Document:

EXHIBIT 10.48

 

RESTRICTED STOCK AGREEMENT

 

VERTIS HOLDINGS, INC.

1999 EQUITY AWARD PLAN

 

GRANTEE: TOM ZIMMER

 

NO. OF SHARES: 7,337

 

This Agreement
(the “Agreement”),
approved by Thomas H. Lee Equity Fund IV, L.P. (the “Sponsor”), evidences
the award of 7,337 restricted shares (each, an “Award Share,” and collectively, the “Award Shares”) of the
Common Stock of Vertis Holdings, Inc., a Delaware corporation (the “Company”), granted to
you, Tom Zimmer, effective as of May 20, 2004 (the “Grant Date”),
pursuant to the Vertis Holdings, Inc. 1999 Equity Award Plan (the “Plan”) and
conditioned upon your agreement to the terms described below.  All of the provisions of the Plan are
expressly incorporated into this Agreement.

 

You must return to Jennifer M. Bass an executed copy of this
Agreement within 10 Business Days after the date indicated below the name of
the officer who signed this Agreement on behalf of the Company.  If you fail to do so, the Award Shares will
be forfeited without consideration and this Agreement will be null and void.

 

1.                                       Terminology.  The Glossary at the end of this Agreement
contains definitions of all words that appear in this Agreement with an initial
capital letter that are not defined elsewhere in this Agreement.

 

2.                                       Vesting.  All of the Award Shares are nonvested and
forfeitable as of the Grant Date.  So
long as your Service with the Company is continuous from the Grant Date through
the applicable date upon which vesting occurs, the Award Shares will vest and
become nonforfeitable immediately prior to the first to occur of the following:

 

(a)                                  a
Liquidity Event;

(b)                                 your
death; or

(c)                                  the
date upon which you suffer a Disability.

 

Except as provided above,
unless otherwise determined by the Administrator, none of the Award Shares will
become vested and nonforfeitable after your Service with the Company ceases.

 

3.                                       Termination
of Employment or Service.

 

3.1                                 Unvested
Award Shares.  If your Service with
the Company ceases for any reason other than your death or Disability, all
Award Shares that are not then vested and nonforfeitable will be immediately
forfeited to the Company upon such cessation for no consideration.

 

3.2                                 Vested
Award Shares.  If your Service with
the Company ceases for any reason, all Award Shares that are then vested and
nonforfeitable will not be affected by such cessation but will remain subject
to the provisions of this Agreement, including the restrictions on transfer set
forth under Section 4 of this Agreement.

 

 

4.                                       Restrictions
on Transfer.

 

4.1                                 Except
as otherwise provided under Sections 4.3 or 7 of this Agreement or in
accordance with your will or the laws of descent and distribution upon your
death, until an Award Share becomes vested and nonforfeitable and a
Liquidity Event has occurred, the Award Share may not be assigned, transferred,
pledged, hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar
process.

 

4.2                               You hereby represent and warrant to the Company as follows:

 

(a)                                  You will hold the Award Shares for your own account for investment only
and not with a view to, or for resale in connection with, any “distribution” of
the Award Shares within the meaning of the Securities Act.

 

(b)                                  You understand that the Award Shares have not been registered under the
Securities Act by reason of a specific exemption and that the Award Shares must
be held indefinitely, unless they are subsequently registered under the
Securities Act or you obtain an opinion of counsel, in form and substance satisfactory
to the Company and its counsel, that such registration is not required.  You further acknowledge and understand that
the Company is under no obligation to register the Award Shares.

 

(c)                                  You understand that the Company may, in its discretion, impose
restrictions on the sale, pledge or other transfer of the Award Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company, such restrictions are necessary or desirable to
comply with the Securities Act, the securities laws of any State or any other
law.

 

(d)                                  You are aware that your investment in the Company is a speculative
investment that has limited liquidity and is subject to the risk of complete
loss.

 

4.3                                 The
provisions of Sections 4.1 and 4.2(b) shall not apply to the following
transfers; provided, however, that no transfer of Award Shares
pursuant to this Section 4.3 (other than a transfer to the Company) shall be
given effect on the books of the Company unless and until the Permitted Transferee
(as defined below) executes an agreement in writing with the parties hereto
pursuant to which he, she, or it agrees to be bound by all of the terms and
conditions of this Agreement to the same extent as the parties hereto; provided,
further, that no transfer will be permitted if the Company determines
that, in its sole discretion, such transfer is, or is reasonably likely to be,
in violation of applicable federal or state securities laws:

 

(a)                                  a
transfer of vested Award Shares made to an Affiliate of the Company or an
Affiliate of any subsidiary of the Company;

 

(b)                                 a
transfer of vested Award Shares upon your death to your executors,
administrators, testamentary trustees, legatees or beneficiaries;

 

(c)                                  a
transfer of vested Award Shares to a trust, the beneficiaries of which include
only you and your spouse, siblings, or direct lineal ancestors or descendants;

 

(d)                                 a
transfer of vested Award Shares made as a gift to your spouse or lineal
descendants; or

 

(e)                                  a
transfer of vested Award Shares made pursuant to a court order in connection
with a divorce proceeding.

 

 

The transferee in
each of the subclauses (a) through (e) above is referred to herein as a “Permitted Transferee.”  Notwithstanding anything to the contrary in
this Agreement, no transfer made to the Company, any subsidiary of the Company,
or the Sponsor shall be subject to any restriction on transfer contained
herein, so long as any such transfer is made in accordance with all applicable
federal and state securities laws and does not violate any contractual
agreement in effect at the time of such transfer.

 

4.4                               The Company shall not be required to (a) transfer on its books any
Award Shares that have been sold or transferred in contravention of this
Agreement or (b) treat as the owner of Award Shares, or otherwise accord
voting, dividend or liquidation rights to, any transferee to whom Award Shares
have been transferred in contravention of this Agreement.

 

5.                                       Stock
Certificates.  You will be reflected
as the owner of record of the Award Shares as of the Grant Date on the Company’s
books.  The Company will hold the share
certificates for safekeeping, or otherwise retain the Award Shares in
uncertificated book entry form, until the Award Shares become vested and
nonforfeitable and until they may be transferred freely without restriction
under this Agreement.  Until the Award
Shares become vested and nonforfeitable, any share certificates representing
such shares will include a legend in substantially the following form, in
addition to any other legends that may be required under federal or state
securities laws.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE APPLICABLE SECURITIES ACT OF ANY STATE
BUT HAVE BEEN ISSUED IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION CONTAINED IN
SAID ACTS.  NO SALE, OFFER TO SELL OR
OTHER TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE
UNLESS A REGISTRATION STATEMENT UNDER SAID ACTS IS IN EFFECT WITH RESPECT TO
THE SECURITIES, OR AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SUCH ACTS
IS THEN APPLICABLE.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND THE OTHER TERMS AND CONDITIONS SET FORTH IN A
CERTAIN RESTRICTED STOCK AGREEMENT DATED MAY 20, 2004, AS AMENDED FROM
TIME TO TIME, BETWEEN THE COMPANY AND THE REGISTERED OWNER OF THIS CERTIFICATE
(OR HIS PREDECESSOR IN INTEREST), AND SUCH AGREEMENT IS AVAILABLE FOR
INSPECTION WITHOUT CHARGE AT THE OFFICE OF THE SECRETARY OF THE COMPANY.

 

All regular cash
dividends and other distributions on the Award Shares held by the Company will
be paid directly to you, but any stock dividends will be treated in the manner
set forth in Section 9 of this Agreement.

 

6.                                       Market
Stand-Off Agreement.  You agree that
following the effective date of a registration statement of the Company filed
under the Securities Act, to the extent requested by the Company and an
underwriter of Common Stock or other securities of the Company, you will not
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any equity securities of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of such securities, whether any such transaction is
to be settled by delivery of such securities or other securities, in cash or
otherwise, or publicly disclose the intention to make any such offer, sale,
pledge or disposition, or to enter into any such transaction, swap, hedge or
other arrangement, in each case during the seven days prior to and the one
hundred and eighty (180) days after the effectiveness of any underwritten
offering of the Company’s equity securities (or such longer or shorter period
as may be requested in writing by the managing underwriter and agreed to in
writing by the Company) (the “Market Stand-Off Period”), except as part of such
underwritten registration if otherwise permitted.  In addition, you agree to execute any further
letters, agreements and/or other documents requested by the Company or its
underwriters which are consistent with the terms of this Section 6.  The

 

 

Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Stand-Off Period.

 

7.                                       Tag-Along
and Drag-Along Rights.

 

7.1.                              Tag-Along
Rights.  (a)  If the Sponsor proposes to transfer all or a
portion of the shares of Common Stock beneficially owned by it to a Third Party
which would not be an Affiliate of the Sponsor immediately upon consummation of
such transfer, and the Sponsor does not exercise its Drag-Along Rights in
accordance with Section 7.4 (a “Tag-Along Sale”), the Sponsor shall cause you and your
Permitted Transferees to have the option to exercise your rights under this
Section 7.1, provided, however, that you and your Permitted
Transferees, if any, shall have no rights under this Section 7.1 if the shares
of Common Stock to be transferred in such transaction and any shares of Common
Stock which have been transferred to any Third Party within a 90-day period
preceding the date of such transfer have, in the aggregate, a Fair Market Value
less than ten million dollars ($10,000,000) (a “Small Transfer”), and provided, further,
that when the cumulative Fair Market Value of all such Small Transfers, the
value to be calculated at the time of each such transfer, exceeds fifty million
dollars ($50,000,000), the restrictions provided for in the first proviso of
this Section 7.1(a) shall no longer be in effect.  Moreover, you and your Permitted Transferees,
if any, shall have no rights under this Section 7.1 with respect to any
transfer by the Sponsor of any shares of Common Stock beneficially owned by it
to any limited partner of the Sponsor.

 

(b)                                 In
the event of a proposed Tag-Along Sale:

 

(i)                                     the
Sponsor shall provide you written notice of the terms and condi­tions of such
proposed Tag-Along Sale, as described in Section 7.1(c) (“Tag-Along Notice”),
at least 10 Busi­ness Days prior to the consummation of such proposed Tag-Along
Sale and offer you and your Permitted Transferees the opportunity to
participate in such Tag-Along Sale on the terms and conditions set forth in
this Section 7.1; and

 

(ii)                                  subject
to Section 7.1(c), you and your Permitted Transferees shall be entitled to sell
up to a Pro Rata Portion (as defined below) of your Award Shares (the “Tag Shares”) at the
same price and on the same terms as the shares of Common Stock proposed to be
sold by the Sponsor in such Tag-Along Sale in accordance with the terms set
forth in this Section 7.1.

The “Pro-Rata Portion” of
your Tag Shares shall mean an amount of such Tag Shares equal to the product
of:

 

(A)                              (x)
a fraction, the numerator of which is the number of shares of Common Stock
proposed to be transferred by the Sponsor and its Affiliates in such Tag-Along
Sale and the denominator of which is the total number of shares of Common Stock
beneficially owned by the Sponsor and its Affiliates collectively, immediately
prior to transferring such shares of Common Stock; or, (y) for the first
transfer after the restrictions set forth in the first proviso of Section
7.1(a) are no longer in effect, a fraction, the numerator of which is the
number of shares of Common Stock proposed to be transferred by the Sponsor and
its Affiliates in such Tag-Along Sale plus the cumulative number of shares of
Common Stock transferred by the Sponsor and its Affiliates in all Small
Transfers, and the denominator of which is the total number of shares of Common
Stock beneficially owned by the Sponsor and its Affiliates collectively,
immediately prior to transferring such shares of Common Stock plus the
cumulative number of shares of Common Stock transferred by the Sponsor and its
Affiliates in all Small Transfers; and

 

(B)                                the
total amount of Tag Shares beneficially owned by such Executive at the time of
the Tag-Along Sale.

 

 

(c)                                  The
Tag-Along Notice shall identify the proposed transferee, the number of shares
of Common Stock to be sold by the Sponsor in the Tag-Along Sale, the Pro Rata
Portion of your Tag Shares which you shall be entitled to transfer in such
Tag-Along Sale, the price at which the transfer of shares of Common Stock is
proposed to be made, and all other material terms and conditions of the
proposed Tag-Along Sale.  From the date
of the Tag-Along Notice, you and your Permitted Transferees shall have the
right (a “Tag-Along
Right”), exercisable by written notice (“Tag-Along Response Notice”)
given by you to the Sponsor within seven Business Days from the date of the
Tag-Along Notice (the “Tag-Along
Response Notice Period”), to request that the Sponsor includes
in the proposed transfer the number of Tag Shares held by you and your
Permitted Transferees (up to their Pro Rata Portion) as is specified in such
Tag-Along Response Notice at the same price and on the same terms and
conditions set forth in the Tag Along Notice; provided, however,
that if the aggregate number of shares of Common Stock proposed to be sold by
(i) the Sponsor, (ii) you and your Permitted Transferees, (iii) Other Award
Share Grantees and their permitted transferees giving tag-along notices similar
to the Tag-Along Notice during such period prescribed in Other Award Share
Grantees’ Agreements and (iv) any other persons entitled to give (and giving on
a timely basis) tag-along notices similar to the Tag-Along Notice pursuant to
agreements substantially similar to this Agreement, including those certain
Option Transfer Agreements, those certain Amended and Restated Management
Subscription Agreements, and those certain Retained Share Agreements, each
between the Company, the Sponsor and you or Other Key People, as amended, (the
persons identified in subclauses (i), (ii), (iii) and (iv) of this subsection,
collectively, the “Participants”),
in such Tag-Along Sale exceeds the number of shares of Common Stock which can
be sold on the terms and conditions set forth in the Tag-Along Notice, then
only the Tag-Along Portion of shares of Common Stock beneficially owned by you
shall be sold pursuant to the Tag-Along Sale. 
“Tag-Along
Portion” means, with respect to you and your Permitted
Transferees, the number of shares of Common Stock beneficially owned by you and
your Permitted Transferees on the date of the Tag-Along Notice multiplied by a
fraction, the numerator of which is the maximum number of shares of Common
Stock which can be sold in the Tag-Along Sale and the denominator of which is
the aggregate number of shares of Common Stock benefi­cially owned by the
Participants, collectively.

 

(d)                                 Delivery
of a Tag-Along Response Notice by you to the Sponsor pursuant to Section 7.1(c)
shall constitute an irrevocable election by you and your Permitted Transferees,
if any, to sell the number of Tag Shares beneficially owned by it or them as is
specified in such Tag-Along Response Notice in such Tag-Along Sale.  If, at the end of a 90-day period after such
delivery, the Tag-Along Sale has not been consummated on substantially the same
terms and conditions set forth in the Tag-Along Notice, all restrictions on
transfers of Tag Shares contained in this Agreement or otherwise applicable at
such time with respect to Tag Shares owned by you and your Permitted
Transferees shall again be in effect.

 

(e)                                  If
at the termination of the Tag-Along Response Notice Period you and your
Permitted Transferees, if any, shall not have exercised its or their Tag-Along
Right by providing the Sponsor with a Tag-Along Response Notice, such Executive
and such Executive’s Permitted Transferees shall be deemed to have waived its
or their Tag-Along Right with respect to transferring its or their Tag Shares
pursuant to such Tag-Along Sale.

 

(f)                                    The
Sponsor may sell, on behalf of you and your Permitted Transferees, if you and
your Permitted Transferees, if any, exercise your or their Tag-Along Right
pursuant to this Section 7.1, the shares of Common Stock entitled to be
transferred in the Tag-Along Sale on the terms and conditions set forth in the
Tag-Along Notice within 90 days of the date on which Tag-Along Rights shall
have been waived or exercised.

 

7.2.                              Limitation
of Rights Following Termination of Employment.  Notwithstanding any other provision of this
Agreement, upon the termination of your employment with the Company or any of
its subsidiaries for Cause, or if you terminate your employment with the
Company or any of its subsidiaries without Good Reason (as such term is defined
in your employment agreement with the Company, if any), you and your Permitted
Transferees shall have no rights under Section 7.1.  In the case of any other termination of your
employment, you and your Permitted Transferees shall continue to have the rights
specified in Section 7.1.

 

7.3.                              Termination
of Tag-Along Rights.  Notwithstanding
anything to the contrary, the provisions of Section 7.1 shall not be applicable
if the Common Stock is publicly traded on an Exchange and there exists a
Minimum Public Float.

 

 

7.4.                              Drag-Along
Rights.  (a)  If the Sponsor and its Affiliates propose to
transfer all or any portion of the shares of Common Stock beneficially owned by
them to a Third Party (a “Drag-Along
Sale”), you and your Permitted Transferees shall, at the Sponsor’s
option and in the Sponsor’s sole discretion, upon your receipt of written
notice from the Sponsor, sell the Drag-Along Portion of your Award Shares to
such Third Party for the same consideration and otherwise on the same terms and
conditions on which the Sponsor and its Affiliates sell their shares of Common
Stock in such Drag-Along Sale (the “Drag-Along Rights”).

 

The “Drag-Along Portion”
of your Award Shares means, at any time, the number of Award Shares
beneficially owned by you and your Permitted Transferees, multiplied by a fraction,
the numerator of which is the number of shares of Common Stock proposed to be
sold on behalf of the Sponsor in such Drag-Along Sale and the denominator of
which is the total number of shares of Common Stock then beneficially owned by
the Sponsor.

 

(b)                                 The
Sponsor shall provide written notice of such Drag-Along Sale to you (a “Drag-Along Notice”)
not less than 20 days prior to the consummation of such proposed Drag-Along
Sale which notice shall state that the Sponsor proposes to effect a transfer of
a certain number of shares of Common Stock, the number of shares of Common
Stock proposed to be transferred, the purchase price, the proposed transferee,
the number of Award Shares which you are required to transfer in such
Drag-Along Sale (based on the methodology set forth in Section 7.4(a)), and all
other material terms and conditions of the Drag-Along Sale.  Subject to Section 7.4(c), you shall be
required to participate in the Drag-Along Sale on the terms and conditions set
forth in the Drag-Along Notice.  Not
later than the tenth day following the date of the Drag-Along Notice (the “Drag-Along Notice Period”),
you shall deliver to a representative of the Sponsor designated in the
Drag-Along Notice certificates representing all the Award Shares beneficially
owned and held by you, duly endorsed, together with all other documents
required to be executed in connection with such Drag-Along Sale, or, if such
delivery is not permitted by applicable law, an unconditional agreement to
deliver such Award Shares pursuant to this Section 7.4 at the closing for such
Drag-Along Sale against delivery to you of the consideration therefor.  If you should fail to deliver such
certificates to the Sponsor in a Drag-Along Sale pursuant to this Section 7.4,
the Company shall cause the books and records of the Company to show that such
shares of Common Stock are bound by the provisions of this Section 7.4 and that
such shares of Common Stock shall be transferred to the purchaser of the shares
of the Common Stock immediately upon surrender for transfer by the holder
thereof.

 

(c)                                  The Sponsor shall have a period of
90 days from the date of the Drag-Along Notice to consummate the Drag-Along
Sale on the terms and conditions set forth in such Drag-Along Sale Notice.  If the Drag-Along Sale shall not have been
consummated during such period, the Sponsor shall return to you all
certificates representing Award Shares that you delivered for transfer pursuant
hereto, together with any documents in the possession of the Sponsor executed
by you in connection with such proposed transfer, and the Drag-Along
Notice shall be deemed to be cancelled and this Agreement will remain in full
force and effect in accordance with its terms.

 

7.5.                              Other
Responsibilities.  The delivery of
any notices to, and the obtaining of any consents from, any Permitted
Transferee with respect to any provision of this Agreement, including, but not
limited to, Sections 7.1 and 7.4, shall be your sole responsibility, unless
otherwise agreed to in writing between such Permitted Transferee and the
Sponsor.  Neither the Company nor the
Sponsor shall be liable to any Permitted Transferee for your failure to deliver
a notice to, or obtain a consent from, any Permitted Transferee with respect to
any provision of this Agreement, including, but not limited to, Sections 7.1
and 7.4.

 

7.6.                              Sales
to Principal Beneficial Owners.  The
Sponsor and its Affiliates shall not transfer all or any portion of the shares
of Common Stock beneficially owned by them to a Principal Beneficial Owner, other
than an Affiliate of the Sponsor, unless such Principal Beneficial Owner agrees
to be bound by this Section 7 as if it were the Sponsor.  To the extent that the Sponsor and its
Affiliates transfer any shares of Common Stock to a Principal Beneficial Owner
other than an Affiliate of the Sponsor, you and your Permitted Transferees
agree that such Principal Beneficial Owner shall receive the benefits set forth
in Sections 7.4 and 7.5 hereof as if such Principal Beneficial Owner were the
Sponsor.

 

 

8.                                       Tax
Withholding and Tax Election.

 

8.1                                 Tax
Withholding.  The Company shall have
the right to deduct from any compensation or any other payment of any kind
(including, upon approval of the Board of Directors of the Company, withholding
the delivery of shares of Common Stock) due you the amount of any federal,
state, local or foreign taxes required by law to be withheld which arise in
connection with the Award Shares; provided, however, that the
value of the shares of Common Stock withheld may not exceed the statutory
minimum withholding amount required by law. 
In lieu of such deduction, the Company may require you to make a cash
payment to the Company equal to the amount required to be withheld.  If you do not make such payment when
requested, the Company may refuse to issue any Common Stock certificate under
this Agreement until arrangements satisfactory to the Administrator for such
payment have been made.

 

8.2                                 Tax
Election.  You hereby acknowledge
that you have been advised by the Company to seek independent tax advice from
your own advisors regarding the availability and advisability of making an
election under Section 83(b) of the Code, and that any such election, if
made, must be made within 30 days of the Grant Date.  You expressly acknowledge that you are solely
responsible for filing any such Section 83(b) election with the appropriate
governmental authorities, irrespective of the fact that such election is also
delivered to the Company.  You may not
rely on the Company or any of its officers, directors or employees for tax or
legal advice regarding this award.  You
acknowledge that you have sought tax and legal advice from your own advisors
regarding this award or have voluntarily and knowingly foregone such consultation.  You must pay over to the Company by check the
amount of any and all applicable withholding taxes at the time that you make a
Section 83(b) election.

 

9.                                       Adjustments
for Corporate Transactions and Other Events.

 

9.1                                 Stock
Dividend, Stock Split and Reverse Stock Split.  Upon a stock dividend
of, or stock split, reverse stock split, or similar event affecting, the Common
Stock, the number of Award Shares and the number of such Award Shares that are
nonvested and forfeitable shall, without further action of the Administrator,
be adjusted to reflect such event.  The
Administrator may make adjustments, in its discretion, to address the treatment
of fractional shares with respect to the Award Shares as a result of the stock
dividend, stock split, reverse stock split, or similar event.  Adjustments under this Section 9 will be
made by the Administrator, whose determination as to what adjustments, if any,
will be made and the extent thereof will be final, binding and conclusive.  No fractional Award Shares will result from
any such adjustments.

 

9.2                                 Binding
Nature of Agreement.  The terms and
conditions of this Agreement shall apply with equal force to any additional
and/or substitute securities received by you in exchange for, or by virtue of
your ownership of, the Award Shares, whether as a result of any spin-off, stock
split-up, stock dividend, stock distribution, other reclassification of the
Common Stock of the Company, or similar event, except as otherwise determined
by the Administrator.  If the Award Shares
are converted into or exchanged for, or stockholders of the Company receive by
reason of any distribution in total or partial liquidation or pursuant to any
merger of the Company or acquisition of its assets, securities of another
entity, or other property (including cash), then the rights of the Company
under this Agreement shall inure to the benefit of the Company’s successor, and
this Agreement shall apply to the securities or other property received upon
such conversion, exchange or distribution in the same manner and to the same
extent as the Award Shares.

 

10.                                 Non-Guarantee
of Employment or Service Relationship. 
Nothing in the Plan or this Agreement shall alter your at-will or other
employment status or other service relationship with the Company, nor be
construed as a contract of employment or service relationship between the
Company and you, or as a contractual right of you to continue in the employ of,
or in a service relationship with, the Company for any period of time, or as a
limitation of the right of the Company to discharge you at any time with or
without cause or notice and whether or not such discharge results in the
forfeiture of any Award Shares or any other adverse effect on your interests
under the Plan.

 

11.                                 Rights
as Stockholder.  Except as otherwise
provided in this Agreement with respect to the nonvested and forfeitable Award
Shares, you are entitled to all rights of a stockholder of the Company,
including the right to vote the Award Shares and receive dividends and/or other
distributions declared on the Award Shares.

 

 

12.                                 The
Company’s Rights.  Except as provided
under Section 7.6 of this Agreement, the existence of the Award Shares shall
not affect in any way the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the Company’s capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred
or other stocks with preference ahead of or convertible into, or otherwise
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of the
Company’s assets or business, or any other corporate act or proceeding, whether
of a similar character or otherwise.

 

13.                                 Notices.  All notices and other communications made or
given pursuant to this Agreement shall be in writing and shall be sufficiently
made or given if hand delivered or mailed by certified mail, addressed to you
at the address contained in the records of the Company, or addressed to the
Administrator, care of the Company for the attention of its Corporate Secretary
at its principal executive office or, if the receiving party consents in
advance, transmitted and received via telecopy or via such other electronic
transmission mechanism as may be available to the parties.

 

14.                                 Entire
Agreement.  This Agreement contains
the entire agreement between the parties with respect to the Award Shares
granted hereunder.  Any oral or written
agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Agreement with respect to
the Award Shares granted hereunder shall be void and ineffective for all
purposes.

 

15.                                 Amendment.  This Agreement may be amended from time to
time only be a written instrument duly executed by the Company, the Sponsor,
and you.

 

16.                                 Conformity
with Plan.  This Agreement is
intended to conform in all respects with, and is subject to all applicable
provisions of, the Plan.  Inconsistencies
between this Agreement and the Plan shall be resolved in accordance with the
terms of the Plan.  In the event of any
ambiguity in this Agreement or any matters as to which this Agreement is
silent, the Plan shall govern.  A copy of
the Plan is available
upon request.  Please contact the Company
by email at dselby@vertisinc.com or at 250 W. Pratt Street, 18th
Floor, Baltimore, Maryland 21201, Attention: Dolores D. Selby (telephone:
410-361-8394), to receive a copy of the Plan.

 

17.                                 Governing
Law. The validity, construction and effect of this Agreement, and of any
determinations or decisions made by the Administrator relating to this
Agreement, and the rights of any and all persons having or claiming to have any
interest under this Agreement, shall be determined exclusively in accordance
with the laws of the State of Delaware, without regard to its provisions
concerning the applicability of laws of other jurisdictions.  Any suit with respect hereto will be brought
in the federal or state courts in the districts which include New York, New
York, and you hereby agree and submit to the personal jurisdiction and venue
thereof.

 

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

 

19.                                 Notices.  All
notices and other communications provided for herein shall be dated and in writing and shall be deemed to
have been duly given when delivered, if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid and when received if delivered otherwise, to the
party to whom it is directed:

 

(a)                        If to the Company, to it at the following address:

 

250 W. Pratt Street, 18th Floor

Baltimore, Maryland  21201

Attention: General Counsel

Fax No.: (410) 528-9287

 

with a copy to the
Sponsor, at the address set forth below:

 

 

(b)                       If to you, at the address set forth in the Company’s
records;

 

(c)                        If to the Sponsor, to it at the following address:

 

Thomas H. Lee Equity Fund IV, L.P.

c/o Thomas H. Lee Company

75 State Street, Suite 2600

Boston, Massachusetts  02109

Attention: Anthony J. DiNovi

Fax No.: (617)
227-3514

 

or at such other
address as the parties hereto shall have
specified by notice in writing to the
other parties (provided,  that
such notice of change of address shall be deemed to have been duly given only when actually
received).

 

20.                                 Limitation
of Liability.  None of the Affiliates
of the Sponsor shall have any liability to the you or any of your Permitted
Transferees or the Company or any of its subsidiaries under any provision of
this Agreement.  In the event of an
alleged breach of this Agreement by the Sponsor, the parties hereto acknowledge
and agree that the sole remedy which may be sought against the Sponsor shall be
specific performance, provided, however, that if the remedy of
specific performance is not available, you, your Permitted Transferees, if any,
and the Company will only seek to recover direct damages for any breach of this
Agreement.  You, your Permitted Transferees,
if any, and the Company agree to waive any other remedy against the Sponsor to
which they might be entitled at law, including, but not limited to,
compensatory damages, consequential damages, continuing damages, future
damages, incidental damages, punitive damages and nominal damages.  The Company shall indemnify, defend, save and
hold harmless Sponsor from and against any and all liabilities arising under,
pursuant to or in connection with this Agreement.

 

21.                                 Severability.  The invalidity, illegality or unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement
in such jurisdiction or the validity, legality or enforceability of this
Agreement, including any such provision, in any other jurisdiction, it being
intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.

 

22.                                 Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument, and it shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.

 

 

GLOSSARY

 

(a)          “Administrator” means
the Committee as determined under Section 2.7 of the Plan.

 

(b)         “Affiliate” has the
meaning given to such term in the Plan.

 

(c)          “Business Day” means
any day other than a Saturday, Sunday, or other day during which the Company’s
principal executive office is not open for business.

 

(d)         “Cause” generally
means your insubordination, dishonesty, incompetence, moral turpitude, other
misconduct of any kind or the refusal to perform your duties or
responsibilities for any reason other than illness or incapacity, in each case
as determined by the Board in good faith. 
However, if you have an employment agreement, consulting agreement,
change of control agreement or similar agreement in effect with the Company at
the time in question that defines “cause” (or words of like import), then “cause”
has the meaning ascribed to it under such agreement, as such agreement shall
provide at the time in question; provided that with respect to any agreement
that conditions “cause” on the occurrence of a change of control, such
definition of “cause” shall not apply until a change of control actually takes
place and then only with regard to a termination thereafter.

 

(e)          “Common Stock” means
the common stock, $.01 par value, of Vertis Holdings, Inc..

 

(f)            “Company” means Vertis
Holdings, Inc. and its Affiliates, except where the context otherwise
requires.  For purposes of determining
whether a Liquidity Event has occurred, Company shall mean only Vertis
Holdings, Inc.

 

(g)         “Disability” means
your inability to perform substantially your duties and responsibilities to the
Company by reason of a physical or mental disability or infirmity for a
continuous period of three months.  The
date of such disability shall be the earlier of (1) the last day of such
three-month period or (2) the day on which you submit, or cause to be
submitted, to the Board any medical evidence of such disability reasonably
satisfactory to the Board.

 

(h)         “Exchange” means the
principal stock exchange, including The Nasdaq Stock Market, on which the
Common Stock is listed or approved for listing, if any.

 

(i)             “Liquidity Event”
means (1) a public offering of the Common Stock registered pursuant to the
Securities Act where there is a Minimum Public Float immediately following such
offering, (2) a merger or other business combination or recapitalization
whereby the Common Stock is exchanged for cash and/or publicly traded equity or
debt securities in another entity or a combination of cash and other
non-publicly traded equity or debt securities where cash constitutes at least a
majority of the consideration to be received in such merger, business
combination or recapitalization or (3) a sale or other disposition of all or
substantially all of the Company’s assets to another entity, for cash and/or
publicly traded equity or debt securities of another entity or a combination of
cash and other non-publicly traded equity or debt securities where cash
constitutes at least a majority of the proceeds of such sale or disposition, in
each case, other than to the Company, any subsidiary of the Company, or any
entity controlled by the ultimate control persons of the Company.

 

(j)             “Minimum Public Float”
means the circumstances existing when (i) the consummation of one or more
public offerings registered pursuant to the Securities Act of shares of Common
Stock if, upon such consummation, the aggregate number of shares of Common
Stock held by the public, not including Affiliates of the Company, represents
at least 20% of the total number of outstanding shares of Common Stock at the
time of such public offering and (ii) the Common Stock is listed on an
Exchange.

 

(k)          “Other Award Share Grantees”
means other persons receiving Award Shares pursuant to a restricted stock
agreement having terms substantially identical to those contained in this
Agreement.

 

 

(l)             “Other Key People”
means the officers, members of management, key employees of the Company and its
Affiliates.

 

(m)       “Principal Beneficial Owner”
means any of the Sponsor, CLI/THLEF IV Vertis LLC, Evercore Capital Partners
L.P., CLI Associates LLC, J.P. Morgan Partners (BHCA), L.P., Wachovia Capital
Partners, LLC (formerly First Union Capital Partners, LLC), and Cadogan
Capital, LLC and their respective Affiliates and successors.

 

(n)         “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

(o)         “Service” means your
employment or other service relationship with the Company and its
Affiliates.  Service will be considered
to have ceased with the Company if, after a sale, merger or other corporate
transaction, the trade, business or entity with which you are employed is no
longer an Affiliate of Vertis Holdings, Inc.

 

(p)         “Third Party” means
any person or entity excluding each of the following:  (a) the Company and its employees, officers,
directors and (b) the Principal Beneficial Owners.

 

(q)         “You”; “Your”.  You means the recipient of the Award Shares
as reflected in the first paragraph of this Agreement.  Whenever the word “you” or “your” is used in
any provision of this Agreement under circumstances where the provision should
logically be construed, as determined by the Administrator, to apply to the
estate, personal representative, or beneficiary to whom the Award Shares may be
transferred by will or by the laws of descent and distribution, the words “you”
and “your” shall be deemed to include such person.

 

 

IN WITNESS
WHEREOF, the Company and the Sponsor have caused this Agreement to be executed
by their duly authorized officers.

 

 

	
   

  	
  VERTIS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/
  John V. Howard

  	
   

  
	
   

  	
   

  	
  Senior Vice President,
  General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date: May 20, 2004

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Anthony DiNovi

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  

 

 

The undersigned hereby acknowledges that he/she has
carefully read this Agreement and agrees to be bound by all of the provisions
set forth herein.

 

	
  WITNESS:

  	
  GRANTEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Witness]

  	
   

  	
  /S/ Thomas R. Zimmer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
						

 

Enclosure: Vertis Holdings, Inc. 1999 Equity Award PlanEXHIBIT 10.49

 

Vertis Holdings, Inc.

2004 Restricted Stock Term Sheet

 

April 5, 2004

 

	
  Goal:

  	
  Provide an equity incentive for 2004 performance to
  certain key employees of Vertis Holdings, Inc. (the “Company”).

  
	
   

  	
   

  
	
  Participant:

  	
  Tom Zimmer (the “Participant”).

  
	
   

  	
   

  
	
  Award:

  	
  11,250 shares of the Company’s restricted common
  stock (the “Award Shares”) that will be granted upon the achievement of
  certain performance thresholds.

  
	
   

  	
   

  
	
  Thresholds:

  	
  2,813 of the Award Shares will be granted to the
  Participant if the Company’s board of directors determines that the Company’s
  EBITDA from its North America West operations for the year ended December 31,
  2004 (the “NAW EBITDA”) is at least $74.9 million. An additional 2,812 of the
  Award Shares will be granted if the Company’s NAW EBITDA is at least $78.0
  million. For NAW EBITDA of between $74.9 million and $78.0 million, the grant
  will be proportionately increased such that the total number of Award Shares
  granted equals 2,813 plus (2,812 multiplied by NAW EBITDA in excess of
  $74.9 million (up to $3.1 million) and divided by $3.1 million).

  
	
   

  	
   

  
	
   

  	
  In addition, 2,813 of the Award Shares will be
  granted to the Participant if the Company’s board of directors determines
  that the Company’s EBITDA from its North American operations for the year
  ended December 31, 2004 (the “NA EBITDA”) is at least $206.2 million. An
  additional 2,812 of the Award Shares will be granted if the Company’s NA
  EBITDA is at least $212.4 million. For NA EBITDA of between $206.2 million
  and $212.4 million, the grant will be proportionately adjusted such that the
  total number of Award Shares granted equals 2,813 plus (2,812
  multiplied by NA EBITDA in excess of $206.2 million (up to $6.2 million) and
  divided by $6.2 million).

  
	
   

  	
   

  
	
  Timing:

  	
  The Award Shares will be granted as soon as
  reasonably practicable following the Company’s determination as to whether
  (and to what extent) the Participant has exceeded the 2004 thresholds
  described above.

  
	
   

  	
   

  
	
  Restricted Stock:

  	
  Upon issuance, the Award Shares will still
  constitute “restricted” shares of the Company’s common stock. The shares are
  restricted because they are subject to forfeiture and restrictions on
  transfer until the shares “vest.” Once shares of restricted stock have
  vested, those shares will no longer be subject to forfeiture.

  
	
   

  	
   

  
	
  Vesting:

  	
  The shares of restricted stock will vest (assuming
  your continued employment) immediately prior to the first to occur of a “liquidity
  event,” your death or the date on which you suffer a “disability.” Prior to
  vesting, your unvested restricted stock will be forfeited completely if you
  leave the employ of the Company (or its subsidiaries) for any or no reason
  (other than your death or disability), including voluntary resignation or
  termination of your employment with or without cause. Because the vesting of
  the restricted stock depends on the occurrence of a future event which may or
  may not occur, the Company cannot assure you that the restricted stock will
  ever become vested.

  
	
   

  	
   

  
	
  Transfers:

  	
  Because the Company is privately owned, the restricted
  stock will continue to be subject to restrictions on transfer, even after it
  vests.

  
	
   

  	
   

  
	
  Documentation:

  	
  The Award Shares described in this term sheet will
  only be issued upon the full execution of a restricted stock agreement
  substantially in the form attached hereto as Exhibit A (the “Restricted
  Stock Agreement”). This term sheet is qualified in its entirety by reference
  to the 

  

 

 

	
   

  	
  detailed terms and conditions included in the
  Restricted Stock Agreement. You should carefully review the Restricted Stock
  Agreement.

  
	
   

  	
   

  
	
  Confidentiality:

  	
  The Award Shares are being made available only to
  the Participant and to a limited number of other key employees of the
  Company. In order to receive any Award Shares, the Participant must maintain
  the confidentiality of this term sheet, the Award Shares and the thresholds
  described above. Any disclosure in violation of this provision may result in
  the forfeiture of any Award Shares to which the Participant may become
  entitled.

  
	
   

  	
   

  
	
  Questions:

  	
  Any questions regarding this transaction should be
  sent by e-mail to restrictedshare2004@vertisinc.com.

  

 

THIS TERM SHEET IS FOR INFORMATIONAL PURPOSES
ONLY.  THE CONTENTS OF THIS TERM SHEET
ARE NOT TO BE CONSTRUED AS LEGAL, BUSINESS OR TAX ADVICE.  EACH PARTICIPANT SHOULD CONSULT THE
PARTICIPANT’S OWN ATTORNEY, BUSINESS ADVISOR AND TAX ADVISOR AS TO LEGAL,
BUSINESS AND TAX ADVICE.

 

2

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