Exhibit 10.16


 


QUAD/GRAPHICS,
INC.


SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(As Restated Effective January 1, 2009)


 


I.   ESTABLISHMENT OF PLAN


 


1.1           Establishment of Plan.  Quad/Graphics, Inc. (the “Corporation”) established
the Quad/Graphics, Inc. Supplemental Executive Retirement Plan (the “Plan”)
effective as of January 1, 2003.  The
terms of the Plan as amended effective January 1, 2009 are described
below.


 


1.2           Purpose.  The purposes of this Plan are to supplement
the retirement income that Participants, as defined below, will receive under
the Quad/Graphics, Inc. Personal Enrichment Plan (“PEP”) and to provide
Participants with an incentive to make a long-term commitment to employment
with the Corporation.  The Plan is not a
contract of employment and does not guarantee employment or any term of
employment.


 


1.3           Nonqualified Status of Plan.  The Plan is a nonqualified deferred
compensation plan.  It is not intended to
meet the tax qualification requirements of section 401(a) of the Internal
Revenue Code of 1986 (the “Code”).  It is
intended that the Participants will not be subject to income tax on Plan
benefits until those benefits are received. 
It is intended that the Plan be an unfunded plan to provide deferred
compensation to a select group of management or highly compensated employees,
as described in sections 201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974 (“ERISA”) and, consequently,
that the Plan be exempt from the participation, vesting, funding and fiduciary
standards of ERISA.  It is intended that
the Plan comply with Code section 409A.


 


1.4           Unsecured Interest.  This Plan does not give the Participants any
interest whatsoever in any specific asset of the Corporation.  To the extent that any person acquires a
right to receive payments under this Plan, such right shall be an unsecured
claim against the general assets of the Corporation and shall be no greater
than the right of any unsecured general creditor of the Corporation.


 


II.   DEFINITIONS


 


For purposes of this Plan, the following terms have
the meanings set forth below:


 


2.1           Accrued Benefit means the
amount of the benefit payable to a Participant or, if applicable, to the
Participant’s Beneficiary, subject to the terms and conditions set forth herein.


 


2.2           Beneficiary means a person or
persons designated by a Participant as provided in Section 4.2 to receive
any benefits under the Plan following his or her death.


 


2.3           Board means the Board of
Directors of the Corporation.


 


2.4           Corporation means Quad/Graphics, Inc.


 

















 


2.5           Corporation Credit means the
amount, if any, contributed to a Participant’s Accrued Benefit account by the
Corporation for a Plan Year in accordance with Section 3.3.


 


2.6           Disability means a physical or
mental condition that renders, or is expected to render, a Participant
permanently and totally unable to perform his or her duties or any comparable
duties for the Corporation.  The
determination of the existence of a Disability shall be made by the Corporation
and shall be final and binding upon the Participant and all other parties.  The Corporation may require the submission of
such medical evidence as it deems necessary in order to arrive at its
determination.


 


2.7           Participant means any corporate
officer with the title of Vice President or above.


 


2.8           Plan Year means the calendar
year.


 


2.9           Separation from Service means
a Participant’s termination of employment or, if the Participant continues to
provide services following such termination, such later date as is considered a
separation from service from the Corporation and its 409A affiliates within the
meaning of Code section 409A. 
Specifically, if a Participant continues to provide services to the
Corporation or a 409A affiliate in a different capacity (i.e., a former
employee becomes a director or an independent contractor), such shift in status
is not automatically a Separation from Service, subject to Treas. Reg. section
1.409A-1(h)(5) among other provisions. 
For purposes of the Plan, a Participant’s termination of employment
shall occur when the Corporation and the Participant reasonably anticipate that
no further services will be performed by the Participant for the Corporation
and its 409A affiliates (whether as an employee, a director or an independent
contractor) or that the level of bona fide services the Participant will
perform after such date will permanently decrease to no more than 20% of the
average level of bona fide services performed by the Participant (whether as an
employee, director or independent contractor) for the Corporation and its 409A
affiliates over the immediately preceding 36-month period (or such lesser
period of services).  Notwithstanding the
foregoing, if a Participant takes a leave of absence for purposes of military
leave, sick leave or other bona fide leave of absence, the Participant will not
be deemed to have incurred a termination of employment for the first 6 months
of the leave of absence, or if longer, for so long as the Participant’s right
to reemployment is provided either by statute or by contract; provided that if
the leave of absence is due to a medically determinable physical or mental
impairment that can be expected to result in death or last for a continuous
period of not less than 6 months, where such impairment causes the Participant
to be unable to perform the duties of his or her position of employment or any
substantially similar position of employment, the leave may be extended for up
to 29 months without causing a termination of employment.  For purposes of the Plan, the term “409A affiliate”
means each entity that is required to be included in the Corporation’s
controlled group of corporations within the meaning of Code section 414(b), or
that is under common control with the Corporation within the meaning of Code
section 414(c), provided, however, that the phrase “at least 50 percent” shall
be used in place of the phrase “at least 80 percent” each place it appears
therein or in the regulations thereunder.


 


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III.   DETERMINATION OF ACCRUED BENEFIT


 


3.1           Participant’s Account(s).  The Corporation shall establish and maintain one
or more bookkeeping accounts for each Participant’s Accrued Benefit.  The number of separate accounts for each
Participant shall equal the number of different forms of payment elected by the
Participant pursuant to Article V. 
The establishment of the account(s) is solely for accounting
purposes and shall not require a segregation of any Corporation assets.  Each separate account of a Participant’s
Accrued Benefit shall be valued in accordance with Section 3.2.


 


3.2           Valuation of Accrued Benefit
Account.  The amount of a Participant’s
Accrued Benefit account at any time will equal the Corporation Credits credited
in accordance with Section 3.3 which are applicable to such account,
adjusted to reflect the investment income, gains and losses on a fund
designated by the Corporation, in the Corporation’s sole discretion, and
charged with any payments from such account in accordance with Article V.


 


3.3           Corporation Credits.  The Corporation shall credit a Participant’s
Accrued Benefit account for a Plan Year with a Corporation Credit as of the
last day of such Plan Year.  The
Corporation Credit for a Plan Year shall be the amount equal to the sum of (a) and
(b) where:


 


(a)                                  equals 1.8% times the Participant’s
excess compensation for such Plan Year; and


 


(b)                                 equals the applicable percentage times
the Participant’s excess compensation for such Plan Year.


 


For purposes of (a) and (b), “excess compensation”
means the difference, if any, of (i) the amount of “401(k) Compensation”
that would have been recognized for the Participant under the PEP for such Plan
Year for purposes of “Deferrals” and “Matching Contributions” if the Code
section 401(a)(17) limitation did not apply, less (ii) the amount of “401(k) Compensation”
actually recognized for the Participant under the PEP for such Plan Year.  Notwithstanding the foregoing, in the event
that a bonus earned during a Plan Year is not paid until the following Plan
Year, for both Plan Years the amounts in (i) and (ii) above shall be
calculated as if the bonus had in fact been paid in the Plan Year in which it
was earned.  For purposes of (b), the “applicable
percentage” is the percentage of “Profit Sharing Compensation” that is allocated
as a “Profit Sharing Contribution” for the Participant under the PEP for such
Plan Year.


 


IV.   VESTING AND DEATH BENEFIT PAYMENTS


 


4.1           Vesting.  A Participant’s Accrued Benefit shall be
fully vested in the event of:


 


(a)                                  the Participant’s Separation from Service
after attainment of age 55;


 


(b)                                 the Participant’s Separation from Service
as a result of the Participant’s Disability prior to age 55; or


 


(c)                                  the Participant’s Separation from Service
as a result of the Participant’s death prior to age 55.


 


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In the event a Participant incurs a Separation from
Service which does not result in vesting pursuant to (a), (b) or (c), the
Participant’s Accrued Benefit shall be forfeited.


 


4.2           Death.  Any benefit payments due on account of a
Participant after the Participant’s death shall be paid to the Participant’s
Beneficiary.  A Participant may designate
a Beneficiary (which may be one or more individuals or entities) in writing,
which designation shall be effective only if and when it is delivered to the
Corporation’s human resources department during the lifetime of the
Participant.  The Participant may change
his or Beneficiary in the same manner, with the last valid designation on file
with the Corporation on the death of the Participant being operative.  If the primary Beneficiary predeceases the
Participant, then the contingent Beneficiary shall have the right to receive
payments under the Plan.  In the event
the Participant shall not designate a Beneficiary, or if for any reason such
designation shall be ineffective, the Beneficiary shall be the Participant’s
estate.  Any payments made by the
Corporation to a Beneficiary in good faith and under the terms of the Plan
shall fully discharge the Corporation from all further obligations with respect
to such payments.


 


V.   TIME AND METHOD OF DISTRIBUTION


 


5.1           Initial Participant Election.  On or before December 31, 2008, a
Participant may make a written election of the time and form of payment of the
Accrued Benefit from the options available under Section 5.3.  In the event that a Participant with an
Accrued Benefit on December 31, 2008 does not make a written election by December 31,
2008, the initial payment election shall be deemed the immediate lump sum method
in Section 5.3(a).  For a
Participant who first becomes a Participant after December 31, 2008, the immediate
lump sum method in Section 5.3(a) shall be deemed the initial payment
election.  The initial payment election
shall apply to the Participant’s account reflecting the Accrued Benefit on December 31,
2008, adjusted as provided in Section 3.2 for deemed investment return,
plus any Corporation Credits for Plan Years after December 31, 2008 (and
deemed investment return thereon) unless and until the Participant makes a
subsequent payment election pursuant to Section 5.2.


 


5.2           Subsequent Participant Elections.  Prior to the end of any Plan Year after 2008,
a Participant may make a subsequent election of the time and form of payment
from the options available under Section 5.3.  Such subsequent election shall apply to
Corporation Credits (and deemed investment return thereon) for Plan Years
commencing after the date of such subsequent election unless and until the
Participant makes a new subsequent payment election hereunder.  A new account shall be established under Section 3.1
to track the Corporation Credits subject to each subsequent payment election,
except to the extent that a Participant repeats a form of payment under Section 5.3,
in which case the Corporation shall use the same account for all credits subject
to the same form of payment.


 


5.3           Time and Forms of Payment.  The optional times and forms of payment are
as follows:


 


(a)                                  A lump sum payment during the calendar
month following the month in which the Participant’s Separation from Service
occurs;


 


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(b)                                 A lump sum payment during the calendar
month following the first anniversary of the Participant’s Separation from
Service;


 


(c)                                  A lump sum payment during the calendar
month following the second anniversary of the Participant’s Separation from
Service;


 


(d)                                 A lump sum payment during the calendar
month following the third anniversary of the Participant’s Separation from
Service;


 


(e)                                  A lump sum payment during the calendar
month following the fourth anniversary of the Participant’s Separation from
Service; or


 


(f)                                    Five annual installments, with one-fifth
of the account balance being paid during the calendar month following the month
in which the Participant’s Separation from Service occurs, one-quarter of the
then-current account balance being paid during the subsequent January, and
then, respectively, one-third, one-half, and the remainder of the then-current
account balance being paid during each of the following three Januarys.


 


5.4           Small Benefit Exception.  Notwithstanding Sections 5.1, 5.2 and 5.3, if
a Participant’s aggregate vested Accrued Benefit as of any time after the
Separation from Service does not exceed the then-applicable dollar limitation
on 401(k) deferrals under Code section 402(g)(1)(B), the remaining portion
of the Accrued Benefit shall be paid in a single lump sum during the following
week.


 


VI.   ADMINISTRATION


 


6.1           Administration by the Corporation.  The Plan shall be administered by the Corporation.  Decisions and determinations by the
Corporation shall be in its sole discretion and shall be final and binding upon
the Participant and any Beneficiary.  As
provided in Article IX, below, however, the Corporation reserves the right
to amend, cancel or modify the Plan.  Subject
to the terms and conditions of the Plan, the Corporation shall have the
exclusive power to:


 


(a)                                  Determine the eligibility of the
Participants for benefits under the Plan;


 


(b)                                 Prescribe the form of any documents or
instruments required in the administration of the Plan; and


 


(c)                                  Do all other things needed for the
orderly administration of the Plan.


 


6.2           Indemnification.  The Corporation shall indemnify all members
of the Board, officers and Plan administrators of the Corporation for any
liability arising out of any action taken or decision made in good faith
relating to the Plan.


 


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VII.   MISCELLANEOUS PROVISIONS


 


7.1           Nonalienation of Benefits.


 


(a)                                  The rights and benefits under this Plan
shall not be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge.  Any attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge the same shall
be void.  No right or benefit under the
Plan shall be liable for or subject to the debts, contracts, liabilities or
torts of a Participant or the person entitled to such benefit.


 


(b)                                 The Corporation may, in its discretion,
forfeit the Participant’s benefits under the Plan if the Participant attempts
to alienate his or her benefits in violation of Section 7.1(a).


 


7.2           Marital Property Interest.  The Wisconsin Marital Property System or
other state laws may confer upon the spouse of a Participant certain marital
property rights or an interest in benefits or payments received or acquired
under the Plan.  Such rights may include
the ability of the spouse of a Participant to dispose of a marital property
interest in a benefit or payment by will or by the laws of dissent and
distribution.  Neither the Board nor the
Corporation shall be liable for actions taken or payments made in accordance
with the Plan and the Board’s records which are inconsistent with any marital
property interest of the spouse of a Participant under any state law.  This Section 7.2 is not intended, and
shall not be construed in such a way as, to make the Plan subject to any state
law otherwise preempted by ERISA.


 


7.3           No Right to Employment.  Nothing in this Plan or in any agreement
entered into pursuant to the Plan shall confer upon the Participants the right
to continue in the employment of the Corporation or affect any right of the
Corporation to terminate the employment of a Participant.


 


7.4           Previous Agreements.  This Agreement replaces and supersedes all
other similar or related booklets, handbooks, documents and agreements.


 


7.5           Claims Procedure.  A Participant or Beneficiary (a “Claimant”)
may file a written request for benefits under the Plan with the Corporation.  The request must be addressed to the General
Counsel at the Corporation’s principal place of business.  Generally, the Corporation shall provide the
Claimant with a written decision on the claim within 45 days.  The Corporation may, however, extend the
reply period for an additional 30 days for reasonable cause.  In that event, the Corporation will notify
the Claimant, before the expiration of the initial 45-day period, of the need
for the extension.  If the claim is
denied in whole or in part, the Corporation shall send a written notice to the
Claimant, using language calculated to be understood by the Claimant, setting
forth:


 


(a)                                  The specific reason or reasons for the
denial;


 


(b)                                 The specific provisions of the Plan on
which the denial is based;


 


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(c)                                  A description of any additional material
or information necessary for the Claimant to perfect his claim and an
explanation of why the material or information is necessary;


 


(d)                                 The steps to be taken if the Claimant
wishes to submit the claim for review; and


 


(e)                                  The time limits for requesting a review
of the Corporation’s decision.


 


Within 60 days after the Claimant receives the written
notice described above, the Claimant may request, in writing, that the
Corporation review its determination.  The
request must be addressed to the General Counsel, at the Corporation’s then
principal place of business.  The
Claimant or his duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Corporation.  If the Claimant does
not request a review of the determination within the 60-day period, he or she
shall be barred and estopped from challenging the Corporation’s determination.


 


Within 45 days after the Corporation receives a
request for review, the Corporation will review its determination.  After considering all materials presented by
the Claimant, the Corporation will render a written opinion, written in a
manner calculated to be understood by the Claimant, setting forth the specific
reasons for the decision and containing specific references to the pertinent
provisions of this Plan on which the decision is based.  If special circumstances require that the
45-day time period be extended, the Corporation will so notify the Claimant and
will render the decision as soon as possible, but no later than 90 days after
the General Counsel receives the request for review.


 


Any decision by the Corporation shall be made by an
officer in a superior office to the Claimant or by the Board with respect to a
claim by the Chief Executive Officer or, in its discretion, a claim by any
other Participant.


 


7.6           Limitation on Actions Against the
Plan.  A Claimant must complete the
Claims Procedure set forth in Section 7.5 before he or she may bring legal
action against the Corporation or the Plan for benefits pursuant to the Plan.  No legal action may be commenced against the
Corporation or the Plan more than 90 days after the Claimant receives notice of
the Corporation’s final decision on his or her appeal.


 


7.7           Amendment and Termination


 


(a)                                  By action of the Board, the Corporation
may, at any time and from time to time, amend the Plan in any respect, in its
sole discretion.  Notwithstanding the
foregoing, no such amendment will reduce the Participant’s vested Accrued
Benefit.


 


(b)                                 By action of the Board, the Corporation
may terminate the Plan at any time.  In
the event the Corporation terminates the Plan, the Participant’s vested Accrued
Benefit, as of the date of termination, shall be paid to the Participant as
soon as practicable following the date of termination of the Plan.


 


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7.8           Separation From
Other Plans.  Except as otherwise
required by law, no benefit under the Plan shall be taken into account in
determining any benefit under any pension, retirement, thrift, profit sharing,
group insurance, or other benefit plan maintained or hereafter established by
the Corporation.


 


7.9           Guardianship.  In the event a Participant is incompetent,
the Corporation, in its sole discretion, may make any distribution due the
Participant to a legal or natural guardian or other relative of the
Participant, to a court-appointed guardian of the Participant, or to any adult
with whom the Participant temporarily or permanently resides, and any payments
to such guardian, custodian, relative or other person shall be a complete
discharge of the Corporation’s obligations under the Plan without any further
responsibility on the part of the Corporation.


 


7.10         Tax Withholding.  The Corporation may withhold, or require the
withholding of, any federal, state or local taxes required to be withheld with
respect to any benefit payment.


 


7.11         FICA Taxation.  Benefits under the Plan shall be subject to
FICA taxation as required pursuant to Code section 3121(v).


 


7.12         Applicable Law.  Except to the extent preempted by ERISA, this
Plan shall be governed and interpreted in accordance with the laws of the State
of Wisconsin.


 


7.13         Successors and Assigns.  The Plan shall be binding upon and inure to
the benefit of the Corporation, its successors and assigns.


 


7.14         Additional Provisions under Code Section 409A
and Other Laws.


 


(a)                                  If an amount or the value of a benefit
under the Plan is required to be included in a Participant’s or Beneficiary’s
income prior to the date such amount is actually distributed or benefit
provided as a result of the failure of the Plan (or any other arrangement
required to be aggregated with the Plan under Code section 409A) to comply with
Code section 409A, then the Participant shall receive a distribution, in a lump
sum, within 90 days after the date it is finally determined that the Plan fails
to meet the requirements of Code section 409A; such distribution shall equal
the amount required to be included in the Participant’s income as a result of such
failure and shall reduce the amount of payments or benefits otherwise due
hereunder.


 


(b)                                 If any payment or the provision of any
benefit required under the terms of the Plan would jeopardize the ability of
the Corporation to continue as a going concern, the Corporation shall not be
required to make such payment or provide such benefit; rather, the payment or
benefit shall be delayed until the first date that making the payment or
benefit does not jeopardize the ability of the Corporation to continue as a
going concern.


 


(c)                                  If any payment or benefit due pursuant to
the Plan would violate the terms of Section 16(b) of the Securities
Exchange Act of 1934 or other Federal securities laws, or any other applicable
law, then the payment or the provision of the benefit


 


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shall be delayed until the earliest date on which making such payment
or providing such benefit would not violate such law.


 


(d)                                 The Corporation and the Participants
intend the terms of the Plan to be in compliance with Code section 409A.  The Corporation does not guarantee the tax
treatment or tax consequences associated with any payment or benefit, including
but not limited to consequences related to Code section 409A.  To the maximum extent permissible, any
ambiguous terms of the Plan shall be interpreted in a manner which avoids a
violation of Code section 409A.


 


(e)                                  By electing to contribute to the Plan,
each Participant acknowledges that to avoid an additional tax on payments that
may be payable or benefits that may be provided under the Plan and that
constitute deferred compensation that is not exempt from Code section 409A, the
Participant must make a reasonable, good faith effort to collect any payment or
benefit to which the Participant believes the Participant is entitled hereunder
no later than 90 days after the latest date upon which the payment could have
been made or benefit provided under the Plan, and if not paid or provided, must
take further enforcement measures within 180 days after such latest date.


 


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