Exhibit 10.6


 


Confidential


 


AMENDMENT
OF CERTAIN QUAD/GRAPHICS, INC. STOCK OPTION

AGREEMENTS


 


Quad/Graphics, Inc. (the “Company”) has granted
options under the Quad/Graphics, Inc. 1999 Nonqualified Stock Option Plan
and the Quad/Graphics, Inc. 1990 Stock Option Plan.  The Company wishes to amend all of the stock
option agreements evidencing such options that were issued prior to January 1,
2008 (collectively the “Agreements” or individually an “Agreement”). The
amendments are:


 


1.                                       Change to Grant Date. With respect to any Agreement which has
a date of grant other than January 1, solely for purposes of determining
the vesting percentage and the anniversaries of the date of grant for the
exercise dates in 2 below, the date of grant is automatically converted to the
immediately preceding January 1 for any awards granted in January through
September and to the immediately following January 1 for any awards
granted in October through December.


 


2.                                       Time of Exercise and Expiration. Any provisions in the Agreements that
relate to the time of exercise or expiration of the options under the
Agreements will no longer have any effect and the time of exercise and
expiration of the options under all Agreements will be handled as follows:


 


(i)                                     General.  The optionee
may exercise the option with respect to vested Option Shares within thirty (30)
days after the five-year (e.g., fifth (5th), tenth (10th), etc.) anniversaries
of the January 1 date of grant.  However,
the optionee may defer the right to exercise the option as of any such
five-year anniversary of the date of grant until a following five-year
anniversary of the date of grant.  To do
so, the optionee must deliver an irrevocable written notice of deferral more
than one year prior to such five-year anniversary.  Upon delivery of such written notice, the
optionee may exercise the option with respect to vested Option Shares only
during the thirty (30) day period that begins on the five-year anniversary of
the date of grant to which the deferral applied (unless a right to exercise
arises under 2(ii), (iii) or (iv) below).


 


(ii)                                  Separation from Service.  The
optionee may exercise the option with respect to vested option shares within
ninety (90) days after a separation from service; provided, however, that if
the separation from service occurs after October 2nd in a calendar year,
then the optionee may not exercise the option until the next calendar year, but
in any case the option must still be exercised within ninety (90) days after
such separation from service.  For this
purpose, a “separation from service” is a separation from service between the
optionee and the Company, as defined under the default rules of the
applicable regulations for Section 409A of the Internal Revenue Code (“Code
Section 409A”).


 


(iii)                               Unforeseeable Emergency.  The
optionee may exercise the option with respect to the number of vested option
shares necessary to satisfy an unforeseeable 


 

















 


emergency.  For this purpose, an “unforeseeable emergency”
has the meaning set forth in the applicable regulations for Code Section 409A.


 


(iv)                              Change of Control.  The
optionee may exercise the option with respect to vested option shares within
thirty (30) days after a change of control.  For this purpose, a “change of control” occurs
if any one person or more than one person acting as a group acquires ownership
of Company stock that, together with stock already held by such person/group,
constitutes more than 50% of the total voting power of the common stock of the
Company.  However, transfers to (x) lineal
descendants of the transferor, (y) spouses of the transferor or such
lineal descendants, or (z) trusts, partnerships or other legal entities
for the benefit of the transferor or any person described in subclause (x) or
(y) shall not be considered in determining whether a change of control has
occurred.


 


(v)                                 Expiration Upon Failure to Exercise. Failure to exercise any portion of the
option that becomes exercisable pursuant to 2(i), (ii) or (iv) above
will result in the expiration of that portion of the option that was vested at
the time the right to exercise arose.


 


3.                                       Unforeseeable Emergency Condition to Put
Right.  The “severe financial hardship” condition for
the exercise of the optionee put right is revised to the Code Section 409A
term “unforeseeable emergency” as defined in 2(iii) above.


 


4.                                       Mechanics of Option Exercise.  The
following provisions will apply to all option exercises and will control over
any conflicting provisions in any of the Agreements:


 


(i)                                     Payment of Option Price.  At
the time the optionee delivers a written notice of exercise, the optionee must
submit to the Company full payment of the option price with respect to the
option shares that are being purchased.  The
optionee may submit payment by delivery of (i) cash or cash equivalents, (ii) certificate(s) for
shares of Company stock that the optionee has owned for at least six (6) months,
duly endorsed in blank or accompanied by stock powers duly endorsed in blank, (iii) other
consideration that the Company’s Board of Directors (“Board”) approves or (iv) any
combination of the foregoing.  The value
of the consideration described in subclauses (ii) and (iii) above
will be the fair market value as determined by the Board.


 


(ii)                                  Certain Agreements.  As
part of the steps necessary to complete the exercise of the option, the
optionee must (i) enter into an agreement containing such investment
representations and warranties, and take such other actions, as the Company
deems appropriate for compliance with securities and other laws, (ii) enter
into a restrictive stock transfer agreement, in form and substance acceptable
to the Company, that may impose restrictions on the transfer of the option
shares purchased upon exercise of the option, among other obligations, and (iii) enter
into a shareholders’ agreement containing such provisions, and take such other
actions, as the Company deems appropriate to preserve the Company’s status as a
Subchapter S corporation.


 


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