Exhibit
10.6


 


RESTRICTED STOCK AGREEMENT


 


VERTIS HOLDINGS, INC.


1999 EQUITY AWARD PLAN


 


GRANTEE: MICHAEL S. RAWLINGS


 


No. OF SHARES: 2,500


 


This Agreement (the “Agreement”), approved by Thomas H. Lee Equity Fund IV, L.P. (the “Sponsor”),
evidences the award
of 2,500 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, Michael S. Rawlings, effective as of April    ,
2004 (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 APRIL     ,
2004, 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. l(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 or Service.
Notwithstanding any other provision of this Agreement, upon the termination of
your employment or service relationship with the Company or any of its subsidiaries
for Cause, or if you terminate your employment or service relationship 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 or service relationship, 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


 


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and your Permitted
Transferees shall, at the Sponsor’s option and in the Sponsor’s sole
discretion, upon your receipt 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 therefore. 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. [Intentionally Omitted]


 


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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 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.


 


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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;


 


(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,
MA 02109


Attention:
Anthony J. DiNovi


 


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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 patties
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.           Severabilitv. 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 or, if you are a director, as
determined by the Company’s stockholders. 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.


 


10

















 


(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.


 


(1)   “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 or for which you serve 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.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  4/20/04

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony J. DiNovi

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  06/07/04

  	
   

  



 


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/ John V.
  Howard, Jr.

  	
   

  	
  /s/ Michael Rawlings

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  4/20/04

  	
   

  



 


Enclosure: Vertis Holdings, Inc. 1999 Equity Award Plan


 


12

















 





 


 


	
   

  	
   

  	
  COMMON
  STOCK

  
	
  

  

  

  

  

  

  INCORPORATED UNDER THE LAWS

  OF THE STATE OF DELAWARE

  	
  

  	
  


  

  SEE REVERSE FOR CERTAIN DEFINITIONS

  



 


THIS CERTIFIES THAT


 


Michael
S. Rawlings


 


IS THE OWNER OF **TWO THOUSAND FIVE
HUNDRED**


 


FULLY PAID AND
NONASSESSABLE SHARES OF COMMON STOCK, $.01 PAR VALUE PER SHARE, OF


 


VERTIS
HOLDINGS INC.


 


transferable on the books of the Corporation by the holder hereof in
person or by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned.


WITNESS the facsimile seal of the Corporation and the
facsimile signatures of its duly authorized officers.


 


Dated:


 


June 7,
2004


 


	
  /s/ John
  V. Howard, Jr.

  	
   

  	
  /s/
  Donald E. Roland

  
	
  SECRETARY

  	
  

  	
  PRESIDENT
  AND CHIEF EXECUTIVE OFFICER

  



 

















 


VERTIS HOLDINGS, INC.


 


The Corporation shall furnish without charge to
each stockholder who so requests a statement of the powers, designations,
preferences and relative, participating, optional, or other special rights of
each class of stock of the Corporation or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
Such requests shall be made to the Corporation’s Secretary at the principal
office of the Corporation.


 


The following abbreviations, when used in the
inscription on the face of this certificate, shall be construed as though they
were written out in full according to applicable laws or regulations:


 


	
  TEN
  COM – 

  	
  as
  tenants in common

  	
   

  	
  UNIF
  GIFT MIN ACT-                    
  Custodian
                        
  

  
	
  TEN
  ENT  – 

  	
  as
  tenants by the entireties

  	
   

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	
   

  
	
  JT
  TEN      – 

  	
  as
  joint tenants with right of

  	
   

  	
   

  	
  under
  Uniform Gifts to Minors

  
	
   

  	
  survivorship
  and not as tenants

  	
   

  	
   

  	
  Act                                                        

  
	
   

  	
  in
  common

  	
   

  	
   

  	
  (State)

  
	
   

  	
   

  	
   

  	
  UNIF
  TRF MIN ACT-
                  Custodian
  (until age             )

  
	
   

  	
   

  	
   

  	
   

  	
  (Cust)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
                        under
  Uniform Transfers

  
	
   

  	
   

  	
   

  	
   

  	
  (Minor)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  to Minors Act                                       

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (State)

  
											



 


Additional abbreviations may also be used
though not in the above list.


 


FOR VALUE RECEIVED,                                     hereby sell,
assign and transfer unto


 


PLEASE INSERT SOCIAL SECURITY
OR OTHER
      IDENTIFYING NUMBER OF ASSIGNEE


 


 


 


	
   

  
	
   

  
	
  (PLEASE
  PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

  
	
   

  
	
   

  	
  Shares

  
	
  of the common stock represented by the within
  Certificate, and do hereby irrevocably constitute and appoint

  
	
   

  
	
   

  	
  Attorney

  
	
  to
  transfer the said stock on the books of the within named Corporation with
  full power of substitution in the premises.

  



 


	
  Dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  NOTICE:

  	
  THE SIGNATURE TO THIS
  ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE
  CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
  WHATEVER.

  
	
   

  	
   

  



 


Signature(s)
Guaranteed


 


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.


 


	
  By.

  	
   

  	
   

  
	
  THE SIGNATURE(S) SHOULD BE
  GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
  AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
  SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

  	
   

  



 


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 MAY 20, 2004, 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.