Exhibit 10.12


 


RESTRICTED STOCK AGREEMENT


 


VERTIS HOLDINGS, INC.

1999 EQUITY AWARD PLAN


 


GRANTEE: ANN RAIDER


 


NO. OF SHARES: 8,267


 


This Agreement (the “Agreement”),
approved by Thomas H. Lee Equity Fund IV, L.P. (the “Sponsor”),
evidences the award of 8,267 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, Ann Raider, 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


 


5

















 


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/ Maureen R. Dry

  	
   

  	
  /s/ Ann Raider

  	
   

  
	
   

  	
   

  
	
   

  	
  Date: March 6, 2006

  
				



 


Enclosure:  Vertis Holdings, Inc.
1999 Equity Award Plan


 


12

















 


STOCK POWER


 


FOR VALUE RECEIVED, the undersigned, Ann Raider, hereby
sells, assigns and transfers unto Vertis Holdings, Inc., a Delaware
corporation (the “Company”), or its successor, 8,267 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/ Maureen R. Dry

  	
   

  	
  /s/ Ann Raider

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
  March 20, 2006