**Exhibit 10.47**

 

 

**Plan Document**

 

 

**EmployeeIncentive Plan – FY 2006**

 

***Purpose***

 

The Employee IncentivePlan (“EIP” or the “Plan”) is designed to reward select key employees of Vertis, Inc.and any subsidiary corporation (the “Company”) for achieving and exceedingperformance objectives. The Plan is intended to provide an incentive forsuperior work and to motivate participating employees to achieve high levels ofperformance that drive business results. The Plan is also intended to alignparticipant goals with those of the Company and its shareholders and enablesthe Company to continue to attract and retain highly qualified employees. ThisPlan Overview, as it is written, is intended to serve as a reference guide andplanning tool with which the Company can further administer the Plan.

 

***Eligibility and Participation***

 
| 1.1    |   | Members of management designated as managers (or  equivalent) and above are eligible to be considered for participation in the  Plan, subject to selection and approval as set forth in paragraph 1.2.                                                                                                                                                                                                                              |
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| 1.2    |   | The Administrative Committee, as defined below, for  the Plan shall have the authority to identify those eligible employees  (“Participants”) who will participate in the Plan for each Performance  Period. Participants are generally defined as manager level and above who  directly impact the top or bottom line financials of the Company. However,  job title alone will not guarantee participation in the Plan. |
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| 1.3    |   | The Administrative Committee, in its sole  discretion, may also select certain non-manager-level employees to  participate in the EIP when those non manager-level employees are able to  significantly impact business results.                                                                                                                                                                                               |
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| 1.4    |   | Participants who are hired between January 1  and October 1 of the Plan Year are eligible to participate for that Plan  Year. Participants hired after October1st are not eligible to participate for  that Plan Year. Any payout for a Participant hired after                                                                                                                                                           |
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|   |   | January 1st will be prorated based on the  number of months worked, including any months on a Company approved leave of  absence, during the Plan Year. Participants hired between the 1st and the  15th of any month will be deemed to have been hired on the 1st of that month.  Participants hired between the 16th and the 31st of any month will be deemed  to have been hired on the 1st of the following month. |
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***Plan Year, Performance Period and Performance Goals***

 
| 2.1    |   | The fiscal year of the Plan shall be the calendar  year (the “Plan Year”). The performance period in which incentives  may be payable under the Plan shall normally be the Plan Year; provided  however, that the Administrative Committee shall have the authority to  designate alternative performance periods under the Plan (“Performance  Period”).                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| 2.2    |   | The Administrative Committee shall establish in  writing, with respect to each Performance Period, Vertis-wide performance  goals and specific target objectives for each (“Vertis Performance Goals”).  To the extent that Vertis Performance Goals are attained, a method or formula  for computing the amount of incentive compensation payable to each  participant under the Plan shall be communicated at the beginning of each  Performance Period or as soon as administratively possible after the  beginning of the Performance Period.                                                                                                                                                                                                                                                      |
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| 2.3    |   | Vertis Performance Goals specific to the current  Plan Year are attached as Attachment A. In addition, other performance goals  may be established and may be based upon a particular business unit  or participant’s attainment of specific objectives set for the Performance  Period (“Individual Objectives”) (the Vertis Performance Goals and the  Individual Objectives are collectively referred to as “Performance Goals”).                                                                                                                                                                                                                                                                                                                                          |
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| 2.4    |   | Individual Objectives shall be developed for each  Participant by the Participant’s supervisor. Individual Objectives will be  documented on the appropriate Plan form at the beginning of the  Performance Period, or as soon as possible thereafter, copies of which will  be given to the Participant and the Administrative Committee. Individual Objectives  will be subject to approval by the Administrative Committee or its designee.  Individual Objectives may be changed during a performance period to  reflect changes in the business or in Company initiatives. To the extent  Individual Objectives are changed during a year, the changes will be reviewed  with the Participant, and a new form will be completed and sent to the  Administrative Committee for approval. |
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***Determination of Incentive Awards***

 
| 3.1    |   | As soon as practicable following the end of the applicable  Performance Period, each Participant will review their performance against  their stated Individual Objectives with their supervisor. The Supervisor will  provide a report to their |
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|   |   | appropriate Group Human Resources Director and  Business Unit General Manager indicating the Participant’s level of  achievement with respect to their Individual Objectives. Following the  approval of the Group Human Resources Director and General Manager, each Participant’s  Individual Objectives attainment level will be reported to the Corporate  Human Resources Department.                                                   |
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| 3.2    |   | The Chief  Financial Officer shall certify in writing to what extent the Company, its  subsidiaries, operating divisions or other operating units and the  Participants have achieved any established Vertis Performance Goal(s) for the  Performance Period(s), including the satisfaction of material terms of the  Performance Goals. The Chief Financial Officer shall then provide this  information to the Corporate Human Resources Department. |
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| 3.3    |   | The Corporate  Human Resources Department shall then calculate the amount of incentive for  each Participant based upon the formula or method as set out for the  applicable Performance Period. Calculated awards shall be presented to the  Administrative Committee for final review and approval.                                                                                                                                                  |
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***Payment of Incentive Awards***

 
| 4.1    |   | Approved  incentive awards shall be payable by the Company by direct deposit, unless  other arrangements are agreed to, to each Participant, or to his/her estate  in the event of his/her death. Payments shall be made as soon as possible  after the Administrative Committee has approved the awards pursuant to  Section 3.3, but no later than two and one-half months following the end  of the calendar year in which the applicable Performance Period ended.     |
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| 4.2    |   | Except as otherwise provided (a) by the  Administrative Committee or (b) in any written employment agreement,  scheduled retirement, written severance agreement or other written agreement  between the Company and a Participant, there shall be no payment of any  incentive award to any Participant who is not actively employed or on a  Company approved leave of absence as of the end of the Plan Year.                                                      |
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| 4.3    |   | To be eligible to receive a payout under this  policy, the participant must be an employee in good standing with the  company. “Good standing” for purposes of this document shall mean that they  shall have received a performance rating of at least Proficient as of the  date of their most recent performance review or if the review is more than 3  months old, must be currently performing at least in a Proficient manner as  of the end of the Plan Year. |
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| 4.4    |   | Calculation of payouts, if any, will be based on the  Participant’s base salary as of the end of the Plan Year (December 31).                                                                                                                                                                                                                                                                                                                                         |
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| 4.5    |   | The Company will  deduct from any incentive award any applicable withholding taxes or any  amounts owed by the Participant to the Company or any of its subsidiaries. |
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***Other Terms and Conditions***

 
| 5.1    |   | Except as  may be otherwise required by law, incentive awards under the Plan shall  not be subject in any manner to anticipation, alienation, sale, transfer,  assignment, pledge, encumbrance, charge, garnishment, execution, or levy of  any kind, either voluntary or involuntary. Incentives awarded under the Plan  shall be payable from the general assets of the Company, and no participant  shall have any claim with respect to any specific assets of the Company. |
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| 5.2    |   | Neither the Plan  nor any action taken under the Plan shall be construed as giving any employee  the right to be retained in the employment of the Company or any parent,  subsidiary or affiliate of the Company or to maintain any Participant’s  compensation at any level. Nothing in this Plan shall in any way diminish or  limit either party’s right to terminate the employment relationship at any  time and for any lawful reason, in its sole discretion.      |
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***Administration***

 
| 6.1    |   | The Administrative  Committee is comprised of the President & Chief Operating Officer,  Chief Financial Officer, VP Human Resources, Chief Legal Officer, and the  Director, Corporate Compensation & Benefits. The CFO is the chair of  the Committee.                                                                  |
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| 6.2    |   | The Administrative Committee shall have full power,  authority and discretion to administer and interpret the provisions of the  Plan and to adopt such rules, regulations, agreements, guidelines and  instruments for the administration of the Plan and for the conduct of its  business as the Committee deems necessary or advisable. |
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| 6.3    |   | The Administrative Committee shall have full power  to delegate to any officer or employee of the Company the authority to  administer and interpret procedural and administrative issues, and unless the  Committee otherwise delegates this authority, the Director, Corporate  Compensation & Benefits fulfills this role.     |
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| 6.4    |   | The Administrative Committee may rely on  opinions, reports or statements of officers or employees of the Company or  any subsidiary thereof and of Company counsel (inside or retained counsel),  public accountants and other professional or expert persons.                                                                       |
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| 6.5    |   | The Administrative Committee reserves the right to  amend or terminate the Plan in whole or in part at any time without  advance notice to the Participants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| 6.6    |   | To the extent permitted by applicable law,  (a) no member of the Administrative Committee shall be liable for any  action taken or omitted to be taken or for any determination made in good  faith with respect to the Plan, and (b) the Company shall indemnify and  hold harmless each member of the Administrative Committee against any  reasonable cost or expense (including reasonable counsel fees) or liability  (including any sum paid in settlement of a claim with the approval of the  Administrator) arising out of any act or omission in connection with the  administration or interpretation of the Plan, unless arising out of fraud or  bad faith. |
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| 6.7    |   | The place of administration of the Plan shall be in  the State of Maryland, and the validity, construction, interpretation,  administration and effect of the Plan and of its rules and regulations,  and rights relating to the Plan, shall be determined solely in accordance  with the laws of the State of Maryland.                                                                                                                                                                                                                                                                                                                                                      |
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