Exhibit
10.13


 


RESTRICTED
STOCK AGREEMENT


 


 


VERTIS
HOLDINGS, INC.

1999 EQUITY AWARD PLAN


 


GRANTEE:
GARY SUTULA


 


NO. OF
SHARES: 20,668


 


This Agreement (the “Agreement”),
approved by Thomas H. Lee Equity Fund IV, L.P. (the “Sponsor”),
evidences the award of 20,668 restricted shares (each, an “Award
Share,” and collectively, the “Award
Shares”) of the Common Stock of Vertis Holdings, Inc., a
Delaware corporation (the “Company”),
granted to you, Gary Sutula, effective as of March 6, 2006 (the “Grant Date”), pursuant to the Vertis
Holdings, Inc. 1999 Equity Award Plan (the “Plan”)
and conditioned upon your agreement to the terms described below. All of the
provisions of the Plan are expressly incorporated into this Agreement.


 


You must return to Jennifer M.
Bass an executed copy of this Agreement within 10 Business Days after the date
indicated below the name of the officer who signed this Agreement on behalf of
the Company. If you fail to do so, the Award Shares will be forfeited without
consideration and this Agreement will be null and void.


 


1.             Terminology.
The Glossary at the end of this Agreement contains definitions of all words
that appear in this Agreement with an initial capital letter that are not
defined elsewhere in this Agreement.


 


2.             Vesting.
All of the Award Shares are nonvested and forfeitable as of the Grant Date. So
long as your Service with the Company is continuous from the Grant Date through
the applicable date upon which vesting occurs, the Award Shares will vest and
become nonforfeitable immediately prior to the first to occur of the following:


 


(a)           a
Liquidity Event;


(b)           your
death; or


(c)           the
date upon which you suffer a Disability.


 


Except as provided
above, unless otherwise determined by the Administrator, none of the Award
Shares will become vested and nonforfeitable after your Service with the
Company ceases.


 


3.             Termination
of Employment or Service.


 


3.1           Unvested
Award Shares. If your Service with the Company ceases for any reason other
than your death or Disability, all Award Shares that are not then vested and
nonforfeitable will be immediately forfeited to the Company upon such cessation
for no consideration.


 


3.2           Vested
Award Shares. If your Service with the Company ceases for any reason, all
Award Shares that are then vested and nonforfeitable will not be affected by
such cessation but will remain subject to the provisions of this Agreement,
including the restrictions on transfer set forth under Section 4 of this
Agreement.


 

















 


4.             Restrictions
on Transfer.


 


4.1           Except
as otherwise provided under Sections 4.3 or 7 of this Agreement or in
accordance with your will or the laws of descent and distribution upon your
death, until an Award Share becomes vested and nonforfeitable and a
Liquidity Event has occurred, the Award Share may not be assigned, transferred,
pledged, hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar
process.


 


4.2           You
hereby represent and warrant to the Company as follows:


 


(a)           You
will hold the Award Shares for your own account for investment only and not
with a view to, or for resale in connection with, any “distribution” of the
Award Shares within the meaning of the Securities Act.


 


(b)           You
understand that the Award Shares have not been registered under the Securities
Act by reason of a specific exemption and that the Award Shares must be held
indefinitely, unless they are subsequently registered under the Securities Act
or you obtain an opinion of counsel, in form and substance satisfactory to the
Company and its counsel, that such registration is not required. You further
acknowledge and understand that the Company is under no obligation to register
the Award Shares.


 


(c)           You
understand that the Company may, in its discretion, impose restrictions on the
sale, pledge or other transfer of the Award Shares (including the placement of
appropriate legends on stock certificates) if, in the judgment of the Company,
such restrictions are necessary or desirable to comply with the Securities Act,
the securities laws of any State or any other law.


 


(d)           You
are aware that your investment in the Company is a speculative investment that
has limited liquidity and is subject to the risk of complete loss.


 


4.3           The
provisions of Sections 4.1 and 4.2(b) shall not apply to the following
transfers; provided, however, that no transfer of Award Shares
pursuant to this Section 4.3 (other than a transfer to the Company) shall be
given effect on the books of the Company unless and until the Permitted
Transferee (as defined below) executes an agreement in writing with the parties
hereto pursuant to which he, she, or it agrees to be bound by all of the terms
and conditions of this Agreement to the same extent as the parties hereto; provided,
further, that no transfer will be permitted if the Company determines
that, in its sole discretion, such transfer is, or is reasonably likely to be,
in violation of applicable federal or state securities laws:


 


(a)           a transfer of vested Award Shares
made to an Affiliate of the Company or an Affiliate of any subsidiary of the
Company;


 


(b)           a transfer of vested Award Shares
upon your death to your executors, administrators, testamentary trustees,
legatees or beneficiaries;


 


(c)           a transfer of vested Award Shares to
a trust, the beneficiaries of which include only you and your spouse, siblings,
or direct lineal ancestors or descendants;


 


(d)           a transfer of vested Award Shares
made as a gift to your spouse or lineal descendants; or


 


(e)           a transfer of vested Award Shares
made pursuant to a court order in connection with a divorce proceeding.


 


The transferee in each of
the subclauses (a) through (e) above is referred to herein as a “Permitted Transferee.”  Notwithstanding anything to the contrary in
this Agreement, no transfer made to the Company, any 


 


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subsidiary of the Company, or the Sponsor shall be
subject to any restriction on transfer contained herein, so long as any such
transfer is made in accordance with all applicable federal and state securities
laws and does not violate any contractual agreement in effect at the time of
such transfer.


 


4.4           The
Company shall not be required to (a) transfer on its books any Award
Shares that have been sold or transferred in contravention of this Agreement or
(b) treat as the owner of Award Shares, or otherwise accord voting,
dividend or liquidation rights to, any transferee to whom Award Shares have
been transferred in contravention of this Agreement.


 


5.             Stock
Certificates. You will be reflected as the owner of record of the Award
Shares as of the Grant Date on the Company’s books. The Company will hold the
share certificates for safekeeping, or otherwise retain the Award Shares in
uncertificated book entry form, until the Award Shares become vested and
nonforfeitable and until they may be transferred freely without restriction
under this Agreement. Until the Award Shares become vested and nonforfeitable,
any share certificates representing such shares will include a legend in
substantially the following form, in addition to any other legends that may be
required under federal or state securities laws.


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE APPLICABLE
SECURITIES ACT OF ANY STATE BUT HAVE BEEN ISSUED IN RELIANCE UPON EXEMPTIONS
FROM REGISTRATION CONTAINED IN SAID ACTS. NO SALE, OFFER TO SELL OR OTHER
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE UNLESS A
REGISTRATION STATEMENT UNDER SAID ACTS IS IN EFFECT WITH RESPECT TO THE
SECURITIES, OR AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SUCH ACTS IS
THEN APPLICABLE.


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER AND THE OTHER TERMS AND CONDITIONS SET
FORTH IN A CERTAIN RESTRICTED STOCK AGREEMENT DATED MARCH 6, 2006, AS
AMENDED FROM TIME TO TIME, BETWEEN THE COMPANY AND THE REGISTERED OWNER OF THIS
CERTIFICATE (OR HIS PREDECESSOR IN INTEREST), AND SUCH AGREEMENT IS AVAILABLE
FOR INSPECTION WITHOUT CHARGE AT THE OFFICE OF THE SECRETARY OF THE COMPANY.


 


All regular cash dividends and other distributions on
the Award Shares held by the Company will be paid directly to you, but any
stock dividends will be treated in the manner set forth in Section 9 of this
Agreement.


 


6.             Market
Stand-Off Agreement. You agree that following the effective date of a
registration statement of the Company filed under the Securities Act, to the
extent requested by the Company and an underwriter of Common Stock or other
securities of the Company, you will not offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any equity securities of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of such securities, whether
any such transaction is to be settled by delivery of such securities or other
securities, in cash or otherwise, or publicly disclose the intention to make
any such offer, sale, pledge or disposition, or to enter into any such
transaction, swap, hedge or other arrangement, in each case during the seven
days prior to and the one hundred and eighty (180) days after the effectiveness
of any underwritten offering of the Company’s equity securities (or such longer
or shorter period as may be requested in writing by the managing underwriter
and agreed to in writing by the Company) (the “Market
Stand-Off Period”), except as part of such underwritten
registration if otherwise permitted. In addition, you agree to execute any
further letters, agreements and/or other documents requested by the Company or
its underwriters which are consistent with the terms of this Section 6. The
Company may impose stop-transfer instructions with respect to securities
subject to the foregoing restrictions until the end of such Market Stand-Off
Period.


 


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7.             Tag-Along
and Drag-Along Rights.


 


7.1.          Tag-Along
Rights. (a)  If the Sponsor proposes
to transfer all or a portion of the shares of Common Stock beneficially owned
by it to a Third Party which would not be an Affiliate of the Sponsor
immediately upon consummation of such transfer, and the Sponsor does not
exercise its Drag-Along Rights in accordance with Section 7.4 (a “Tag-Along Sale”), the Sponsor shall
cause you and your Permitted Transferees to have the option to exercise your
rights under this Section 7.1, provided, however, that you and
your Permitted Transferees, if any, shall have no rights under this Section 7.1
if the shares of Common Stock to be transferred in such transaction and any
shares of Common Stock which have been transferred to any Third Party within a
90-day period preceding the date of such transfer have, in the aggregate, a
Fair Market Value less than ten million dollars ($10,000,000) (a “Small Transfer”), and provided,
further, that when the cumulative Fair Market Value of all such Small
Transfers, the value to be calculated at the time of each such transfer,
exceeds fifty million dollars ($50,000,000), the restrictions provided for in
the first proviso of this Section 7.1(a) shall no longer be in effect. Moreover,
you and your Permitted Transferees, if any, shall have no rights under this
Section 7.1 with respect to any transfer by the Sponsor of any shares of Common
Stock beneficially owned by it to any limited partner of the Sponsor.


 


(b)           In the
event of a proposed Tag-Along Sale:


 


(i)            the Sponsor shall provide you
written notice of the terms and conditions of such proposed Tag-Along Sale, as
described in Section 7.1(c) (“Tag-Along Notice”),
at least 10 Business Days prior to the consummation of such proposed Tag-Along
Sale and offer you and your Permitted Transferees the opportunity to
participate in such Tag-Along Sale on the terms and conditions set forth in
this Section 7.1; and


 


(ii)           subject to Section 7.1(c), you and
your Permitted Transferees shall be entitled to sell up to a Pro Rata Portion
(as defined below) of your Award Shares (the “Tag
Shares”) at the same price and on the same terms as the shares
of Common Stock proposed to be sold by the Sponsor in such Tag-Along Sale in
accordance with the terms set forth in this Section 7.1.


 


The “Pro-Rata Portion” of your Tag Shares
shall mean an amount of such Tag Shares equal to the product of:


 


(A)                              (x) a fraction, the numerator of
which is the number of shares of Common Stock proposed to be transferred by the
Sponsor and its Affiliates in such Tag-Along Sale and the denominator of which
is the total number of shares of Common Stock beneficially owned by the Sponsor
and its Affiliates collectively, immediately prior to transferring such shares
of Common Stock; or, (y) for the first transfer after the restrictions set
forth in the first proviso of Section 7.1(a) are no longer in effect, a
fraction, the numerator of which is the number of shares of Common Stock
proposed to be transferred by the Sponsor and its Affiliates in such Tag-Along
Sale plus the cumulative number of shares of Common Stock transferred by the
Sponsor and its Affiliates in all Small Transfers, and the denominator of which
is the total number of shares of Common Stock beneficially owned by the Sponsor
and its Affiliates collectively, immediately prior to transferring such shares
of Common Stock plus the cumulative number of shares of Common Stock
transferred by the Sponsor and its Affiliates in all Small Transfers; and


 


(B)                                the total amount of Tag Shares
beneficially owned by such Executive at the time of the Tag-Along Sale.


 


(c)           The
Tag-Along Notice shall identify the proposed transferee, the number of shares
of Common Stock to be sold by the Sponsor in the Tag-Along Sale, the Pro Rata
Portion of your Tag Shares which you shall be entitled to transfer in such
Tag-Along Sale, the price at which the transfer of shares of Common Stock is
proposed to be made, and all other material terms and conditions of the
proposed Tag-Along Sale. From the date of 


 


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the Tag-Along Notice, you and your Permitted
Transferees shall have the right (a “Tag-Along Right”),
exercisable by written notice (“Tag-Along Response Notice”)
given by you to the Sponsor within seven Business Days from the date of the
Tag-Along Notice (the “Tag-Along Response Notice
Period”), to request that the Sponsor includes in the proposed
transfer the number of Tag Shares held by you and your Permitted Transferees
(up to their Pro Rata Portion) as is specified in such Tag-Along Response
Notice at the same price and on the same terms and conditions set forth in the
Tag Along Notice; provided, however, that if the aggregate number
of shares of Common Stock proposed to be sold by (i) the Sponsor, (ii) you and
your Permitted Transferees, (iii) Other Award Share Grantees and their
permitted transferees giving tag-along notices similar to the Tag-Along Notice
during such period prescribed in Other Award Share Grantees’ Agreements and
(iv) any other persons entitled to give (and giving on a timely basis)
tag-along notices similar to the Tag-Along Notice pursuant to agreements
substantially similar to this Agreement, including those certain Option
Transfer Agreements, those certain Amended and Restated Management Subscription
Agreements, and those certain Retained Share Agreements, each between the
Company, the Sponsor and you or Other Key People, as amended, (the persons
identified in subclauses (i), (ii), (iii) and (iv) of this subsection,
collectively, the “Participants”), in such
Tag-Along Sale exceeds the number of shares of Common Stock which can be sold
on the terms and conditions set forth in the Tag-Along Notice, then only the
Tag-Along Portion of shares of Common Stock beneficially owned by you shall be
sold pursuant to the Tag-Along Sale. “Tag-Along Portion”
means, with respect to you and your Permitted Transferees, the number of shares
of Common Stock beneficially owned by you and your Permitted Transferees on the
date of the Tag-Along Notice multiplied by a fraction, the numerator of which
is the maximum number of shares of Common Stock which can be sold in the
Tag-Along Sale and the denominator of which is the aggregate number of shares
of Common Stock beneficially owned by the Participants, collectively.


 


(d)           Delivery
of a Tag-Along Response Notice by you to the Sponsor pursuant to Section 7.1(c)
shall constitute an irrevocable election by you and your Permitted Transferees,
if any, to sell the number of Tag Shares beneficially owned by it or them as is
specified in such Tag-Along Response Notice in such Tag-Along Sale. If, at the
end of a 90-day period after such delivery, the Tag-Along Sale has not been
consummated on substantially the same terms and conditions set forth in the
Tag-Along Notice, all restrictions on transfers of Tag Shares contained in this
Agreement or otherwise applicable at such time with respect to Tag Shares owned
by you and your Permitted Transferees shall again be in effect.


 


(e)           If at the
termination of the Tag-Along Response Notice Period you and your Permitted
Transferees, if any, shall not have exercised its or their Tag-Along Right by
providing the Sponsor with a Tag-Along Response Notice, such Executive and such
Executive’s Permitted Transferees shall be deemed to have waived its or their
Tag-Along Right with respect to transferring its or their Tag Shares pursuant
to such Tag-Along Sale.


 


(f)            The
Sponsor may sell, on behalf of you and your Permitted Transferees, if you and
your Permitted Transferees, if any, exercise your or their Tag-Along Right
pursuant to this Section 7.1, the shares of Common Stock entitled to be
transferred in the Tag-Along Sale on the terms and conditions set forth in the
Tag-Along Notice within 90 days of the date on which Tag-Along Rights shall
have been waived or exercised.


 


7.2.          Limitation
of Rights Following Termination of Employment. Notwithstanding any other
provision of this Agreement, upon the termination of your employment with the
Company or any of its subsidiaries for Cause, or if you terminate your employment
with the Company or any of its subsidiaries without Good Reason (as such term
is defined in your employment agreement with the Company, if any), you and your
Permitted Transferees shall have no rights under Section 7.1. In the case of
any other termination of your employment, you and your Permitted Transferees
shall continue to have the rights specified in Section 7.1.


 


7.3.          Termination
of Tag-Along Rights. Notwithstanding anything to the contrary, the
provisions of Section 7.1 shall not be applicable if the Common Stock is
publicly traded on an Exchange and there exists a Minimum Public Float.


 


7.4.          Drag-Along Rights. (a)  If the Sponsor and its Affiliates propose to
transfer all or any portion of the shares of Common Stock beneficially owned by
them to a Third Party (a “Drag-Along Sale”),
you and your Permitted Transferees shall, at the Sponsor’s option and in the
Sponsor’s sole discretion, upon your receipt 


 


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of written notice from the Sponsor, sell the
Drag-Along Portion of your Award Shares to such Third Party for the same
consideration and otherwise on the same terms and conditions on which the
Sponsor and its Affiliates sell their shares of Common Stock in such Drag-Along
Sale (the “Drag-Along Rights”).


 


The “Drag-Along Portion” of your Award
Shares means, at any time, the number of Award Shares beneficially owned by you
and your Permitted Transferees, multiplied by a fraction, the numerator of
which is the number of shares of Common Stock proposed to be sold on behalf of
the Sponsor in such Drag-Along Sale and the denominator of which is the total
number of shares of Common Stock then beneficially owned by the Sponsor.


 


(b)           The
Sponsor shall provide written notice of such Drag-Along Sale to you (a “Drag-Along Notice”) not less than 20
days prior to the consummation of such proposed Drag-Along Sale which notice
shall state that the Sponsor proposes to effect a transfer of a certain number
of shares of Common Stock, the number of shares of Common Stock proposed to be
transferred, the purchase price, the proposed transferee, the number of Award
Shares which you are required to transfer in such Drag-Along Sale (based on the
methodology set forth in Section 7.4(a)), and all other material terms and conditions
of the Drag-Along Sale. Subject to Section 7.4(c), you shall be required to
participate in the Drag-Along Sale on the terms and conditions set forth in the
Drag-Along Notice. Not later than the tenth day following the date of the
Drag-Along Notice (the “Drag-Along Notice Period”),
you shall deliver to a representative of the Sponsor designated in the
Drag-Along Notice certificates representing all the Award Shares beneficially
owned and held by you, duly endorsed, together with all other documents required
to be executed in connection with such Drag-Along Sale, or, if such delivery is
not permitted by applicable law, an unconditional agreement to deliver such
Award Shares pursuant to this Section 7.4 at the closing for such Drag-Along
Sale against delivery to you of the consideration therefor. If you should fail
to deliver such certificates to the Sponsor in a Drag-Along Sale pursuant to
this Section 7.4, the Company shall cause the books and records of the Company
to show that such shares of Common Stock are bound by the provisions of this
Section 7.4 and that such shares of Common Stock shall be transferred to the
purchaser of the shares of the Common Stock immediately upon surrender for
transfer by the holder thereof.


 


(c)           The Sponsor shall have a period of 90 days from the date
of the Drag-Along Notice to consummate the Drag-Along Sale on the terms and
conditions set forth in such Drag-Along Sale Notice. If the Drag-Along Sale
shall not have been consummated during such period, the Sponsor shall return to
you all certificates representing Award Shares that you delivered for transfer
pursuant hereto, together with any documents in the possession of the Sponsor
executed by you in connection with such proposed transfer, and the
Drag-Along Notice shall be deemed to be cancelled and this Agreement will
remain in full force and effect in accordance with its terms.


 


7.5.          Other
Responsibilities. The delivery of any notices to, and the obtaining of any
consents from, any Permitted Transferee with respect to any provision of this
Agreement, including, but not limited to, Sections 7.1 and 7.4, shall be your
sole responsibility, unless otherwise agreed to in writing between such
Permitted Transferee and the Sponsor. Neither the Company nor the Sponsor shall
be liable to any Permitted Transferee for your failure to deliver a notice to,
or obtain a consent from, any Permitted Transferee with respect to any
provision of this Agreement, including, but not limited to, Sections 7.1 and
7.4.


 


7.6.          Sales
to Principal Beneficial Owners. The Sponsor and its Affiliates shall not
transfer all or any portion of the shares of Common Stock beneficially owned by
them to a Principal Beneficial Owner, other than an Affiliate of the Sponsor,
unless such Principal Beneficial Owner agrees to be bound by this Section 7 as
if it were the Sponsor. To the extent that the Sponsor and its Affiliates
transfer any shares of Common Stock to a Principal Beneficial Owner other than
an Affiliate of the Sponsor, you and your Permitted Transferees agree that such
Principal Beneficial Owner shall receive the benefits set forth in Sections 7.4
and 7.5 hereof as if such Principal Beneficial Owner were the Sponsor.


 


8.             Tax
Withholding and Tax Election.


 


8.1           Tax
Withholding. The Company shall have the right to deduct from any
compensation or any other payment of any kind (including, upon approval of the
Board of Directors of the Company, withholding the 


 


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delivery of shares of Common Stock) due you the amount
of any federal, state, local or foreign taxes required by law to be withheld
which arise in connection with the Award Shares; provided, however,
that the value of the shares of Common Stock withheld may not exceed the
statutory minimum withholding amount required by law. In lieu of such
deduction, the Company may require you to make a cash payment to the Company
equal to the amount required to be withheld. If you do not make such payment
when requested, the Company may refuse to issue any Common Stock certificate
under this Agreement until arrangements satisfactory to the Administrator for
such payment have been made.


 


8.2           Tax
Election. You hereby acknowledge that you have been advised by the Company
to seek independent tax advice from your own advisors regarding the
availability and advisability of making an election under Section 83(b) of
the Code, and that any such election, if made, must be made within 30 days of
the Grant Date. You expressly acknowledge that you are solely responsible for
filing any such Section 83(b) election with the appropriate governmental
authorities, irrespective of the fact that such election is also delivered to
the Company. You may not rely on the Company or any of its officers, directors
or employees for tax or legal advice regarding this award. You acknowledge that
you have sought tax and legal advice from your own advisors regarding this
award or have voluntarily and knowingly foregone such consultation. You must
pay over to the Company by check the amount of any and all applicable
withholding taxes at the time that you make a Section 83(b) election.


 


9.             Adjustments
for Corporate Transactions and Other Events.


 


9.1           Stock
Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend of, or
stock split, reverse stock split, or similar event affecting, the Common Stock,
the number of Award Shares and the number of such Award Shares that are
nonvested and forfeitable shall, without further action of the Administrator,
be adjusted to reflect such event. The Administrator may make adjustments, in
its discretion, to address the treatment of fractional shares with respect to
the Award Shares as a result of the stock dividend, stock split, reverse stock
split, or similar event. Adjustments under this Section 9 will be made by
the Administrator, whose determination as to what adjustments, if any, will be
made and the extent thereof will be final, binding and conclusive. No
fractional Award Shares will result from any such adjustments.


 


9.2           Binding
Nature of Agreement. The terms and conditions of this Agreement shall apply
with equal force to any additional and/or substitute securities received by you
in exchange for, or by virtue of your ownership of, the Award Shares, whether
as a result of any spin-off, stock split-up, stock dividend, stock
distribution, other reclassification of the Common Stock of the Company, or
similar event, except as otherwise determined by the Administrator. If the
Award Shares are converted into or exchanged for, or stockholders of the
Company receive by reason of any distribution in total or partial liquidation
or pursuant to any merger of the Company or acquisition of its assets,
securities of another entity, or other property (including cash), then the
rights of the Company under this Agreement shall inure to the benefit of the
Company’s successor, and this Agreement shall apply to the securities or other
property received upon such conversion, exchange or distribution in the same
manner and to the same extent as the Award Shares.


 


10.           Non-Guarantee
of Employment or Service Relationship. Nothing in the Plan or this
Agreement shall alter your at-will or other employment status or other service
relationship with the Company, nor be construed as a contract of employment or
service relationship between the Company and you, or as a contractual right of
you to continue in the employ of, or in a service relationship with, the
Company for any period of time, or as a limitation of the right of the Company
to discharge you at any time with or without cause or notice and whether or not
such discharge results in the forfeiture of any Award Shares or any other
adverse effect on your interests under the Plan.


 


11.           Rights
as Stockholder. Except as otherwise provided in this Agreement with respect
to the nonvested and forfeitable Award Shares, you are entitled to all rights
of a stockholder of the Company, including the right to vote the Award Shares
and receive dividends and/or other distributions declared on the Award Shares.


 


12.           The
Company’s Rights. Except as provided under Section 7.6 of this Agreement,
the existence of the Award Shares shall not affect in any way the right or
power of the Company or its stockholders to make or 


 


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authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company’s capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or other stocks with preference ahead of or convertible
into, or otherwise affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or
any part of the Company’s assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.


 


13.           Notices.
All notices and other communications made or given pursuant to this Agreement
shall be in writing and shall be sufficiently made or given if hand delivered
or mailed by certified mail, addressed to you at the address contained in the
records of the Company, or addressed to the Administrator, care of the Company
for the attention of its Corporate Secretary at its principal executive office
or, if the receiving party consents in advance, transmitted and received via
telecopy or via such other electronic transmission mechanism as may be
available to the parties.


 


14.           Entire
Agreement. This Agreement contains the entire agreement between the parties
with respect to the Award Shares granted hereunder. Any oral or written
agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Agreement with respect to
the Award Shares granted hereunder shall be void and ineffective for all
purposes.


 


15.           Amendment.
This Agreement may be amended from time to time only be a written instrument
duly executed by the Company, the Sponsor, and you.


 


16.           Conformity
with Plan. This Agreement is intended to conform in all respects with, and
is subject to all applicable provisions of, the Plan. Inconsistencies between
this Agreement and the Plan shall be resolved in accordance with the terms of
the Plan. In the event of any ambiguity in this Agreement or any matters as to
which this Agreement is silent, the Plan shall govern. A copy of the Plan is available upon request. Please
contact the Company by email at dselby@vertisinc.com or at 250 W. Pratt Street,
18th Floor, Baltimore, Maryland 21201, Attention: Dolores D. Selby
(telephone: 410-361-8394), to receive a copy of the Plan.


 


17.           Governing
Law. The validity, construction and effect of this Agreement, and of any
determinations or decisions made by the Administrator relating to this
Agreement, and the rights of any and all persons having or claiming to have any
interest under this Agreement, shall be determined exclusively in accordance
with the laws of the State of Delaware, without regard to its provisions
concerning the applicability of laws of other jurisdictions. Any suit with
respect hereto will be brought in the federal or state courts in the districts
which include New York, New York, and you hereby agree and submit to the
personal jurisdiction and venue thereof.


 


18.           Headings.
The headings in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.


 


19.           Notices.
All notices and other communications provided for herein shall be dated and in
writing and shall be deemed to have been duly given when delivered, if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid and when received if delivered otherwise, to the
party to whom it is directed:


 


(a)        If to
the Company, to it at the following address:


 


250 W. Pratt Street, 18th Floor


Baltimore, Maryland 
21201


Attention: General Counsel


Fax No.: (410) 528-9287


 


with a copy to the Sponsor, at the address set forth
below:


 


(b)        If to
you, at the address set forth in the Company’s records;


 


8

















 


(c)        If to
the Sponsor, to it at the following address:


 


Thomas H. Lee Equity Fund IV, L.P.


c/o Thomas H. Lee Company


75 State Street, Suite 2600


Boston, Massachusetts 
02109


Attention: Anthony J. DiNovi


Fax No.: (617) 227-3514


 


or at such other address as the parties hereto shall
have specified by notice in writing to the other parties (provided, that
such notice of change of address shall be deemed to have been duly given only
when actually received).


 


20.           Limitation of Liability. None of the Affiliates of the Sponsor shall
have any liability to the you or any of your Permitted Transferees or the
Company or any of its subsidiaries under any provision of this Agreement. In
the event of an alleged breach of this Agreement by the Sponsor, the parties
hereto acknowledge and agree that the sole remedy which may be sought against
the Sponsor shall be specific performance, provided, however,
that if the remedy of specific performance is not available, you, your
Permitted Transferees, if any, and the Company will only seek to recover direct
damages for any breach of this Agreement. You, your Permitted Transferees, if
any, and the Company agree to waive any other remedy against the Sponsor to
which they might be entitled at law, including, but not limited to,
compensatory damages, consequential damages, continuing damages, future
damages, incidental damages, punitive damages and nominal damages. The Company
shall indemnify, defend, save and hold harmless Sponsor from and against any
and all liabilities arising under, pursuant to or in connection with this
Agreement.


 


21.           Severability.
The invalidity, illegality or unenforceability of one or more of the provisions
of this Agreement in any jurisdiction shall not affect the validity, legality
or enforceability of the remainder of this Agreement in such jurisdiction or
the validity, legality or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.


 


22.           Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed
an original, but all of which shall constitute one and the same instrument, and
it shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.


 


9

















 


GLOSSARY


 


(a)           “Administrator” means the Committee
as determined under Section 2.7 of the Plan.


 


(b)           “Affiliate” has the meaning given to
such term in the Plan.


 


(c)           “Business Day” means any day other
than a Saturday, Sunday, or other day during which the Company’s principal
executive office is not open for business.


 


(d)           “Cause” generally means your
insubordination, dishonesty, incompetence, moral turpitude, other misconduct of
any kind or the refusal to perform your duties or responsibilities for any
reason other than illness or incapacity, in each case as determined by the
Board in good faith. However, if you have an employment agreement, consulting
agreement, change of control agreement or similar agreement in effect with the
Company at the time in question that defines “cause” (or words of like import),
then “cause” has the meaning ascribed to it under such agreement, as such
agreement shall provide at the time in question; provided that with respect to
any agreement that conditions “cause” on the occurrence of a change of control,
such definition of “cause” shall not apply until a change of control actually
takes place and then only with regard to a termination thereafter.


 


(e)           “Common Stock” means the common
stock, $.01 par value, of Vertis Holdings, Inc..


 


(f)            “Company” means Vertis Holdings, Inc.
and its Affiliates, except where the context otherwise requires. For purposes
of determining whether a Liquidity Event has occurred, Company shall mean only
Vertis Holdings, Inc.


 


(g)           “Disability” means your inability to
perform substantially your duties and responsibilities to the Company by reason
of a physical or mental disability or infirmity for a continuous period of
three months. The date of such disability shall be the earlier of (1) the last
day of such three-month period or (2) the day on which you submit, or cause to
be submitted, to the Board any medical evidence of such disability reasonably
satisfactory to the Board.


 


(h)           “Exchange” means the principal stock
exchange, including The Nasdaq Stock Market, on which the Common Stock is
listed or approved for listing, if any.


 


(i)            “Liquidity Event” means (1) a public
offering of the Common Stock registered pursuant to the Securities Act where
there is a Minimum Public Float immediately following such offering, (2) a
merger or other business combination or recapitalization whereby the Common
Stock is exchanged for cash and/or publicly traded equity or debt securities in
another entity or a combination of cash and other non-publicly traded equity or
debt securities where cash constitutes at least a majority of the consideration
to be received in such merger, business combination or recapitalization or (3)
a sale or other disposition of all or substantially all of the Company’s assets
to another entity, for cash and/or publicly traded equity or debt securities of
another entity or a combination of cash and other non-publicly traded equity or
debt securities where cash constitutes at least a majority of the proceeds of
such sale or disposition, in each case, other than to the Company, any
subsidiary of the Company, or any entity controlled by the ultimate control
persons of the Company.


 


(j)            “Minimum Public Float” means the
circumstances existing when (i) the consummation of one or more public
offerings registered pursuant to the Securities Act of shares of Common Stock
if, upon such consummation, the aggregate number of shares of Common Stock held
by the public, not including Affiliates of the Company, represents at least 20%
of the total number of outstanding shares of Common Stock at the time of such
public offering and (ii) the Common Stock is listed on an Exchange.


 


(k)           “Other Award Share Grantees” means
other persons receiving Award Shares pursuant to a restricted stock agreement
having terms substantially identical to those contained in this Agreement.


 


10

















 


(l)            “Other Key People” means the
officers, members of management, key employees of the Company and its
Affiliates.


 


(m)          “Principal Beneficial Owner” means
any of the Sponsor, CLI/THLEF IV Vertis LLC, Evercore Capital Partners L.P.,
CLI Associates LLC, J.P. Morgan Partners (BHCA), L.P., Wachovia Capital
Partners, LLC (formerly First Union Capital Partners, LLC), and Cadogan
Capital, LLC and their respective Affiliates and successors.


 


(n)           “Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


(o)           “Service” means your employment or
other service relationship with the Company and its Affiliates. Service will be
considered to have ceased with the Company if, after a sale, merger or other
corporate transaction, the trade, business or entity with which you are
employed is no longer an Affiliate of Vertis Holdings, Inc.


 


(p)           “Third Party” means any person or
entity excluding each of the following: 
(a) the Company and its employees, officers, directors and (b) the
Principal Beneficial Owners.


 


(q)           “You”; “Your”.
You means the recipient of the Award Shares as reflected in the first paragraph
of this Agreement. Whenever the word “you” or “your” is used in any provision
of this Agreement under circumstances where the provision should logically be
construed, as determined by the Administrator, to apply to the estate, personal
representative, or beneficiary to whom the Award Shares may be transferred by
will or by the laws of descent and distribution, the words “you” and “your”
shall be deemed to include such person.


 


11

















 


IN WITNESS WHEREOF, the Company and the Sponsor have
caused this Agreement to be executed by their duly authorized officers.


 


	
   

  	
  VERTIS HOLDINGS,
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V.
  Howard, Jr.

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Date: March 6,
  2006

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THOMAS H. LEE
  EQUITY FUND IV, L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony J.
  DiNovi

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date: March 6,
  2006

  	
   

  
						



 


The undersigned hereby acknowledges that he/she has
carefully read this Agreement and agrees to be bound by all of the provisions
set forth herein.


 


	
  WITNESS:

  	
   

  	
  GRANTEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Dolores Selby

  	
   

  	
  /s/ Gary Sutula

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date: March 6,
  2006

  	
   

  



 


Enclosure:  Vertis Holdings, Inc. 1999 Equity Award Plan


 


12

















 


STOCK
POWER


 


FOR VALUE RECEIVED, the undersigned, Gary Sutula,
hereby sells, assigns and transfers unto Vertis Holdings, Inc., a Delaware
corporation (the “Company”), or its successor, 20,668 shares of common stock,
par value $0.01 per share, of the Company standing in my name on the books of
the Company, represented by Certificate No.                 ,
which is attached hereto, and hereby irrevocably constitutes and appoints                                                                                      
as my attorney-in-fact to transfer the said stock on the books of the Company
with full power of substitution in the premises.


 


	
  WITNESS:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Dolores
  Selby

  	
   

  	
  /s/ Gary Sutula

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated: