed and the claimant’s name and current address.

 

(b) Notice of Denial of Claim

In the event that the Plan Administrator determines that any claim for benefits
should be denied in whole or in part, the Plan Administrator shall, by written
or electronic communication, notify such claimant within a reasonable period of
time but not later than 90 days after receipt of such claim that the claimant’s
claim has been denied. Such notification shall be written in a manner calculated
to be understood by the claimant and shall include:

 

  (i) the specific reason or reasons for the denial,

 

  (ii) specific references to the pertinent Plan provisions on which the denial
is based,

 

  (iii) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary, and

 

  (iv) an explanation of how the claimant can obtain review of such denial,
including the Plan’s review procedures, the time limits applicable to such
procedures, and a statement of the claimant’s right to bring a civil action
under Section 502(a) of ERISA following an adverse benefit determination on
review.

 

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(c) Review of Claim Denial

Within 60 days after receipt by the claimant of notice of denial of claim, such
claimant may request, by mailing or delivery of written notice to the Plan
Administrator, a review by the Plan Administrator of the decision denying the
claim. Unless the Plan Administrator for good cause extends the 60-day period,
if the claimant fails to request such a review within such 60-day period, it
shall be conclusively determined for all purposes of this Plan that the denial
of such claim by the Plan Administrator is correct. If a review is requested,
the claimant may submit written comments, documents, records and other
information relating to the claim for benefits. The claimant shall be provided,
upon request and free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the claimant’s claim for
benefits. Any such review shall take into account all comments, documents,
records, and other information submitted by the claimant relating to the claim,
without regard to whether such information was submitted or considered in the
initial benefit determination. After such review, the Plan Administrator shall
within a reasonable period of time, but not later than 60 days after receipt of
the claimant’s request for review, determine whether such denial of the claim
was correct and shall notify such claimant by written or electronic
communication of its determination. In the case of an adverse determination on
review, such notification shall be written in a manner calculated to be
understood by the claimant and shall include:

 

  (i) the specific reason or reasons for the adverse determination,

 

  (ii) specific reference to the pertinent Plan provisions on which the decision
is based,

 

  (iii) a statement that the claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the claimant’s claim for benefits, and

 

  (iv) a statement of the claimant’s right to bring an action under
Section 502(a) of ERISA.

 

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(d) Extension for Special Circumstances

The 90-day and 60-day periods described in subsections (b) and (c) above,
respectively, may be extended for as much as a second 90-day or 60-day period,
as the case may be, if the Plan Administrator determines that special
circumstances (such as the need to hold a hearing) require an extension of time
for processing the claim or request for review of claim denial, whichever is
applicable. If the Plan Administrator determines that an extension of time for
processing is required, written notice of the extension shall be furnished to
the claimant prior to the termination of the initial period, indicating the
special circumstances requiring such extension of time and the date by which a
final determination is expected.

 

(e) Electronic Communication

Any electronic communication provided under subsection (b) or (c), above, shall
comply with the standards imposed by Department of Labor Regulation
Section 2520.104b-1(c)(1)(i), (iii) and (iv).

 

(f) Determination of Relevance

For purposes of subsection (c), above, a document, record or other information
shall be considered “relevant” to a claimant’s claim if such document, record,
or other information

 

  (i) was relied upon in making the benefit determination,

 

  (ii) was submitted, considered, or generated in the course of making the
benefit determination, without regard to whether such document, record, or other
information was relied upon in making the benefit determination, or

 

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  (iii) was consistent with administrative processes and Plan document
provisions applicable in making the benefit determination.

 

(g) Exhaustion of Administrative Remedies

No claimant shall be entitled to challenge the Plan Administrator’s denial of
benefits or determination on review in judicial or administrative proceedings
without first complying with the procedures in this Section 7.4. The Plan
Administrator’s determinations made pursuant to this Section 7.4 are intended to
be binding and conclusive on claimants.

 

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ARTICLE VIII

GENERAL MATTERS

 

8.1 Benefits from General Assets

Benefits under the Plan will be paid from the general assets of the Company. In
the event that the Company shall decide to establish an advance accrual reserve
on its books against the future expense of benefit payments or contributions, or
establish a “grantor trust” within the meaning of Sections 671 through 679 of
the Code, such reserve or grantor trust shall not under any circumstances be
deemed to be an asset of this Plan but at all times shall remain a part of the
general assets of the Company, subject to claims of the Company’s creditors.
Neither a Participant nor his or her Beneficiary will have any interest in any
specific asset of the Company as a result of the Plan.

 

8.2 No Assignment

Benefits payable under the Plan will not be subject to assignment, transfer,
sale, pledge, encumbrance, alienation or charge by a Participant, surviving
spouse, contingent annuitant or Beneficiary, nor may any such benefits be taken,
either voluntarily or involuntarily for the satisfaction of the debts of, or
other obligations or claims against, such person or entity, including claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings.

 

8.3 Expenses of Plan

All expenses of the Plan will be paid by the Company.

 

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8.4 Amendment or Termination

The Plan may be amended or terminated at any time by the Board of Directors.
However, no amendment or termination of the Plan may have a material adverse
impact upon the accrued and future rights of anyone participating in the Plan as
of the amendment or termination date, unless he or she consents to such
amendment in writing.

 

8.5 Limitation on Benefits and Payments

A person entitled to benefits under the Plan shall have a claim upon the Company
only to the extent of the annual payments, if any, due up to and including the
then current year and shall not have a claim against the Company for any
subsequent annual payment unless and until such payment shall become due and
payable. Notwithstanding any provision of the Plan to the contrary, the right of
a Participant or the Participant’s Beneficiary to receive retirement benefits
otherwise payable hereunder shall cease upon the discharge of the Participant
from employment with the Employer for acts that constitute fraud, embezzlement,
or dishonesty.

 

8.6 Participation by Subsidiaries and Affiliates

If any company is now or hereafter becomes a subsidiary or affiliated company of
the Company and its employees participate in the Savings Plan, the Board of
Directors may authorize such subsidiary or affiliated company to participate in
this Plan upon appropriate action by such company necessary to adopt the Plan.
In determining the period of service of any employee of such subsidiary or
affiliated company, the Board of Directors may determine the extent, if any, to
which credit is granted for service with such subsidiary or affiliated company
prior to the time it became such.

 

8.7 Limitation of Liability

The Plan Administrator shall not be liable for any act or omission on its part,
excepting only its own willful misconduct or gross negligence or except as
otherwise expressly provided by applicable law. To the extent permitted by
applicable law and not otherwise

 

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covered by insurance, the Company shall indemnify and save harmless the Plan
Administrator against any and all claims, demands, suits or proceedings in
connection with the Plan that may be brought by Participants or their
Beneficiaries, or by any other person, corporation, entity, government or agency
thereof; provided, however, that such indemnification shall not apply with
respect to acts or omissions of willful misconduct or gross negligence. The
Board of Directors, at the expense of the Company, may settle any such claim or
demand asserted or suit or proceeding brought against the Plan Administrator
when such settlement appears to be in the best interest of the Company.

 

8.8 Agent for Service of Process

The Plan Administrator or such other person as may from time to time be
designated by the Plan Administrator shall be the agent for service of process
under the Plan.

 

8.9 Delivery of Elections to Plan Administrator

All elections, designation, requests, notices, instructions and other
communications required or permitted under the Plan from the Employer, a
Participant, Beneficiary or other person to the Plan Administrator shall be on
the Appropriate Form, shall be mailed by first-class mail or delivered to such
address as shall be specified by such Plan Administrator, and shall be deemed to
have been given or delivered only upon actual receipt thereof by such Plan
Administrator at such location.

 

8.10 Delivery of Notice to Participants

All notices, statements, reports and other communications required or permitted
under the Plan from the Employer or the Plan Administrator or any officer,
Participant, Beneficiary or other person shall be deemed to have been duly given
when delivered to, or when mailed by first-class mail, postage prepaid, and
addressed to such person at the address last appearing on the records of the
Plan Administrator.

 

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8.11 No Enlargement of Employee Rights

No Participant shall have any right to receive retirement benefits under the
Plan except in accordance with the terms of the Plan. Establishment of the Plan
shall not be construed to give any Participant the right to be retained in the
service of the Company or any Employer.

 

8.12 Tax Withholding

The Company shall withhold from Participants’ retirement benefits any taxes
required to be withheld under federal, state, or local law. Each Participant
shall bear the ultimate responsibility for payment of all taxes owed under this
Plan.

 

8.13 Incapacity of Recipient

If any person entitled to a distribution under the Plan is deemed by the Plan
Administrator to be incapable of personally receiving and giving a valid receipt
for such payment, then, unless and until claim therefor shall have been made by
a duly appointed guardian or other legal representative of such person, the Plan
Administrator may provide for such payment or any part thereof to be made to any
other person or institution then contributing toward or providing for the care
and maintenance of such person. Any such payment shall be a payment for the
account of such person and a complete discharge of any liability of the Company,
the Plan Administrator and the Plan therefor.

 

8.14 Unclaimed Benefit

In the event that all, or any portion, of the retirement benefits payable to a
Participant or Beneficiary hereunder shall, at the expiration of five years
after it shall become payable, remain unpaid solely by reason of the inability
of the Company or the Plan Administrator, after sending a registered letter,
return receipt requested, to the last known address, and after further diligent
effort, to ascertain the whereabouts of such Participant or Beneficiary, the
amount so distributable shall be treated as a forfeiture and shall be retained
by the Company as part of its general assets.

 

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ARTICLE IX

CONSTRUCTION OF THE PLAN

 

9.1 Construction of the Plan

The Plan is intended to constitute an arrangement that is unfunded and
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, within the meaning
of ERISA. The provisions of this Plan shall be construed, regulated and
administered according to the laws of the Commonwealth of Kentucky, other than
with respect to choice of law.

 

9.2 Headings

The headings in this document and in the table of contents prefixed hereto are
inserted only as a matter of convenience and for reference and in no way define,
limit, enlarge or describe the scope of intent of the Plan and shall in no way
affect the Plan or the construction of any provisions thereof.

 

9.3 Separability

If any provision of the Plan is held invalid or unenforceable, its invalidity or
unenforceability shall not affect any other provisions of the Plan.

 

9.4 Counterparts

This Plan has been established by the Company in accordance with the resolutions
adopted by the Board of Directors and may be executed in any number of
counterparts, each of which shall be deemed to be an original. All the
counterparts shall constitute one instrument, which may be sufficiently
evidenced by any one counterpart.

IN WITNESS WHEREOF, and as evidence of the adoption of the Plan by Southern
Graphic Systems, Inc., the undersigned officer duly authorized has appended his
or her signature this 3rd day of August, 2006.

 

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ATTEST:   SOUTHERN GRAPHIC SYSTEMS, INC.

/s/ Benjamin F. Harmon, IV

  By:  

/s/ Henry R. Baughman

Benjamin F. Harmon, IV     Henry R. Baughman Secretary, Southern Graphic    
President and Chief Executive Officer Systems, Inc.    

 

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