Document:

Exhibit 10.2

                                                                    Grant No: 02

                    NONSTATUTORY STOCK OPTION GRANT AGREEMENT

                                    UNDER THE

          PHOENIX COLOR CORP. AMENDED AND RESTATED STOCK INCENTIVE PLAN

      1. Terminology. All capitalized words that are not defined in this
Agreement have the meanings ascribed to them in the Plan. For purposes of this
Agreement, the terms below have the following meanings:

            (a) "Cause" has the meaning ascribed to such term or words of
similar import in the Optionee's written employment or service contract with the
Company and, in the absence of such agreement or definition, means the
Optionee's (i) conviction of, or plea of nolo contendere to, a felony or crime
involving moral turpitude; (ii) fraud on or misappropriation of any funds or
property of the Company; (iii) personal dishonesty, incompetence, willful
misconduct, willful violation of any law, rule or regulation (other than minor
traffic violations or similar offenses), or breach of fiduciary duty which
involves personal profit; (iv) willful misconduct in connection with the
Optionee's duties or willful failure to perform the Optionee's responsibilities
in the best interests of the Company; (v) chronic use of alcohol, drugs or other
similar substances which affects the Optionee's work performance; (vi) violation
of any Company rule, regulation, procedure or policy; or (vii) breach of any
provision of any employment, non-disclosure, non-competition, non-solicitation
or other similar agreement executed by the Optionee for the benefit of the
Company, all as determined by the Administrator, which determination will be
conclusive.

            (b) "Change of Control" means: (i) the acquisition in one or more
transactions by any Person, as defined in this Section 1(b), (other than from
the Company) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of 50% or
more of (A) the then outstanding capital stock of the Company, or (B) the
combined voting power of the then outstanding capital stock of the Company
entitled to vote generally in the election of directors (the "Company Voting
Stock"); (ii) the closing of a sale or other conveyance of all or substantially
all of the assets of the Company; or (iii) the effective time of any merger,
share exchange, consolidation, or other business combination involving the
Company if immediately after such transaction persons who hold a majority of the
outstanding voting securities entitled to vote generally in the election of
directors of the surviving entity (or the entity owning 100% of such surviving
entity) are not persons who, immediately prior to such transaction, held the
Company Voting Stock. For purposes of this Section 1(b), a "Person" means any
individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended, other than: employee benefit
plans sponsored or maintained by the Company and entities controlled by the
Company.

            (c) "Company" means PHOENIX COLOR CORP.

            (d) "Total and Permanent Disability" has the meaning ascribed to
such term or words of similar import in the Optionee's written employment or
service contract with the Company and, in the absence of such agreement or
definition, means the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental

Early-Exercise Stock Options

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impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve months. The
Administrator may require such proof of Total and Permanent Disability as the
Administrator in its sole discretion deems appropriate and the Administrator's
good faith determination as to whether the Optionee is totally and permanently
disabled will be final and binding on all parties concerned.

      2. Vesting.

            (a) The shares of Common Stock underlying the Options are referred
to in this Agreement as "Option Shares." Option Shares may be either "Vested
Option Shares" or "Unvested Option Shares" depending on their vested status. If
any Options are exercised before they are vested, the Unvested Option Shares
that are purchased upon such exercise are subject to repurchase by the Company
as described in Section 7 below.

            (b) The Options, and the underlying Option Shares, shall vest in
accordance with the vesting schedule identified in the Stock Option Certificate
which is attached hereto and constitutes a part of the Agreement (the "Vesting
Schedule"), so long as the Optionee is in the continuous employ of, or in a
service relationship with, the Company or its Affiliates from the Grant Date
through the applicable date upon which vesting is scheduled to occur. No vesting
will accrue to any Options or Option Shares after the Optionee ceases to be in
either an employment or other service relationship with the Company or its
Affiliates.

            (c) In determining the vested status of the Options and Option
Shares in circumstances where some but not all of the Options have been
exercised, vesting under the Vesting Schedule is attributed first to Option
Shares that have been exercised, in the order in which they were exercised, and
second to Option Shares underlying unexercised Options.

            (d) Unless the Options have earlier terminated, the unvested Options
and the Unvested Option Shares become fully vested upon the occurrence of a
Change of Control.

            (e) Unless the Options have earlier terminated, the unvested Options
and the Unvested Option Shares become fully vested upon the termination of the
Optionee's employment or other service relationship with the Company and its
Affiliates as a result of the Optionee's Total and Permanent Disability or
death.

      3. Exercise of Options.

            (a) Right to Exercise. The Optionee may exercise the Options,
regardless of their vested status, at any time on or before the Expiration Date
or the earlier termination of the Options, unless otherwise provided in this
Agreement. Section 4 below describes certain limitations on exercise of the
Options that apply in the event of the Optionee's death, Total and Permanent
Disability, or termination of employment or other service relationship with the
Company or its Affiliates. The Options may be exercised only in multiples of
whole shares and may not be exercised at any one time as to fewer than one
hundred shares (or such lesser number of shares as to which the Options are then
exercisable). No fractional shares will be issued under the Options.

            (b) Exercise Procedure. In order to exercise the Options, the
following items must be delivered to the Secretary of the Company before the
expiration or termination of the

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Options: (i) an exercise notice, in such form as the Administrator may require
from time to time, specifying the number of Option Shares to be purchased, (ii)
full payment of the Exercise Price for such Option Shares in accordance with
Section 3(c) of this Agreement, and (iii) an executed copy of any other
agreements requested by the Administrator pursuant to Section 3(d) of this
Agreement. An exercise will not be effective until all three of the foregoing
items are received by the Secretary of the Company.

            (c) Method of Payment. Payment of the Exercise Price may be made by
delivery of cash, certified or cashier's check, money order or other cash
equivalent acceptable to the Administrator in its discretion. In addition,
payment of the Exercise Price may be made by any of the following methods, or a
combination thereof, as determined by the Administrator in its discretion at the
time of exercise:

                  (i) by tender (via actual delivery or attestation) to the
      Company of other shares of Common Stock of the Company which have a Fair
      Market Value on the date of tender equal to the Exercise Price, provided
      that such shares have been owned by the Optionee for a period of at least
      six months free of any substantial risk of forfeiture or were purchased on
      the open market without assistance, direct or indirect, from the Company;
      or

                  (ii) by any other method approved by the Administrator.

            (d) Agreement by Optionee to Execute Other Agreements. The Optionee
agrees to execute, as a condition precedent to the exercise of the Options and
at any time thereafter as may reasonably be requested by the Administrator, a
Stock Restriction Agreement ("Stock Restriction Agreement") in such form as the
Administrator may from time to time request; provided, however, that execution
of the Stock Restriction Agreement will not be required upon any exercise of the
Options that occurs after the closing of the first public offering of capital
stock of the Company that is effected pursuant to a registration statement filed
with, and declared effective by, the Securities and Exchange Commission under
the Securities Act of 1933, as amended, or, if later, the expiration of any
market stand-off agreement that applies to other stockholders of the Company
respecting such public offering of capital stock. The Optionee acknowledges and
agrees that the Stock Restriction Agreement may include such provisions as the
Administrator in its sole discretion may determine are desirable including,
without limitation, restrictions on transfer, rights of first refusal of the
Company, Company repurchase rights that may be exercised at any time and for any
reason, including repurchases under specified circumstances that will result in
the Optionee not realizing any gain from the purchase of the shares, deferred
payment for the purchase of shares from the Optionee, rights to require sale of
the shares in the event of a change of control of the Company and limitations on
sales immediately following an initial public offering. Copies of the Stock
Restriction Agreement are available for inspection at any time prior to exercise
of the Options upon written request. Except as provided above, exercise of the
Options and issuance of the underlying Option Shares will be conditioned upon
the Optionee's (i) receipt of the Stock Restriction Agreement, (ii)
acknowledgment that the Optionee has read and understands the terms and
provisions of the Stock Restriction Agreement and enters into such agreement
voluntarily with an intent to be bound by its provisions, and (iii) delivery of
an executed copy of the Stock Restriction Agreement to the Administrator.

            (e) Issuance of Shares upon Exercise. Upon exercise of the Options
in accordance with the terms of this Agreement, the Company will issue to the
Optionee or such

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other person exercising the Options, as the case may be, the number of shares of
Common Stock so paid for, in the form of fully paid and nonassessable stock. To
the extent that the Options are vested at the time of exercise, the Company will
deliver stock certificates for the Vested Option Shares as soon as practicable
after exercise, which certificates will, unless such Vested Option Shares are
registered or an exemption from registration is available under applicable
federal and state law, bear a legend restricting transferability of such shares
and referencing any applicable Stock Restriction Agreement. To the extent that
the Options are unvested at the time of exercise, the Company will retain
physical possession of the stock certificates for the Unvested Option Shares,
or, in its discretion, will evidence such Unvested Option Shares by book entry
only, until the shares covered by the stock certificates become vested. While
holding the stock certificates, the Company may place a legend on the stock
certificates restricting the transferability of such certificates and referring
to this Agreement and any other terms and conditions applicable to the shares
represented by the stock certificates. Upon the Company's request, the holder of
the Unvested Option Shares must deliver to the Company a stock power, endorsed
in blank, with respect to the Unvested Option Shares to be held by the Company
during the period before the Option Shares vest.

      4. Termination of Employment or Service.

            (a) Exercise Period Following Cessation of Employment or Other
Service Relationship, In General. If the Optionee ceases to be employed by, or
in a service relationship with, the Company or its Affiliates for any reason
other than death, Total and Permanent Disability, or discharge for Cause, (i)
the unvested Options, after giving effect to the provisions of Section 2 of this
Agreement, terminate immediately upon such cessation, and (ii) the vested
Options remain exercisable during the 90-day period following such cessation,
but in no event after the Expiration Date. Unless sooner terminated, the vested
Options terminate upon the expiration of such 90-day period.

            (b) Disability of Optionee. Notwithstanding the provisions of
Section 4(a) above, if the Optionee ceases to be employed by, or in a service
relationship with, the Company or its Affiliates as a result of the Optionee's
Total and Permanent Disability, (i) the unvested Options, after giving effect to
the provisions of Section 2 of this Agreement, terminate immediately upon such
cessation, and (ii) the vested Options remain exercisable during the 90-day
period following such cessation, but in no event after the Expiration Date.
Unless sooner terminated, the vested Options terminate upon the expiration of
such 90-day period.

            (c) Death of Optionee. If the Optionee dies prior to the expiration
or other termination of the Options, (i) the unvested Options, after giving
effect to the provisions of Section 2 of this Agreement, terminate immediately
upon the Optionee's death, and (ii) the vested Options remain exercisable during
the one-year period following the Optionee's death, but in no event after the
Expiration Date, by the Optionee's executor, personal representative, or the
person(s) to whom the Options are transferred by will or the laws of descent and
distribution. Unless sooner terminated, the vested Options terminate upon the
expiration of such one-year period.

            (d) Misconduct. Notwithstanding anything to the contrary in this
Agreement, the Options terminate in their entirety, regardless of whether the
Options are vested, immediately upon the Optionee's discharge of employment or
other service relationship for Cause.

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      5. Termination of Options/Recapture Payment. The Options are granted as
consideration for, and contingent upon, the Optionee's agreement to and
compliance with the noncompetition, nonsolicitation, and confidential
information covenants contained in the Optionee's Employment Agreement with the
Company (or its Affiliates) or in any other agreement for the benefit of the
Company (or its Affiliates) (the "Restrictive Covenants"). The Optionee
recognizes and acknowledges that it would be difficult to ascertain the damages
arising from a violation of the Restrictive Covenants. Accordingly,
notwithstanding anything herein to the contrary, if the Administrator or its
delegate, in its sole discretion, determines that the Optionee has engaged in
any activity that contravenes the Restrictive Covenants, Optionee agrees that
the following shall occur:

      (i)   The Options will terminate effective on the date on which such
            determination is made, regardless of whether the Options are vested
            in whole or in part, unless terminated sooner by operation of
            another provision of this Agreement; and

      (ii)  With respect to any Common Stock acquired by the Optionee through
            the exercise of the Options within six months before the Optionee's
            termination of employment or at any time after the Optionee's
            termination of employment (the "Recapture Shares"), the Optionee
            agrees to pay to the Company, within 30 days of when the Company
            delivers written notice to the Optionee, an amount as set forth
            below (the "Recapture Payment"). The Recapture Payment may be paid
            in cash, Recapture Shares, or a combination of cash or Recapture
            Shares. If paid in cash, the Recapture Payment shall be an amount
            equal to the difference between the aggregate Exercise Price paid to
            acquire the Recapture Shares and the Fair Market Value of the shares
            on the exercise date. If paid in Recapture Shares, the Recapture
            Payment shall be paid by the Optionee delivering to the Company
            share certificates evidencing the Recapture Shares, together with a
            stock power, endorsed in blank. As soon as practicable after receipt
            of the stock certificates and stock power properly endorsed, the
            Company will pay to the Optionee the lower of (A) the aggregate
            Exercise Price paid by the Optionee to acquire the Recapture Shares
            for which the stock certificates have been delivered to the Company
            or (B) the Fair Market Value of such Recapture Shares.

      6. Coordination With Other Agreements. The Optionee and the Company
expressly agree that any remedy available to the Company or its Affiliates under
this Agreement is in addition to, and does not limit the enforceability of, any
remedy available to the Company or its Affiliates under any other agreement.

      7. Repurchase Right. Upon termination of the Optionee's employment or
other service relationship with the Company or its Affiliates for any reason,
the Company will have the right to purchase (the "Repurchase Right"), and the
Optionee will have the obligation to sell to the Company upon request any or all
of the Unvested Option Shares held by the Optionee or a Permitted Transferee
within the meaning of Section 10 of this Agreement. The Company may exercise
this Repurchase Right at any time, and from time to time, following the
Optionee's termination by giving written notice to the Optionee stating the
number of Unvested Option Shares to be purchased. The purchase price of the
Unvested Option Shares will be the lesser of (i) the Fair Market Value of such
Unvested Option Shares at the time of repurchase by the

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Company, or (ii) the Exercise Price per share that was paid by the Optionee to
buy the Unvested Option Shares (adjusted to reflect adjustments made under
Section 7(c) of the Plan) multiplied by the number of Unvested Option Shares
being purchased by the Company. Settlement of the Repurchase Right will be made
at the principal executive offices of the Company within 30 days after delivery
of the written notice of the Company's exercise of the Repurchase Right to the
Optionee. In the discretion of the Administrator, the purchase price will be
made via cash, a promissory note, or a combination of the two. Any such
promissory note will provide for substantially equal installments, payable at
least annually, over a period not to exceed five years and will accrue interest
at the applicable Federal mid-term rate in effect under Code section 1274(d) as
of the settlement date, compounded annually. Upon settlement, the Company shall
become the legal and beneficial owner of the Unvested Option Shares repurchased
and all rights and interests therein or relating thereto, and the Company shall
have the right to retain and transfer to its own name the number of Unvested
Option Shares repurchased by the Company.

      8. Company's Right to Defer Payments. Notwithstanding anything herein to
the contrary, no payment shall be made under this Agreement, or under any
promissory note issued by the Company pursuant to this Agreement, that would
cause the Company to violate any banking agreement or loan or other financial
covenant or cause default of any senior indebtedness of the Company, regardless
of when such agreement, covenant or indebtedness was created, incurred or
assumed. Any payment under this Agreement that would cause such violation or
default shall be deferred until, in the sole discretion of the Board of
Directors of the Company, such payment shall no longer cause any such violation
or default. Any payment deferred in consequence of the provisions of the
preceding sentence shall bear simple interest from the date such payment would
otherwise have been made to the date when such payment is actually made, at a
rate which is equal to the prime rate of interest published in the Wall Street
Journal from time-to-time during the period of such deferral, but in no event
shall such rate of interest exceed ten percent per annum. The Company shall pay
interest at the same time as it makes the payment to which such interest
relates.

      9. Lock-Up Agreement. The Optionee agrees that following the effective
date of a registration statement of the Company filed under the Securities Act
of 1933, as amended, the Optionee, for the duration specified by and to the
extent requested by the Company and an underwriter of Common Stock or other
securities of the Company, will not directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase, or otherwise transfer or dispose of any Option Shares held
by the Optionee at any time during such period except Option Shares included in
such registration; provided however, that (a) such agreement shall be applicable
only to the first such registration statement of the Company which covers Common
Stock (or other securities) to be sold on its behalf to the public in an
underwritten offering, and (b) all officers and directors of the Company enter
into similar agreements.

      10. Nontransferability of Options. These Options are nontransferable
otherwise than by will or the laws of descent and distribution, or as otherwise
permitted by the Administrator, in its sole discretion, to certain Permitted
Transferees as defined below. During the lifetime of the Optionee, the Options
may be exercised only by the Optionee, by such permitted transferees or, during
the period the Optionee is under a legal disability, by the Optionee's guardian
or legal representative. Except as provided above, the Options may not be
assigned, transferred, pledged, hypothecated or disposed of in any way (whether
by operation of law or otherwise) and

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shall not be subject to execution, attachment or similar process. For purposes
of this Agreement, the term "Permitted Transferee" means one or more members of
the Optionee's immediate family, a trust for the exclusive benefit of the
Optionee or such immediate family members, any other entity owned exclusively by
the Optionee or such immediate family members, or any combination of the
foregoing; provided, however, that no transfers made pursuant to any divorce or
separation proceedings or settlements will be permitted. "Immediate family
member" means spouse, children, grandchildren, parents or siblings of the
Optionee, including in each case in-laws and adoptive relations.

      11. Transferability of Option Shares. Transferability of Vested Option
Shares is governed by the Stock Restriction Agreement required under Section
3(d) of this Agreement and any other agreements that the Optionee may be
required to enter into upon exercise of the Options. Unvested Option Shares may
not be sold, pledged, encumbered, borrowed against, or used to secure an
indebtedness. Unvested Option Shares may only be transferred, either during the
Optionee's lifetime or on death by will or the laws of descent and distribution,
to one or more Permitted Transferees without consideration; provided, however,
that no transfers made pursuant to any divorce or separation proceedings or
settlements will be permitted. Each Permitted Transferee shall receive and hold
the Unvested Option Shares subject to the provisions of this Agreement, and, as
a condition precedent to any transfer permitted under this Section 11, the
Permitted Transferee must deliver to the Company a written instrument confirming
that such transferee is bound by all of the terms and conditions of this
Agreement and that no subsequent transfers of such Unvested Option Shares will
occur prior to their becoming vested.

      12. Drag-Along Rights. If at any time any stockholder of the Company, or
group of stockholders, owning a majority or more of the voting capital stock of
the Company (hereinafter, the "Transferring Stockholders") proposes to enter
into any transaction involving (a) a sale of more than 50% of the outstanding
voting capital stock of the Company in a non-public sale or (b) any merger,
share exchange, consolidation or other reorganization or business combination of
the Company immediately after which a majority of the directors of the surviving
entity is not comprised of persons who were directors of the Company immediately
prior to such transaction or after which persons who hold a majority of the
voting capital stock of the surviving entity are not persons who held voting
capital stock of the Company immediately prior to such transaction, the Company
may require the Optionee to participate in such transaction by giving the
Optionee written notice thereof at least 10 days in advance of the date of the
transaction or the date that tender is required, as the case may be (hereinafter
referred to as the "Drag-Along Date"). Notwithstanding anything herein to the
contrary and without the Optionee's consent, if such notice is provided to the
Optionee, then the outstanding Options, or a portion thereof, as determined by
the Company in its sole discretion and specified in the written notice of the
transaction, shall terminate effective as of the Drag-Along Date and shall be of
no further force or effect thereafter, provided that in consideration therefor
the Optionee receives from the Company, the acquirer or the Company's successor,
an aggregate amount equal to the product of (a) the number of Vested Option
Shares as to which the Options so terminate, multiplied by (b) the difference
between (i) the Exercise Price per share of the Options and (ii) the price the
Transferring Stockholders receive per share of Common Stock pursuant to the
terms of the transaction, adjusted as determined by the Administrator to reflect
the fact that the Exercise Price with respect to the Options has not, in fact,
been paid. The payment of such amount to the Optionee shall be made either upon
the same terms and conditions as those applicable to the Transferring
Stockholders with respect to their Common Stock pursuant to the terms of the

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transaction or via delivery of immediately available funds within 30 days
following the transaction, as determined in the sole discretion of the payor.

      13. Nonstatutory Nature of the Options. The Options are not intended to
qualify as incentive stock options within the meaning of Code section 422, and
this Agreement shall be so construed. The Optionee acknowledges that, upon
exercise of the Options for Vested Option Shares, the Optionee will recognize
taxable income in an amount equal to the excess of the then Fair Market Value of
the Vested Option Shares over the Exercise Price and must comply with the
provisions of Section 14 of this Agreement with respect to any tax withholding
obligations that arise as a result of such exercise. The Optionee further
acknowledges that if the Options are exercised as to any Unvested Option Shares,
such Unvested Option Shares may be treated as subject to a substantial risk of
forfeiture under Code section 83. In such event, the Optionee may make an
election under Code section 83(b) to include in income currently the difference
between the Fair Market Value of the Unvested Option Shares and the Exercise
Price, if any. If the Optionee does not make such an election within 30 days of
exercising the Options for Unvested Option Shares, the Optionee understands that
he or she will recognize income at the time such Unvested Option Shares become
vested. The Optionee agrees to consult with his or her own tax advisor prior to
the exercise of the Options for Unvested Option Shares.

      14. Withholding of Taxes. At the time the Options are exercised, in whole
or in part, or at any time thereafter as requested by the Company or its
Affiliates, the Optionee hereby authorizes withholding from payroll or any other
payment of any kind due the Optionee and otherwise agrees to make adequate
provision for foreign, federal, state and local taxes required by law to be
withheld, if any, which arise in connection with the Options. The Company or its
Affiliates may require the Optionee to make a cash payment to cover any
withholding tax obligation as a condition of exercise of the Options or issuance
of share certificates representing Vested Option Shares.

      The Administrator may, in its sole discretion, permit the Optionee to
satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the Options either by electing to have the Company withhold from
the shares to be issued upon exercise that number of shares, or by electing to
deliver to the Company already-owned shares of Common Stock, in either case
having a Fair Market Value equal to the amount necessary to satisfy the
statutory minimum withholding amount due.

      15. Adjustments for Corporate Transactions and Other Events.

            (a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a
stock dividend of, or stock split or reverse stock split affecting, the Common
Stock, the number of shares covered by and the exercise price and other terms of
the Options and Option Shares, shall, without further action of the Board, be
adjusted to reflect such event unless the Board determines, at the time it
approves such stock dividend, stock split or reverse stock split, that no such
adjustment shall be made. The Administrator may make adjustments, in its
discretion, to address the treatment of fractional shares and fractional cents
that arise with respect to the Options and Option Shares as a result of the
stock dividend, stock split or reverse stock split.

            (b) Non-Change of Control Transactions. Except with respect to the
transactions set forth in Section 15(a), in the event of any change affecting
the Common Stock,

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the Company or its capitalization, by reason of a spin-off, split-up, dividend,
recapitalization, merger, consolidation or share exchange, other than any such
change that is part of a transaction resulting in a Change of Control, the
Administrator, in its discretion and without the consent of the Optionee, may
make any adjustments in the Options and Option Shares, including but not limited
to modifying the number, kind and price of securities subject to the Options.

            (c) Change of Control Transactions. In the event of any transaction
resulting in a Change of Control, the Options will terminate upon the effective
time of any such Change of Control unless provision is made in connection with
the transaction in the sole discretion of the parties thereto for the
continuation or assumption of the Options, or the substitution of the Options
with new options of the surviving or successor entity or a parent thereof. In
the event of such termination, (A) the Options that will terminate upon the
effective time of the Change of Control shall become fully vested immediately
before the effective time of the Change of Control; and (B) the Optionee will be
permitted, immediately before the Change of Control, to exercise all of the
Options that are then exercisable or will become exercisable upon or prior to
the effective time of the Change of Control.

            (d) Adjustments for Unusual Events. The Administrator is authorized
to make, in its discretion and without the consent of the Optionee, adjustments
in the terms and conditions of, and the criteria included in, the Options in
recognition of unusual or nonrecurring events affecting the Company, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Administrator determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Options or the Plan.

            (e) Binding Nature of Adjustments. Adjustments under this Section 15
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 shares will be issued pursuant to the Options or
Option Shares on account of any such adjustments. The terms and conditions of
this Agreement shall apply with equal force to any additional and/or substitute
securities received by the Optionee pursuant to this Section 15 in exchange for,
or by virtue of the Optionee's ownership of, the Options or the Option Shares,
except as otherwise determined by the Administrator.

      16. Non-Guarantee of Employment or Service Relationship. Nothing in the
Plan or this Agreement shall alter the at-will or other employment status or
other service relationship of the Optionee, nor be construed as a contract of
employment or service relationship between the Company (or its Affiliates) and
the Optionee, or as a contractual right of Optionee to continue in the employ
of, or in a service relationship with, the Company (or its Affiliates) for any
period of time, or as a limitation of the right of the Company (or its
Affiliates) to discharge the Optionee at any time with or without cause or
notice and whether or not such discharge results in the failure of any Options
or Option Shares to vest, the forfeiture of any Vested or Unvested Option
Shares, or any other adverse effect on the Optionee's interests under the Plan.

      17. No Rights as a Stockholder. The Optionee shall not have any of the
rights of a stockholder with respect to the Option Shares until such shares have
been issued to him or her upon the due exercise of the Options. No adjustment
shall be made for dividends or distributions or other rights for which the
record date is prior to the date such shares are issued.

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Upon issuance of any Unvested Option Shares, the Optionee will be entitled to
all rights as a stockholder of the Company with respect to those shares,
including the right to vote the Unvested Option Shares, except that, unless the
Administrator determines otherwise, the Optionee shall not be entitled to
receive dividends and/or other distributions declared on such Unvested Option
Shares prior to their becoming vested.

      18. The Company's Rights. The existence of the Options 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.

      19. Invalidity or Unenforceability. It is the intention of the Company and
the Optionee that this Agreement shall be enforceable to the fullest extent
allowed by law. In the event that a court having jurisdiction holds any
provision of this Agreement to be invalid or unenforceable, in whole or in part,
the Company and the Optionee agree that, if allowed by law, that provision shall
be reduced to the degree necessary to render it valid and enforceable without
affecting the rest of this Agreement.

      20. Waiver. No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.

      21. Optionee. Whenever the word "Optionee" 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 Options or Option Shares may be
transferred by will or by the laws of descent and distribution, or another
permitted transferee, the word "Optionee" shall be deemed to include such
person.

      22. 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 the Optionee 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 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.

      23. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the Options 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
Options granted hereunder shall be void and ineffective for all purposes.

                                       10
<PAGE>

      24. Amendment. This Agreement may be amended from time to time by the
Administrator in its discretion; provided, however, that this Agreement may not
be modified in a manner that would have a materially adverse effect on the
Options or Option Shares as determined in the discretion of the Administrator,
except as provided in the Plan or in a written document signed by each of the
parties hereto.

      25. Conformity with Plan. This Agreement is intended to conform in all
respects with, and is subject to all applicable provisions of, the Plan, as may
be amended from time to time. 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 provided to you with this
Agreement.

      26. 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 the city and state in which the principal offices of
the Company are located, and the Optionee hereby agrees and submits to the
personal jurisdiction and venue thereof.

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

Enclosure: PHOENIX COLOR CORP. AMENDED AND RESTATED STOCK INCENTIVE PLAN

                                       11
<PAGE>

                                  EXERCISE FORM

Administrator of AMENDED AND RESTATED STOCK INCENTIVE PLAN
c/o Office of the Corporate Secretary
Phoenix Color Corp.
540 Western Maryland Parkway
Hagerstown, Maryland 21740

Gentlemen:

      I hereby exercise the Options granted to me on August ____, 2003, by
PHOENIX COLOR CORP. (the "Company"), subject to all the terms and provisions of
the applicable grant agreement and of the PHOENIX COLOR CORP. AMENDED AND
RESTATED STOCK INCENTIVE PLAN (the "Plan"), and notify you of my desire to
purchase ____________ shares of Class A Common Stock, par value $.01 per share,
of the Company at a price of $_____ per share pursuant to the exercise of said
Options.

      This will confirm my understanding with respect to the shares to be issued
to me by reason of this exercise of the Options (the shares to be issued
pursuant hereto shall be collectively referred to hereinafter as the "Shares")
as follows:

            (a) I am acquiring the Shares for my own account for investment with
no present intention of dividing my interest with others or of reselling or
otherwise disposing of any of the Shares.

            (b) The Shares are being issued without registration under the
Securities Act of 1933, as amended (the "Act"), in reliance upon one or more
exemptions contained in the Act, and such reliance is based in part on the above
representation.

            (c) The certificates for the Shares to be issued to me will bear a
legend substantially as follows:

                  "The securities represented by this stock certificate have not
      been registered under the Securities Act of 1933 (the "Act") or applicable
      state securities laws (the "State Acts"), and shall not be sold, pledged,
      hypothecated, donated, or otherwise transferred (whether or not for
      consideration) by the holder except upon the issuance to the Company of a
      favorable opinion of its counsel and/or submission to the Company of such
      other evidence as may be satisfactory to counsel for the Company, to the
      effect that any such transfer shall not be in violation of the Act and the
      State Acts.

                  The shares of stock represented by this certificate are
      subject to forfeiture, restrictions on transfer, an option to purchase and
      a market stand-off agreement set forth in a certain grant agreement and
      stock restriction agreement between the Company and the registered owner
      of this certificate (or his predecessor in interest), and no transfer of
      such shares may be made without compliance with those agreements. A copy
      of those agreements are available for inspection by any stockholder of the
      Company at the office of the Company upon appropriate request and without
      charge."

                                       1
<PAGE>

Appropriate stop transfer instructions will be issued by the Company to its
transfer agent.

            (d) Since the Shares have not been registered under the Act, they
must be held indefinitely until an exemption from the registration requirements
of the Act is available or they are subsequently registered, in which event the
representation in Paragraph (a) hereof shall terminate. As a condition to any
transfer of the Shares, I understand that the Company will require an opinion of
counsel satisfactory to the Company to the effect that such transfer does not
require registration under the Act or any state securities law.

            (e) The Company is not obligated to comply with the registration
requirements of the Act or with the requirements for an exemption under
Regulation A under the Act for my benefit.

            (f) I am a party to a grant agreement and a stock restriction
agreement with the Company, pursuant to which I have agreed to certain
restrictions on the transferability of the Shares and other matters relating
thereto.

Total Amount Enclosed: $__________

Date:________________________               ____________________________________
                                            (Optionee)

                                            Received by PHOENIX COLOR CORP. on

                                            ___________________________, ____

                                            By: ________________________________

                                       2
<PAGE>

                                                                    Grant No: 02

                               NOTICE TO OPTIONEE

      The purpose of this notice is to alert you to the fact that there are
potentially significant tax consequences to you arising from the exercise of the
options prior to vesting, in which event you will acquire restricted common
stock. In particular, it may be to your advantage to file an election pursuant
to Section 83(b) of the Internal Revenue Code of 1986, as amended (an "83(b)
Election").

      You are urged to consult with your own tax advisor before exercise as to
the advisability of making an 83(b) Election. Please note that an 83(b) Election
must be filed with the Internal Revenue Service within 30 days of your receipt
of the restricted stock. There are no exceptions to this rule. Failure to timely
file an 83(b) Election with the Internal Revenue Service could have serious
adverse tax consequences to you.

      The following summarizes the rules and procedure for filing an 83(b)
Election:

1.    An 83(b) Election is irrevocable.

2.    If you desire to make an 83(b) Election, an 83(b) Election Form must be
      filed with the Internal Revenue Service within 30 days of the date that
      you exercise your options to purchase restricted stock; no exceptions to
      this rule are made.

3.    You must provide a copy of the 83(b) Election Form to the corporate
      secretary or other designated officer of the company. This copy should be
      provided to the company at the same time that you file your 83(b) Election
      Form with the Internal Revenue Service.

4.    In addition to making the filing under Item 2 above, you must attach a
      copy of your 83(b) Election Form to your tax return for the taxable year
      in which you exercised your options to purchase restricted stock.

5.    If you make an 83(b) Election and later forfeit the restricted stock, you
      will not be entitled to a refund of any tax you paid as a result of having
      made the 83(b) Election. You may, however, recognize a capital loss upon
      such forfeiture.

      You are urged to consult your personal tax advisor before making an 83(b)
Election to discuss the consequences thereof and consider whether such an
election is advisable under your personal circumstances.

<PAGE>

                                                                    Grant No: 02

                               PHOENIX COLOR CORP.
                            STOCK OPTION CERTIFICATE

      THIS CERTIFIES THAT Edward Lieberman (the "Optionee") has been awarded
under the PHOENIX COLOR CORP. AMENDED AND RESTATED STOCK INCENTIVE PLAN (the
"Plan"), nonqualified stock options (each, an "Option" or collectively, the
"Options") to purchase 415 shares of Class A Common Stock, par value $0.01 per
share ("Common Stock") of PHOENIX COLOR CORP., a Delaware corporation (the
"Company"), at a price of $661.00 per share (the "Exercise Price"). This
Certificate constitutes part of and is subject to the terms and provisions of
the attached Nonqualified Stock Option Grant Agreement (the "Agreement"), which
is incorporated by reference herein.

Grant Date: August 16, 2003.

Expiration Date: The Options expire at 5:00 p.m. Eastern Time on the last
business day coincident with or prior to the tenth anniversary of the Grant
Date, unless fully exercised or terminated earlier.

Vesting Schedule: The Options and Option Shares vest in accordance with the
vesting schedule below, subject to the terms and conditions described in the
Agreement:

o     The Options and Option Shares vest in equal annual installments over a
      three-year period that begins on August 16, 2003 (the "Vesting
      Commencement Date"). Each such installment shall vest on the anniversary
      of the Vesting Commencement Date, subject to the terms and conditions
      described in the Agreement.

o     The extent to which the Options and Option Shares are vested as of a
      particular vesting date is rounded down to the nearest whole share.
      Vesting is rounded up to 100%, however, with respect to the third
      anniversary of the Vesting Commencement Date.

      IN WITNESS WHEREOF, the Company has caused this Certificate to be executed
by its duly authorized officer on this 16th day of August, 2003.

                                             PHOENIX COLOR CORP.

                                             By: /s/ Louis LaSorsa
                                                 ---------------------

      The undersigned hereby acknowledges that he/she has carefully read the
attached Agreement and the Plan and agrees to be bound by all of the provisions
set forth in such documents.

                                             OPTIONEE

                                             /s/ Edward Lieberman
                                             --------------------------
                                             Date: August 16, 2003Exhibit 10.3

                                                                    Grant No: 03

                    NONSTATUTORY STOCK OPTION GRANT AGREEMENT

                                    UNDER THE

          PHOENIX COLOR CORP. AMENDED AND RESTATED STOCK INCENTIVE PLAN

      1. Terminology. All capitalized words that are not defined in this
Agreement have the meanings ascribed to them in the Plan. For purposes of this
Agreement, the terms below have the following meanings:

            (a) "Cause" has the meaning ascribed to such term or words of
similar import in the Optionee's written employment or service contract with the
Company and, in the absence of such agreement or definition, means the
Optionee's (i) conviction of, or plea of nolo contendere to, a felony or crime
involving moral turpitude; (ii) fraud on or misappropriation of any funds or
property of the Company; (iii) personal dishonesty, incompetence, willful
misconduct, willful violation of any law, rule or regulation (other than minor
traffic violations or similar offenses), or breach of fiduciary duty which
involves personal profit; (iv) willful misconduct in connection with the
Optionee's duties or willful failure to perform the Optionee's responsibilities
in the best interests of the Company; (v) chronic use of alcohol, drugs or other
similar substances which affects the Optionee's work performance; (vi) violation
of any Company rule, regulation, procedure or policy; or (vii) breach of any
provision of any employment, non-disclosure, non-competition, non-solicitation
or other similar agreement executed by the Optionee for the benefit of the
Company, all as determined by the Administrator, which determination will be
conclusive.

            (b) "Change of Control" means: (i) the acquisition in one or more
transactions by any Person, as defined in this Section 1(b), (other than from
the Company) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of 50% or
more of (A) the then outstanding capital stock of the Company, or (B) the
combined voting power of the then outstanding capital stock of the Company
entitled to vote generally in the election of directors (the "Company Voting
Stock"); (ii) the closing of a sale or other conveyance of all or substantially
all of the assets of the Company; or (iii) the effective time of any merger,
share exchange, consolidation, or other business combination involving the
Company if immediately after such transaction persons who hold a majority of the
outstanding voting securities entitled to vote generally in the election of
directors of the surviving entity (or the entity owning 100% of such surviving
entity) are not persons who, immediately prior to such transaction, held the
Company Voting Stock. For purposes of this Section 1(b), a "Person" means any
individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended, other than: employee benefit
plans sponsored or maintained by the Company and entities controlled by the
Company.

            (c) "Company" means PHOENIX COLOR CORP.

            (d) "Total and Permanent Disability" has the meaning ascribed to
such term or words of similar import in the Optionee's written employment or
service contract with the Company and, in the absence of such agreement or
definition, means the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental

Early-Exercise Stock Options

<PAGE>

impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve months. The
Administrator may require such proof of Total and Permanent Disability as the
Administrator in its sole discretion deems appropriate and the Administrator's
good faith determination as to whether the Optionee is totally and permanently
disabled will be final and binding on all parties concerned.

      2. Vesting.

            (a) The shares of Common Stock underlying the Options are referred
to in this Agreement as "Option Shares." Option Shares may be either "Vested
Option Shares" or "Unvested Option Shares" depending on their vested status. If
any Options are exercised before they are vested, the Unvested Option Shares
that are purchased upon such exercise are subject to repurchase by the Company
as described in Section 7 below.

            (b) The Options, and the underlying Option Shares, shall vest in
accordance with the vesting schedule identified in the Stock Option Certificate
which is attached hereto and constitutes a part of the Agreement (the "Vesting
Schedule"), so long as the Optionee is in the continuous employ of, or in a
service relationship with, the Company or its Affiliates from the Grant Date
through the applicable date upon which vesting is scheduled to occur. No vesting
will accrue to any Options or Option Shares after the Optionee ceases to be in
either an employment or other service relationship with the Company or its
Affiliates.

            (c) In determining the vested status of the Options and Option
Shares in circumstances where some but not all of the Options have been
exercised, vesting under the Vesting Schedule is attributed first to Option
Shares that have been exercised, in the order in which they were exercised, and
second to Option Shares underlying unexercised Options.

            (d) Unless the Options have earlier terminated, the unvested Options
and the Unvested Option Shares become fully vested upon the occurrence of a
Change of Control.

            (e) Unless the Options have earlier terminated, the unvested Options
and the Unvested Option Shares become fully vested upon the termination of the
Optionee's employment or other service relationship with the Company and its
Affiliates as a result of the Optionee's Total and Permanent Disability or
death.

      3. Exercise of Options.

            (a) Right to Exercise. The Optionee may exercise the Options,
regardless of their vested status, at any time on or before the Expiration Date
or the earlier termination of the Options, unless otherwise provided in this
Agreement. Section 4 below describes certain limitations on exercise of the
Options that apply in the event of the Optionee's death, Total and Permanent
Disability, or termination of employment or other service relationship with the
Company or its Affiliates. The Options may be exercised only in multiples of
whole shares and may not be exercised at any one time as to fewer than one
hundred shares (or such lesser number of shares as to which the Options are then
exercisable). No fractional shares will be issued under the Options.

            (b) Exercise Procedure. In order to exercise the Options, the
following items must be delivered to the Secretary of the Company before the
expiration or termination of the

                                        2
<PAGE>

Options: (i) an exercise notice, in such form as the Administrator may require
from time to time, specifying the number of Option Shares to be purchased, (ii)
full payment of the Exercise Price for such Option Shares in accordance with
Section 3(c) of this Agreement, and (iii) an executed copy of any other
agreements requested by the Administrator pursuant to Section 3(d) of this
Agreement. An exercise will not be effective until all three of the foregoing
items are received by the Secretary of the Company.

            (c) Method of Payment. Payment of the Exercise Price may be made by
delivery of cash, certified or cashier's check, money order or other cash
equivalent acceptable to the Administrator in its discretion. In addition,
payment of the Exercise Price may be made by any of the following methods, or a
combination thereof, as determined by the Administrator in its discretion at the
time of exercise:

                  (i) by tender (via actual delivery or attestation) to the
      Company of other shares of Common Stock of the Company which have a Fair
      Market Value on the date of tender equal to the Exercise Price, provided
      that such shares have been owned by the Optionee for a period of at least
      six months free of any substantial risk of forfeiture or were purchased on
      the open market without assistance, direct or indirect, from the Company;
      or

                  (ii) by any other method approved by the Administrator.

            (d) Agreement by Optionee to Execute Other Agreements. The Optionee
agrees to execute, as a condition precedent to the exercise of the Options and
at any time thereafter as may reasonably be requested by the Administrator, a
Stock Restriction Agreement ("Stock Restriction Agreement") in such form as the
Administrator may from time to time request; provided, however, that execution
of the Stock Restriction Agreement will not be required upon any exercise of the
Options that occurs after the closing of the first public offering of capital
stock of the Company that is effected pursuant to a registration statement filed
with, and declared effective by, the Securities and Exchange Commission under
the Securities Act of 1933, as amended, or, if later, the expiration of any
market stand-off agreement that applies to other stockholders of the Company
respecting such public offering of capital stock. The Optionee acknowledges and
agrees that the Stock Restriction Agreement may include such provisions as the
Administrator in its sole discretion may determine are desirable including,
without limitation, restrictions on transfer, rights of first refusal of the
Company, Company repurchase rights that may be exercised at any time and for any
reason, including repurchases under specified circumstances that will result in
the Optionee not realizing any gain from the purchase of the shares, deferred
payment for the purchase of shares from the Optionee, rights to require sale of
the shares in the event of a change of control of the Company and limitations on
sales immediately following an initial public offering. Copies of the Stock
Restriction Agreement are available for inspection at any time prior to exercise
of the Options upon written request. Except as provided above, exercise of the
Options and issuance of the underlying Option Shares will be conditioned upon
the Optionee's (i) receipt of the Stock Restriction Agreement, (ii)
acknowledgment that the Optionee has read and understands the terms and
provisions of the Stock Restriction Agreement and enters into such agreement
voluntarily with an intent to be bound by its provisions, and (iii) delivery of
an executed copy of the Stock Restriction Agreement to the Administrator.

            (e) Issuance of Shares upon Exercise. Upon exercise of the Options
in accordance with the terms of this Agreement, the Company will issue to the
Optionee or such

                                       3
<PAGE>

other person exercising the Options, as the case may be, the number of shares of
Common Stock so paid for, in the form of fully paid and nonassessable stock. To
the extent that the Options are vested at the time of exercise, the Company will
deliver stock certificates for the Vested Option Shares as soon as practicable
after exercise, which certificates will, unless such Vested Option Shares are
registered or an exemption from registration is available under applicable
federal and state law, bear a legend restricting transferability of such shares
and referencing any applicable Stock Restriction Agreement. To the extent that
the Options are unvested at the time of exercise, the Company will retain
physical possession of the stock certificates for the Unvested Option Shares,
or, in its discretion, will evidence such Unvested Option Shares by book entry
only, until the shares covered by the stock certificates become vested. While
holding the stock certificates, the Company may place a legend on the stock
certificates restricting the transferability of such certificates and referring
to this Agreement and any other terms and conditions applicable to the shares
represented by the stock certificates. Upon the Company's request, the holder of
the Unvested Option Shares must deliver to the Company a stock power, endorsed
in blank, with respect to the Unvested Option Shares to be held by the Company
during the period before the Option Shares vest.

      4. Termination of Employment or Service.

            (a) Exercise Period Following Cessation of Employment or Other
Service Relationship, In General. If the Optionee ceases to be employed by, or
in a service relationship with, the Company or its Affiliates for any reason
other than death, Total and Permanent Disability, or discharge for Cause, (i)
the unvested Options, after giving effect to the provisions of Section 2 of this
Agreement, terminate immediately upon such cessation, and (ii) the vested
Options remain exercisable during the 90-day period following such cessation,
but in no event after the Expiration Date. Unless sooner terminated, the vested
Options terminate upon the expiration of such 90-day period.

            (b) Disability of Optionee. Notwithstanding the provisions of
Section 4(a) above, if the Optionee ceases to be employed by, or in a service
relationship with, the Company or its Affiliates as a result of the Optionee's
Total and Permanent Disability, (i) the unvested Options, after giving effect to
the provisions of Section 2 of this Agreement, terminate immediately upon such
cessation, and (ii) the vested Options remain exercisable during the 90-day
period following such cessation, but in no event after the Expiration Date.
Unless sooner terminated, the vested Options terminate upon the expiration of
such 90-day period.

            (c) Death of Optionee. If the Optionee dies prior to the expiration
or other termination of the Options, (i) the unvested Options, after giving
effect to the provisions of Section 2 of this Agreement, terminate immediately
upon the Optionee's death, and (ii) the vested Options remain exercisable during
the one-year period following the Optionee's death, but in no event after the
Expiration Date, by the Optionee's executor, personal representative, or the
person(s) to whom the Options are transferred by will or the laws of descent and
distribution. Unless sooner terminated, the vested Options terminate upon the
expiration of such one-year period.

            (d) Misconduct. Notwithstanding anything to the contrary in this
Agreement, the Options terminate in their entirety, regardless of whether the
Options are vested, immediately upon the Optionee's discharge of employment or
other service relationship for Cause.

                                       4
<PAGE>

      5. Termination of Options/Recapture Payment. The Options are granted as
consideration for, and contingent upon, the Optionee's agreement to and
compliance with the noncompetition, nonsolicitation, and confidential
information covenants contained in the Optionee's Employment Agreement with the
Company (or its Affiliates) or in any other agreement for the benefit of the
Company (or its Affiliates) (the "Restrictive Covenants"). The Optionee
recognizes and acknowledges that it would be difficult to ascertain the damages
arising from a violation of the Restrictive Covenants. Accordingly,
notwithstanding anything herein to the contrary, if the Administrator or its
delegate, in its sole discretion, determines that the Optionee has engaged in
any activity that contravenes the Restrictive Covenants, Optionee agrees that
the following shall occur:

      (i)   The Options will terminate effective on the date on which such
            determination is made, regardless of whether the Options are vested
            in whole or in part, unless terminated sooner by operation of
            another provision of this Agreement; and

      (ii)  With respect to any Common Stock acquired by the Optionee through
            the exercise of the Options within six months before the Optionee's
            termination of employment or at any time after the Optionee's
            termination of employment (the "Recapture Shares"), the Optionee
            agrees to pay to the Company, within 30 days of when the Company
            delivers written notice to the Optionee, an amount as set forth
            below (the "Recapture Payment"). The Recapture Payment may be paid
            in cash, Recapture Shares, or a combination of cash or Recapture
            Shares. If paid in cash, the Recapture Payment shall be an amount
            equal to the difference between the aggregate Exercise Price paid to
            acquire the Recapture Shares and the Fair Market Value of the shares
            on the exercise date. If paid in Recapture Shares, the Recapture
            Payment shall be paid by the Optionee delivering to the Company
            share certificates evidencing the Recapture Shares, together with a
            stock power, endorsed in blank. As soon as practicable after receipt
            of the stock certificates and stock power properly endorsed, the
            Company will pay to the Optionee the lower of (A) the aggregate
            Exercise Price paid by the Optionee to acquire the Recapture Shares
            for which the stock certificates have been delivered to the Company
            or (B) the Fair Market Value of such Recapture Shares.

      6. Coordination With Other Agreements. The Optionee and the Company
expressly agree that any remedy available to the Company or its Affiliates under
this Agreement is in addition to, and does not limit the enforceability of, any
remedy available to the Company or its Affiliates under any other agreement.

      7. Repurchase Right. Upon termination of the Optionee's employment or
other service relationship with the Company or its Affiliates for any reason,
the Company will have the right to purchase (the "Repurchase Right"), and the
Optionee will have the obligation to sell to the Company upon request any or all
of the Unvested Option Shares held by the Optionee or a Permitted Transferee
within the meaning of Section 10 of this Agreement. The Company may exercise
this Repurchase Right at any time, and from time to time, following the
Optionee's termination by giving written notice to the Optionee stating the
number of Unvested Option Shares to be purchased. The purchase price of the
Unvested Option Shares will be the lesser of (i) the Fair Market Value of such
Unvested Option Shares at the time of repurchase by the

                                       5
<PAGE>

Company, or (ii) the Exercise Price per share that was paid by the Optionee to
buy the Unvested Option Shares (adjusted to reflect adjustments made under
Section 7(c) of the Plan) multiplied by the number of Unvested Option Shares
being purchased by the Company. Settlement of the Repurchase Right will be made
at the principal executive offices of the Company within 30 days after delivery
of the written notice of the Company's exercise of the Repurchase Right to the
Optionee. In the discretion of the Administrator, the purchase price will be
made via cash, a promissory note, or a combination of the two. Any such
promissory note will provide for substantially equal installments, payable at
least annually, over a period not to exceed five years and will accrue interest
at the applicable Federal mid-term rate in effect under Code section 1274(d) as
of the settlement date, compounded annually. Upon settlement, the Company shall
become the legal and beneficial owner of the Unvested Option Shares repurchased
and all rights and interests therein or relating thereto, and the Company shall
have the right to retain and transfer to its own name the number of Unvested
Option Shares repurchased by the Company.

      8. Company's Right to Defer Payments. Notwithstanding anything herein to
the contrary, no payment shall be made under this Agreement, or under any
promissory note issued by the Company pursuant to this Agreement, that would
cause the Company to violate any banking agreement or loan or other financial
covenant or cause default of any senior indebtedness of the Company, regardless
of when such agreement, covenant or indebtedness was created, incurred or
assumed. Any payment under this Agreement that would cause such violation or
default shall be deferred until, in the sole discretion of the Board of
Directors of the Company, such payment shall no longer cause any such violation
or default. Any payment deferred in consequence of the provisions of the
preceding sentence shall bear simple interest from the date such payment would
otherwise have been made to the date when such payment is actually made, at a
rate which is equal to the prime rate of interest published in the Wall Street
Journal from time-to-time during the period of such deferral, but in no event
shall such rate of interest exceed ten percent per annum. The Company shall pay
interest at the same time as it makes the payment to which such interest
relates.

      9. Lock-Up Agreement. The Optionee agrees that following the effective
date of a registration statement of the Company filed under the Securities Act
of 1933, as amended, the Optionee, for the duration specified by and to the
extent requested by the Company and an underwriter of Common Stock or other
securities of the Company, will not directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase, or otherwise transfer or dispose of any Option Shares held
by the Optionee at any time during such period except Option Shares included in
such registration; provided however, that (a) such agreement shall be applicable
only to the first such registration statement of the Company which covers Common
Stock (or other securities) to be sold on its behalf to the public in an
underwritten offering, and (b) all officers and directors of the Company enter
into similar agreements.

      10. Nontransferability of Options. These Options are nontransferable
otherwise than by will or the laws of descent and distribution, or as otherwise
permitted by the Administrator, in its sole discretion, to certain Permitted
Transferees as defined below. During the lifetime of the Optionee, the Options
may be exercised only by the Optionee, by such permitted transferees or, during
the period the Optionee is under a legal disability, by the Optionee's guardian
or legal representative. Except as provided above, the Options may not be
assigned, transferred, pledged, hypothecated or disposed of in any way (whether
by operation of law or otherwise) and

                                       6
<PAGE>

shall not be subject to execution, attachment or similar process. For purposes
of this Agreement, the term "Permitted Transferee" means one or more members of
the Optionee's immediate family, a trust for the exclusive benefit of the
Optionee or such immediate family members, any other entity owned exclusively by
the Optionee or such immediate family members, or any combination of the
foregoing; provided, however, that no transfers made pursuant to any divorce or
separation proceedings or settlements will be permitted. "Immediate family
member" means spouse, children, grandchildren, parents or siblings of the
Optionee, including in each case in-laws and adoptive relations.

      11. Transferability of Option Shares. Transferability of Vested Option
Shares is governed by the Stock Restriction Agreement required under Section
3(d) of this Agreement and any other agreements that the Optionee may be
required to enter into upon exercise of the Options. Unvested Option Shares may
not be sold, pledged, encumbered, borrowed against, or used to secure an
indebtedness. Unvested Option Shares may only be transferred, either during the
Optionee's lifetime or on death by will or the laws of descent and distribution,
to one or more Permitted Transferees without consideration; provided, however,
that no transfers made pursuant to any divorce or separation proceedings or
settlements will be permitted. Each Permitted Transferee shall receive and hold
the Unvested Option Shares subject to the provisions of this Agreement, and, as
a condition precedent to any transfer permitted under this Section 11, the
Permitted Transferee must deliver to the Company a written instrument confirming
that such transferee is bound by all of the terms and conditions of this
Agreement and that no subsequent transfers of such Unvested Option Shares will
occur prior to their becoming vested.

      12. Drag-Along Rights. If at any time any stockholder of the Company, or
group of stockholders, owning a majority or more of the voting capital stock of
the Company (hereinafter, the "Transferring Stockholders") proposes to enter
into any transaction involving (a) a sale of more than 50% of the outstanding
voting capital stock of the Company in a non-public sale or (b) any merger,
share exchange, consolidation or other reorganization or business combination of
the Company immediately after which a majority of the directors of the surviving
entity is not comprised of persons who were directors of the Company immediately
prior to such transaction or after which persons who hold a majority of the
voting capital stock of the surviving entity are not persons who held voting
capital stock of the Company immediately prior to such transaction, the Company
may require the Optionee to participate in such transaction by giving the
Optionee written notice thereof at least 10 days in advance of the date of the
transaction or the date that tender is required, as the case may be (hereinafter
referred to as the "Drag-Along Date"). Notwithstanding anything herein to the
contrary and without the Optionee's consent, if such notice is provided to the
Optionee, then the outstanding Options, or a portion thereof, as determined by
the Company in its sole discretion and specified in the written notice of the
transaction, shall terminate effective as of the Drag-Along Date and shall be of
no further force or effect thereafter, provided that in consideration therefor
the Optionee receives from the Company, the acquirer or the Company's successor,
an aggregate amount equal to the product of (a) the number of Vested Option
Shares as to which the Options so terminate, multiplied by (b) the difference
between (i) the Exercise Price per share of the Options and (ii) the price the
Transferring Stockholders receive per share of Common Stock pursuant to the
terms of the transaction, adjusted as determined by the Administrator to reflect
the fact that the Exercise Price with respect to the Options has not, in fact,
been paid. The payment of such amount to the Optionee shall be made either upon
the same terms and conditions as those applicable to the Transferring
Stockholders with respect to their Common Stock pursuant to the terms of the

                                       7
<PAGE>

transaction or via delivery of immediately available funds within 30 days
following the transaction, as determined in the sole discretion of the payor.

      13. Nonstatutory Nature of the Options. The Options are not intended to
qualify as incentive stock options within the meaning of Code section 422, and
this Agreement shall be so construed. The Optionee acknowledges that, upon
exercise of the Options for Vested Option Shares, the Optionee will recognize
taxable income in an amount equal to the excess of the then Fair Market Value of
the Vested Option Shares over the Exercise Price and must comply with the
provisions of Section 14 of this Agreement with respect to any tax withholding
obligations that arise as a result of such exercise. The Optionee further
acknowledges that if the Options are exercised as to any Unvested Option Shares,
such Unvested Option Shares may be treated as subject to a substantial risk of
forfeiture under Code section 83. In such event, the Optionee may make an
election under Code section 83(b) to include in income currently the difference
between the Fair Market Value of the Unvested Option Shares and the Exercise
Price, if any. If the Optionee does not make such an election within 30 days of
exercising the Options for Unvested Option Shares, the Optionee understands that
he or she will recognize income at the time such Unvested Option Shares become
vested. The Optionee agrees to consult with his or her own tax advisor prior to
the exercise of the Options for Unvested Option Shares.

      14. Withholding of Taxes. At the time the Options are exercised, in whole
or in part, or at any time thereafter as requested by the Company or its
Affiliates, the Optionee hereby authorizes withholding from payroll or any other
payment of any kind due the Optionee and otherwise agrees to make adequate
provision for foreign, federal, state and local taxes required by law to be
withheld, if any, which arise in connection with the Options. The Company or its
Affiliates may require the Optionee to make a cash payment to cover any
withholding tax obligation as a condition of exercise of the Options or issuance
of share certificates representing Vested Option Shares.

      The Administrator may, in its sole discretion, permit the Optionee to
satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the Options either by electing to have the Company withhold from
the shares to be issued upon exercise that number of shares, or by electing to
deliver to the Company already-owned shares of Common Stock, in either case
having a Fair Market Value equal to the amount necessary to satisfy the
statutory minimum withholding amount due.

      15. Adjustments for Corporate Transactions and Other Events.

            (a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a
stock dividend of, or stock split or reverse stock split affecting, the Common
Stock, the number of shares covered by and the exercise price and other terms of
the Options and Option Shares, shall, without further action of the Board, be
adjusted to reflect such event unless the Board determines, at the time it
approves such stock dividend, stock split or reverse stock split, that no such
adjustment shall be made. The Administrator may make adjustments, in its
discretion, to address the treatment of fractional shares and fractional cents
that arise with respect to the Options and Option Shares as a result of the
stock dividend, stock split or reverse stock split.

            (b) Non-Change of Control Transactions. Except with respect to the
transactions set forth in Section 15(a), in the event of any change affecting
the Common Stock,

                                       8
<PAGE>

the Company or its capitalization, by reason of a spin-off, split-up, dividend,
recapitalization, merger, consolidation or share exchange, other than any such
change that is part of a transaction resulting in a Change of Control, the
Administrator, in its discretion and without the consent of the Optionee, may
make any adjustments in the Options and Option Shares, including but not limited
to modifying the number, kind and price of securities subject to the Options.

            (c) Change of Control Transactions. In the event of any transaction
resulting in a Change of Control, the Options will terminate upon the effective
time of any such Change of Control unless provision is made in connection with
the transaction in the sole discretion of the parties thereto for the
continuation or assumption of the Options, or the substitution of the Options
with new options of the surviving or successor entity or a parent thereof. In
the event of such termination, (A) the Options that will terminate upon the
effective time of the Change of Control shall become fully vested immediately
before the effective time of the Change of Control; and (B) the Optionee will be
permitted, immediately before the Change of Control, to exercise all of the
Options that are then exercisable or will become exercisable upon or prior to
the effective time of the Change of Control.

            (d) Adjustments for Unusual Events. The Administrator is authorized
to make, in its discretion and without the consent of the Optionee, adjustments
in the terms and conditions of, and the criteria included in, the Options in
recognition of unusual or nonrecurring events affecting the Company, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Administrator determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Options or the Plan.

            (e) Binding Nature of Adjustments. Adjustments under this Section 15
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 shares will be issued pursuant to the Options or
Option Shares on account of any such adjustments. The terms and conditions of
this Agreement shall apply with equal force to any additional and/or substitute
securities received by the Optionee pursuant to this Section 15 in exchange for,
or by virtue of the Optionee's ownership of, the Options or the Option Shares,
except as otherwise determined by the Administrator.

      16. Non-Guarantee of Employment or Service Relationship. Nothing in the
Plan or this Agreement shall alter the at-will or other employment status or
other service relationship of the Optionee, nor be construed as a contract of
employment or service relationship between the Company (or its Affiliates) and
the Optionee, or as a contractual right of Optionee to continue in the employ
of, or in a service relationship with, the Company (or its Affiliates) for any
period of time, or as a limitation of the right of the Company (or its
Affiliates) to discharge the Optionee at any time with or without cause or
notice and whether or not such discharge results in the failure of any Options
or Option Shares to vest, the forfeiture of any Vested or Unvested Option
Shares, or any other adverse effect on the Optionee's interests under the Plan.

      17. No Rights as a Stockholder. The Optionee shall not have any of the
rights of a stockholder with respect to the Option Shares until such shares have
been issued to him or her upon the due exercise of the Options. No adjustment
shall be made for dividends or distributions or other rights for which the
record date is prior to the date such shares are issued.

                                       9
<PAGE>

Upon issuance of any Unvested Option Shares, the Optionee will be entitled to
all rights as a stockholder of the Company with respect to those shares,
including the right to vote the Unvested Option Shares, except that, unless the
Administrator determines otherwise, the Optionee shall not be entitled to
receive dividends and/or other distributions declared on such Unvested Option
Shares prior to their becoming vested.

      18. The Company's Rights. The existence of the Options 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.

      19. Invalidity or Unenforceability. It is the intention of the Company and
the Optionee that this Agreement shall be enforceable to the fullest extent
allowed by law. In the event that a court having jurisdiction holds any
provision of this Agreement to be invalid or unenforceable, in whole or in part,
the Company and the Optionee agree that, if allowed by law, that provision shall
be reduced to the degree necessary to render it valid and enforceable without
affecting the rest of this Agreement.

      20. Waiver. No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.

      21. Optionee. Whenever the word "Optionee" 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 Options or Option Shares may be
transferred by will or by the laws of descent and distribution, or another
permitted transferee, the word "Optionee" shall be deemed to include such
person.

      22. 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 the Optionee 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 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.

      23. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the Options 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
Options granted hereunder shall be void and ineffective for all purposes.

                                       10
<PAGE>

      24. Amendment. This Agreement may be amended from time to time by the
Administrator in its discretion; provided, however, that this Agreement may not
be modified in a manner that would have a materially adverse effect on the
Options or Option Shares as determined in the discretion of the Administrator,
except as provided in the Plan or in a written document signed by each of the
parties hereto.

      25. Conformity with Plan. This Agreement is intended to conform in all
respects with, and is subject to all applicable provisions of, the Plan, as may
be amended from time to time. 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 provided to you with this
Agreement.

      26. 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 the city and state in which the principal offices of
the Company are located, and the Optionee hereby agrees and submits to the
personal jurisdiction and venue thereof.

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

Enclosure: PHOENIX COLOR CORP. AMENDED AND RESTATED STOCK INCENTIVE PLAN

                                       11
<PAGE>

                                  EXERCISE FORM

Administrator of AMENDED AND RESTATED STOCK INCENTIVE PLAN
c/o Office of the Corporate Secretary
Phoenix Color Corp.
540 Western Maryland Parkway
Hagerstown, Maryland 21740

Gentlemen:

      I hereby exercise the Options granted to me on August ____, 2003, by
PHOENIX COLOR CORP. (the "Company"), subject to all the terms and provisions of
the applicable grant agreement and of the PHOENIX COLOR CORP. AMENDED AND
RESTATED STOCK INCENTIVE PLAN (the "Plan"), and notify you of my desire to
purchase ____________ shares of Class A Common Stock, par value $.01 per share,
of the Company at a price of $_______ per share pursuant to the exercise of said
Options.

      This will confirm my understanding with respect to the shares to be issued
to me by reason of this exercise of the Options (the shares to be issued
pursuant hereto shall be collectively referred to hereinafter as the "Shares")
as follows:

            (a) I am acquiring the Shares for my own account for investment with
no present intention of dividing my interest with others or of reselling or
otherwise disposing of any of the Shares.

            (b) The Shares are being issued without registration under the
Securities Act of 1933, as amended (the "Act"), in reliance upon one or more
exemptions contained in the Act, and such reliance is based in part on the above
representation.

            (c) The certificates for the Shares to be issued to me will bear a
legend substantially as follows:

                  "The securities represented by this stock certificate have not
      been registered under the Securities Act of 1933 (the "Act") or applicable
      state securities laws (the "State Acts"), and shall not be sold, pledged,
      hypothecated, donated, or otherwise transferred (whether or not for
      consideration) by the holder except upon the issuance to the Company of a
      favorable opinion of its counsel and/or submission to the Company of such
      other evidence as may be satisfactory to counsel for the Company, to the
      effect that any such transfer shall not be in violation of the Act and the
      State Acts.

                  The shares of stock represented by this certificate are
      subject to forfeiture, restrictions on transfer, an option to purchase and
      a market stand-off agreement set forth in a certain grant agreement and
      stock restriction agreement between the Company and the registered owner
      of this certificate (or his predecessor in interest), and no transfer of
      such shares may be made without compliance with those agreements. A copy
      of those agreements are available for inspection by any stockholder of the
      Company at the office of the Company upon appropriate request and without
      charge."

                                       1
<PAGE>

Appropriate stop transfer instructions will be issued by the Company to its
transfer agent.

            (d) Since the Shares have not been registered under the Act, they
must be held indefinitely until an exemption from the registration requirements
of the Act is available or they are subsequently registered, in which event the
representation in Paragraph (a) hereof shall terminate. As a condition to any
transfer of the Shares, I understand that the Company will require an opinion of
counsel satisfactory to the Company to the effect that such transfer does not
require registration under the Act or any state securities law.

            (e) The Company is not obligated to comply with the registration
requirements of the Act or with the requirements for an exemption under
Regulation A under the Act for my benefit.

            (f) I am a party to a grant agreement and a stock restriction
agreement with the Company, pursuant to which I have agreed to certain
restrictions on the transferability of the Shares and other matters relating
thereto.

Total Amount Enclosed: $__________

Date:________________________               ____________________________________
                                            (Optionee)

                                            Received by PHOENIX COLOR CORP. on

                                            ___________________________, ____

                                            By: ________________________________

                                       2
<PAGE>

                                                                    Grant No: 03

                               NOTICE TO OPTIONEE

      The purpose of this notice is to alert you to the fact that there are
potentially significant tax consequences to you arising from the exercise of the
options prior to vesting, in which event you will acquire restricted common
stock. In particular, it may be to your advantage to file an election pursuant
to Section 83(b) of the Internal Revenue Code of 1986, as amended (an "83(b)
Election").

      You are urged to consult with your own tax advisor before exercise as to
the advisability of making an 83(b) Election. Please note that an 83(b) Election
must be filed with the Internal Revenue Service within 30 days of your receipt
of the restricted stock. There are no exceptions to this rule. Failure to timely
file an 83(b) Election with the Internal Revenue Service could have serious
adverse tax consequences to you.

      The following summarizes the rules and procedure for filing an 83(b)
Election:

1.    An 83(b) Election is irrevocable.

2.    If you desire to make an 83(b) Election, an 83(b) Election Form must be
      filed with the Internal Revenue Service within 30 days of the date that
      you exercise your options to purchase restricted stock; no exceptions to
      this rule are made.

3.    You must provide a copy of the 83(b) Election Form to the corporate
      secretary or other designated officer of the company. This copy should be
      provided to the company at the same time that you file your 83(b) Election
      Form with the Internal Revenue Service.

4.    In addition to making the filing under Item 2 above, you must attach a
      copy of your 83(b) Election Form to your tax return for the taxable year
      in which you exercised your options to purchase restricted stock.

5.    If you make an 83(b) Election and later forfeit the restricted stock, you
      will not be entitled to a refund of any tax you paid as a result of having
      made the 83(b) Election. You may, however, recognize a capital loss upon
      such forfeiture.

      You are urged to consult your personal tax advisor before making an 83(b)
Election to discuss the consequences thereof and consider whether such an
election is advisable under your personal circumstances.

<PAGE>

                                                                    Grant No. 03

                               PHOENIX COLOR CORP.
                            STOCK OPTION CERTIFICATE

      THIS CERTIFIES THAT John Carbone (the "Optionee") has been awarded under
the PHOENIX COLOR CORP. AMENDED AND RESTATED STOCK INCENTIVE PLAN (the "Plan"),
nonqualified stock options (each, an "Option" or collectively, the "Options") to
purchase 242 shares of Class A Common Stock, par value $0.01 per share ("Common
Stock") of PHOENIX COLOR CORP., a Delaware corporation (the "Company"), at a
price of $661.00 per share (the "Exercise Price"). This Certificate constitutes
part of and is subject to the terms and provisions of the attached Nonqualified
Stock Option Grant Agreement (the "Agreement"), which is incorporated by
reference herein.

Grant Date: August 16, 2003.

Expiration Date: The Options expire at 5:00 p.m. Eastern Time on the last
business day coincident with or prior to the tenth anniversary of the Grant
Date, unless fully exercised or terminated earlier.

Vesting Schedule: The Options and the Option Shares vest in accordance with the
vesting schedule below, subject to the terms and conditions described in the
Agreement:

o     The Options and Option Shares vest in equal annual installments over a
      three-year period that begins on August 16, 2003 (the "Vesting
      Commencement Date"). Each such installment shall vest on the anniversary
      of the Vesting Commencement Date, subject to the terms and conditions
      described in the Agreement.

o     The extent to which the Options and Option Shares are vested as of a
      particular vesting date is rounded down to the nearest whole share.
      Vesting is rounded up to 100%, however, with respect to the third
      anniversary of the Vesting Commencement Date.

      IN WITNESS WHEREOF, the Company has caused this Certificate to be executed
by its duly authorized officer on this 16th day of August, 2003.

                                                        PHOENIX COLOR CORP.

                                                        By: /s/ Edward Lieberman
                                                            --------------------

      The undersigned hereby acknowledges that he/she has carefully read the
attached Agreement and the Plan and agrees to be bound by all of the provisions
set forth in such documents.

                                                        OPTIONEE

                                                        /s/ John Carbone
                                                        ----------------
                                                        Date: August 16, 2003

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